SECURITIES AND EXCHANGE COMMISSION
                           WASHINGTON, D.C.  20549

                                  FORM 10-K

(Mark One)
[X]   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
      SECURITIES EXCHANGE ACT OF 1934 [Fee Required]

For the fiscal year ended September 30, 1996

                                     OR

[ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
      SECURITIES EXCHANGE ACT OF 1934 [No Fee Required]

      For the transition period from  to

                       Commission File Number 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


      SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT: None

      SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: None

      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     
                                -----         -----
      INDICATE BY CHECK MARK IF DISCLOSURE OF DELINQUENT FILERS PURSUANT TO
ITEM 405 OF REGULATION S-K IS NOT CONTAINED HEREIN, AND WILL NOT BE CONTAINED,
TO THE BEST OF REGISTRANT'S KNOWLEDGE, IN DEFINITIVE PROXY OR INFORMATION
STATEMENTS INCORPORATED BY REFERENCE IN PART III OF THIS FORM 10-K OR ANY
AMENDMENT TO THIS FORM 10-K.   X    
                             ----
      THE NUMBER OF SHARES OUTSTANDING OF THE REGISTRANT'S COMMON STOCK ON
DECEMBER 19, 1996 WAS AS FOLLOWS:

Common Stock (par value $1,000.00 per share)               3,511 shares




<PAGE>

                                   PART I
ITEM 1.  BUSINESS

GENERAL DESCRIPTION

      Anchor National Life Insurance Company (the "Company"), is an indirect
wholly owned subsidiary of SunAmerica Inc. (the "Parent"), a diversified
financial services company specializing in retirement savings and investment
products and services.  The Company ranks among the largest U.S. issuers of
variable annuities.  Complementing these annuity operations are the Company's
asset management operations and broker-dealer operations.  At September 30,
1996, the Company held $11.34 billion of assets, consisting of $9.20 billion
of assets owned by the Company and $2.14 billion of assets managed in mutual
funds.   

      The Company believes that demographic trends have produced strong
consumer demand for long-term, investment-oriented products.  According to U.S.
Census Bureau projections, the number of individuals ages 45 to 64 will grow
from 46 million to 60 million during the 1990s, making this age group the
fastest-growing segment of the U.S. population.  Between 1985 and 1995, annual
industry premiums from annuities and fund deposits increased from $53 billion
to $159 billion.  During the same period, annual industry sales of mutual
funds, excluding money market accounts, rose from $114 billion to $477 billion.

      Focusing its operations on this expanding market, the Company specializes
in the sale of tax-deferred long-term savings products and investments through
its life insurance operations and its asset management and broker-dealer
subsidiaries.  The Company markets fee-generating variable annuities,
guaranteed investment contracts ("GICs") and mutual funds.  Its annuity
products are distributed through a broad spectrum of financial services
distribution channels, including independent registered representatives of the
Company's broker-dealer subsidiary, affiliated and unaffiliated broker-dealers
and banks and financial institutions.

      The Company maintains its principal executive offices at 1 SunAmerica
Center, Los Angeles, California 90067-6022, telephone (310) 772-6000.  The
Company has no employees; however, employees of the Parent and its other
subsidiaries perform various services for the Company.  The Parent has
approximately 1,600 employees, approximately 880 of whom perform services for
the Company as well as for certain of its affiliates.

      As consumer demand for investment-oriented products has grown, the
Company has broadened the array of fee income producing products and services
it offers and has in recent years significantly increased its fee income.  Over
the last several years, the Company has enhanced its marketing of variable
annuities and mutual funds.  Fee income has also expanded through the receipt
of broker-dealer net retained commissions.  The Company's fee-generating
businesses entail no portfolio credit risk and require significantly less
capital support than its fixed-rate business, which generates net investment
income.
                                      1




<PAGE>
      For the year ended September 30, 1996, the Company's net investment
income (including net realized investment losses) and fee income by primary
product line or service are as follows:

                        NET INVESTMENT AND FEE INCOME

                                                            Primary product or
                                Amount     Percent                      service
                             ---------   ---------    -------------------------
(In thousands)

Net investment income 
  (including net realized 
  investment losses)         $  43,488        21.3%   Fixed-rate products
                             ---------       -----
Fee income:
  Variable annuity fees        103,970        50.9    Variable annuities
  Net retained commissions      31,548        15.4    Broker-dealer sales  
  Asset management fees         25,413        12.4    Mutual funds
                             ---------       -----
  Total fee income             160,931        78.7
                             ---------       -----
Total                        $ 204,419       100.0%
                             =========       =====
      For financial information on the Company's business segments, see Part
IV - "Notes to Consolidated Financial Statements - Note 10 - Business
Segments."

LIFE INSURANCE OPERATIONS

      Founded in 1965, the Company is an Arizona-chartered company licensed in
49 states and the District of Columbia, the Company specializes in the sale of
flexible premium variable annuities and GICs.  It has a "AA-" (Excellent)
claims-paying ability rating from Standard & Poor's Corporation ("S&P"), a "AA"
(Very High) rating from Duff & Phelps, Inc. ("D&P") and an "A2" (Good) rating
from Moody's Investors Service ("Moody's").  It also has an "A+" (Superior)
rating from industry analyst A.M. Best Company.  The Company specializes in the
sale of flexible premium variable annuities, including Polaris, the Company's
flagship variable annuity, which offers investors nine money management groups,
22 variable annuity portfolios and five fixed-rate account options.  The
Company ranks among the largest issuers of variable annuities in the nation,
according to the latest published industry data.

      Benefitting from continued strong demographic growth of the retirement
savings market, industry sales of tax-deferred savings products have
represented, for a number of years, a significantly larger source of new
premiums for the U.S. life insurance industry than have traditional life
insurance products.  Recognizing the growth potential of this market, the
Company focuses its life insurance operations on the sale of annuities and
GICs.

      Because of its focus on annuity products, which generally have more
contractholder transactions than traditional life insurance products, the
Company utilizes computer-driven systems that employ optical disk imaging and
artificial intelligence, in lieu of paper-intensive life insurance processing 
                                      2
<PAGE>
procedures.  The Company believes its service support and associated cost
structure to be among the most competitive in the industry.

      The Company markets its variable annuities through the following
distribution channels: (i) independent registered representatives of SunAmerica
Securities, Inc. and Advantage Capital Corp., which are indirect wholly owned
subsidiaries of the Parent, and Royal Alliance Associates, Inc. ("Royal
Alliance"), which is an indirect wholly owned subsidiary of the Company; and
(ii) approximately 600 other securities firms and financial institutions. 
Approximately 30,000 independent sales representatives nationally are licensed
to sell the Company's variable annuity products.  

      The Company markets its GICs principally through direct marketing to
banks, municipalities, asset management firms and direct plan sponsors or
through intermediaries, such as managers or consultants servicing these groups.


FIXED ANNUITIES AND GICs

      The Company services a number of fixed-rate products, including fixed-
rate annuities issued in prior years and fixed-rate account options of its
variable annuity contracts.  Although the Company's contracts remain in force
an average of seven to ten years, a majority (approximately 81% at September
30, 1996) reprice annually at discretionary rates determined by the Company. 
In repricing, the Company takes into account yield characteristics of its
investment portfolio, annuity surrender assumptions and competitive industry
pricing.

      During 1995 the Company began augmenting its retail annuity sales effort
with the marketing of institutional products.   At September 30, 1996, the
Company had $410.2 million of fixed-maturity, variable-rate GIC obligations
that reprice periodically based upon certain defined indexes.  Of the total GIC
portfolio at September 30, 1996, approximately 83% was sold to asset management
firms, including bank trust departments, and 17% was sold to banks.  The one
new GIC contract sold by the Company in 1996 amounted to $75.0 million,
compared to an average new GIC contract size of $34.4 million in 1995.
                                                  
      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 63% of the Company's fixed annuity and GIC reserves
had surrender penalties or other restrictions at September 30, 1996.


VARIABLE ANNUITIES

      The variable annuity products of the Company offer investors a broad
spectrum of fund alternatives, with a choice of investment managers, as well
as guaranteed fixed-rate account options.  The Company earns fee income through
the sale, administration and management of the variable account options of its
variable annuity products.  The Company also earns investment income on monies
allocated to the fixed-rate account options of these products.  Variable
                                      3
<PAGE>
annuities offer retirement planning features and surrender charges similar to
those offered by fixed annuities, but differ in that the annuity holder's rate
of return is generally dependent upon the investment performance of the
particular equity, fixed-income, money market or asset allocation funds
selected by the contractholder.  Because the investment risk is borne by the
customer in  all  but  the fixed-rate account options, these products require
significantly less capital support than fixed annuities.  The average new
variable annuity contract sold by the Company amounted to approximately $37,000
in 1996.

INVESTMENT OPERATIONS

      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 competitive conditions
within the industry.  The Company manages most of its invested assets
internally.  Its portfolio strategy is designed to achieve adequate risk-
adjusted returns consistent with its investment objectives of effective
asset-liability matching, liquidity and safety.

      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.  

      For the years ended September 30, 1996, 1995 and 1994, the Company's
yields on average invested assets were 7.50%, 7.62% and 8.20%, respectively,
before net realized investment losses, and it realized net investment spreads
of 2.59%, 2.95% and 3.78%, respectively, on average invested assets.  At
September 30, 1996, 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 is the
calculation of the relative percentage change in market value resulting from
shifts in interest rates, and recognizes the changes in portfolio cashflows
resulting from embedded options such as prepayments and bond calls.

      The Company's general investment philosophy is to hold fixed maturity
assets for long-term investment.  Thus, it does not have a trading portfolio. 
Effective December 1, 1995, pursuant to guidelines issued by the Financial
Accounting Standards Board, the Company 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. 
Accordingly, the Company no longer classifies a portion of its Bond Portfolio
as held for investment.
                                      4

<PAGE>
      The following table summarizes the Company's investment portfolio at
September 30, 1996:

                              SUMMARY OF INVESTMENTS
                                                                             
                                                   Amortized       Percent of
                                                        cost        portfolio
                                             ---------------       ----------
                                               (In thousands)              
Fixed maturities:
 Cash and short-term investments                 $   122,058              5.2%
 U.S. Government securities                          311,458             13.3
 Mortgage-backed securities                          747,653             32.0
 Other bonds, notes and redeemable 
   preferred stocks                                  941,913             40.2
 Mortgage loans                                       98,284              4.2
                                             ---------------       ----------
 Total                                             2,221,366             94.9 

Real estate                                           39,724              1.7 
Equity securities                                      2,911              0.1
Other invested assets                                 77,925              3.3
                                             ---------------       ----------
Total investments                                $ 2,341,926            100.0%
                                             ===============       ==========

      All of the Bond Portfolio (at amortized cost, excluding $9.1 million of
redeemable preferred stock) at September 30, 1996 was rated by S&P, Moody's,
D&P, Fitch Investor Service, Inc. ("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
September 30, 1996, approximately $1.83 billion (at amortized cost) of the Bond
Portfolio was rated investment grade by one or more of these agencies or by the
Company or the NAIC, pursuant to applicable NAIC guidelines, including $1.05
billion of U.S. government/agency securities and mortgage-backed securities
("MBSs").

      At September 30, 1996, the Bond Portfolio included $160.8 million (fair
value, $160.2 million) of bonds not rated investment grade by S&P, Moody's,
D&P, Fitch or the NAIC.  Based on their September 30, 1996 amortized cost,
these non-investment-grade bonds accounted for 1.8% of the Company's total
assets and 6.9% of its invested assets.  

      Senior secured loans ("Secured Loans") are included in the Bond Portfolio
and their amortized cost aggregated $200.8 million at September 30, 1996. 
Secured Loans are senior to subordinated debt and equity, and are secured by
assets of the issuer.  At September 30, 1996, Secured Loans consisted of loans
to 52 borrowers spanning 20 industries.

      Mortgage loans aggregated $98.3 million at September 30, 1996 and
consisted of 17 first mortgage loans with an average loan balance of
approximately $5.8 million, collateralized by properties located in 11 states. 
                                      5
<PAGE>

      At September 30, 1996, the amortized cost of all investments in default
as to the payment of principal or interest totaled $3.1 million (fair value,
$2.9 million), which constituted 0.1% of total invested assets at amortized
cost.

      For more information concerning the Company's investments, including the
risks inherent in such investments, see Item 7, "Management Discussion and
Analysis of Financial Condition and Results of Operations - Financial Condition
and Liquidity".


MUTUAL FUNDS AND INVESTMENT SERVICES

      Through its registered investment advisor, SunAmerica Asset Management
Corp. ("SunAmerica Asset Management") and its related mutual fund distributor,
the Company earns fee income by distributing and managing a diversified family
of mutual funds and by providing professional management of individual,
corporate and pension plan portfolios.  These mutual funds offer investors an
array of equity, fixed-income, money market and tax-exempt portfolios.  In
November 1996, SunAmerica Asset Management introduced its new "Style Select
Series," which combines the expertise of three well-respected advisors with
similar investment styles in each available portfolio.  Founded in 1983 and
acquired by the Company in January 1990, SunAmerica Asset Management managed
approximately $2.43 billion of assets at September 30, 1996, including mutual
fund assets and certain of the variable annuity assets of the Company and its
affiliates.

