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  [NO  FEE  REQUIRED,  EFFECTIVE  OCTOBER  7,  1996]

                   For the fiscal year ended December 31, 1999

                                       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 No. 33-47472


                     ANCHOR NATIONAL LIFE INSURANCE COMPANY


     Incorporated  in  Arizona                             86-0198983
                                                          IRS  Employer
                                                        Identification  No.

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


        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 REGISTRANTS COMMON STOCK ON MARCH
28,  2000  WAS  AS  FOLLOWS:

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

<PAGE>

                                     PART I

ITEM  1.  BUSINESS

GENERAL  DESCRIPTION

     Anchor  National  Life  Insurance  Company,  including  its  wholly  owned
subsidiaries, (The "Company") is an indirect wholly owned subsidiary of American
International  Group,  Inc.  ("AIG"),  an  international insurance and financial
services  holding company.  At December 31, 1998, the Company was a wholly owned
indirect  subsidiary  of  SunAmerica Inc., a Maryland Corporation. On January 1,
1999, SunAmerica Inc. merged with and into AIG in a tax-free reorganization that
has  been  treated  as  a  pooling  of interests for accounting purposes.  Thus,
SunAmerica  Inc. ceased to exist on that date. However, immediately prior to the
date  of the merger, substantially all of the net assets of SunAmerica Inc. were
contributed to a newly formed subsidiary of AIG named SunAmerica Holdings, Inc.,
a  Delaware Corporation. SunAmerica Holdings, Inc. subsequently changed its name
to  SunAmerica  Inc.  ("SunAmerica").

     The  Company  ranks  among  the largest U.S. issuers of variable annuities.
Complementing  these  annuity operations are the Company's guaranteed investment
contract  ("GIC")  operations,  its  asset  management operations and its wholly
owned  and  affiliated  broker-dealer operations, which provide a broad range of
financial  planning  and investment services through more than 8,600 independent
registered representatives nationwide. At December 31, 1999, the Company managed
$32.47  billion of assets, consisting of $26.87 billion of assets on its balance
sheet  and  $5.60  billion  of  assets  managed  in  mutual  funds.

     The  Company  is  incorporated  in  Arizona  and  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
SunAmerica  and its other subsidiaries perform various services for the Company.
SunAmerica had approximately 2,500 employees at December 31, 1999, approximately
1,500  of  whom  perform  services for the Company as well as for certain of its
affiliates.

     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 between the ages of 45 to 64 grew
from  46  million  to  60  million  during  the 1990s, making this age group the
fastest-growing  segment  of the U.S. population.  Between 1988 and 1998, annual
industry  premiums from fixed and variable annuities and fund deposits increased
from  $103.87  billion  to  $229.47  billion.  During  the  same  period, annual
industry sales of mutual funds, excluding money market accounts, rose from $95.1
billion  to  $1.06  trillion.

     Benefiting  from  continued strong 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.

     The Company's six affiliated broker-dealers comprise the largest network of
independent  registered  representatives  in  the  nation  and the fifth-largest
securities  sales force, based on industry data.  Its wholly owned or affiliated
broker-dealers  accounted  for  approximately  one-third  of the Company's total
annuity  sales  in  1999. The Company also distributes its products and services
through  an  extensive  network  of  independent  broker-dealers,   full-service
securities  firms,  independent  general  insurance

                                        1
<PAGE>

agents,  major financial institutions and, in the case of its GICs, by marketing
directly  to  banks,  municipalities,  asset  management  firms  and direct plan
sponsors  and  through intermediaries, such as managers or consultants servicing
these  groups.

     The  Company  and  its  affiliates  have  made  significant  investments in
technology  over  the  past  several years in order to lower operating costs and
enhance their marketing efforts.  Its use of optical disk imaging and artificial
intelligence has substantially reduced the more traditional paper-intensive life
insurance processing procedures, reducing annuity processing and servicing costs
and  improving  customer  service.  This  has  also  enabled the Company to more
efficiently  assimilate  acquired  business.  The  Company  has also implemented
technology  to  interface  with  its  wholly owned or affiliated broker-dealers,
which  enables  the Company to more effectively market its products and help the
affiliated  financial  professionals  to  better  serve  their  clients.

     In  recent  years,  the  Company  has  enhanced  its  marketing efforts and
expanded  its  offerings  of  fee-based  products such as variable annuities and
mutual  funds,  resulting in significantly increased fee income.  Fee income has
also  expanded  through  the  receipt of broker-dealer net retained commissions,
resulting  primarily  from  increased  demand for long-term investment products.
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.

     For  the  year ended December 31, 1999, the Company's net investment income
(including  net  realized  investment  losses) and fee income by primary product
line  or  service  are  as  follows:
<TABLE>
<CAPTION>

                          NET INVESTMENT AND FEE INCOME

                                                      Primary  product  or
                                   Amount    Percent               service
                                   ------    -------    ------------------

                                (In thousands)
<S>                          <C>              <C>     <C>
Net investment income
  (including net realized
  investment losses). . . .  $       144,596   24.1%  Fixed-rate products
                             ---------------  ------

Fee income:
  Variable annuity fees . .          306,417   51.1   Variable annuities
  Net retained commissions.           51,039    8.5   Broker-dealer sales
  Asset management fees . .           43,510    7.2   Mutual funds
  Universal life insurance
    fees. . . . . . . . . .           23,290    3.9   Fixed-rate universal
                                                        life insurance
  Surrender charges . . . .           17,137    2.9   Fixed- and variable-
                                                        rate products
  Other fees. . . . . . . .           13,999    2.3
                             ---------------  ------

  Total fee income. . . . .          455,392   75.9
                             ---------------  ------

Total . . . . . . . . . . .  $       599,988  100.0%
                             ===============  ======
</TABLE>

     For financial information on the Company's business segments, see Part IV -
"Notes  to  Consolidated  Financial  Statements  - Note 14 - Business Segments".

     The  business  segments  defined  by  the  Company for disclosure under the
requirements  of  Financial  Accounting  Standards  No.  131, "Disclosures about

                                        2
<PAGE>

Segments  of  an  Enterprise  and  Related information," are Annuity Operations,
Asset  Management  Operations  and Broker-Dealer Operations.  Annuity Operations
are  discussed  in  the  following  four  sections,  and  Asset  Management  and
Broker-Dealer  Operation  are  discussed  on  pages  6  and  7  respectively.

ANNUITY  OPERATIONS

     Founded in 1965, the Company is an Arizona-chartered company licensed in 49
states  and  the  District  of  Columbia which markets flexible-premium variable
annuities and GICs.  It has a "AAA" (Extremely Strong) financial strength rating
from  Standard & Poor's Corporation ("S&P"), a "AAA"(Highest) rating from Duff &
Phelps  Credit  Rating  Co.  ("DCR"),  an "Aaa"(Exceptional) rating from Moody's
Investors  Service  ("Moody's")  and  an  "A++"  (Superior) rating from industry
analyst  A.M.  Best  Company.

     In  addition  to distributing its variable annuity products through its six
wholly  owned or affiliated broker-dealers, the Company distributes its products
through over 800 other independent broker-dealers, full-service securities firms
and  financial  institutions  as  well  as through independent general insurance
agents.  In total, more than 55,000 independent sales representatives nationally
are  licensed  to  sell  the  Company's  annuity  products.

     On December 31, 1998, the Company acquired the individual life business and
the  individual  and  group  annuity  business of MBL Life Assurance Corporation
("MBL  Life"), via a 100% coinsurance transaction.  The Company assumed reserves
in  this  acquisition totaling $5,793,256,000, including $3,460,503,000 of fixed
annuity  contracts,  $2,308,742,000  of  universal  life insurance contracts and
$24,011,000  of  guaranteed  investment  contracts. Policyholders of MBL annuity
products  were  required to transfer their funds into an existing product of the
Company  or  one  of its affiliates by December 31, 1999 in order to receive the
policy  enhancements  due under the MBL Life rehabilitation agreement.  Over 92%
of  the  deferred annuity reserves had either been transferred or surrendered by
December  31,  1999.

     Included  in  the  block  of  business acquired from MBL Life were policies
whose owners are residents of New York State ("the New York Business").  On July
1, 1999, the New York Business was acquired by the Company's New York affiliate,
First  SunAmerica  Life Insurance Company ("FSA"), via an assumption reinsurance
agreement,  and  the  remainder  of  the  business  converted  to  assumption
reinsurance,  which  superseded  the  coinsurance  agreement.  As  part  of this
transfer,  invested  assets  equal  to  $678,272,000,  life  reserves  equal  to
$282,247,000, group pension reserves equal to $406,118,000, and other net assets
of  $10,093,000  were  transferred  to  FSA.

     Substantially  all  of  the  Company's revenues are derived from the United
States.

ANNUITY  OPERATIONS  -  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
annuities  offer  retirement planning features similar to those offered by fixed
annuities,  but  differ in that the contractholder's rate of return is generally
dependent  upon  the  investment  performance  of  the  particular  equity,
fixed-income,  money  market  or  asset  allocation  fund  selected  by  the
contractholder.  Because  the  investment  risk  is  borne  by  the

                                        3
<PAGE>

customer  in  all  but  the  fixed-rate  account options, these products require
significantly  less  capital  support  than  fixed  annuities.

     The  Company's  flagship Polaris variable annuity products are multimanager
variable  annuities that offer investors a choice of more than 25 variable funds
and  a  number  of  guaranteed  fixed-rate  funds.  Polaris sales have increased
significantly  in  recent years due to enhanced distribution efforts and growing
consumer demand for flexible retirement savings products that offer a variety of
equity,  fixed-income  and  guaranteed  fixed  account  investment  choices.