      The SunAmerica mutual funds are distributed nationally through a network
of approximately 350 financial institutions and affiliated and unaffiliated
broker-dealers, as well as by the Company's broker-dealer subsidiary.


BROKER-DEALER

      The Company owns a broker-dealer, Royal Alliance, acquired by the Company
in January 1990.  As a result of the Company's ongoing active recruitment of
independent registered representatives, the Company has increased its network
of representatives from approximately 2,800 at September 30, 1995 to
approximately 3,000 at September 30, 1996.  The Company believes that, through
its ownership of Royal Alliance and marketing arrangements with two affiliated
broker-dealers, SunAmerica Securities, Inc. and Advantage Capital Corp., it has
the largest network of independent registered representatives in the nation,
based on industry data.

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 
                                      6
<PAGE>
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.

      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.  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 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 is registered with the Securities and
Exchange Commission (the "Commission") 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 Commission.  In addition, variable annuities and the related separate
accounts of the Company are subject to regulation by the Commission 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.


COMPETITION

      The businesses conducted by the Company are highly competitive.  The
Company's life insurance operations compete with other life insurers, and also
compete for customers' funds with a variety of investment products offered by
financial services companies other than life insurance companies, such as
banks, investment advisors, mutual fund companies and other financial
institutions.  Within the U.S. life insurance industry, the 100 largest writers
of individual and group annuities account for approximately 97% of total net
premiums written.  Net annuity premiums written among the top 100 companies
range from less than $200 million to more than $9 billion annually.  The
Company ranks in the top quartile of this group.  Certain of these companies
and other life insurers with which the Company competes are significantly
larger and have available to them much greater financial and other resources. 
The Company believes the primary competitive factors among life insurance
companies for investment-oriented insurance products, such as annuities and
GICs, include product flexibility, product pricing, innovation in product
design, the claims-paying ability rating and the name recognition of the
issuing company, the availability of distribution channels and service rendered
to the customer before and after a contract is issued.  Other factors affecting
                                      7
<PAGE>
the annuity business include the benefits (including before-tax and after-tax
investment returns) and guarantees provided to the customer and the commissions
paid.

      Competitors of SunAmerica Asset Management include a large number of
mutual fund organizations, both independent and affiliated with other financial
services companies, including banks and insurance companies.  Competition in
mutual fund sales is based on investment performance, service to clients and
product design.

      The Company's broker-dealer faces competition from regional firms and
large, national full service and discount brokerage firms.

ITEM 2.   PROPERTIES

      The Company's principal office is in leased premises at 1 SunAmerica
Center, Los Angeles, California.  The Company, through an affiliate, also
leases office space in Torrance, California which is utilized for certain
recordkeeping and data processing functions.  The Company's broker-dealer and
asset management subsidiaries lease offices in New York, New York.

      The Company believes that such properties, including the equipment
located therein, are suitable and adequate to meet the requirements of its
businesses.

ITEM 3.  LEGAL PROCEEDINGS

      The Company is involved in various kinds of litigation common to its
businesses.  These cases are in various stages of development and, based on
reports of counsel, management believes that provisions made for potential
losses are adequate and any further liabilities and costs will not have a
material adverse impact upon the Company's financial position or results of
operations.


ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS

      No matters were submitted during the fourth quarter 1996 to a vote of
security-holders, through the solicitation of proxies or otherwise.

                                   PART II
Item 5.  MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER   
         MATTERS

      Not applicable.






                                      8
<PAGE>
<TABLE>
ITEM 6.  SELECTED CONSOLIDATED FINANCIAL DATA

      The following selected consolidated financial data of the Company and its subsidiaries
should be read in conjunction with the consolidated financial statements and notes thereto and
Management's Discussion and Analysis of Financial Condition and Results of Operations, both of
which are included elsewhere herein.

<CAPTION>
                                                                     Years ended September 30,  
                                                ----------------------------------------------
                                                    1996     1995      1994      1993      1992 
                                                -------- --------  --------  -------- --------
<S>                                            <C>      <C>       <C>       <C>      <C>      
                                                              (In thousands)
RESULTS OF OPERATIONS

Net investment income                           $ 56,843 $ 50,083  $ 58,996  $ 48,912 $ 36,499
Net realized investment losses                   (13,355)  (4,363)  (33,713)  (22,247) (22,749)
Fee income                                       160,931  135,214   131,225   118,247   97,220
General and administrative expenses              (80,048) (61,629)  (52,636)  (55,142) (55,615)
Provision for future guaranty fund 
  assessments                                        ---      ---       ---    (4,800)     ---
Amortization of deferred acquisition costs       (57,520) (58,713)  (44,195)  (30,825) (18,224)
Annual commissions                                (4,613)  (2,658)   (1,158)     (312)    (215)
Other income and expenses, net                     7,070    7,063     8,801     9,679    9,218  
                                                -------- --------  --------  -------- --------

Pretax income                                     69,308   64,997    67,320    63,512   46,134
Income tax expense                               (24,252) (25,739)  (22,705)  (21,794) (15,361) 
                                                -------- --------  --------  -------- --------
INCOME FROM CONTINUING OPERATIONS                 45,056   39,258    44,615    41,718   30,773
Net income of subsidiaries sold to affiliates                             ------------   1,312 
                                                -------- --------  --------  -------- --------
INCOME BEFORE CUMULATIVE EFFECT OF CHANGE IN 
  ACCOUNTING FOR INCOME TAXES                     45,056   39,258    44,615    41,718   32,085

Cumulative effect of change in accounting 
  for income taxes                                   ---      ---   (20,463)      ---      ---
                                                -------- --------  --------  -------- --------
NET INCOME                                      $ 45,056 $ 39,258  $ 24,152  $ 41,718 $ 32,085
                                                ======== ========  ========  ======== ========

</TABLE>

                                                9












<PAGE>
<TABLE>
ITEM. 6   SELECTED CONSOLIDATED FINANCIAL DATA (continued)
<CAPTION>
                                                                                                
                                                                               At  September 30, 
                                --------------------------------------------------------------- 
                                      1996         1995          1994         1993         1992
                               -----------  -----------   -----------  -----------  -----------
<S>                           <C>          <C>           <C>          <C>          <C>         
                                                        (In thousands)
FINANCIAL POSITION

Investments                     $2,329,232   $2,114,908    $1,632,072   $2,093,100   $2,126,899
Variable annuity assets          6,311,557    5,230,246     4,486,703    4,170,275    3,284,507
Deferred acquisition costs         443,610      383,069       416,289      336,677      288,264
Other assets                       120,136       55,474        67,062       71,337       91,588
                               -----------  -----------   -----------  -----------  -----------

TOTAL ASSETS                    $9,204,535   $7,783,697    $6,602,126   $6,671,389   $5,791,258
                               ===========  ===========   ===========  ===========  ===========

Reserves for fixed annuity 
  contracts                     $1,789,962   $1,497,052    $1,437,488   $1,562,136   $1,735,565
Reserves for guaranteed
  investment contracts             415,544      277,095           ---          ---          ---
Variable annuity liabilities     6,311,557    5,230,246     4,486,703    4,170,275    3,284,507
Other payables and accrued
  liabilities                       96,196      227,953       195,134      495,308      398,045
Subordinated notes payable 
  to Parent                         35,832       35,832        34,712       34,432       15,500
Deferred income taxes               70,189       73,459        64,567       38,145       35,163
Shareholder's equity               485,255      442,060       383,522      371,093      322,478
                               -----------  -----------   -----------  -----------  -----------
TOTAL LIABILITIES AND 
  SHAREHOLDER'S EQUITY          $9,204,535   $7,783,697    $6,602,126   $6,671,389   $5,791,258
                               ===========  ===========   ===========  ===========  ===========
</TABLE>


                                               10















<PAGE>
ITEM 7.  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 years in the period ended September 30, 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 elsewhere 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 ("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 contained in this
report which represent the Company's beliefs concerning future or projected
levels of sales of the Company's products, investment spreads or 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, 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 the 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 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

      INCOME BEFORE CUMULATIVE EFFECTIVE OF CHANGE IN ACCOUNTING FOR INCOME
TAXES totaled $45.1 million in 1996, compared with $39.3 million in 1995 and
$44.6 million in 1994.  The cumulative effect of the change in accounting for
income taxes resulting from the 1994 implementation of Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes," amounted to a
nonrecurring non-cash charge of $20.5 million.  Accordingly, net income
amounted to $24.1 million in 1994.

      PRETAX INCOME totaled $69.3 million in 1996, $65.0 million in 1995, and
$67.3 million in 1994.  The $4.3 million improvement in 1996 over 1995
primarily resulted from increased net investment income and significantly
increased fee income partially offset by increased net realized investment
losses and additional general and administrative expenses.  The $2.3 million
decline in 1995 over 1994 primarily resulted from additional amortization of 
                                     11
<PAGE>
deferred acquisition costs, increased general and administrative expenses and
decreased net investment income, partially offset by decreased net realized
investment losses. 
      
      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 $56.8 million in 1996, $50.1 million in
1995 and $59.0 million in 1994.  These amounts represent 2.59% on average
invested assets (computed on a daily basis) of $2.19 billion in 1996, 2.95% on
average invested assets of $1.70 billion in 1995 and 3.78% on average invested
assets of $1.56 billion in 1994.  

      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 $142.9 million in 1996, $108.4 million in 1995 and
$49.5 million in 1994.  The difference between the Company's yield on average
invested assets and the rate paid on average interest-bearing liabilities was
2.25% in 1996, 2.63% in 1995 and 3.64% in 1994.

      Investment income and the related yields on average invested assets
totaled $164.6 million or 7.50% in 1996, compared with $129.5 million or 7.62%
in 1995 and $127.8 million or 8.20% in 1994.

      Investment income rose during 1996 as a result of higher levels of
average invested assets, partially offset by reduced investment yields. 
Investment yields were lower in 1996 because of a generally declining interest
rate environment since early 1995 and lower contributions from the Company's
investments in partnerships.  Partnership income totaled $4.1 million in 1996,
$5.1 million in 1995 and $9.5 million in 1994.  This income represents a yield
of 10.12% on average investments in partnerships of $40.2 million in 1996,
compared with 10.60% on average investments in partnerships of $48.4 million 
in 1995 and 23.78% on average investments in partnerships of $39.9 million in
1994.  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.  

      The decline in investment yield in 1995 compared with 1994 is primarily
due to lower contributions from the Company's investments in partnerships and
a significant decline from the $3.7 million of yield enhancement recorded in
1994 through the Company's use of dollar roll transactions ("Dollar Rolls"). 
Although the Company continues to use Dollar Rolls, their use did not have a
significant impact on investment income in 1995 or 1996.

      Total interest expense aggregated $107.8 million in 1996, $79.4 million
in 1995 and $68.8 million in 1994.  The average rate paid on all interest-
bearing liabilities increased to 5.25% (5.11% on fixed annuity contracts and
5.87% on guaranteed investment contracts ("GICs")) in 1996, compared with 4.99% 
(4.90% on fixed annuity contracts and 6.14% on GICs) in 1995 and 4.56% (4.50%
on fixed annuity contracts) in 1994.  Interest-bearing liabilities averaged
$2.05 billion during 1996, compared with $1.59 billion during 1995 and $1.51
billion during 1994.  

      The increase in the average rates paid on all interest-bearing
liabilities during 1996 primarily resulted from the growth in average reserves 
for GICs, which credit at higher rates of interest than fixed annuity
contracts. Average GIC reserves were $340.5 million in 1996 and $60.8 million
                                     12
<PAGE>
in 1995.  The increase in average crediting rates in 1995 resulted from higher
crediting rates on fixed annuity contracts as interest rates rose from the low
levels experienced in 1994.

      The growth in average invested assets since 1994 primarily reflects sales
of the Company's fixed-rate products, consisting of both fixed accounts of
variable annuity products and GICs.  Fixed annuity premiums totaled $741.8
million in 1996, compared with $284.4 million in 1995 and $140.7 million in
1994.  These increased premiums resulted from greater inflows into the one-year
fixed account of the Company's Polaris variable annuity product.  

      GIC premiums totaled $135.0 million in 1996 and $275.0 million in 1995. 
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 year.  The
Company's GICs that are purchased by asset management firms permit withdrawals
with notice of 90 days.  Contracts that are purchased by banks or state and
local governmental authorities may 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 (see "Financial
Condition and Liquidity").

      NET REALIZED INVESTMENT LOSSES totaled $13.4 million in 1996, $4.4
million in 1995 and $33.7 million in 1994 and represent 0.61%, 0.26% and 2.16%,
respectively, of average invested assets.  Net realized investment losses
include impairment writedowns of $16.0 million in 1996, $4.8 million in 1995
and $14.2 million in 1994.  Therefore, net gains from sales of investments
totaled $2.6 million in 1996 and $0.4 million in 1995.  In 1994, the Company
incurred $19.5 million of net losses from sales of investments.

      Net gains from sales of investments in 1996 include $4.1 million of net
gains realized on $1.27 billion of sales of bonds and $288.6 million of
redemptions of bonds.  Net gains from sales of investments in 1995 include a
$4.4 million gain on sales of real estate, common stock and other invested
assets offset by $4.0 million of net losses realized on $1.11 billion of sales
of bonds.  Net losses from sales of investments in 1994 include $17.3 million
of net losses realized on $673.6 million of sales of bonds.  These bond sales
include approximately $289.3 million of sales of MBSs made primarily to acquire
other MBSs that were then used in dollar roll transactions ("Dollar Rolls"). 
Sales of investments are generally made to maximize total return. 
      
      Impairment writedowns in 1996 include $13.4 million of provisions applied
to certain real estate owned in Arizona on December 31, 1995.  Prior to that
date, the statutory carrying value of this real estate had been guaranteed by
the Company's ultimate parent, SunAmerica Inc.  On December 31, 1995, the
Parent made a $27.4 million capital contribution to the company through the
company's direct parent in exchange for the termination of its guaranty with
respect to this real estate.  Accordingly, the Company reduced the carrying
value of this real estate to estimated fair value to reflect the termination
of the guaranty.  The Parent continues to guarantee the statutory carrying
value of the Company's other real estate owned in Arizona.   

      Impairment writedowns in 1995 include $2.0 million of additional
provisions applied to defaulted bonds and $1.8 million of additional provisions
applied to certain interest-only strips ("IOs").  IOs, a type of MBS used as
an asset-liability matching tool to hedge against rising interest rates, are
investment grade securities that give the holder the right to receive only the
interest payments on a pool of underlying mortgage loans.  At September 30,
                                     13
<PAGE>
1996, the amortized cost of the IOs held by the Company was $2.6 million and
their fair value was $3.7 million.  Impairment writedowns in 1994 of $14.2
million reflect additional provisions applied to bonds, primarily made in
response to the adverse impact of declining interest rates on certain MBSs.

      VARIABLE ANNUITY FEES are based on the market value of assets supporting
variable annuity contracts in separate accounts.  Such fees totaled $104.0 
million in 1996, $84.2 million in 1995 and $79.1 million in 1994.  Increases
in variable annuity fees in 1996 and 1995 reflect growth in average variable
annuity assets, principally due to increased market values and the receipt of
variable annuity premiums, partially offset by surrenders.  Variable annuity
assets averaged $5.70 billion during 1996, $4.65 billion during 1995 and $4.40
billion during 1994.  Variable annuity premiums, which exclude premiums
allocated to the fixed accounts of variable annuity products, totaled $919.8
million in 1996, $577.2 million in 1995 and $769.6 million in 1994.  The
increase in premiums in 1996 may be attributed, in part, to a heightened demand
for equity investments, principally as a result of generally improved market
performance.  The decline in premiums in 1995 may be attributed, in part, to
a heightened demand for fixed-rate investment options, including the fixed
accounts of variable annuities.  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.

      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 $25.4 million on
average assets managed of $2.14 billion in 1996, $26.9 million on average
assets managed of $2.07 billion in 1995 and $31.3 million on average assets
managed of $2.39 billion in 1994. Asset management fees decreased slightly in
1996, despite a modest increase in average assets managed, principally due to
changes in product mix.  The decrease in asset management fees during 1995
principally resulted from the decline in average assets managed, primarily due
to an excess of redemptions over sales.  Redemptions of mutual funds, excluding
redemptions of money market accounts, amounted to $379.9 million in 1996,
compared with $426.5 million in 1995 and $561.0 million in 1994.  Sales of
mutual funds, excluding sales of money market accounts, amounted to $223.4
million in 1996, compared with $140.2 million in 1995 and $342.6 million in
1994.  Higher mutual fund sales and lower redemptions in 1996 both reflect the
combined effects of additional advertising, the favorable performance records
of certain of the Company's mutual funds and heightened demand for equity
investments, principally as a result of improved market performance.

      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
$31.5 million in 1996, $24.1 million in 1995 and $20.8 million in 1994. 
Broker-dealer sales (mainly sales of general securities, mutual funds, and
annuities) totaled $8.75 billion in 1996, $5.67 billion in 1995 and $5.21
billion in 1994.  The significant increases in sales and net retained
commissions during 1996 reflect a greater number of registered representatives 
and higher average production, combined with generally favorable market
conditions.  Increases in net retained commissions are not proportionate to
increases in sales primarily due to differences in sales mix.

                                     14

<PAGE>
      SURRENDER CHARGES on fixed and variable annuities totaled $5.2 million
in 1996, $5.9 million in 1995 and $5.0 million in 1994.  Surrender charges
generally are assessed on annuity withdrawals at declining rates during the
first five to seven years of the contract.  Withdrawal payments, which include
surrenders and lump-sum annuity benefits, totaled $898.0 million in 1996,
$908.9 million in 1995 and $723.9 million in 1994.  These payments represent
12.4%, 15.1% and 12.5%, respectively, of average fixed and variable annuity
reserves.  Withdrawals include variable annuity payments from the separate
accounts totaling $634.1 million in 1996, $646.4 million in 1995 and $459.1
million in 1994.   Such variable annuity surrenders represent 11.2%, 14.0% and
10.5%, respectively, of average variable annuity liabilities in 1996, 1995 and
1994.  Variable annuity surrender rates increased in 1995 primarily due to
surrenders on a closed block of business, policies coming off surrender charge
restrictions and increased competition in the marketplace.  Fixed annuity
surrenders have remained relatively constant, totaling $263.8 million in 1996,
$262.4 million in 1995 and $264.8 million in 1994.  Management anticipates that
withdrawal rates will remain relatively stable for the foreseeable future. 

      GENERAL AND ADMINISTRATIVE EXPENSES totaled $80.0 million in 1996,
compared with $61.6 million in 1995 and $52.6 million in 1994.  General and
administrative expenses in 1996 include expenses related to a national
advertising campaign, as well as additional administrative expenses related to
a growing block of business.  General and administrative expenses remain
closely controlled through a company-wide cost containment program and
represent approximately 1% of average total assets.

       AMORTIZATION OF DEFERRED ACQUISITION COSTS totaled $57.5 million in
1996, $58.7 million in 1995 and $44.2 million in 1994.  The decline in
amortization for 1996 is due to lower redemptions of mutual funds from the rate
experienced in 1995, partially offset by additional fixed and variable annuity
and mutual fund sales in recent years and the subsequent amortization of
related deferred commissions and other acquisition costs.  The increase in
amortization in 1995 was primarily caused by the substantial reduction in net
realized capital losses from the level experienced in 1994. 

      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 $4.6
million in 1996, $2.7 million in 1995 and $1.2 million in 1994.  The increase
in annual commissions since 1994 reflects increased sales of annuities that
offer this commission option.  The company estimates that approximately 35% of
the average balances of its variable annuity products are currently subject to
such annual commissions.  Based on current sales, this percentage is expected
to increase in future periods.

      INCOME TAX EXPENSE totaled $24.3 million in 1996, $25.7 million in 1995
and $22.7 million in 1994, representing effective tax rates of 35% in 1996, 40%
in 1995 and 34% in 1994.  The increase in the effective tax rate in 1995 was
due to a prior year tax settlement.  Without such payment, the effective tax
rate would have been 33%.
                                     15

<PAGE>
FINANCIAL CONDITION AND LIQUIDITY

      SHAREHOLDER'S EQUITY increased by $43.2 million to $485.3 million at
September 30, 1996 from $442.1 million at September 30, 1995, primarily as a
result of the $45.1 million of net income recorded in 1996 and a $0.2 million
reduction of net unrealized losses on debt and equity securities available for
sale charged directly to shareholder's equity.  In addition, the Company
received a contribution of capital of $27.4 million in December 1995 and paid
a dividend of $29.4 million in March 1996.  

      TOTAL ASSETS increased by $1.42 billion to $9.20 billion at September 30,
1996 from $7.78 billion at September 30, 1995, principally due to a $1.08
billion increase in the separate accounts for variable annuities and a $214.3
million increase in invested assets.  

      INVESTED ASSETS at year end totaled $2.33 billion in 1996, compared with
$2.11 billion in 1995. This $214.3 million increase primarily resulted from a
$208.2 million increase in amounts receivable from brokers for sales of
securities.  

      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.  Effective
December 1, 1995, pursuant to guidelines issued by the Financial Accounting
Standards Board, the Company 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.  Accordingly,
the Company no longer classifies a portion of its Bond Portfolio as held for
investment. 
      
      THE BOND PORTFOLIO had an aggregate amortized cost that exceeded its fair
value by $13.8 million at September 30, 1996, compared with $3.7 million at
September 30, 1995 (including net unrealized losses of $10.8 million on the
portion of the portfolio that was designated as available for sale at September
30, 1995).  The increase in net unrealized losses on the Bond Portfolio since
September 30, 1995, principally reflects the higher prevailing interest rates
at September 30, 1996 and their corresponding effect on the fair value of the
Bond Portfolio.

      All of the Bond Portfolio ($1.99 billion at amortized cost, excluding
$9.1 million of redeemable preferred stocks) at September 30, 1996 was rated
by Standard & Poor's Corporation ("S&P"), Moody's Investors Service
("Moody's"), Duff and Phelps Credit Rating Co. ("D&P"), Fitch Investor Service,
Inc. ("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 September 30, 1996, approximately
$1.83 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 $1.05 billion of
U.S. government/agency securities and MBSs.

      At September 30, 1996, the Bond Portfolio included $160.8 million (fair
value, $160.2 million) of bonds not rated investment grade by S&P, Moody's, 
D&P, Fitch or the NAIC.  Based on their September 30, 1996 amortized cost,
these non-investment-grade bonds accounted for 1.8% of the Company's total
assets and 6.9% of its invested assets.
                                     16
<PAGE>
      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 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 September 30, 1996.

The table on the following page summarizes the Company's rated bonds by rating
classification as of September 30, 1996.




                                     17







































<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/D&P/Fitch          D&P/Fitch, by NAIC Category                               Total 
----------------------------------------------  ----------------------------------- -----------------------------------
 S&P/(Moody's)/                      Estimated      NAIC                  Estimated             Percent of    Estimated
  [D&P]/{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-}         $ 1,345,960  $ 1,333,515       1    $   125,115  $   125,046   $ 1,471,075     62.81%  $ 1,458,561
BBB+ to BBB-
  (Baal to Baa3)
  [BBB+ to BBB-]
  {BBB+ to BBB-}          226,312      226,191       2        133,773      133,698       360,085     15.38       359,889
BB+ to BB-
  (Ba1 to Ba3)
  [BB+ to BB-] 
  {BB+ to BB-}             30,023       30,368       3          5,597        5,597        35,620      1.52        35,965
B+ to B-
  (B1 to B3)
  [B+ to B-]
  {B+ to B-}               87,580       90,468       4         17,136       18,089       104,716      4.47       108,557
CCC+ to C
  (Caa to C)
  [CCC]
  {CCC+ to C-}             19,847       15,018       5            ---          ---        19,847      0.85        15,018
C1 to D
  [DD]
  {D}                         ---          ---       6            618          618           618      0.03           618
                      -----------  -----------            -----------  -----------   -----------             -----------
Total rated issues    $ 1,709,722  $ 1,695,560            $   282,239  $   283,048   $ 1,991,961             $ 1,978,608
                      ===========  ===========            ===========  ===========   ===========             ===========

Footnotes appear on the following page.
</TABLE>

                                                           18














<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.  D&P 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, D&P 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/D&P/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.



                                     19
























<PAGE>
      SENIOR SECURED LOANS  ("Secured Loans") are included in the Bond
Portfolio and their amortized cost aggregated $200.8 million at September 30,
1996.  Secured Loans are senior to subordinated debt and equity, and are
secured by assets of the issuer.  At September 30, 1996, Secured Loans
consisted of loans to 52 borrowers spanning 20 industries, with 22% of these
assets (at amortized cost) concentrated in the leisure industry.  No other
industry concentration constituted more than 9% 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, D&P, Fitch
or by the Company or the NAIC, pursuant to comparable statutory rating
guidelines established by the NAIC.

      MORTGAGE LOANS aggregated $98.3 million at September 30, 1996 and
consisted of 17 first mortgage loans with an average loan balance of
approximately $5.8 million, collateralized by properties located in 11 states.
At September 30, 1996, the Company had no concentrations in any single state
or in any single type of property that amounted to more than 23% of the
mortgage loan portfolio.  At September 30, 1996, there were four loans with
outstanding balances of $10 million or more, the largest of which had a balance
of approximately $21 million, which collectively aggregated approximately 61%
of the portfolio.  At September 30, 1996, approximately 33% of the mortgage
loan portfolio consisted of loans with balloon payments due before October 1,
1999. At September 30, 1996, loans delinquent by more than 90 days totaled $1.5
million (1.6% of total mortgages).  There were no loans foreclosed upon and
transferred to real estate in the balance sheet during 1996.  At September 30,
1996, mortgage loans having an aggregate carrying value of $21.3 million had
been previously restructured.  Of this amount, $16.5 million was restructured
during 1995 and $4.8 million was restructured during 1992.  No mortgage loans
were restructured during 1996.
  
      Approximately 62% of the mortgage loans in the portfolio at September 30,
1996 were seasoned loans underwritten to the Company's standards and purchased
at or near par from another financial institution which was downsizing its
portfolio.  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.