     At  December 31, 1999, total variable product reserves were $22.27 billion,
of  which $19.95 billion were held in separate accounts.  The Company's variable
annuity  products  incorporate  surrender  charges to encourage persistency.  At
December  31,  1999,  82% of the Company's variable annuity reserves held in the
separate  accounts  were subject to surrender penalties.  The Company's variable
annuity  products  also  generally  limit  the  number  of  transfers  made in a
specified  period  between account options without the assessment of a fee.  The
average  size of a new variable annuity contract sold by the Company in 1999 was
approximately  $52,000.

ANNUITY  OPERATIONS  -  FIXED  ANNUITIES  AND  GICs

     The  Company's  general  account  obligations  are  fixed-rate  products,
including  fixed  annuity and universal life contracts issued in prior years and
fixed-rate  options  of  its variable annuity contracts.  Although the Company's
annuity  contracts  remain in force an average of seven to ten years, a majority
(approximately  83%  at  December 31, 1999) of the annuity contracts, as well as
the universal life contracts, reprice annually at discretionary rates determined
by  the  Company.  In  repricing,  the  Company  takes  into  account  yield
characteristics  of  its  investment  portfolio,  surrender  assumptions  and
competitive  industry  pricing,  among  other  factors.

     The  Company  augments  its  retail  annuity  business  with  the  sale  of
institutional products.  At December 31, 1999, the Company had $284.6 million of
fixed-maturity,  variable-rate  GIC  obligations that reprice periodically based
upon  certain  defined  indexes  and $21.0 million of fixed-maturity, fixed-rate
GICs  acquired  from MBL Life.  Of the total GIC portfolio at December 31, 1999,
approximately  68% was sold to asset management firms, 16% was sold to banks, 9%
was sold to state and local government entities and 7% was sold to corporations.

     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 fixed annuity, universal life 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 annuity and universal life products
incorporate  surrender  charges  and  its  GIC  products  incorporate  other
restrictions  in  order  to  encourage  persistency.  Approximately  48%  of the
Company's fixed annuity, universal life and GIC reserves had surrender penalties
or  other  restrictions  at  December  31,  1999.

INVESTMENT  OPERATIONS

     The  Company believes that its fixed-rate liabilities should be backed by a
portfolio  principally  composed  of  fixed-rate  investments  that  generate
predictable  rates  of return.  The Company does not have a specific target rate
of  return.  Instead,  its rates of return vary over time depending on a variety
of  factors,  including  the current interest rate environment, the slope of the
yield  curve,  the  spread  at which fixed-rate investments are priced  over the
yield  curve,  default  rates  and  general  economic  conditions.

                                        4

<PAGE>

The  Company  manages  most  of  its  invested assets internally.  Its portfolio
strategy  is  constructed  with a view to achieve adequate risk-adjusted returns
consistent with its investment objectives of effective asset-liability matching,
liquidity  and  safety.

     As  part  of  its asset-liability matching discipline, the Company conducts
detailed  computer  simulations that model its fixed-rate assets and liabilities
under  commonly  used  stress-test interest rate scenarios.  With the results of
these  computer  simulations, the Company can measure the potential gain or loss
in fair value of its interest-rate sensitive instruments and seek to protect its
economic  value  and  achieve  a predictable spread between what it earns on its
invested  assets and what it pays on its liabilities by designing its fixed-rate
products  and conducting its investment operations to closely match the duration
of  the  fixed-rate assets to that of its fixed-rate liabilities.  The Company's
fixed-rate  assets  include:  cash  and short-term investments; bonds, notes and
redeemable  preferred  stocks;  mortgage  loans;  and  investments  in  limited
partnerships  that  invest  primarily in fixed-rate securities and are accounted
for  by  using  the  cost  method.  At  December  31,  1999, these assets had an
aggregate  fair  value  of  $5.05 billion with a duration of 3.2.  The Company's
fixed-rate  liabilities  include  fixed annuity, GIC and universal life reserves
and  subordinated  notes.  At  December  31,  1999,  these  liabilities  had  an
aggregate fair value (determined by discounting future contractual cash flows by
related  market rates of interest) of $4.81 billion with a duration of 4.1.  For
the years ended December 31, 1999 and September 30, 1998 and 1997, the Company's
yields on average invested assets were 7.11%, 8.53% and 7.97%, respectively; its
average  rates  paid  on  all interest-bearing liabilities were 5.00%, 5.49% and
5.46%,  respectively;  it  realized  net  investment spreads of 2.24%, 3.34% and
2.77%,  respectively,  on  average  invested assets; and net realized investment
gains  and losses were 0.27%, 0.75% and 0.66%, respectively, of average invested
assets.

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

     The  following  table  summarizes  the  Company's  investment  portfolio at
December  31,  1999:
<TABLE>
<CAPTION>

                             SUMMARY OF INVESTMENTS


                                              Carrying       Percent of
                                                value         portfolio
                                           ---------------  -----------

                                             (In thousands)
<S>                                        <C>              <C>
Cash and short-term investments . . . . .  $       475,162         8.6%
U.S. government securities. . . . . . . .           22,884         0.4
Mortgage-backed securities. . . . . . . .        1,412,134        25.4
Other bonds, notes and redeemable
  preferred stocks. . . . . . . . . . . .        2,518,151        45.4
Mortgage loans. . . . . . . . . . . . . .          674,679        12.2
Policy loans. . . . . . . . . . . . . . .          260,066         4.7
Investment in separate account seed money          141,499         2.5
Partnerships. . . . . . . . . . . . . . .            4,009         0.1
Real estate . . . . . . . . . . . . . . .           24,000         0.4
Other invested assets . . . . . . . . . .           19,385         0.3
                                           ---------------  -----------

Total investments . . . . . . . . . . . .  $     5,551,969       100.0%
                                           ===============  ===========
</TABLE>

                                        5
<PAGE>

     At  December  31,  1999,  the  Bond  Portfolio  (excluding  $4.5 million of
redeemable  preferred  stocks)  included  $3.81  billion  of bonds rated by S&P,
Moody's,  DCR,  Fitch  Investors  Service,  L.P.  ("Fitch")  or  the  National
Association  of  Insurance  Commissioners  ("NAIC"), and $138.5 million of bonds
rated by the Company pursuant to statutory ratings guidelines established by the
NAIC.  At  December  31, 1999, approximately $3.57 billion of the Bond Portfolio
was  investment  grade,  including  $1.43  billion  of  U.S.  government/agency
securities  and  mortgage-backed  securities.

     At  December  31, 1999, the Bond Portfolio included $377.1 million of bonds
that  were not investment grade.  These non-investment-grade bonds accounted for
1.4%  of  the  Company's  total  assets  and  6.8%  of  its  invested  assets.

     Senior  secured  loans ("Secured Loans") are included in the Bond Portfolio
and aggregated $373.6 million at December 31, 1999.  Secured Loans are senior to
subordinated  debt  and  equity,  and  are  secured by assets of the issuer.  At
December  31, 1999, Secured Loans consisted of loans to 66 borrowers spanning 17
industries,  with  13%  of  these  assets  concentrated  in  utilities  and  11%
concentrated  in  financial  institutions.  No  other  industry  concentration
constituted  more  than  7%  of  these  assets.

     Mortgage loans aggregated $674.7 million at December 31, 1999 and consisted
of  136  commercial  first  mortgage  loans  with  an  average  loan  balance of
approximately  $5.0  million, collateralized by properties located in 29 states.
Approximately 36% of this portfolio was office, 17% was multifamily residential,
10%  was  hotels, 10% was manufactured housing, 9% was industrial, 5% was retail
and  13%  was  other  types.  At December 31, 1999, approximately 36% and 11% of
this  portfolio  were  secured by properties located in California and New York,
respectively,  and  no  more than 8% of this portfolio was secured by properties
located  in  any  other  single  state.

     At  December  31, 1999, the carrying value (after impairment writedowns) of
all  investments  in  default as to the payment of principal or interest totaled
$1.5  million,  which  constituted  less  than  0.1%  of  total invested assets.

     For  more  information  concerning the Company's investments, including the
risks  inherent  in  such  investments, see Item 7, "Management's 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 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.  The  Company  offers  investors  an array of equity,
fixed-income,  money  market and tax-exempt mutual funds. Sales growth in recent
years  is primarily due to sales of the Company's "Style Select Series" product,
which  was introduced in November 1996.  The "Style Select Series" is a group of
mutual  funds  that are each managed by three industry-recognized fund managers.
In  1999,  one  "Focus  Portfolio"  was  added  to  the  "Style  Select Series",
increasing  to ten the number of portfolios.  The Focus Portfolios utilize three
leading  independent  money  managers,  each  of  whom  manages one-third of the
portfolio  by choosing ten favorite stocks.  In 1999, the Company introduced the
Focused  Value  Portfolio.  This  portfolio,  along  with the two existing Focus
Portfolios introduced in 1998, climbed to over $1.28 billion in assets.  Founded
in 1983 and acquired by the Company in January 1990, SunAmerica Asset Management
managed  approximately  $7.56  billion  of  assets  at  December  31,

                                        6

<PAGE>

1999, including mutual fund assets, private accounts 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  450  financial  institutions  and unaffiliated broker-dealers, as
well  as  by  the  Company's  broker-dealer  subsidiary  and  its  affiliated
broker-dealers.

BROKER-DEALER

     The  Company  owns  two  broker-dealers,  Royal  Alliance  Associates, Inc.
("Royal")  and  SunAmerica  Capital  Services,  Inc. ("SACS").  SACS underwrites
proprietary mutual fund sales only and does not sell to the public.  Royal sells
proprietary  insurance  products  and  mutual  funds, as well as a full range of
non-proprietary  investment  products.  Royal  currently  has  a  network  of
approximately  2,900  representatives.