      REAL ESTATE aggregated $39.7 million at September 30, 1996 and consisted
of non-income producing land in the Phoenix, Arizona metropolitan area.  Of
this amount, the Company has undertaken to dispose of $28.4 million during the
next year, either to affiliated or nonaffiliated parties, and SunAmerica Inc.,
the ultimate parent, has guaranteed that the Company will receive its statutory
carrying value of these assets.
                                     20
<PAGE>

      OTHER INVESTED ASSETS aggregated $77.9 million at September 30, 1996,
including $45.1 million of investments in limited partnerships and an aggregate
of $32.8 million of miscellaneous investments, including collateralized bond
obligations, CMO residuals, policy loans, separate account investments, and
leveraged leases.  The Company's 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 competitive conditions within the industry.  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 63% of the Company's fixed annuity and GIC reserves
had surrender penalties or other restrictions at September 30, 1996.
      
      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 September 30, 1996 the weighted
average life of the Company's investments was approximately 5 years and the
duration was approximately 3.

      The Company also seeks to provide liquidity from time to time by using
reverse repurchase agreements ("Reverse Repos"), Dollar Rolls and by investing
in MBSs.  It also seeks to enhance its spread income by using Reverse Repos and
Dollar Rolls.  Reverse Repos involve a sale of securities and an agreement to
repurchase the same securities at a later date at an agreed upon price and are
generally over-collateralized.  Dollar 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 and
Reverse Repos is counterparty risk.  The Company believes, however, that the
                                     21
<PAGE>
counterparties to its Dollar Rolls and Reverse Repos 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.  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.  

      DEFAULTED INVESTMENTS, comprising all investments that are in default as
to the payment of principal or interest, totaled $3.1 million at September 30,
1996 (at amortized cost, with a fair value of $2.9 million) including $1.6
million of bonds and notes and $1.5 million of mortgage loans.  At September
30, 1996, defaulted investments constituted 0.1% of total invested assets.  At
September 30, 1995, defaulted investments totaled $5.0 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 of cash and short-term investments, Reverse
Repo capacity on invested assets and, if required, proceeds from invested asset
sales.  At September 30, 1996, approximately $936.8 million of the Company's
Bond Portfolio had an aggregate unrealized gain of $20.1 million, while
approximately $1.06 billion of the Bond Portfolio had an aggregate unrealized 
loss of $33.9 million.  In addition, the Company's investment portfolio
currently provides approximately $21.6 million of monthly cash flow from
scheduled principal and interest payments.
                                     22
<PAGE>
      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.


ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

      The Company's consolidated financial statements begin on page F-3. 
Reference is made to the Index to Financial Statements on page F-1 herein.


ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND    
         FINANCIAL DISCLOSURE

      None.







                                     23













<PAGE>
<TABLE>
                                  PART III

Item 10.  DIRECTORS AND EXECUTIVE OFFICERS

      The directors and principal officers of Anchor National Life Insurance
Company (the "Company") as of December 19, 1996 are listed below, together with
information as to their ages, dates of election and principal business
occupation during the last five years (if other than their present business
occupation).
<CAPTION>
                                                             Other Positions and
                                                Year           Other Business
                            Present             Assumed      Experience Within
    Name               Age  Position(s)         Position(s)     Last Five Years**    From-To
-------------          ---  -----------         -----------  ------------------      -------
<S>                    <C>  <C>                 <C>          <C>                     <C>
Eli Broad*             63   Chairman, Chief     1994         Cofounded SunAmerica
                            Executive Officer                Inc. ("SAI") in 1957
                            and President of 
                            the Company 
                            Chairman, Chief     1986
                            Executive Officer   
                            and President of 
                            SAI

Joseph M. Tumbler*     48   Executive Vice      1996         President and Chief     1989-1995
                            President                        Executive Officer,
                            of the Company                   Providian
                            Vice Chairman       1995         Capital Management
                            of SAI

Jay S. Wintrob*        39   Executive Vice      1991         Senior Vice President   1989-1991
                            President of the                 (Joined SAI in 1987)
                            Company 
                            Vice Chairman of    1995
                            SAI

James R. Belardi*      39   Senior Vice         1992         Vice President and      1989-1992
                            President of the                 Treasurer (Joined SAI
                            Company                          in 1986)
                            Executive Vice      1995
                            President of SAI

Jana Waring Greer*     44   Senior Vice         1991         (Joined SAI in 1974)
                            President of the                 
                            Company and SAI

Peter McMillan, III*   39   Executive Vice      1994         Senior Vice President,  1989-1994
                            President and                    SunAmerica Investments,
                            Chief Investment                 Inc.
                            Officer of 
                            SunAmerica
                            Investments, Inc. 
                            
--------------------------------------
*   Also serves as a director
**  Unless otherwise indicated, officers and positions are with SunAmerica Inc.

                                              24

<PAGE>
<CAPTION>
                                                             
                                                                                        
                                                            Other Positions and
                                               Year         Other Business
                           Present             Assumed      Experience Within
    Name              Age  Position(s)         Position(s)  Last Five Years**       From-To
-------------         ---  -----------         -----------  -----------------       -------
<S>                   <C>  <C>                 <C>          <C>                     <C>
Scott L. Robinson*    50   Senior Vice         1991         (Joined SAI in 1978)
                           President of the                 
                           Company                              
                           Senior Vice 
                           President and
                           Controller of SAI

Lorin M. Fife*        43   Senior Vice         1994         Vice President and      1994-1995
                           President,                       General Counsel-
                           General Counsel                  Regulatory Affairs 
                           and Assistant                    of SAI
                           Secretary of                     Vice President and      1989-1994
                           the Company                      Associate General
                           Senior Vice         1995         Counsel of SAI
                           President and                    (Joined SAI in 1989)
                           General Counsel-
                           Regulatory Affairs
                           of SAI

Susan L. Harris*      39   Senior Vice         1994         Vice President,         1994-1995
                           President and                    General Counsel-
                           Secretary of the                 Corporate Affairs and
                           Company                          Secretary of SAI
                           Senior Vice         1995         Vice President,         1989-1994
                           President,                       Associate General
                           General Counsel-                 Counsel and Secretary
                           Corporate Affairs                of SAI (Joined SAI
                           and Secretary of                 in 1985)
                           SAI

James Rowan*          34   Senior Vice         1996         Vice President          1993-1995
                           President of the                 Assistant to the        1992
                           Company and SAI                  Chairman                       
                                                            Senior Vice President,  1990-1992
                                                            Security Pacific Corp.         

N. Scott Gillis       43   Senior Vice         1994         Vice President and      1989-1994
                           President and                    Controller, SunAmerica
                           Controller of the                Life Companies
                           Company                          (Joined SAI in 1985)           
                                                                                           
Edwin R. Reoliquio    39   Senior Vice         1995         Vice President and      1990-1995 
                           President and                    Actuary, SunAmerica
                           Chief Actuary                    Life Companies
                           of the Company
--------------------------------------
*   Also serves as a director
**  Unless otherwise indicated, officers and positions are with SunAmerica Inc.
                                              25
<PAGE>
<CAPTION>
                                                            
                                                            Other Positions and
                                               Year         Other Business
                           Present             Assumed      Experience Within
    Name              Age  Position(s)         Position(s)  Last Five Years**       From-To
-------------         ---  -----------         -----------  -----------------       -------
<S>                   <C>  <C>                 <C>          <C>                     <C>
Victor E. Akin        32   Senior Vice         1996         Vice President,         1995-1996
                           President of                     SunAmerica Life
                           the Company                      Companies (SLC)
                                                            Director, SLC           1994-1995
                                                            Manager, SLC            1993-1994
                                                            Actuary, Milliman       1992-1993
                                                            and Robertson
                                                            Consultant, Chalke      1991-1992
                                                            Inc.
                           


--------------------------------------
*   Also serves as a director
**  Unless otherwise indicated, officers and positions are with SunAmerica Inc.            

</TABLE>

                                              26




























<PAGE>

ITEM 11.  EXECUTIVE COMPENSATION

      All of the executive officers of the Company also serve as employees of
SunAmerica Inc. or its affiliates and receive no compensation directly from the
Company.  Some of the officers also serve as officers of other companies
affiliated with the Company.  Allocations have been made as to each
individual's time devoted to his or her duties as an executive officer of the
Company.

      The following table shows the cash compensation paid or earned, based on
these allocations, to the chief executive officer and top four executive
officers of the Company whose allocated compensation exceeds $100,000 and to
all executive officers of the Company as a group for services rendered in all
capacities to the Company during 1996:

    Name of Individual or                   Capacities In      Allocated Cash
          Number in Group                    Which Served        Compensation
    ---------------------       -------------------------      --------------
    Eli Broad                   Chairman, Chief Executive          $1,444,146
                                 Officer and President
    Joseph M. Tumbler           Executive Vice President              834,708
    Jay S. Wintrob              Executive Vice President              836,327
    James R. Belardi            Senior Vice President                 341,329
    Jana Waring Greer           Senior Vice President                 420,171
    All Executive Officers
      as a Group (12)                                              $5,056,560
                                                                  ===========

    Directors of the Company who are also employees of SunAmerica Inc. or its
affiliates receive no compensation in addition to their compensation as
employees of SunAmerica Inc. or its affiliates.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

      No shares of the Company are owned by any executive officer or director. 
The Company is an indirect wholly owned subsidiary of SunAmerica Inc.  Except
for Mr. Broad, the percentage of shares of SunAmerica Inc. beneficially owned
by any director does not exceed one percent of the class outstanding.  At
November 30, 1996, Mr. Broad was the beneficial owner of 5,930,156 shares of
Common Stock (approximately 5.3% of the class outstanding) and 9,160,294 shares
of Class B Common Stock (approximately 84.4% of the class outstanding).  Of the
Common Stock, 715,872 shares represent restricted shares granted under the
Company's employee stock plans as to which Mr. Broad has no investment power;
and 3,605,700 shares represent employee stock options held by Mr. Broad which
are or will become exercisable on or before February 28, 1997 and as to which
he has no voting or investment power.  Of the Class B Stock, 8,456,140 shares
are held directly by Mr. Broad; and 704,154 shares are registered in the name
of a corporation as to which Mr. Broad exercises sole voting and dispositive
powers.  At November 30, 1996, all directors and officers as a group
beneficially owned 9,197,722 shares of Common Stock (approximately 8.1% of the
class outstanding) and 9,160,294 shares of Class B Common Stock (approximately
84.4% of the class outstanding).

Item 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

      None.

                                     27

<PAGE>

                                   PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENTS, FINANCIAL STATEMENT SCHEDULES AND  
          REPORTS ON FORM 8-K

FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES

      Reference is made to the index set forth on page F-1 of this report.

EXHIBITS

Exhibit
      No.                                  Description
-------                                    -----------
  3(a)      Amended and Restated Articles of Incorporation and Articles of
            Redomestication, filed with the Arizona Department of Insurance on
            December 22, 1995, is incorporated herein by reference to Exhibit
            3(a) to the Company's quarterly report on Form 10-Q for quarter
            ended December 31, 1995, filed February 14, 1996.
  3(b)      Amended and Restated Bylaws, as adopted January 1, 1996, is
            incorporated herein by reference to Exhibit 3(b) to the Company's
            quarterly report on Form 10-Q for quarter ended December 31, 1995,
            filed February 14, 1996.
  4(a)      Amended and Restated Articles of Incorporation and Articles of
            Redomestication, filed with the Arizona Department of Insurance on
            December 12, 1996.  See Exhibit 3(a).
  4(b)      Amended and Restated Bylaws as adopted January 1, 1996.  See
            Exhibit 3(b).
 10(a)      Subordinated Loan Agreement for Equity Capital, dated as of August
            23, 1993, between the Company's subsidiary, Royal Alliance, and
            SAI, defining SAI's rights with respect to the 7% notes due August
            22, 1996, is incorporated herein by reference to Exhibit 10(b) to
            the Company's Form 10-K, filed December 21, 1993.
 10(b)      Subordinated Loan Agreement for Equity Capital, dated as of June
            30, 1992, between the Company's subsidiary, SACS, and SAI, defining
            SAI's rights with respect to the 7% notes due June 29, 1996, is
            incorporated herein by reference to Exhibit 10(d) to the Company's
            Form 10-K, filed December 21, 1993.
 10(c)      Subordinated Loan Agreement for Equity Capital, dated as of May 29,
            1992, between the Company's subsidiary, SACS, and SAI, defining
            SAI's rights with respect to the 7% notes due May 28, 1996, is
            incorporated herein by reference to Exhibit 10(e) to the Company's
            Form 10-K, filed December 21, 1993.
 10(d)      Subordinated Loan Agreement for Equity Capital, dated as of March
            16, 1992, between the Company's subsidiary, SACS, and SAI, defining
            SAI's rights with respect to the 7% notes due March 15, 1996, is
            incorporated herein by reference to Exhibit 10(f) to the Company's
            Form 10-K, filed December 21, 1993.
 10(e)      Subordinated Loan Agreement for Equity Capital, dated as of January
            14, 1992, between the Company's subsidiary, SACS, and SAI, defining
            SAI's rights with respect to the 7% notes due January 13, 1996, is
            incorporated herein by reference to Exhibit 10(g) to the Company's
            Form 10-K, filed December 21, 1993.
 10(f)      Amendment to the Subordinated Loan Agreement for Equity Capital,
            dated as of August 22, 1996, between the Company's subsidiary,
            SACS, and SAI, extending the maturity date to September 30, 1999,
            of a Subordinated Loan Agreement for Equity Capital, dated as of
            September 30, 1992, which defined SAI's rights of the 9% notes due
            September 29, 1996.
                                     28
<PAGE>
Exhibit
      No.                                  Description
-------                                    -----------
 10(g)      Subordinated Loan Agreement for Equity Capital, dated as of 
            December 14, 1994, between the Company's subsidiary, SACS, and SAI,
            defining SAI's rights with respect to the 9% notes due January 13,
            1998.
 10(h)      Subordinated Loan Agreement for Equity Capital, dated as of April
            20, 1995, between the Company's subsidiary, SACS, and SAI, defining
            SAI's rights with respect to the 9% notes due May 27, 1998.
 10(i)      Subordinated Loan Agreement for Equity Capital, dated as of May 30,
            1996, between the Company's subsidiary, SACS, and SAI, defining
            SAI's rights with respect to the 9% notes due June 29, 1998.
 10(j)      Subordinated Loan Agreement for Equity Capital, dated as of
            February 24, 1992, between the Company's subsidiary, SACS, and SAI,
            defining SAI's rights with respect to the 7% notes due March 15,
            1997.
 10(k)      Subordinated Loan Agreement for Equity Capital, dated as of July
            24, 1996, between the Company's subsidiary, Royal Alliance, and
            SAI, defining SAI's rights with respect to the 9% notes due August
            23, 1999.
 10(l)      Amendment to the Subordinated Loan Agreement for Equity Capital,
            dated as of September 3, 1996, between the Company's subsidiary,
            SunAmerica Asset Management, and SAI, extending the maturity date
            to September 13, 1999 of a Subordinated Loan Agreement for Equity
            Capital, dated as of September 3, 1993, which defined SAI's rights
            of the 7% notes due September 13, 1996.   
    21      Subsidiaries of the Company.
    27      Financial Data Schedule



REPORTS ON FORM 8-K

No Current Report on Form 8-K was filed during the three months ended September
30, 1996.

                                     29



















<PAGE>
<TABLE>

                                 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

                              By/s/  SCOTT L. ROBINSON
                              --------------------------------------          
                              Scott L. Robinson
December 19, 1996             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:

<CAPTION>
            Signature               Title                              Date
            ---------               -----                              ----
<S>        <C>                     <C>                                <C>
/s/   ELI BROAD                     Chairman, Chief Executive          December 19, 1996
------------------------------      Officer and President              -----------------
      Eli Broad                     (Principal Executive Officer)

/s/   SCOTT L. ROBINSON             Senior Vice President and          December 19, 1996 -
-----------------------------       Director (Principal                -----------------
      Scott L. Robinson             Financial Officer)

/s/   N. SCOTT GILLIS               Senior Vice President and          December 19, 1996
------------------------------      Controller (Principal              -----------------
      N. Scott Gillis               Accounting Officer)

/s/   JOSEPH M. TUMBLER             Executive Vice President           December 19, 1996
------------------------------      and Director                       -----------------
      Joseph M. Tumbler

/s/   JAY S. WINTROB                Executive Vice President           December 19, 1996
------------------------------      and Director                       -----------------
      Jay S. Wintrob

/s/   JAMES R. BELARDI              Senior Vice President,             December 19, 1996
------------------------------      Treasurer and Director             -----------------
      James R. Belardi

/s/   LORIN M. FIFE                 Senior Vice President,             December 19, 1996
------------------------------      General Counsel, Assistant         -----------------
      Lorin M. Fife                 Secretary and Director  
                                          
/s/   JANA W. GREER                 Senior Vice President              December 19, 1996
------------------------------      and Director                       -----------------
      Jana W. Greer

/s/   SUSAN L. HARRIS               Senior Vice President,             December 19, 1996
------------------------------      Secretary and Director             -----------------
      Susan L. Harris
                                          30
<PAGE>
            Signature               Title                             Date
            ---------               -----                             ----
<S>        <C>                     <C>                               <C>
/s/   JAMES W. ROWAN                Senior Vice President             December 19, 1996
------------------------------      and Director                      -----------------
      James W. Rowan

/s/   EDWIN R. REOLIQUIO            Senior Vice President             December 19, 1996
------------------------------      and Chief Actuary                 -----------------
      Edwin R. Reoliquio.

/s/   PETER McMILLAN                Director                          December 19, 1996
------------------------------                                        -----------------
      Peter McMillan

</TABLE>



<PAGE>
                   ANCHOR NATIONAL LIFE INSURANCE COMPANY

                 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS


                                                                  Page(s)
                                                                  -------

Report of Independent Accountants                                 F-2

Consolidated Balance Sheet as of September 30, 1996 and 1995      F-3 through
                                                                  F-4

Consolidated Income Statement for the years ended
      September 30, 1996, 1995 and 1994                           F-5

Consolidated Statement of Cash Flows for the years ended
      September 30, 1996, 1995 and 1994                           F-6 through
                                                                  F-7

Notes to Consolidated Financial Statements                        F-8 through
                                                                  F-26




































                                     F-1



<PAGE>






                      REPORT OF INDEPENDENT ACCOUNTANTS


      
To the Board of Directors and Shareholder of
Anchor National Life Insurance Company


In our opinion, the accompanying consolidated balance sheet and the related
consolidated income statement and statement of cash flows present fairly, in
all material respects, the financial position of Anchor National Life Insurance
Company and its subsidiaries at September 30, 1996 and 1995, and the results
of their operations and their cash flows for each of the three years in the
period ended September 30, 1996, in conformity with generally accepted
accounting principles.  These financial statements are the responsibility of
the Company's management; our responsibility is to express an opinion on these
financial statements based on our audits.  We conducted our audits of these
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement.  An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation.  We believe that our audits provide a
reasonable basis for the opinion expressed above.

As discussed in Note 2, the Company adopted Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes," in fiscal 1994.


Price Waterhouse LLP
Los Angeles, California
November 8, 1996


                                     F-2









<PAGE>
<TABLE>
                          ANCHOR NATIONAL LIFE INSURANCE COMPANY

                                CONSOLIDATED BALANCE SHEET


<CAPTION>
                                                                       September 30,
                                                      ------------------------------
                                                               1996             1995
                                                     --------------   --------------
<S>                                                 <C>              <C>            
ASSETS

Investments:
  Cash and short-term investments                     $  122,058,000  $  249,209,000  
  Bonds, notes and redeemable
   preferred stocks:
    Available for sale, at fair value 
      (amortized cost: 1996, $2,001,024,000;
      1995, $1,500,062,000)                            1,987,271,000   1,489,213,000  
    Held for investment, at amortized cost
      (fair value:  1995, $165,004,000)                          ---     157,901,000  
  Mortgage loans                                          98,284,000      94,260,000  
  Common stocks, at fair value (cost:  
    1996, $2,911,000; 1995, $6,576,000)                    3,970,000       4,097,000  
  Real estate                                             39,724,000      55,798,000  
  Other invested assets                                   77,925,000      64,430,000
                                                      --------------  --------------
  Total investments                                    2,329,232,000   2,114,908,000  

Variable annuity assets                                6,311,557,000   5,230,246,000  
Receivable from brokers for sales
  of securities                                           52,348,000             ---
Accrued investment income                                 19,675,000      14,192,000  
Deferred acquisition costs                               443,610,000     383,069,000  
Other assets                                              48,113,000      41,282,000
                                                      --------------  --------------

TOTAL ASSETS                                          $9,204,535,000  $7,783,697,000
                                                      ==============  ==============  












                                            F-3





<PAGE>
                          ANCHOR NATIONAL LIFE INSURANCE COMPANY

                          CONSOLIDATED BALANCE SHEET (Continued)
<CAPTION>

                                                                       September 30,
                                                      ------------------------------
                                                                1996            1995
                                                      --------------  --------------
<S>                                                  <C>             <C>            
LIABILITIES AND SHAREHOLDER'S EQUITY

Reserves, payables and accrued liabilities:
  Reserves for fixed annuity contracts                $1,789,962,000  $1,497,052,000  
  Reserves for guaranteed investment
    contracts                                            415,544,000     277,095,000
  Payable to brokers for purchases of
    securities                                                   ---     155,861,000  
  Income taxes currently payable                          21,486,000      15,720,000  
  Other liabilities                                       74,710,000      56,372,000  
                                                      --------------  --------------
  Total reserves, payables
    and accrued liabilities                            2,301,702,000   2,002,100,000  
                                                      --------------  --------------
Variable annuity liabilities                           6,311,557,000   5,230,246,000  
                                                      --------------  --------------
Subordinated notes payable to Parent                      35,832,000      35,832,000  
                                                      --------------  --------------
Deferred income taxes                                     70,189,000      73,459,000  
                                                      --------------  --------------
Shareholder's equity:
  Common Stock                                             3,511,000       3,511,000  
  Additional paid-in capital                             280,263,000     252,876,000  
  Retained earnings                                      207,002,000     191,346,000  
  Net unrealized losses on debt and equity
    securities available for sale                         (5,521,000)     (5,673,000)
                                                      --------------  --------------
  Total shareholder's equity                             485,255,000     442,060,000  
                                                      --------------  --------------
TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY            $9,204,535,000  $7,783,697,000  
                                                      ==============  ==============
</TABLE>











                                  See accompanying notes


                                            F-4




<PAGE>
<TABLE>
                          ANCHOR NATIONAL LIFE INSURANCE COMPANY

                               CONSOLIDATED INCOME STATEMENT

<CAPTION>
                                                             Years ended September 30,
                                     -------------------------------------------------
                                              1996              1995              1994
                                     -------------     -------------     -------------
<S>                                 <C>               <C>               <C>           
Investment income                    $ 164,631,000     $ 129,466,000     $ 127,758,000
                                     -------------     -------------     -------------
Interest expense on:
  Fixed annuity contracts              (82,690,000)      (72,975,000)      (66,311,000)
  Guaranteed investment contracts      (19,974,000)       (3,733,000)              ---
  Senior indebtedness                   (2,568,000)         (227,000)          (71,000)
  Subordinated notes payable
    to Parent                           (2,556,000)       (2,448,000)       (2,380,000)
                                     -------------      ------------     -------------
  Total interest expense              (107,788,000)      (79,383,000)      (68,762,000)
                                     -------------      ------------     -------------
NET INVESTMENT INCOME                   56,843,000        50,083,000        58,996,000
                                     -------------      ------------     -------------
NET REALIZED INVESTMENT LOSSES         (13,355,000)       (4,363,000)      (33,713,000)
                                     -------------      ------------     -------------
Fee income:
  Variable annuity fees                103,970,000        84,171,000        79,101,000
  Asset management fees                 25,413,000        26,935,000        31,302,000
  Net retained commissions              31,548,000        24,108,000        20,822,000
                                     -------------      ------------     -------------
TOTAL FEE INCOME                       160,931,000       135,214,000       131,225,000
                                     -------------     -------------     -------------
Other income and expenses:
  Surrender charges                      5,184,000         5,889,000         5,034,000
  General and administrative
    expenses                           (80,048,000)      (61,629,000)      (52,636,000)
  Amortization of deferred
    acquisition costs                  (57,520,000)      (58,713,000)      (44,195,000)
  Annual commissions                    (4,613,000)       (2,658,000)       (1,158,000)
  Other, net                             1,886,000         1,174,000         3,767,000
                                     -------------     -------------     -------------
TOTAL OTHER INCOME AND EXPENSES       (135,111,000)     (115,937,000)      (89,188,000)
                                     -------------     -------------     -------------
PRETAX INCOME                           69,308,000        64,997,000        67,320,000
Income tax expense                     (24,252,000)      (25,739,000)      (22,705,000)
                                     -------------     -------------     -------------
INCOME BEFORE CUMULATIVE EFFECT
  OF CHANGE IN ACCOUNTING FOR
  INCOME TAXES                          45,056,000        39,258,000        44,615,000

Cumulative effect of change
  in accounting for income taxes               ---               ---       (20,463,000)
                                     -------------     -------------     -------------
NET INCOME                           $  45,056,000     $  39,258,000     $  24,152,000
                                     =============     =============     =============


                                  See accompanying notes
                                            F-5
</TABLE>
<PAGE>
<TABLE>