REGULATION

     The  Company,  in  common with other insurers, is subject to regulation and
supervision  by  the  states  and other jurisdictions in which it does business.
Within the United States, the method of such regulation varies but generally has
its  source  in  statutes  that delegate regulatory and supervisory powers to an
insurance official.  The regulation and supervision relate primarily to approval
of  policy  forms  and  rates,  the  standards  of solvency that must be met and
maintained, including risk based capital measurements, the licensing of insurers
and  their agents, the nature of and limitations on investments, restrictions on
the  size  of  risks  which  may  be  insured under a single policy, deposits of
securities  for  the  benefit  of policyholders, methods of accounting, periodic
examinations  of  the  affairs  of  insurance companies, the form and content of
reports  of  financial condition required to be filed, and reserves for unearned
premiums,  losses  and  other  purposes.  In general, such regulation is for the
protection  of  policyholders  rather  than  security  holders.

     Risk-based  capital  ("RBC") standards are designed to measure the adequacy
of  an insurer's statutory capital and surplus in relation to the risks inherent
in  its  business.  The RBC standards consist of formulas that establish capital
requirements  relating  to  insurance,  business, asset and interest rate risks.
The  standards  are  intended  to  help  identify  companies  which  are
under-capitalized  and  require  specific  regulatory  actions  in  the event an
insurer's  RBC  is  deficient.  The RBC formula develops a risk- adjusted target
level  of  adjusted statutory capital and surplus by applying certain factors to
various  asset,  premium  and reserve items.  Higher factors are applied to more
risky items and lower factors are applied to less risky items.  Thus, the target
level  of  statutory  surplus varies not only as a result of the insurer's size,
but also on the risk profile of the insurer's operations.  The statutory capital
and  surplus  of  the  Company  exceeded  its RBC requirements by a considerable
margin  as  of  December  31,  1999.

     Federal legislation has been recently enacted allowing combinations between
insurance  companies, banks and other entities.  It is not yet known what effect
this  legislation  will  have on insurance companies.  In addition, from time to
time,  Federal  initiatives  are  proposed  that  could  affect  the  Company's
businesses.  Such  initiatives include employee benefit plan regulations and tax
law  changes affecting the taxation of insurance companies and the tax treatment
of  insurance  and  other investment products. Proposals made in recent years to
limit the tax deferral of annuities or otherwise modify the tax rules related to
the  treatment  of  annuities  have  not  been  enacted.  While  certain of such
proposals,  if  implemented, could have an adverse effect on the Company's sales
of affected products, and, consequently,  on  its  results  of  operations,  the
Company  believes  these

                                        7

<PAGE>

proposals  have  a  small  likelihood  of  being  enacted,  because  they  would
discourage retirement savings and there is strong public and industry opposition
to  them.

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

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

COMPETITION

     The  businesses  conducted  by  the  Company  are  highly competitive.  The
Company competes 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.  During  1998, net annuity
premiums  written  among  the  top  100  companies range from approximately $100
million  to  approximately  $10 billion annually.  The Company together with its
affiliates  ranks  in  the  top quartile of this group. The Company believes the
primary  competitive  factors  among  life  insurance  companies  for
investment-oriented  insurance  products,  such  as  annuities and GICs, include
product  flexibility,  net  return after fees, 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 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.

     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  executive  offices  and  its principal office are in leased
premises  at  1  SunAmerica Center, Los Angeles, California 90067.  The Company,
through  an  affiliate,  also leases office space in Woodland Hills, California.
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.

                                        8
<PAGE>

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  relating to such litigation are adequate and any further liabilities and
costs  will  not  have  a  material  adverse impact upon the Company's financial
position,  results  of  operations  or  cash  flows.

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

     No  matters were submitted during the quarter ending December 31, 1999 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.



                                        9
<PAGE>

<TABLE>
<CAPTION>

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.

                              Year  Ended Three  Months  Ended            Years  Ended  September  30,
                                                            ------------------------------------------
                        December 31, 1999  December 31, 1998     1998       1997       1996       1995
                        -----------------  ---------------- ---------  ---------  ---------  ---------
<S>                          <C>                  <C>        <C>        <C>        <C>        <C>
                                                        (In thousands)
RESULTS OF OPERATIONS

Net investment income . . .  $          164,216   $ 26,583   $ 86,872   $ 73,201   $ 56,843   $ 50,083
Net realized investment
  gains (losses). . . . . .             (19,620)       271     19,482    (17,394)   (13,355)    (4,363)
Fee income. . . . . . . . .             455,392     83,330    290,362    213,146    169,505    145,105
General and administrative
  expenses. . . . . . . . .            (154,665)   (21,993)   (96,102)   (98,802)   (81,552)   (64,457)
Amortization of deferred
  acquisition costs . . . .            (116,840)   (27,070)   (72,713)   (66,879)   (57,520)   (58,713)
Annual commissions. . . . .             (40,760)    (6,624)   (18,209)    (8,977)    (4,613)    (2,658)
                             -------------------  ---------  ---------  ---------  ---------  ---------


Pretax income . . . . . . .             287,723     54,497    209,692     94,295     69,308     64,997
Income tax expense. . . . .            (103,025)   (20,106)   (71,051)   (31,169)   (24,252)   (25,739)
                             -------------------  ---------  ---------  ---------  ---------  ---------

NET INCOME. . . . . . . . .  $          184,698   $ 34,391   $138,641   $ 63,126   $ 45,056   $ 39,258
                             ===================  =========  =========  =========  =========  =========
</TABLE>



The  results  of  operations  of  the  Company  for  1999  are  affected  by the
acquisition  of  business  from MBL Life on December 31, 1998 (See Note 4 of the
accompanying  consolidated  financial  statements).

                                       10
<PAGE>

<TABLE>
<CAPTION>

ITEM  6.  SELECTED  CONSOLIDATED  FINANCIAL  DATA  (Continued)

                                      At  December  31,                                At  September  30,
                                ---------------------    ------------------------------------------------
                                      1999         1998         1998         1997         1996       1995
                               -----------  -----------  -----------  -----------  ----------  ----------
<S>                            <C>          <C>          <C>          <C>          <C>         <C>
                                                     (In thousands)
FINANCIAL POSITION

Investments . . . . . . . . .  $ 5,551,969  $ 8,306,943  $ 2,734,742  $ 2,608,301  $2,329,232  $2,114,908
Variable annuity assets
  held in separate accounts .   19,949,145   13,767,213   11,133,569    9,343,200   6,311,557   5,230,246
Deferred acquisition costs. .    1,089,979      866,053      539,850      536,155     443,610     383,069
Deferred income taxes               53,445          ---          ---          ---         ---         ---
Other assets. . . . . . . . .      229,956      206,124      142,107       85,573     144,578      55,474
                               -----------  -----------  -----------  -----------  ----------  ----------

TOTAL ASSETS. . . . . . . . .  $26,874,494  $23,146,333  $14,550,268  $12,573,229  $9,228,977  $7,783,697
                               ===========  ===========  ===========  ===========  ==========  ==========

Reserves for fixed annuity
  contracts . . . . . . . . .  $ 3,254,895  $ 5,500,157  $ 2,189,272  $ 2,098,803  $1,789,962  $1,497,052
Reserves for universal life
  insurance contracts            1,978,332    2,339,194          ---          ---         ---         ---
Reserves for guaranteed
  investment contracts. . . .      305,570      306,461      282,267      295,175     415,544     277,095
Variable annuity liabilities
  related to separate
  accounts. . . . . . . . . .   19,949,145   13,767,213   11,133,569    9,343,200   6,311,557   5,230,246
Other payables and accrued
  liabilities . . . . . . . .      413,610      171,143      157,551      157,546     120,638     227,953
Subordinated notes payable
  to affiliates . . . . . . .       37,816      209,367       39,182       36,240      35,832      35,832
Deferred income taxes                  ---      105,772       95,758       67,047      70,189      73,459
Shareholder's equity. . . . .      935,126      747,026      652,669      575,218     485,255     442,060
                               -----------  -----------  -----------  -----------  ----------  ----------

TOTAL LIABILITIES AND
  SHAREHOLDER'S EQUITY. . . .  $26,874,494  $23,146,333  $14,550,268  $12,573,229  $9,228,977  $7,783,697
                               ===========  ===========  ===========  ===========  ==========  ==========
</TABLE>

The  financial position of the Company as of December 31, 1998 and thereafter is
affected  by  the  acquisition  of  business  from  MBL  Life (See Note 4 of the
accompanying  consolidated  financial  statements).

                                       11

<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  ended  December  31,  1999,  September  30, 1998 and 1997 follows.
Effective  December  31,  1998,  the  Company  changed  its fiscal year end from
September  30  to  December  31.  Accordingly,  the  three-  month  period ended
December  31,  1998  was  a  transition  period.

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

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

RESULTS  OF  OPERATIONS

     NET  INCOME totaled $184.7 million in 1999, compared with $138.6 million in
1998  and $63.1 million in 1997.  On December 31, 1998, the Company acquired the
individual  life  business  and the individual and group annuity business of MBL
Life  Assurance  Corporation  (the  "Acquisition").  Since  the  Acquisition was
accounted  for  under  the  purchase method of accounting, results of operations
include  those  of  the  Acquisition  only  from  its  date  of  acquisition.
Consequently,  the  operating  results for 1999 are not comparable with those of
1998 and 1997.  On a pro forma basis, using the historical financial information
of  the acquired business and assuming that the Acquisition had been consummated
on  October  1,  1996, the beginning of the prior-year periods discussed herein,
net  income would have been $158.9 million and $83.4 million for the years ended
September  30,  1998  and  1997,  respectively.

     PRETAX  INCOME  totaled  $287.7 million in 1999, $209.7 million in 1998 and
$94.3  million  in  1997.  The  37.2%  improvement  in  1999 over 1998 primarily
resulted  from  increased  fee  income  and  higher  net  investment

                                       12
<PAGE>

income,  partially  offset  by  higher net realized investment losses, increased
general  and  administrative  expenses  and  increased  amortization of deferred
acquisition  costs.  The 122.4% improvement in 1998 over 1997 primarily resulted
from  increased  fee  income and higher net realized investment gains, partially
offset  by  increased  annual commissions and increased amortization of deferred
acquisition  costs.