                          ANCHOR NATIONAL LIFE INSURANCE COMPANY

                           CONSOLIDATED STATEMENT OF CASH FLOWS

<CAPTION>
                                                             Years ended September 30,
                                     -------------------------------------------------
                                              1996              1995              1994
                                     -------------     -------------     -------------
<S>                                 <C>               <C>               <C>           
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income                           $  45,056,000     $  39,258,000     $  24,152,000
Adjustments to reconcile net
  income to net cash provided
  by operating activities:
     Interest credited to:
       Fixed annuity contracts          82,690,000        72,975,000        66,311,000
       Guaranteed investment contracts  19,974,000         3,733,000               ---
     Net realized investment losses     13,355,000         4,363,000        33,713,000
     Accretion of net discounts
       on investments                   (8,976,000)       (6,865,000)       (2,050,000)
     Amortization of goodwill            1,169,000         1,168,000         1,169,000
     Provision for deferred
       income taxes                     (3,351,000)       (1,489,000)       19,395,000
     Cumulative effect of change
       in accounting for income taxes          ---               ---        20,463,000
Change in:
  Accrued investment income             (5,483,000)        3,373,000        (1,310,000)
  Deferred acquisition costs           (60,941,000)       (7,180,000)      (34,612,000)
  Other assets                          (8,000,000)        7,047,000         5,133,000
  Income taxes currently payable         5,766,000         3,389,000         6,559,000
  Other liabilities                      5,474,000         4,063,000            46,000
Other, net                                (129,000)            7,000           360,000
                                      ------------      ------------      ------------
NET CASH PROVIDED BY OPERATING
  ACTIVITIES                            86,604,000       123,842,000       139,329,000
                                      ------------      ------------      ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Premium receipts on: 
     Fixed annuity contracts           651,649,000       245,320,000       138,526,000
     Guaranteed investment contracts   134,967,000       275,000,000               ---
  Net exchanges to (from) the fixed
     accounts of variable annuity
     contracts                        (236,705,000)       10,475,000       (29,286,000)
  Withdrawal payments on: 
     Fixed annuity contracts          (173,489,000)     (237,977,000)     (269,412,000)
     Guaranteed investment contracts   (16,492,000)       (1,638,000)              ---
  Claims and annuity payments on
     fixed annuity contracts           (31,107,000)      (31,237,000)      (31,146,000)
  Net receipts from (repayments of) 
     other short-term financings      (119,712,000)        3,202,000      (166,685,000)
  Capital contribution received         27,387,000               ---               ---
  Dividend paid                        (29,400,000)              ---               ---
                                     -------------      ------------     -------------
NET CASH PROVIDED (USED) BY
  FINANCING ACTIVITIES                 207,098,000       263,145,000      (358,003,000)
                                     -------------      ------------     -------------

                                            F-6
</TABLE>
<PAGE>
<TABLE>
                          ANCHOR NATIONAL LIFE INSURANCE COMPANY

                     CONSOLIDATED STATEMENT OF CASH FLOWS (Continued)

<CAPTION>
                                                             Years ended September 30,
                                   ---------------------------------------------------
                                              1996              1995              1994
                                   ---------------   ---------------   ---------------
<S>                               <C>               <C>               <C>             
CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of:
    Bonds, notes and redeemable
       preferred stocks            $(1,937,890,000)  $(1,556,586,000)  $(1,197,743,000)
    Mortgage loans                     (15,000,000)              ---       (10,666,000)
    Other investments, excluding
       short-term investments          (36,770,000)      (13,028,000)      (26,317,000)
  Sales of: 
    Bonds, notes and redeemable
       preferred stocks              1,241,928,000     1,026,078,000       877,068,000
    Real estate                            900,000        36,813,000        33,443,000
    Other investments, excluding
       short-term investments            4,937,000         5,130,000         2,353,000
  Redemptions and maturities of: 
    Bonds, notes and redeemable
       preferred stocks                288,969,000       178,688,000       173,763,000
    Mortgage loans                      11,324,000        14,403,000        10,087,000
    Other investments, excluding
          short-term investments        20,749,000        13,286,000        13,500,000
                                     -------------     -------------     -------------
NET CASH USED BY INVESTING
  ACTIVITIES                          (420,853,000)     (295,216,000)     (124,512,000)
                                     -------------     -------------     -------------
NET INCREASE (DECREASE) IN CASH
  AND SHORT-TERM INVESTMENTS          (127,151,000)       91,771,000      (343,186,000)

CASH AND SHORT-TERM INVESTMENTS
  AT BEGINNING OF PERIOD               249,209,000       157,438,000       500,624,000
                                     -------------     -------------     -------------
CASH AND SHORT-TERM INVESTMENTS
  AT END OF PERIOD                   $ 122,058,000     $ 249,209,000     $ 157,438,000
                                     =============     =============     =============

Supplemental cash flow information:

  Interest paid on indebtedness      $   5,982,000     $   3,235,000     $   1,175,000
                                     =============     =============     =============
  Net income taxes paid (recovered)  $  22,031,000     $  23,656,000     $  (3,328,000)
                                     =============     =============     =============

                                  See accompanying notes
                                            F-7
</TABLE>
<PAGE>
                   ANCHOR NATIONAL LIFE INSURANCE COMPANY

                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



1.    NATURE OF OPERATIONS

      Anchor National Life Insurance Company (the "Company") is a wholly owned
      indirect subsidiary of SunAmerica, Inc. (the "Parent").  The Company is
      an Arizona-domiciled life insurance company and, on a consolidated basis,
      conducts its business through three segments:  annuity operations, asset
      management operations and broker-dealer operations.  Annuity operations
      include the sale and administration of fixed and variable annuities and
      guaranteed investment contracts.  Asset management operations, which
      include the sale and management of mutual funds, is conducted by
      SunAmerica Asset Management Corp.  Broker-dealer operations include the
      sale of securities and financial services products, and is conducted by
      Royal Alliance Associates, Inc.

      The operations of the Company are influenced by many factors, including
      general economic conditions, monetary and fiscal policies of the federal
      government, and policies of state and other regulatory authorities.  The
      level of sales of the Company's financial products is influenced by many
      factors, including general market rates of interest; strength, weakness
      and volatility of equity market; and terms and conditions of competing
      financial products.  The Company is exposed to the typical risks normally
      associated with a portfolio of fixed-income securities, namely interest
      rate, option, liquidity and credit risks.  The Company controls its
      exposure to these risks by, among other things, closely monitoring and
      matching the duration of its assets and liabilities, monitoring and
      limiting prepayment and extension risk in its portfolio, maintaining a
      large percentage of its portfolio in highly liquid securities, and
      engaging in a disciplined process of underwriting, reviewing and
      monitoring credit risk.  The Company also is exposed to market risk, as
      market volatility may result in reduced fee income in the case of assets
      managed in mutual funds and held in separate accounts.

2.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      BASIS OF PRESENTATION: The accompanying consolidated financial statements
      have been prepared in accordance with generally accepted accounting
      principles and include the accounts of the Company and all of its wholly
      owned subsidiaries.  All significant intercompany accounts and
      transactions are eliminated in consolidation.  Certain 1995 and 1994
      amounts have been reclassified to conform with the 1996 presentation.

      The preparation of financial statements in conformity with generally
      accepted accounting principles requires the use of estimates and
      assumptions that affect the amounts reported in the financial statements
      and the accompanying notes.  Actual results could differ from those
      estimates.

                                      F-8




<PAGE>
                    ANCHOR NATIONAL LIFE INSURANCE COMPANY

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)



2.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

      RECENTLY ISSUED ACCOUNTING STANDARDS: Effective October 1, 1993, the
      Company adopted the provisions of Statement of Financial Accounting
      Standards No. 109, "Accounting for Income Taxes."  Accordingly, the
      cumulative effect of this change in accounting for income taxes was
      recorded on October 1, 1993 to increase the liability for Deferred Income
      Taxes by $20,463,000.

      INVESTMENTS:  Cash and short-term investments primarily include cash,
      commercial paper, money market investments, repurchase agreements and
      short-term bank participations.  All such investments are carried at cost
      plus accrued interest, which approximates fair value, have maturities of
      three months or less and are considered cash equivalents for purposes of
      reporting cash flows.

      Bonds, notes and redeemable preferred stocks available for sale and
      common stocks are carried at aggregate fair value and changes in
      unrealized gains or losses, net of tax, are credited or charged directly
      to shareholder's equity.  Bonds, notes and redeemable preferred stocks
      held for investment (the "Held for Investment Portfolio") are carried at
      amortized cost.  On December 1, 1995, the Company reassessed the
      appropriateness of classifying a portion of its portfolio of bonds, notes
      and redeemable preferred stocks as held for investment.  This
      reassessment was made pursuant to the provisions of "Special Report: A
      Guide to Implementation of Statement 115 on Accounting for Certain
      Investments in Debt and Equity Securities," issued by the Financial
      Accounting Standards Board in November 1995.  As a result of its
      reassessment, the Company reclassified all of its Held for Investment
      Portfolio as available for sale.  At December 1, 1995, the amortized cost
      of the Held for Investment Portfolio aggregated $157,830,000 and its fair
      value was $166,215,000.  Upon reclassification, the resulting net
      unrealized gain of $8,385,000 was credited to Net Unrealized Losses on
      Debt and Equity Securities Available for Sale in the shareholder's equity
      section of the balance sheet.

      Bonds, notes and redeemable preferred stocks are reduced to estimated net
      realizable value when necessary for declines in value considered to be
      other than temporary.  Estimates of net realizable value are subjective
      and actual realization will be dependent upon future events.

      Mortgage loans are carried at amortized unpaid balances, net of
      provisions for estimated losses.  Real estate is carried at the lower of
      cost or fair value. Other invested assets include investments in limited
      partnerships, which are accounted for by using the cost method of
      accounting; separate account investments; leveraged leases; policy loans,
      which are carried at unpaid balances; and collateralized mortgage
      obligation residuals.

      Realized gains and losses on the sale of investments are recognized in
      operations at the date of sale and are determined using the specific cost
      identification method.  Premiums and discounts on investments are
      amortized to investment income using the interest method over the
      contractual lives of the investments.

                                     F-9
<PAGE>
                   ANCHOR NATIONAL LIFE INSURANCE COMPANY

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)



2.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

      DEFERRED ACQUISITION COSTS:  Policy acquisition costs are deferred and
      amortized, with interest, over the estimated lives of the contracts in
      relation  to  the  present value  of  estimated gross profits, which are
      composed of net interest income, net realized investment gains and
      losses, variable annuity fees, surrender charges and direct
      administrative expenses.  Costs incurred to sell mutual funds are also
      deferred and amortized over the estimated lives of the funds obtained. 
      Deferred acquisition costs consist of commissions and other costs that
      vary with, and are primarily related to, the production or acquisition
      of new business.

      As debt and equity securities available for sale are carried at aggregate
      fair value, an adjustment is made to deferred acquisition costs equal to
      the change in amortization that would have been recorded if such
      securities had been sold at their stated aggregate fair value and the
      proceeds reinvested at current yields.  The change in this adjustment,
      net of tax, is included with the change in net unrealized gains or losses
      on debt and equity securities available for sale that is credited or
      charged directly to shareholder's equity.  Deferred Acquisition Costs
      have been increased by $4,200,000 at September 30, 1996, and by
      $4,600,000 at September 30, 1995 for this adjustment.

      VARIABLE ANNUITY ASSETS AND LIABILITIES:  The assets and liabilities
      resulting from the receipt of variable annuity premiums are segregated
      in separate accounts.  The Company receives administrative fees for
      managing the funds and other fees for assuming mortality and certain
      expense risks.  Such fees are included in Variable Annuity Fees in the
      income statement.

      GOODWILL:  Goodwill, amounting to $19,478,000 at September 30, 1996, is
      amortized by using the straight-line method over periods averaging 25
      years and is included in Other Assets in the balance sheet.

      CONTRACTHOLDER RESERVES:  Contractholder reserves for fixed annuity
      contracts and guaranteed investment contracts are accounted for as
      investment-type contracts in accordance with Statement of Financial
      Accounting Standards No. 97, "Accounting and Reporting by Insurance
      Enterprises for Certain Long-Duration Contracts and for Realized Gains
      and Losses from the Sale of Investments," and are recorded at accumulated
      value (premiums received, plus accrued interest, less withdrawals and
      assessed fees).

      FEE INCOME:  Variable annuity fees and asset management fees are recorded
      in income as earned.  Net retained commissions are recognized as income
      on a trade-date basis.
                                    F-10


<PAGE>

                   ANCHOR NATIONAL LIFE INSURANCE COMPANY

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)



2.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

      INCOME TAXES:  The Company is included in the consolidated federal income
      tax return of the Parent and files as a "life insurance company" under
      the provisions of the Internal Revenue Code of 1986.  Income taxes have
      been calculated as if the Company filed a separate return.  Deferred
      income tax assets and liabilities are recognized based on the difference
      between financial statement carrying amounts and income tax bases of
      assets and liabilities using enacted income tax rates and laws.










                                    F-11
































<PAGE>
<TABLE>
                   ANCHOR NATIONAL LIFE INSURANCE COMPANY

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)



3.    INVESTMENTS

      The amortized cost and estimated fair value of bonds, notes and
      redeemable preferred stocks available for sale and held for investment
      by major category follow:
<CAPTION>
                  
                                                                             
                                                                    Estimated
                                                Amortized                fair
                                                     cost               value
                                           --------------      --------------
<S>                                       <C>                 <C>            
      AT SEPTEMBER 30, 1996:

      AVAILABLE FOR SALE:
       Securities of the United States
        Government                         $  311,458,000      $  304,538,000
       Mortgage-backed securities             747,653,000         741,876,000
       Securities of public utilities           3,684,000           3,672,000
       Corporate bonds and notes              590,071,000         591,148,000
       Redeemable preferred stocks              9,064,000           8,664,000
       Other debt securities                  339,094,000         337,373,000
                                           --------------      --------------
       Total available for sale            $2,001,024,000      $1,987,271,000
                                           ==============      ==============
      AT SEPTEMBER 30, 1995:

      AVAILABLE FOR SALE:
       Securities of the United States
        Government                         $   59,756,000      $   60,258,000
       Mortgage-backed securities           1,121,064,000       1,110,676,000
       Securities of public utilities             792,000             774,000
       Corporate bonds and notes              290,924,000         288,883,000
       Redeemable preferred stocks              3,945,000           4,937,000
       Other debt securities                   23,581,000          23,685,000
                                           --------------      --------------
       Total available for sale            $1,500,062,000      $1,489,213,000
                                           ==============      ==============
      HELD FOR INVESTMENT:
       Securities of the United States 
        Government                         $   10,379,000      $   10,797,000
       Mortgage-backed securities               8,378,000           8,378,000
       Corporate bonds and notes              105,980,000         112,665,000
       Other debt securities                   33,164,000          33,164,000
                                           --------------      --------------
       Total held for investment           $  157,901,000      $  165,004,000
                                           ==============      ==============

                                    F-12





<PAGE>
                   ANCHOR NATIONAL LIFE INSURANCE COMPANY

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
      


3.    INVESTMENTS (continued)

      The amortized cost and estimated fair value of bonds, notes and
      redeemable preferred stocks available for sale by contractual maturity,
      as of September 30, 1996, follow:
<CAPTION>

                                                                    Estimated
                                                Amortized                fair
                                                     cost               value
                                           --------------      --------------
<S>                                       <C>                 <C>            
      AVAILABLE FOR SALE:
       Due in one year or less             $   18,792,000      $   19,357,000
       Due after one year through
         five years                           505,564,000         499,163,000
       Due after five years through
         ten years                            378,249,000         378,250,000
       Due after ten years                    350,766,000         348,625,000
       Mortgage-backed securities             747,653,000         741,876,000
                                           --------------      --------------
       Total available for sale            $2,001,024,000      $1,987,271,000
                                           ==============      ==============


      Actual maturities of bonds, notes and redeemable preferred stocks will
      differ from those shown above due to prepayments and redemptions.









                                    F-13


















<PAGE>
                   ANCHOR NATIONAL LIFE INSURANCE COMPANY

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)



3.    INVESTMENTS (continued)

      Gross unrealized gains and losses on bonds, notes and redeemable
      preferred stocks available for sale and held for investment by major
      category follow:
<CAPTION>
                                                   Gross               Gross
                                              unrealized          unrealized
                                                   gains              losses
                                           -------------       -------------
<S>                                       <C>                 <C>           
      AT SEPTEMBER 30, 1996:

      AVAILABLE FOR SALE:
        Securities of the United States
          Government                       $     284,000       $  (7,204,000)
        Mortgage-backed securities             7,734,000         (13,511,000)
        Securities of public utilities             1,000             (13,000)
        Corporate bonds and notes             11,709,000         (10,632,000)
        Redeemable preferred stocks               16,000            (416,000)
        Other debt securities                    431,000          (2,152,000)
                                           -------------       -------------
        Total available for sale           $  20,175,000       $ (33,928,000)
                                           =============       =============


      AT SEPTEMBER 30, 1995:

      AVAILABLE FOR SALE:
        Securities of the United States
          Government                       $     553,000       $     (51,000)
        Mortgage-backed securities            12,013,000         (22,401,000)
        Securities of public utilities               ---             (18,000)
        Corporate bonds and notes              5,344,000          (7,385,000)
        Redeemable preferred stocks              992,000                 ---
        Other debt securities                    104,000                 ---
                                           -------------       -------------
        Total available for sale           $  19,006,000       $ (29,855,000)
                                           =============       =============
      HELD FOR INVESTMENT:
        Securities of the United States 
          Government                       $     432,000       $     (14,000)
        Corporate bonds and notes              6,685,000                 ---
                                           -------------       -------------
        Total held for investment          $   7,117,000       $     (14,000)
                                           =============       =============
</TABLE>
                                    F-14


<PAGE>
                   ANCHOR NATIONAL LIFE INSURANCE COMPANY

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

<TABLE>

3.    INVESTMENTS (continued)

      At September 30, 1996, gross unrealized gains on equity securities aggregated
      $1,368,000 and gross unrealized losses aggregated $309,000.  At September 30,
      1995, gross unrealized gains on equity securities aggregated $1,082,000 and gross
      unrealized losses aggregated $3,561,000.

      Gross realized investment gains and losses on sales of all types of investments
      are as follows:

<CAPTION>
                                                            Years ended September 30,
                                             ----------------------------------------
                                                     1996          1995          1994
                                             ------------  ------------  ------------
<S>                                         <C>           <C>           <C>          
      BONDS, NOTES AND REDEEMABLE
       PREFERRED STOCKS:
        Available for sale:
          Realized gains                     $ 14,532,000  $ 15,983,000  $ 12,760,000
          Realized losses                     (10,432,000)  (21,842,000)  (31,066,000)

        Held for investment:                             
          Realized gains                              ---     2,413,000       890,000
          Realized losses                             ---      (586,000)   (1,913,000)

      EQUITIES:
        Realized gains                            511,000       994,000       467,000
        Realized losses                        (3,151,000)     (114,000)     (303,000)

      OTHER INVESTMENTS:
        Realized gains                          1,135,000     3,561,000           ---
        Realized losses                        (1,729,000)      (12,000)     (358,000)

      IMPAIRMENT WRITEDOWNS                   (14,221,000)   (4,760,000)  (14,190,000)
                                             ------------  ------------  ------------
      Total net realized
        investment losses                    $(13,355,000) $ (4,363,000) $(33,713,000)
                                             ============  ============  ============

</TABLE>
                                         F-15












<PAGE>
<TABLE>
                        ANCHOR NATIONAL LIFE INSURANCE COMPANY

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)



3.    INVESTMENTS (continued)

      The sources and related amounts of investment income are as follows:
<CAPTION>
                                                            Years ended September 30,
                                           ------------------------------------------
                                                     1996          1995          1994
                                           -------------- ------------- -------------
<S>                                       <C>            <C>           <C>           
      Short-term investments                 $ 10,647,000  $  8,308,000  $  4,648,000
      Bonds, notes and
        redeemable preferred stocks           140,387,000   107,643,000    98,935,000
      Mortgage loans                            8,701,000     7,419,000    12,133,000
      Common stocks                                 8,000         3,000         1,000
      Real estate                                (196,000)      (51,000)    1,379,000
      Limited partnerships                      4,073,000     5,128,000     9,487,000
      Other invested assets                     1,011,000     1,016,000     1,175,000
                                           -------------- ------------- -------------
        Total investment income              $164,631,000  $129,466,000  $127,758,000
                                           ============== ============= =============

      Expenses incurred to manage the investment portfolio amounted to $1,737,000 for
      the year ended September 30, 1996, $1,983,000 for the year ended September 30,
      1995, and $1,714,000 for the year ended September 30, 1994 and are included in
      General and Administrative Expenses in the income statement.

      At September 30, 1996, no investment exceeded 10% of the Company's consolidated
      shareholder's equity.

      At September 30, 1996, mortgage loans were collateralized by properties located
      in 11 states, with loans totaling approximately 21% of the aggregate carrying
      value of the portfolio secured by properties located in Colorado, approximately
      17% by properties located in New Jersey and approximately 14% by properties
      located in California.  No more than 12% of the portfolio was secured by
      properties in any other single state.

      At September 30, 1996, bonds, notes and redeemable preferred stocks included
      $160,801,000  (fair value, $160,158,000) of bond and notes not rated investment
      grade by either Standard & Poor's Corporation, Moody's Investors Service, Duff and
      Phelps Credit Rating Co., Fitch Investor Service, Inc. or under National
      Association of Insurance Commissioners' guidelines.  The Company had no material
      concentrations of non-investment-grade assets at September 30, 1996.

      At September 30, 1996, the amortized cost of investments in default as to the
      payment of principal or interest was $3,115,000, consisting of $1,580,000 of non-
      investment-grade bonds and $1,535,000 of mortgage loans.  Such nonperforming
      investments had an estimated fair value of $2,935,000.

                                         F-16

<PAGE>
                        ANCHOR NATIONAL LIFE INSURANCE COMPANY

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)



3.    INVESTMENTS (continued)
        
      At September 30, 1996, $6,486,000 of bonds, at amortized cost, were on deposit
      with regulatory authorities in accordance with statutory requirements.

      The Company has undertaken to dispose of certain real estate investments, having
      an aggregate carrying value of $28,410,000, during the next year, to affiliated
      or nonaffiliated parties, and the Parent has guaranteed that the Company will
      receive its current carrying value for these assets.

4.    FAIR VALUE OF FINANCIAL INSTRUMENTS

      The following estimated fair value disclosures are limited to reasonable estimates
      of the fair value of only the Company's financial instruments.  The disclosures
      do not address the value of the Company's recognized and unrecognized nonfinancial
      assets (including its other invested assets, equity investments and real estate
      investments) and liabilities or the value of anticipated future business.  The
      Company does not plan to sell most of its assets or settle most of its liabilities
      at these estimated fair values.

      The fair value of a financial instrument is the amount at which the instrument
      could be exchanged in a current transaction between willing parties, other than
      in a forced or liquidation sale.  Selling expenses and potential taxes are not
      included.  The estimated fair value amounts were determined using available market
      information, current pricing information and various valuation methodologies.  If
      quoted market prices were not readily available for a financial instrument,
      management determined an estimated fair value.  Accordingly, the estimates may not
      be indicative of the amounts the financial instruments could be exchanged for in
      a current or future market transaction.

      The following methods and assumptions were used to estimate the fair value of each
      class of financial instruments for which it is practicable to estimate that value:

      CASH AND SHORT TERM INVESTMENTS:  Carrying value is considered to be a reasonable
      estimate of fair value.

      BONDS, NOTES AND REDEEMABLE PREFERRED STOCKS:  Fair value is based principally on
      independent pricing services, broker quotes and other independent information.

      MORTGAGE LOANS:  Fair values are primarily determined by discounting future cash
      flows to the present at current market rates, using expected prepayment rates.

      VARIABLE ANNUITY ASSETS:  Variable annuity assets are carried at the market value
      of the underlying securities.

      RECEIVABLE FROM (PAYABLE TO) BROKERS FOR SALES (PURCHASES) OF SECURITIES: Such
      obligations represent net transactions of a short-term nature for which the
      carrying value is considered a reasonable estimate of fair value.

                                         F-17



<PAGE>
                        ANCHOR NATIONAL LIFE INSURANCE COMPANY

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


4.    FAIR VALUE OF FINANCIAL INSTRUMENTS (continued)
      
      RESERVES FOR FIXED ANNUITY CONTRACTS:  Deferred annuity contracts and single
      premium life contracts are assigned a fair value equal to current net surrender
      value.  Annuitized contracts are valued based on the present value of future cash
      flows at current pricing rates.

      RESERVES FOR GUARANTEED INVESTMENT CONTRACTS:  Fair value is based on the present
      value of future cash flows at current pricing rates.
  
      VARIABLE ANNUITY LIABILITIES:  Fair values of contracts in the accumulation phase
      are based on net surrender values.  Fair values of contracts in the payout phase
      are based on the present value of future cash flows at assumed investment rates.

      SUBORDINATED NOTES PAYABLE TO PARENT:  Fair value is estimated based on the quoted
      market prices for similar issues.

</TABLE>




                                         F-18
































<PAGE>
<TABLE>
                        ANCHOR NATIONAL LIFE INSURANCE COMPANY

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


4.    FAIR VALUE OF FINANCIAL INSTRUMENTS (continued)

      The estimated fair values of the Company's financial instruments at September 30,
      1996 and 1995, compared with their respective carrying values, are as follows:
<CAPTION>
                                                             Carrying             Fair
                                                                value            value
                                                       --------------   --------------
<S>                                                   <C>              <C>            
      1996:

      ASSETS:                                                        
            Cash and short-term investments            $  122,058,000   $  122,058,000
            Bonds, notes and redeemable
              preferred stocks                          1,987,271,000    1,987,271,000
            Mortgage loans                                 98,284,000      102,112,000
            Receivable from brokers for sales
              of securities                                52,348,000       52,348,000
            Variable annuity assets                     6,311,557,000    6,311,557,000

      LIABILITIES:
            Reserves for fixed annuity contracts        1,789,962,000    1,738,784,000
            Reserves for guaranteed investment
             contracts                                    415,544,000      416,695,000
            Variable annuity liabilities                6,311,557,000    6,117,508,000
            Subordinated notes payable to Parent           35,832,000       37,339,000
                                                       ==============   ==============

      1995:

      ASSETS:                                                        
            Cash and short-term investments            $  249,209,000   $  249,209,000
            Bonds, notes and redeemable
              preferred stocks                          1,647,114,000    1,654,217,000
            Mortgage loans                                 94,260,000       95,598,000
            Variable annuity assets                     5,230,246,000    5,230,246,000

      LIABILITIES:
            Reserves for fixed annuity contracts        1,497,052,000    1,473,757,000
            Reserves for guaranteed investment
              contracts                                   277,095,000      277,095,000
            Payable to brokers for purchases
              of securities                               155,861,000      155,861,000
            Variable annuity liabilities                5,230,246,000    5,077,257,000
            Subordinated notes payable to Parent           35,832,000       34,620,000
                                                       ==============   ==============
</TABLE>


                                         F-19




<PAGE>
<TABLE>
                        ANCHOR NATIONAL LIFE INSURANCE COMPANY

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


5.    SUBORDINATED NOTES PAYABLE TO PARENT

      Subordinated notes payable to Parent averaged $35,832,000 at a weighted average
      interest rate of 8.71% (with rates ranging from 7% to 9%) at September 30, 1996
      and require principal payments of $5,272,000 in 1997, $7,500,000 in 1998 and
      $23,060,000 in 1999.
      