     NET  INVESTMENT  INCOME,  which  is the spread between the income earned on
invested  assets  and  the  interest  paid  on  fixed  annuities  and  other
interest-bearing  liabilities,  increased  to  $164.2 million in 1999 from $86.9
million in 1998 and $73.2 million in 1997.  These amounts equal 2.24% on average
invested  assets  (computed on a daily basis) of $7.34 billion in 1999, 3.34% on
average  invested assets of $2.60 billion in 1998, and 2.77% on average invested
assets of $2.65 billion in 1997.  On a pro forma basis, assuming the Acquisition
had  been  consummated  on  October  1,  1996,  net investment income on related
average  invested  assets  would  have  been  1.32% and 1.14% in the years ended
September  30,  1998  and  1997,  respectively.  The  improvement  in  1999  net
investment yields over these pro forma amounts reflects a redeployment of assets
received  in  the  Acquisition  into  higher  yielding  investment  categories.

     Net  investment  spreads  include  the  effect  of  income  earned  on  the
difference  between  average  invested  assets  and  average  interest-bearing
liabilities.  Average  invested  assets  exceeded  average  interest-bearing
liabilities by $187.8 million in 1999, $140.4 million in 1998 and $126.5 million
in  1997.  The difference between the Company's yield on average invested assets
and  the  rate  paid  on  average  interest-bearing  liabilities  (the  "Spread
Difference") was 2.11% in 1999, 3.04% in 1998 and 2.51% in 1997.  On a pro forma
basis,  assuming  the  Acquisition  had been consummated on October 1, 1996, the
Spread  Difference would have been 1.31% and 1.13% for the years ended September
30,  1998 and 1997, reflecting primarily the effect of the lower yielding assets
received  in  the  Acquisition.

     Investment  income  (and  the  related  yields  on average invested assets)
totaled  $522.0 million (7.11%) in 1999, compared with $222.0 million (8.53%) in
1998  and  $210.8  million  (7.97%)  in 1997.  Both the significant increases in
investment  income  and  the decreases in the related yields in 1999 as compared
with  1998  and  1997  principally  resulted from the Acquisition.  The invested
assets associated with the Acquisition included high-grade corporate, government
and  government/agency  bonds  and  cash  and  short-term investments, which are
generally  lower yielding than a significant portion of the invested assets that
comprise  the remainder of the Company's portfolio.  The increased yield in 1998
over  1997 includes the effects of an increasing proportion of mortgage loans in
the  Company's  portfolio,  which on average have higher yields than that of the
Company's  overall  portfolio.  Also  in  1998,  the  Company experienced higher
returns  on its investments in partnerships.  On a pro forma basis, assuming the
Acquisition  had  been  consummated  on  October  1,  1996, the yield on related
average  invested  assets  would  have  been  6.59% and 6.41% in the years ended
September  30,  1998  and  1997,  respectively.

     Investment  income  and  related  yields  in  all  periods also reflect the
Company's  investments in limited partnerships.  Partnership income decreased to
$13.1 million, (a yield of 24.66% on related average assets of $53.2 million) in
1999,  compared with $25.8 million (a yield of 185.62% on related average assets
of  $13.9  million)  in  1998,  and  $7.1  million (a yield of 16.17% on related
average assets of $44.0 million) in 1997.  Partnership income is based primarily
upon  cash  distributions  received from limited partnerships, the operations of
which  the  Company  does  not  influence.  Consequently,  such  income  is  not
predictable  and  there  can  be  no  assurance  that  the  Company will realize
comparable  levels  of  such  income  in  the  future.

                                       13
<PAGE>

     Total  interest  expense  equaled $357.7 million in 1999, $135.1 million in
1998  and $137.6 million in 1997.  The average rate paid on all interest-bearing
liabilities  was  5.00%  in 1999, compared with 5.49% in 1998 and 5.46% in 1997.
Interest-bearing  liabilities  averaged $7.15 billion during 1999, compared with
$2.46  billion during 1998 and $2.52 billion during 1997. Total interest expense
in  1999  and related average rates paid reflect the effects of the Acquisition.
On  a  pro forma basis, assuming the Acquisition had been consummated on October
1,  1996,  the  average rate paid on all interest-bearing liabilities would have
been  5.28%  in  the  years ended September 30, 1998 and 1997, respectively, and
interest-bearing  liabilities  would  have  averaged  $7.84  billion  and  $7.89
billion,  respectively, in those years.  The decreases in the overall rates paid
in  1999  result  primarily  from a generally lower interest rate environment in
1999.

     GROWTH  IN  AVERAGE  INVESTED  ASSETS  since 1998 largely resulted from the
impact  of  the  Acquisition.  Changes  in  average invested assets also reflect
sales of fixed annuities and the fixed account options of the Company's variable
annuity  products  ("Fixed  Annuity  Premiums"),  and  renewal  premiums  on its
universal  life  product  ("UL Premiums") acquired in the Acquisition, partially
offset  by  net  exchanges  from  fixed  accounts  into the separate accounts of
variable  annuity  contracts.  Fixed  Annuity  Premiums  and UL Premiums totaled
$2.10  billion in 1999, compared with $1.51 billion in 1998 and $1.10 billion in
1997,  and  are  largely  premiums for the fixed accounts of variable annuities.
Such  premiums have increased principally because of greater customer allocation
of  new  premium  dollars  to  the  fixed  account options of variable products,
particularly  from  the  Acquisition business, resulting in greater inflows into
the  one-year  and  six-month  fixed  accounts  of  these  products.  Such fixed
accounts  are  principally  used  for  dollar-cost  averaging  into the variable
accounts.  Accordingly, the Company anticipates that it will see a large portion
of these premiums transferred into the variable funds.  These premiums represent
27%, 72% and 61%, respectively, of the related reserve balances at the beginning
of  the  respective  periods.  The decrease in 1999 premiums when expressed as a
percentage  of  related  reserve  balances  results  from  the  impact  of  the
Acquisition.  When  premium  and reserve balances resulting from the Acquisition
are  excluded,  the  resulting  premiums  represent  94%  of the beginning fixed
annuity  reserve  balance  in  1999.

     There  were no guaranteed investment contract ("GIC") premiums in 1999. GIC
premiums totaled $5.6 million in 1998 and $55.0 million in 1997.  GIC surrenders
and  maturities  totaled $19.7 million in 1999, $36.3 million in 1998 and $198.1
million  in  1997.  The  Company  does  not  actively market GICs; consequently,
premiums  and surrenders may vary substantially from period to period.  The GICs
issued  by the Company generally guarantee the payment of principal and interest
at  fixed  or  variable  rates for a term of three to five years.  GICs that are
purchased  by  banks  for  their  long-term  portfolios  or  by  state and local
governmental entities either prohibit withdrawals or permit scheduled book value
withdrawals subject to the terms of the underlying indenture or agreement.  GICs
purchased  by  asset  management  firms  for  their short-term portfolios either
prohibit  withdrawals  or  permit withdrawals with notice ranging from 90 to 270
days.  In  pricing  GICs,  the Company analyzes cash flow information and prices
accordingly  so  that  it  is  compensated  for  possible  withdrawals  prior to
maturity.

     NET  REALIZED  INVESTMENT  LOSSES  totaled  $19.6  in 1999, compared to net
realized  investment  gains of $19.5 million in 1998 and net realized investment
losses of $17.4 million in 1997.  Net realized investment gains (losses) include
impairment  writedowns of $6.1 million in 1999, $13.1 million in 1998, and $20.4
million  in  1997.  Thus,  net  gains  (losses)  from  sales  and redemptions of
investments  totaled  $13.5 million of losses in 1999, $32.6 million of gains in
1998  and  $3.0  million  of  gains  in  1997.

                                       14
<PAGE>

     The  Company sold or redeemed invested assets, principally bonds and notes,
aggregating  $4.43  billion  in 1999, $2.23 billion in 1998 and $2.62 billion in
1997.  Sales  of  investments result from the active management of the Company's
investment  portfolio,  including  assets  received  as part of the Acquisition.
Because  redemptions  of  investments  are  generally  involuntary  and sales of
investments  are made in both rising and falling interest rate environments, net
gains and losses from sales and redemptions of investments fluctuate from period
to  period, and represent 0.18%, 1.25%, and 0.11% of average invested assets for
1999,  1998  and  1997,  respectively.  Active portfolio management involves the
ongoing evaluation of asset sectors, individual securities within the investment
portfolio and the reallocation of investments from sectors that are perceived to
be  relatively  overvalued  to  sectors  that  are  perceived  to  be relatively
undervalued.  The  intent  of  the  Company's  active portfolio management is to
maximize  total returns on the investment portfolio, taking into account credit,
option,  liquidity  and  interest-rate  risk.

     Impairment  writedowns  include $6.1 million of provisions applied to bonds
in  1999,  $9.4  million of provisions applied to partnerships in 1998 and $15.7
million  of  provisions applied to non-income producing land owned in Arizona in
1997.  The  statutory  carrying  value  of  this land had been guaranteed by the
Company's former ultimate parent, SunAmerica Inc. SunAmerica Inc. made a capital
contribution  of  $28.4  million on December 31, 1996 to the Company through the
Company's  direct  parent,  SunAmerica Life Insurance Company (the "Parent"), in
exchange  for  the  termination  of  its  guaranty  with  respect  to this land.
Accordingly,  the  Company  reduced the carrying value of this land to estimated
fair  value  to  reflect  the  full  termination  of  the  guaranty.  Impairment
writedowns  represent  0.08%,  0.50%,  and  0.77% of average invested assets for
1999,  1998  and 1997, respectively. For the five years ended December 31, 1999,
impairment  writedowns  as  a  percentage of average invested assets have ranged
from  0.06%  to  0.77%  and have averaged 0.40%.  Such writedowns are based upon
estimates  of  the  net  realizable  value  of  the  applicable  assets.  Actual
realization  will  be  dependent  upon  future  events.

     VARIABLE  ANNUITY  FEES are based on the market value of assets in separate
accounts  supporting  variable  annuity  contracts.  Such  fees  totaled  $306.4
million  in  1999,  $200.9  million  in  1998  and  $139.5  million in 1997. The
increased  fees  reflect  growth in average variable annuity assets, principally
due to the receipt of variable annuity premiums, net exchanges into the separate
accounts  from  the  fixed  accounts of variable annuity contracts and increased
market  values,  partially offset by surrenders. Variable annuity fees represent
1.9%, 1.9%, and 1.8% of average variable annuity assets for 1999, 1998 and 1997,
respectively.  Variable  annuity  assets averaged $16.15 billion in 1999, $10.70
billion  during  1998 and $7.55 billion during 1997.  Variable annuity premiums,
which  exclude  premiums  allocated  to  the  fixed accounts of variable annuity
products,  aggregated  $1.70  billion  in  1999, $1.82 billion in 1998 and $1.27
billion  in  1997.  These amounts represent 12%, 19% and 20% of variable annuity
reserves  at  the  beginning  of  the  respective  periods.  Such  premiums have
decreased  in  1999  principally  because  of greater customer allocation of new
premium  dollars to the fixed account options of variable products, particularly
from  the  Acquisition  business, resulting in greater inflows into the one-year
and  six-month  fixed  accounts  of  these  products.  Transfers  from the fixed
accounts  of  the  Company's  variable annuity products to the separate accounts
(see "Growth in Average Invested Assets") are not classified in variable annuity
premiums  (in  accordance  with  generally  accepted  accounting  principles).
Accordingly, changes in variable annuity premiums are not necessarily indicative
of the ultimate allocation by customers among fixed and variable account options
of  the  Company's  variable  annuity  products.

     Sales  of  variable  annuity  products  (which  include  premiums allocated

                                       15
<PAGE>

to  the  fixed  accounts)  ("Variable  Annuity Product Sales") amounted to $3.66
billion,  $3.33  billion and $2.37 billion in 1999, 1998 and 1997, respectively.
Variable Annuity Product Sales primarily reflect sales of the Company's flagship
variable  annuity,  Polaris.  The  Polaris  products  are  multimanager variable
annuities  that  offer  investors  a choice of more than 25 variable funds and a
number  of  guaranteed  fixed-rate funds.  Increases in Variable Annuity Product
Sales are due, in part, to enhanced distribution efforts and consumer demand for
flexible  retirement  savings  products  that  offer  a variety of equity, fixed
income  and  guaranteed  fixed  account  investment  choices.

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

     NET  RETAINED  COMMISSIONS  are  primarily  derived from commissions on the
sales  of  nonproprietary  investment  products  by the Company's subsidiary and
affiliate  broker-dealers,  after  deducting  the  substantial  portion  of such
commissions  that  is  passed  on  to  registered representatives.  Net retained
commissions  totaled  $51.0  million  in  1999,  $48.6 million in 1998 and $39.1
million  in  1997.  Broker-dealer  sales  (mainly  sales  of general securities,
mutual  funds  and  annuities) totaled $13.40 million in 1999, $14.37 billion in
1998  and  $11.56 billion in 1997.  Fluctuations in net retained commissions may
not  be proportionate to fluctuations in sales primarily due to changes in sales
mix.

     ASSET  MANAGEMENT  FEES,  which include investment advisory fees  and 12b-1
distribution  fees,  are  based  on the market value of assets managed in mutual
funds  by  SunAmerica Asset Management Corp.  Such fees totaled $43.5 million on
average assets managed of $4.19 billion in 1999, $29.6 million on average assets
managed  of $2.89 billion in 1998 and $25.8 million on average assets managed of
$2.34  billion in 1997.  Asset management fees are not necessarily proportionate
to  average  assets  managed, principally due to changes in product mix.  Mutual
fund  sales,  excluding sales of money market accounts, aggregated $1.48 billion
in  1999,  compared with $853.6 million in 1998 and $454.8 million in 1997.  The
increase  in sales during 1999 and 1998 resulted in part from increased sales of
the  Company's  "Style  Select  Series" product.  The "Style Select Series" is a
group  of  mutual  funds that are each managed by three industry-recognized fund
managers.  In  1999,  the  number  of  portfolios  in  the "Style Select Series"
increased  by  one "Focus Portfolio" to ten.  The Focus Portfolios utilize three
leading  independent  money  managers,  each  of  whom  manages one-third of the
portfolio  by  choosing ten favorite stocks.  Sales of the "Style Select Series"
products  totaled $938.5 million in 1999, compared to $550.6 million in 1998 and
$267.8  million  in 1997.  Redemptions of mutual funds, excluding redemptions of
money  market  accounts,  amounted  to $571.5 million in 1999, $402.5 million in
1998  and  $412.8  million  in  1997,  which  represent  16.8%, 17.5% and 22.0%,
respectively,  of  average  related  mutual  fund  assets.

     UNIVERSAL  LIFE  INSURANCE  FEES  result  from the universal life insurance
contract reserves acquired in the Acquisition and the ongoing receipt of renewal
premiums on such contracts, and comprise mortality charges, up-front fees earned
on  premiums  received  and  administrative  fees,  net  of the excess mortality
expense  on  these  contracts.  Universal  life insurance fees amounted to $23.3
million  in  1999.  Such  fees represent 1.10% of average reserves for universal
life  insurance  contracts for 1999.  Since the Acquisition occurred on December
31,  1998,  there  were  no  such  fees  earned  in  1998  or  1997.

                                       16

<PAGE>

     SURRENDER  CHARGES  on  fixed  and variable annuity contracts and universal
life  contracts  totaled  $17.1  million  in  1999  (including  $1.5  million
attributable to the Acquisition), $7.4 million in 1998 and $5.5 million in 1997.
Surrender  charges  generally  are  assessed  on  withdrawals at declining rates
during  the first seven years of a contract.  Withdrawal payments, which include
surrenders  and  lump-sum  annuity  benefits,  totaled  $3.12  billion  in  1999
(including $1.58 billion attributable to the Acquisition), $1.14 billion in 1998
and  $1.06  billion  in  1997.  These payments when expressed as a percentage of
average  fixed  and variable annuity and universal life reserves are 13.8% (7.0%
attributable  to  the  Acquisition),  9.0%  and  11.2%  for 1999, 1998 and 1997,
respectively.  The  relatively  high  surrenders  in  the  acquisition  block of
business  were  expected  and  occurred  because July 1, 1999 was the first time
since  1991  that  these  policyholders  were  able  to surrender their policies
without  a moratorium fee.  Excluding the effects of the Acquisition, withdrawal
payments  represent  8.3% of related average fixed and variable annuity reserves
in  1999.  Withdrawals  include  variable  annuity withdrawals from the separate
accounts  totaling  $1.34  billion  (8.3% of average variable annuity reserves),
$952.1  million  (8.9%  of average variable annuity reserves) and $822.0 million
(10.9%  of  average  variable  annuity  reserves)  in  1999,  1998  and  1997,
respectively.

     GENERAL  AND  ADMINISTRATIVE  EXPENSES  totaled  $154.7  million  in  1999,
compared with $96.1 million in 1998 and $98.8 million in 1997.  The increases in
1999  over  1998 principally reflect the increased costs related to the business
acquired  in  the  Acquisition  and  expenses related to servicing the Company's
growing block of variable annuity policies.  General and administrative expenses
remain  closely  controlled  through a company-wide cost containment program and
continue  to  represent  less  than  1%  of  average  total  assets.

     AMORTIZATION  OF  DEFERRED  ACQUISITION  COSTS  totaled  $116.8  million
(including  $8.9 million attributable to the Acquisition) in 1999, compared with
$72.7  million in 1998 and $66.9 million in 1997.  The increases in amortization
were  primarily  due  to  additional  fixed and variable annuity and mutual fund
sales  and the subsequent amortization of related deferred commissions and other
direct  selling  costs.

     ANNUAL  COMMISSIONS represent renewal commissions paid quarterly in arrears
to  maintain  the  persistency  of  certain  of  the  Company's variable annuity
contracts.  Substantially  all  of  the  Company's  currently available variable
annuity  products  allow for an annual commission payment option in return for a
lower  immediate  commission.  Annual commissions totaled $40.8 million in 1999,
$18.2  million  in  1998  and  $9.0  million  in  1997.  The increases in annual
commissions  since  1997  reflect  increased  sales of annuities that offer this
commission  option  and  gradual expiration of the initial fifteen-month periods
before such payments begin.  The Company estimates that over 55% of its variable
annuity  product  liabilities  are currently subject to such annual commissions.
Based  on  current  sales,  this  percentage  is  expected to increase in future
periods.

     INCOME  TAX  EXPENSE  totaled  $103.0  million in 1999, compared with $71.1
million  in  1998 and $31.2 million in 1997, representing effective tax rates of
36%  in  1999,  34%  in  1998  and  33%  in  1997.

FINANCIAL  CONDITION  AND  LIQUIDITY

     SHAREHOLDER'S EQUITY increased 25.2% to $935.1 million at December 31, 1999
from  $747.0  million at December 31, 1998, due principally to $184.7 million of
net  income  recorded  in 1999, partially offset by a $110.9 million increase in
accumulated  other  comprehensive  loss.  In  addition,  the  Company received a
$114.3  million  net  capital  contribution  from  the  Parent  (see  Note

                                       17
<PAGE>

10  of  Notes  to  Consolidated  Financial  Statements).

     INVESTED  ASSETS  at December 31, 1999 totaled $5.55 billion, compared with
$8.31  billion  at  December  31, 1998.  The decrease in invested assets in 1999
compared  to  1998  is  primarily  due  to  the  expected high surrenders in the
business  acquired in the Acquisition.  The Company manages most of its invested
assets  internally.  The  Company's  general  investment  philosophy  is to hold
fixed-rate  assets  for  long-term investment.  Thus, it does not have a trading
portfolio.  However,  the  Company  has  determined that all of its portfolio of
bonds, notes and redeemable preferred stocks (the "Bond Portfolio") is available
to  be sold in response to changes in market interest rates, changes in relative
value  of  asset  sectors and individual securities, changes in prepayment risk,
changes in the credit quality outlook for certain securities, the Company's need
for  liquidity  and  other  similar  factors.