6.    CONTINGENT LIABILITIES

      The Company has entered into two agreements in which it has guaranteed the
      liquidity of certain short-term securities of two municipalities by agreeing to
      purchase such securities in the event there is no other buyer in the short-term
      marketplace.  In return the Company receives a fee.  These guarantees total up to
      $182,600,000.  Management does not anticipate any material future losses with
      respect to these guarantees.

      The Company is involved in various kinds of litigation common to its businesses. 
      These cases are in various stages of development and, based on reports of counsel,
      management believes that provisions made for potential losses are adequate and any
      further liabilities and costs will not have a material adverse impact upon the
      Company's financial position or results of operations.

7.    SHAREHOLDER'S EQUITY

      The Company is authorized to issue 4,000 shares of its $1,000 par value Common
      Stock.  At September 30, 1996, 1995 and 1994, 3,511 shares are outstanding.

      Changes in shareholder's equity are as follows:
<CAPTION>
                                                             Years ended September 30,
                                         ---------------------------------------------
                                                 1996            1995             1994
                                        -------------   -------------    -------------
<S>                                    <C>             <C>              <C>           
     ADDITIONAL PAID-IN CAPITAL:
       Beginning balance                $ 252,876,000   $ 252,876,000    $ 252,876,000
       Capital contributions received      27,387,000             ---              ---
                                        -------------   -------------    -------------
       Ending balance                   $ 280,263,000   $ 252,876,000    $ 252,876,000
                                        =============   =============    =============

     RETAINED EARNINGS:
       Beginning balance                  191,346,000     152,088,000      127,936,000
       Net income                          45,056,000      39,258,000       24,152,000
       Dividend paid                      (29,400,000)            ---              ---
                                        -------------   -------------    -------------
       Ending balance                   $ 207,002,000   $ 191,346,000    $ 152,088,000
                                        =============   =============    =============

</TABLE>
                                         F-20


<PAGE>
<TABLE>
                        ANCHOR NATIONAL LIFE INSURANCE COMPANY

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)



7.  SHAREHOLDER'S EQUITY (continued)

<CAPTION>
                                                             Years ended September 30,
                                         ---------------------------------------------
                                                 1996            1995             1994
                                        -------------   -------------    -------------
<S>                                    <C>             <C>              <C>           
     NET UNREALIZED LOSSES ON 
      DEBT AND EQUITY SECURITIES 
      AVAILABLE FOR SALE:
       Beginning balance                $  (5,673,000)  $ (24,953,000)   $ (13,230,000)
       Change in net unrealized 
         gains/losses on debt
         securities available
         for sale                          (2,904,000)     71,302,000      (69,407,000)
       Change in net unrealized
         gains/losses on equity
         securities available for sale      3,538,000      (1,240,000)        (753,000)
       Change in adjustment to 
         deferred acquisition costs          (400,000)    (40,400,000)      45,000,000 
       Tax effects of net changes             (82,000)    (10,382,000)      13,437,000
                                        -------------   -------------    -------------
       Ending balance                   $  (5,521,000)  $  (5,673,000)   $ (24,953,000)
                                        =============   =============    =============


    Dividends that the Company may pay to its shareholder in any year without prior
    approval of the Arizona Department of Insurance are limited by statute.  The maximum
    amount of dividends which can be paid to shareholders of insurance companies
    domiciled in the state of Arizona without obtaining the prior approval of the
    Insurance Commissioner is limited to the lesser of either 10% of the preceding
    year's Statutory Surplus or the preceding year's statutory net gain from operations. 
    A dividend in the amount of $29,400,000 was paid on March 18, 1996.  No dividends
    were paid in fiscal years 1995 or 1994.

    Under statutory accounting principles utilized in filings with insurance regulatory
    authorities, the Company's net income for the nine months ended September 30, 1996
    was $21,898,000.  The statutory net income for the year ended December 31, 1995 was
    $30,673,000 and for the year ended December 31, 1994 was $35,060,000.  The Company's
    statutory capital and surplus was $282,275,000 at September 30, 1996, $294,767,000
    at December 31, 1995 and $219,577,000 at December 31, 1994.

</TABLE>
                                         F-21







<PAGE>
<TABLE>

                        ANCHOR NATIONAL LIFE INSURANCE COMPANY

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

    


8.  INCOME TAXES

    The components of the provisions for federal income taxes on pretax income consist
    of the following:
<CAPTION>
                                           Net realized
                                             investment
                                          gains (losses)     Operations          Total
                                          -------------    ------------   ------------
<S>                                      <C>              <C>            <C>          
    1996: 

    Currently payable                     $   5,754,000    $ 21,849,000   $ 27,603,000
    Deferred                                (10,347,000)      6,996,000     (3,351,000)
                                          -------------    ------------   ------------

    Total income tax expense              $  (4,593,000)   $ 28,845,000   $ 24,252,000
                                          =============    ============   ============
    1995:

    Currently payable                     $   4,248,000    $ 22,980,000   $ 27,228,000
    Deferred                                 (6,113,000)      4,624,000     (1,489,000)
                                          -------------    ------------   ------------

    Total income tax expense              $  (1,865,000)   $ 27,604,000   $ 25,739,000
                                          =============    ============   ============
    1994:

    Currently payable                     $  (6,825,000)   $ 10,135,000   $  3,310,000
    Deferred                                 (1,320,000)     20,715,000     19,395,000
                                          -------------    ------------   ------------

    Total income tax expense              $  (8,145,000)   $ 30,850,000   $ 22,705,000
                                          =============    ============   ============
</TABLE>

                                         F-22













<PAGE>
<TABLE>
                        ANCHOR NATIONAL LIFE INSURANCE COMPANY

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


8.  INCOME TAXES (continued)

    Income taxes computed at the United States federal income tax rate of 35% and income
    taxes provided differ as follows:

<CAPTION>
                                                                      
                                                            Years ended September 30,
                                           ------------------------------------------
                                                   1996           1995           1994
                                           ------------    -----------   ------------
<S>                                       <C>             <C>           <C>          
    Amount computed at
       statutory rate                      $ 24,258,000   $ 22,749,000  $  23,562,000
    Increases (decreases)
       resulting from:
         Amortization of differences
           between book and tax
           bases of net assets
           acquired                             464,000      3,049,000        465,000
         State income taxes, net of
           federal tax benefit                2,070,000        437,000       (662,000)
         Dividends-received deduction        (2,357,000)           ---            ---
         Tax credits                           (257,000)      (168,000)      (612,000)
         Other, net                              74,000       (328,000)       (48,000) 
                                           ------------   ------------   ------------
    Total income tax expense               $ 24,252,000   $ 25,739,000   $ 22,705,000
                                           ============   ============   ============

    For United States federal income tax purposes, certain amounts from life insurance
    operations are accumulated in a memorandum policyholders' surplus account and are
    taxed only when distributed to shareholders or when such account exceeds prescribed
    limits.  The accumulated policyholders' surplus was $14,300,000 at September 30,
    1996.  The Company does not anticipate any transactions which would cause any part
    of this surplus to be taxable.


                                         F-23













<PAGE>

                        ANCHOR NATIONAL LIFE INSURANCE COMPANY

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)



8.  INCOME TAXES (continued)

    Deferred income taxes reflect the net tax effects of temporary differences between
    the carrying amounts of assets and liabilities for financial reporting purposes and
    the amounts used for income tax reporting purposes.  The significant components of
    the liability for Deferred Income Taxes are as follows:
<CAPTION>
                                                                        September 30,
                                                         ----------------------------
                                                                  1996           1995
                                                         -------------  -------------
<S>                                                     <C>            <C>           
    DEFERRED TAX LIABILITIES:
    Investments                                          $  15,036,000  $  14,181,000
    Deferred acquisition costs                             136,747,000    118,544,000
    State income taxes                                       1,466,000      1,847,000 
                                                         -------------  -------------
    Total deferred tax liabilities                         153,249,000    134,572,000
                                                         -------------  -------------

    DEFERRED TAX ASSETS:
    Contractholder reserves                                (77,522,000)   (55,910,000)
    Guaranty fund assessments                               (1,031,000)    (1,123,000)
    Other assets                                            (1,534,000)    (1,025,000)
    Net unrealized losses on certain
        debt and equity securities                          (2,973,000)    (3,055,000)
                                                         -------------  -------------
    Total deferred tax assets                              (83,060,000)   (61,113,000) 
                                                         -------------  -------------

    Deferred income taxes                                $  70,189,000  $  73,459,000
                                                         =============  =============
</TABLE>

                                         F-24















<PAGE>
<TABLE>
                        ANCHOR NATIONAL LIFE INSURANCE COMPANY

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
          

9.  RELATED PARTY MATTERS

    The Company pays commissions to two affiliated companies, SunAmerica Securities,
    Inc. and Advantage Capital Corp.  These broker-dealers represent a significant
    portion of the Company's business, amounting to approximately 15.6%, 14.1% and 14.5%
    of premiums in 1996, 1995 and 1994, respectively.  Commissions paid to these broker-
    dealers totaled $16,906,000 in 1996, $9,435,000 in 1995 and $9,725,000 in 1994. 

    The Company purchases administrative, investment management, accounting, marketing
    and data processing services from SunAmerica Financial, Inc., whose purpose is to
    provide services to the SunAmerica companies.  Amounts paid for such services
    totaled $65,351,000 for the year ended September 30, 1996, $42,083,000 for the year
    ended September 30, 1995 and $36,934,000 for the year ended September 30, 1994. 
    Such amounts are included in General and Administrative Expenses in the income
    statement.
    
    On December 31, 1995, the Parent made a $27,387,000 capital contribution to the
    Company, through the Company's direct parent, in exchange for the termination of its
    guaranty with respect to certain real estate owned in Arizona.  Accordingly, the
    Company reduced the carrying value of this real estate to estimated fair value to
    reflect the termination of the guaranty.

    During the year ended September 30, 1995, the Company sold to the Parent real estate
    for cash equal to its carrying value of $29,761,000.

    During the year ended September 30, 1996, the Company sold various invested assets
    to the Parent, SunAmerica Life Insurance Company and Ford Life Insurance Company
    ("Ford") for cash equal to their current market values of $274,000, $8,968,000 and
    $38,353,000, respectively.  The Company recorded net losses of $3,000 on such
    transactions.

    During the year ended September 30, 1996, the Company also purchased certain
    invested assets from SunAmerica Life Insurance Company and Ford for cash equal to
    their current market values of $5,159,000 and $23,220,000, respectively.


                                         F-25














<PAGE>

                        ANCHOR NATIONAL LIFE INSURANCE COMPANY

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


10. BUSINESS SEGMENTS

    Summarized data for the Company's business segments follow:
                                      
<CAPTION>
                                                     Total
                                              depreciation
                                                       and
                                       Total  amortization       Pretax          Total
                                    revenues       expense       income         assets
                               -------------  ------------ ------------ --------------
<S>                           <C>            <C>          <C>          <C>            
    1996:
    Annuity operations         $ 250,645,000  $ 43,974,000 $ 53,827,000 $9,092,770,000
    Asset management              29,711,000    18,295,000    2,448,000     74,410,000
    Broker-dealer operations      31,851,000       449,000   13,033,000     37,355,000
                               -------------  ------------ ------------ --------------
    Total                      $ 312,207,000  $ 62,718,000 $ 69,308,000 $9,204,535,000
                               =============  ============ ============ ==============
  
    1995:
    Annuity operations         $ 205,698,000  $ 38,350,000 $ 55,462,000 $7,667,946,000
    Asset management              30,253,000    24,069,000      510,000     86,510,000
    Broker-dealer operations      24,366,000       411,000    9,025,000     29,241,000
                               -------------  ------------ ------------ --------------
    Total                      $ 260,317,000  $ 62,830,000 $ 64,997,000 $7,783,697,000
                               =============  ============ ============ ==============

    1994:
    Annuity operations         $ 171,553,000  $ 26,501,000 $ 52,284,000 $6,473,065,000
    Asset management              32,803,000    19,330,000    7,916,000    102,192,000
    Broker-dealer operations      20,914,000       408,000    7,120,000     26,869,000
                               -------------  ------------ ------------ --------------
    Total                      $ 225,270,000  $ 46,239,000 $ 67,320,000 $6,602,126,000
                               =============  ============ ============ ==============
</TABLE>

                                         F-26

<PAGE>
                           ANCHOR NATIONAL LIFE INSURANCE COMPANY
                               AND CONSOLIDATED SUBSIDIARIES
                                   LIST OF EXHIBITS FILED

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

10(f)   Amendment to the Subordinated Loan Agreement for Equity Capital.

10(g)   Subordinated Loan Agreement for Equity Capital.

10(h)   Subordinated Loan Agreement for Equity Capital.

10(i)   Subordinated Loan Agreement for Equity Capital.

10(j)   Subordinated Loan Agreement for Equity Capital.

10(k)   Subordinated Loan Agreement for Equity Capital.

10(l)   Amendment to the Subordinated Loan Agreement for Equity Capital.

21      Subsidiaries of the Company.

27      Financial Data Schedule.