     THE BOND PORTFOLIO, which constituted 71% of the Company's total investment
portfolio,  had  an  amortized  cost  that  was  $202.6 million greater than its
aggregate  fair  value  at  December  31,  1999, compared with an excess of $3.9
million  at  December 31, 1998.  The net unrealized losses on the Bond Portfolio
in 1999 principally reflect the recent increase in prevailing interest rates and
the corresponding effect on the fair value of the Bond Portfolio at December 31,
1999.

     At  December  31,  1999,  the  Bond  Portfolio  (excluding  $4.5 million of
redeemable preferred stocks) included $3.81 billion of bonds rated by Standard &
Poor's Corporation ("S&P"), Moody's Investors Service ("Moody's"), Duff & Phelps
Credit  Rating  Co.  ("DCR"),  Fitch  Investors  Service,  L.P. ("Fitch") or the
National  Association of Insurance Commissioners ("NAIC"), and $138.5 million of
bonds  rated by the Company pursuant to statutory ratings guidelines established
by  the  NAIC.  At  December  31,  1999, approximately $3.57 billion of the Bond
Portfolio  was  investment  grade,  including  $1.43  billion  of  U.S.
government/agency  securities  and  mortgage-backed  securities  ("MBSs").

     At  December  31, 1999, the Bond Portfolio included $376.1 million of bonds
that  were not investment grade.  These non-investment-grade bonds accounted for
1.4%  of  the  Company's  total  assets  and  6.8%  of  its  invested  assets.

     Non-investment-grade securities generally provide higher yields and involve
greater  risks  than investment-grade securities because their issuers typically
are  more  highly  leveraged  and more vulnerable to adverse economic conditions
than  investment-grade  issuers.  In  addition,  the  trading  market  for these
securities  is  usually  more limited than for investment-grade securities.  The
Company  had  no  material  concentrations of non-investment-grade securities at
December  31,  1999.

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

                                       18
<PAGE>

<TABLE>
<CAPTION>

                                        RATED BONDS BY RATING CLASSIFICATION
                                               (Dollars in thousands)

                                          Issues  not  rated  by  S&P/Moody's/
   Issues  Rated  by  S&P/Moody's/DCR/Fitch      DCR/Fitch,  by  NAIC Category                                Total
-------------------------------------------  ---------------------------------  -----------------------------------
S&P/(Moody's)                     Estimated       NAIC               Estimated               Estimated   Percent of
[DCR] {Fitch}         Amortized        fair   category   Amortized        fair   Amortized        fair     invested
  category (1)             cost       value        (2)        cost       value        cost       value       assets
-------------------  ----------  ----------  ---------  ----------  ----------  ----------  ----------  -----------
<S>                  <C>         <C>         <C>        <C>         <C>         <C>         <C>         <C>
AAA+ to A-
  (Aaa to A3)
  [AAA to A-]
  {AAA to A-} . . .  $2,809,442  $2,663,519         1   $  167,810  $  168,798  $2,977,252  $2,832,317       51.01%

BBB+ to BBB-
  (Baal to Baa3)
  [BBB+ to BBB-]
  {BBB+ to BBB-}. .     636,752     609,079         2      133,351     131,111     770,103     740,190       13.33

BB+ to BB-
  (Ba1 to Ba3)
  [BB+ to BB-]
  {BB+ to BB-}. . .      71,360      67,472         3            0           0      71,360      67,472        1.22

B+ to B-
  (B1 to B3)
  [B+ to B-]
  {B+ to B-}. . . .     290,407     275,381         4       10,876       9,970     301,283     285,351        5.14

CCC+ to C
  (Caa to C)
  [CCC]
  {CCC+ to C-}. . .      17,357      11,638         5       13,867      11,523      31,224      23,161        0.42

CI to D
  [DD]
  {D} . . . . . . .           0           0         6          131         131         131         131        0.00
                     ----------  ----------             ----------  ----------  ----------  ----------

TOTAL RATED ISSUES.  $3,825,318  $3,627,089             $  326,035  $  321,533  $4,151,353  $3,948,622
                     ==========  ==========             ==========  ==========  ==========  ==========
<FN>

Footnotes  appear  on  the  following  page.
</TABLE>


                                       19
<PAGE>

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

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

(2)     Bonds and short-term promissory instruments are divided into six quality
categories  for NAIC rating purposes, ranging from 1 (highest) to 5 (lowest) for
nondefaulted  bonds  plus  one category, 6, for bonds in or near default.  These
six  categories  correspond  with the S&P/Moody's/DCR/Fitch rating groups listed
above, with categories 1 and 2 considered investment grade.  The NAIC categories
include  $138.5  million  of  assets  that were rated by the Company pursuant to
applicable  NAIC  rating  guidelines.

                                       20
<PAGE>
     Senior  secured  loans ("Secured Loans") are included in the Bond Portfolio
and aggregated $373.6 million at December 31, 1999.  Secured Loans are senior to
subordinated  debt  and  equity,  and  are  secured by assets of the issuer.  At
December  31,  1999, Secured Loans consisted of $73.0 million of publicly traded
securities  and  $300.6  million  of privately traded securities.  These Secured
Loans  are composed of loans to 66 borrowers spanning 17 industries, with 13% of
these  assets  concentrated  in  utilities  and  11%  concentrated  in financial
institutions.  No other industry concentration constituted more than 7% of these
assets.

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

     MORTGAGE LOANS aggregated $674.7 million at December 31, 1999 and consisted
of  136  commercial  first  mortgage  loans  with  an  average  loan  balance of
approximately  $5.0  million, collateralized by properties located in 29 states.
Approximately 36% of this portfolio was office, 17% was multifamily residential,
10%  was hotels, 10% was manufactured housing, 9% was industrial, 5% was retail,
and  13%  was  other  types.  At December 31, 1999, approximately 36% and 11% of
this  portfolio  were  secured by properties located in California and New York,
respectively,  and  no  more than 8% of this portfolio was secured by properties
located  in any other single state. At December 31, 1999, there were 10 mortgage
loans  with  outstanding  balances  of  $10  million or more, which collectively
aggregated  approximately  30%  of  this  portfolio.  At  December  31,  1999,
approximately 31% of the mortgage loan portfolio consisted of loans with balloon
payments  due  before  January  1,  2003.  During  1999,  1998  and  1997, loans
delinquent  by  more  than 90 days, foreclosed loans and restructured loans have
not  been  significant  in  relation  to  the  total  mortgage  loan  portfolio.

     At December 31, 1999, approximately 12% of the mortgage loans were seasoned
loans  underwritten to the Company's standards and purchased at or near par from
other financial institutions.  Such loans generally have higher average interest
rates  than  loans  that  could be originated today. The balance of the mortgage
loan  portfolio  has  been  originated  by the Company under strict underwriting
standards.  Commercial  mortgage loans on properties such as offices, hotels and
shopping  centers  generally  represent  a higher level of risk than do mortgage
loans  secured  by  multifamily residences.  This greater risk is due to several
factors,  including the larger size of such loans and the more immediate effects
of general economic conditions on these commercial property types.  However, due
to  the strict underwriting standards utilized, the Company believes that it has
prudently  managed  the  risk  attributable to its mortgage loan portfolio while
maintaining  attractive  yields.

     POLICY  LOANS  aggregated  $260.1 million at December 31, 1999, compared to
$320.7  million  at  December  31,  1998.  This  decrease  was  primarily due to
repayment  of  policy  loans by surrendering policyholders from the Acquisition.

     PARTNERSHIP  INVESTMENTS  totaled  $4.0  million  at  December  31,  1999,
constituting  investments  in  6  separate  partnerships with an average size of

                                       21

<PAGE>
approximately  $0.7  million.  These partnerships are accounted for by using the
cost  method  of  accounting  and are managed by independent money managers that
invest  in  a  broad  selection of equity and fixed-income securities, currently
including  8 separate issuers.  The risks generally associated with partnerships
include  those  related to their underlying investments (i.e., equity securities
and  debt  securities),  plus a level of illiquidity, which is mitigated to some
extent  by  the  existence  of  contractual  termination  provisions.

     SEPARATE  ACCOUNT  SEED  MONEY totaled $141.5 million at December 31, 1999,
consisting  of  seed  money for mutual funds used as investment vehicles for the
Company's  variable  annuity  separate  accounts.

     OTHER  INVESTED  ASSETS  aggregated  $19.4  million  at  December 31, 1999,
compared  with $15.2 million at December 31, 1998, and consist of collateralized
bond  obligations.

     ASSET-LIABILITY  MATCHING  is utilized by the Company to minimize the risks
of  interest rate fluctuations and disintermediation.  The Company believes that
its  fixed-rate liabilities should be backed by a portfolio principally composed
of  fixed-rate  investments  that  generate  predictable  rates  of return.  The
Company  does  not have a specific target rate of return.  Instead, its rates of
return  vary  over  time depending on the current interest rate environment, the
slope  of the yield curve, the spread at which fixed-rate investments are priced
over  the  yield  curve,  default  rates  and  general economic conditions.  Its
portfolio  strategy is constructed with a view to achieve adequate risk-adjusted
returns  consistent  with its investment objectives of effective asset-liability
matching,  liquidity  and safety.  The Company's fixed-rate products incorporate
surrender  charges  or  other  restrictions  in  order to encourage persistency.
Approximately  48%  of  the  Company's  fixed  annuity,  universal  life and GIC
reserves  had  surrender  penalties  or other restrictions at December 31, 1999.

     As  part  of  its asset-liability matching discipline, the Company conducts
detailed  computer  simulations that model its fixed-rate assets and liabilities
under  commonly  used  stress-test interest rate scenarios.  With the results of
these  computer  simulations, the Company can measure the potential gain or loss
in fair value of its interest-rate sensitive instruments and seek to protect its
economic  value  and  achieve  a predictable spread between what it earns on its
invested  assets and what it pays on its liabilities by designing its fixed-rate
products  and conducting its investment operations to closely match the duration
of  the  fixed-rate assets to that of its fixed-rate liabilities.  The Company's
fixed-rate  assets  include:  cash  and short-term investments; bonds, notes and
redeemable  preferred  stocks;  mortgage  loans;  and  investments  in  limited
partnerships  that  invest  primarily in fixed-rate securities and are accounted
for  by  using  the  cost  method.  At  December  31,  1999, these assets had an
aggregate  fair  value  of  $5.05 billion with a duration of 3.2.  The Company's
fixed-rate  liabilities  include  fixed annuity, GIC and universal life reserves
and  subordinated  notes.  At  December  31,  1999,  these  liabilities  had  an
aggregate fair value (determined by discounting future contractual cash flows by
related  market rates of interest) of $4.81 billion with a duration of 4.1.  The
Company's  potential exposure due to a 10% decrease in prevailing interest rates
from  their  December  31, 1999 levels is a loss of approximately $22.4 million,
representing an increase in the fair value of its fixed-rate liabilities that is
not  offset  by an increase in the fair value of its fixed-rate assets.  Because
the  Company  actively  manages its assets and liabilities and has strategies in
place  to  minimize  its  exposure  to  loss  as interest rate changes occur, it
expects  that  actual  losses  would  be less than the estimated potential loss.

                                       22

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

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

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

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

                                       23

<PAGE>
security  with  the  intent  to  maximize  total  return.

     INVESTED  ASSETS  EVALUATION  is  routinely  conducted  by  the  Company.
Management  identifies  monthly  those  investments  that  require  additional
monitoring  and  carefully  reviews  the  carrying values of such investments at
least  quarterly to determine whether specific investments should be placed on a
nonaccrual  basis  and  to  determine  declines  in value that may be other than
temporary.  In  making these reviews for bonds, management principally considers
the  adequacy  of  any  collateral,  compliance  with contractual covenants, the
borrower's  recent  financial  performance,  news  reports  and other externally
generated information concerning the creditor's affairs. In the case of publicly
traded  bonds,  management also considers market value quotations, if available.
For  mortgage  loans,  management generally considers information concerning the
mortgaged  property  and,  among other things, factors impacting the current and
expected payment status of the loan and, if available, the current fair value of
the  underlying  collateral. For investments in partnerships, management reviews
the financial statements and other information provided by the general partners.

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

     DEFAULTED INVESTMENTS, comprising all investments that are in default as to
the  payment  of  principal or interest, totaled $0.9 ($0.2 million of bonds and
$0.7  million of mortgage loans) at December 31, 1999, and constituted less than
0.1%  of  total  invested  assets.  At  December 31, 1998, defaulted investments
totaled  $1.9  million,  including  $1.2  million  of  bonds and $0.7 million of
mortgage  loans,  and  constituted  less  than  0.1%  of  total invested assets.

     SOURCES  OF  LIQUIDITY  are readily available to the Company in the form of
the  Company's  existing  portfolio  of cash and short-term investments, Reverse
Repo  capacity on invested assets and, if required, proceeds from invested asset
sales.  At December 31, 1999, approximately $484.1 million of the Company's Bond
Portfolio had an aggregate unrealized gain of $18.0 million, while approximately
$3.47  billion  of the Bond Portfolio had an aggregate unrealized loss of $220.5
million.  In  addition,  the  Company's  investment portfolio currently provides
approximately  $46.4  million  of monthly cash flow from scheduled principal and
interest payments. Historically, cash flows from operations and from the sale of
the  Company's annuity and GIC products have been more than sufficient in amount
to satisfy the Company's liquidity needs.  As the Company anticipated, liquidity
needs  were  unusually  high  this past year due to the Acquisition.  Short-term
investments  were  sold  as  needed  to satisfy these current cash requirements.

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

                                       24

<PAGE>
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.

     CONTINGENT  LIABILITIES  are  discussed  in  Note  9  of  the  accompanying
consolidated  financial  statements.

     RECENTLY  ISSUED  ACCOUNTING  STANDARDS  are  discussed  in  Note  2 of the
accompanying  consolidated  financial  statements.

YEAR  2000

     The  year  2000 issue arose from computer programs written using two digits
rather than four digits to define the applicable year.  This possibly could have
caused  a  failure  of the information technology systems (IT systems) and other
equipment containing imbedded technology (non-IT systems) in the year 2000.  The
Company  implemented  a  plan  to address the Year 2000 issue and to assess Year
2000  issues  relating  to  third  parties  with  which the Company has critical
relationships.  The  Company's cost to make necessary repairs had no significant
impact  on  its  results  of  operations.  The  Company  has not experienced any
business  disruption  from  the Year 2000 issue.  Its IT and non-IT systems were
compliant  on  January  1,  2000, and there have been no problems related to any
third  parties  compliance.

ITEM  7A.  QUANTITATIVE  AND  QUALITATIVE  DISCLOSURES  ABOUT  MARKET  RISK

     The  quantitative  and  qualitative  disclosures  about  market  risk  are
contained in the Asset-Liability Matching section of Management's Disclosure and
Analysis  of  Financial  Condition  and Results of Operations on pages 22 and 23
herein.  Statement  of  Financial  Accounting Standards No. 133, "Accounting for
Derivative  Instruments  and  Hedging  Activities,"  will  be  effective for the
Company  as  of  January  1,  2001.  Therefore,  it  is  not  included  in  the
accompanying  financial  statements.  The Company has not completed its analysis
of  the  effect  of  SFAS  133,  but management believes that it will not have a
material  impact  on the Company's results of operations, financial condition or
liquidity.

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.

                                       25

<TABLE>
<CAPTION>

                                        PART III

ITEM  10.  DIRECTORS  AND  EXECUTIVE  OFFICERS

     The  directors  and  principal  officers of Anchor National Life Insurance Company
(the  "Company") as of March 29, 2000 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).

                                                      Other  Positions  and
                                           Year       Other  Business
                          Present          Assumed    Experience  Within
   Name              Age  Position         Position   Last Five Years**         From-To
   ----              ---  --------         --------   -----------------         -------


<S>                <C>  <C>                 <C>   <C>                         <C>
Eli Broad*. . . .   66  Chairman,           1994  Cofounded SAI
                        Chief Executive           in 1957
                        Officer and
                        President of
                        the Company
                        Chairman, Chief     1986
                        Executive Officer
                        and President of
                        SunAmerica Inc.
                        ("SAI")

Jay S. Wintrob* .   42  Executive Vice      1991  (Joined SAI in 1987)
                        President of the
                        Company
                        Vice Chairman and   1998
                        Chief Operating
                        Officer of SAI

James R. Belardi*   42  Senior Vice         1992  (Joined SAI in 1986)
                        President of the
                        Company
                        Executive Vice      1995
                        President of SAI

Marc H. Gamsin* .   44  Senior Vice         1999  Executive Vice President      1998 to
                        President of the          SunAmerica Investments,     Present
                        Company                   Inc. (GA)
                        Senior Vice         1996  Executive Vice President,   1997-1998
                        President of SAI          SunAmerica Investments,
                                                  Inc. (DE)
                                                  Partner, O'Melveny &        1976-1996
                                                  Myers, LLP

Jana W. Greer*. .   47  Senior Vice         1994  (Joined SAI in 1974)
                        President of the
                        Company
                        Senior Vice
                        President of SAI    1992



<FN>

____________________________________
*  Also  services  as  a  director
**  Unless  otherwise  indicated,  officers  and  positions  are  with  SunAmerica Inc.
</TABLE>


                                       26
<PAGE>
<TABLE>
<CAPTION>

                                                      Other  Positions  and
                                           Year       Other  Business
                          Present          Assumed    Experience  Within
   Name              Age  Position         Position   Last  Five  Years**         From-To
   ----              ---  --------         --------   -------------------         -------


<S>                   <C>  <C>                <C>   <C>                         <C>
Susan L. Harris* . .   42  Senior Vice        1994  Vice President,             1994-1995
                           President and            General Counsel-
                           Secretary of the         Corporate Affairs and
                           Company                  Secretary of SAI
                           Senior Vice        1995
                           President,
                           General Counsel
                           and Secretary of
                           SAI                      (Joined SAI in 1985)

N. Scott Gillis* . .   46  Senior Vice        2000  Senior Vice President       1994-1999
                           President of the         and Controller,
                           Company                  SunAmerica Life Insurance
                           Vice President of  1997  Companies ("SLC")
                           SAI                      (Joined SAI in 1985)

Gregory M. Outcalt .   37  Senior Vice        2000  Vice President, SLC         1993-1999
                           President of the         (Joined SAI in 1986)
                           Company

Edwin R. Raquel. . .   42  Senior Vice        1995  Vice President,             1990-1995
                           President and            Actuary, SLC
                           Chief Actuary
                           of the Company

David R. Bechtel . .   32  Vice President     1998  Vice President,             1996-1998
                           and Treasurer of         Deutsche Morgan
                           the Company              Grenfell, Inc.
                           Vice President     1998  Associate,                  1995-1996
                           and Treasurer of         UBS Securities LLC
                           SAI                      Associate,                       1994
                                                    Wachtell Lipton Rosen
                                                    & Katz

P. Daniel Demko, Jr.   50  Vice President     1999  Executive Vice President,     1998 to
                           of the Company           SunAmerica Retirement       Present
                                                    Markets, Inc.
                                                    President & Vice            1995-1998
                                                    Chairman, Global Health
                                                    Network, LLC
                                                    Owner, P. Demko Company     1992-1995

J. Franklin Grey . .   47  Vice President     1994  Vice President of             1994 to
                           of the Company           Certain SLC                 Present

<FN>

____________________________________
*  Also  serves  as  a  director
**  Unless  otherwise  indicated,  officers  and  positions  are  with  SunAmerica  Inc.
</TABLE>


                                       27
<PAGE>
<TABLE>
<CAPTION>

                                                      Other  Positions  and
                                           Year       Other  Business
                          Present          Assumed    Experience  Within
   Name              Age  Position         Position   Last  Five Years**         From-To
   ----              ---  --------         --------   ------------------         -------


<S>                   <C>  <C>               <C>   <C>                         <C>
Kevin J. Hart. . . .   45  Vice President    1999  Executive Vice President,     1995 to
                           of the Company          SunAmerica Retirement       Present
                                                   Markets, Inc.
                                                   National Sales Manager,     1991-1995
                                                   American Skandia Life
                                                   Assurance Corporation

Edward P. Nolan, Jr.   50  Vice President    1993  (Joined SAI in 1989)
                           of the Company

Stewart R. Polakov .   40  Vice President    2000  Vice President,             1997-1999
                           of the Company          SunAmerica Financial,
                                                   division of the Company
                                                   Director, Investment        1994-1997
                                                   Accounting, SAI
                                                   (Joined SAI in 1991)

Scott H. Richland. .   37  Vice President    1994  Senior Vice President       1997-1998
                           of the Company          and Treasurer of SAI
                           Senior Vice       1997  Vice President and          1995-1997
                           President of SAI        Treasurer of SAI
                                                   Vice President and          1994-1995
                                                   Assistant Treasurer
                                                   of SAI
                                                   (Joined SAI in 1990)

<FN>

____________________________________
*  Also  services  as  a  director
**  Unless  otherwise  indicated,  officers  and  positions  are  with  SunAmerica  Inc.
</TABLE>


                                       28

<PAGE>


<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 for
services  rendered  in  all  capacities  to  the  Company  during  1999:
<TABLE>
<CAPTION>

  Name  of  Individual  or          Capacities  In     Allocated  Cash
         Number  in  Group           Which  Served        Compensation
   -----------------------   ----------------------     --------------

<S>                          <C>                        <C>
  Eli Broad . . . . . . . .  Chairman, Chief Executive  $1,717,681
                               Officer and President
  Jay S. Wintrob. . . . . .  Executive Vice President      858,159
  Jana Waring Greer . . . .  Senior Vice President         673,541
  Daniel P. Demko . . . . .  Vice President                521,513
  Scott H. Richland . . . .  Vice President                273,303
</TABLE>

     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

     The  Company  is  an  indirect  wholly  owned  subsidiary  of  American
International  Group,  Inc.

ITEM  13.  CERTAIN  RELATIONSHIPS  AND  RELATED  TRANSACTIONS

     None.


                                       29
<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
------                         -----------

  2(a)     Purchase  and Sale Agreement, dated as of July 15, 1998, by and among
the  Company,  SunAmerica  Inc. ("SAI"), First SunAmerica Life Insurance Company
and  MBL  Life  Assurance  Corporation,  is  incorporated herein by reference to
Exhibit  2(e) to SAI's 1998 Annual Report on Form 10-K, filed December 21, 1998.
  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 the 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 the 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)     Amendment  to  the  Subordinated  Loan  Agreement for Equity Capital,
dated  as  of  August  22,  1996,  between  the Company's subsidiary, SunAmerica
Capital  Services,  Inc.  ("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, defining SAI's rights with respect to the 9% notes due
September  29, 1996, is incorporated herein by reference to Exhibit 10(f) to the
Company's  Form  10-K,  filed  December  19,  1996.
 10(b)     Subordinated  Loan Agreement for Equity Capital, dated as of July 24,
1996, between the Company's subsidiary, Royal Alliance Associates, Inc. and SAI,
defining  SAI's  rights  with  respect  to  the  9% notes due August 23, 1999 is
incorporated  herein  by  reference to Exhibit 10(k) to the Company's Form 10-K,
filed  December  19,  1996.
 10(c)     Amendment  to  the  Subordinated  Loan  Agreement for Equity Capital,
dated  as  of  September  3,  1996, between the Company's subsidiary, SunAmerica
Asset  Management  Corp.,  and SAI, extending the maturity date to September 13,
1999  of a Subordinated Loan Agreement for Equity Capital, dated as of September
3,  1993,  defining  SAI's rights with respect to the 7% notes due September 13,
1996, is incorporated herein by reference to Exhibit 10(l) to the Company's Form
10-K,  filed  December  19,  1996.
 10(d)     Subordinated  Loan Agreement for Equity Capital, dated as of February
19, 1997, between the Company's subsidiary, SACS, and SAI, defining SAI's rights
with  respect to the 9% notes due Exhibit March 14, 2000, is incorporated herein
by reference to Exhibit 10(a) to Company's quarterly report on Form 10-Q for the
quarter  ended  March  31,  1997,  filed  May  15,  1997.

                                       30
<PAGE>
Exhibit
   No.                         Description
------                         -----------

 10(e)     Subordinated Loan Agreement for Equity Capital, dated as of April 29,
1998,  between  the  Company's  subsidiary, SACS, and SAI, defining SAI's rights
with  respect  to  the  8.5%  notes due June 27, 2001, is incorporated herein by
reference  to  Exhibit  10(a) to the Company's quarterly report on Form 10-Q for
the  quarter  ended  June  30,  1998,  filed  August  14,  1998.
 10(f)     Subordinated  Loan  Agreement for Equity Capital, dated as of June 3,
1998,  between  the  Company's  subsidiary, SACS, and SAI, defining SAI's rights
with  respect  to  the  8.5%  notes due July 30, 2001, is incorporated herein by
reference  to  Exhibit  10(b) to the Company's quarterly report on Form 10-Q for
the  quarter  ended  June  30,  1998,  filed  August  14,  1998.
 10(g)     Subordinated  Loan  Agreement  for Equity Capital, dated as of August
25, 1998, between the Company's subsidiary, SACS, and SAI, defining SAI's rights
with  respect  to the 8.5% notes due October 30, 2001, is incorporated herein by
reference  to Exhibit 10(g) to the Company's Form 10-K, filed December 23, 1998.
 10(h)     Subordinated Loan Agreement for Equity Capital, dated as of March 12,
1999,  between  the  Company's  subsidiary, SACS, and SAI, defining SAI's rights
with  respect  to  the  8.5% notes due April 30, 2002, is incorporated herein by
reference  to  Exhibit  10(a) to the Company's quarterly report on Form 10-Q for
the  quarter  ended  March  31,  1999,  filed  May  14,  1999.
 10(i)     Subordinated Loan Agreement for Equity Capital, dated as of August 9,
1999,  between  the  Company's  subsidiary, SACS, and SAI, defining SAI's rights
with  respect  to the 8% notes due September 30, 2002, is incorporated herein by
reference  to  Exhibit  10(a) to the Company's quarterly report on Form 10-Q for
the  quarter  ended  September  30,  1999,  filed  November  15,  1999.
 10(j)     Asset  Lease  Agreement, dated June 26, 1998, between the Company and
Aurora  National  Life  Assurance  Company  ("Aurora"), relating to a lease from
Aurora  of certain information relating to single premium deferred annuities, is
incorporated  herein  by  reference by Exhibit 10(h) to the Company's Form 10-K,
filed  December  23,  1998.
 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 December
31,  1999.

                                       31

<PAGE>

<TABLE>
<CAPTION>

                                   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/  N.  SCOTT  GILLIS
                         ------------------------
                         N.  Scott  Gillis
March  30,  2000         Senior  Vice  President  and  Director

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


      Signature                            Title                 Date
-------------------------------  -------------------------  --------------
<S>                              <C>                        <C>
/s/   ELI BROAD . . . . . . . .  Chairman, Chief Executive  March 30, 2000
-------------------------------
      Eli Broad . . . . . . . .  Officer and President
                                 (Principal Executive Officer)

/s/   N. SCOTT GILLIS . . . . .  Senior Vice President and  March 30, 2000
-------------------------------
      N. Scott Gillis . . . . .  Director (Principal
                                 Financial Officer)

/s/   GREGORY M. OUTCALT. . . .  Senior Vice President and  March 30, 2000
-------------------------------
      Gregory M. Outcalt. . . .  Controller (Principal
                                 Accounting Officer)

/s/   JAY S. WINTROB. . . . . .  Executive Vice President   March 30, 2000
-------------------------------
      Jay S. Wintrob. . . . . .  and Director

/s/   JAMES R. BELARDI. . . . .  Senior Vice President,     March 30, 2000
-------------------------------
      James R. Belardi. . . . .  Treasurer and Director

/s/   MARC H. GAMSIN. . . . . .  Senior Vice President      March 30, 2000
-------------------------------
      Marc H. Gamsin. . . . . .  and Director

/s/   JANA W. GREER . . . . . .  Senior Vice President      March 30, 2000
-------------------------------
      Jana W. Greer . . . . . .  and Director

/s/   SUSAN L. HARRIS . . . . .  Senior Vice President,     March 30, 2000
-------------------------------
      Susan L. Harris . . . . .  Secretary and Director

/s/   EDWIN R. RAQUEL . . . . .  Senior Vice President      March 30, 2000
-------------------------------
      Edwin R. Raquel . . . . .  and Chief Actuary


</TABLE>


                                       32

<PAGE>
<TABLE>
<CAPTION>

                     ANCHOR NATIONAL LIFE INSURANCE COMPANY

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS


                                                         Page

                                                      Number(s)
                                                     ------------
<S>                                                  <C>
Report of Independent Accountants . . . . . . . . .  F-2

Consolidated Balance Sheet - December 31, 1999,
December 31, 1998, and September 30, 1998 . . . . .  F-3 to F-4

Consolidated Statement of Income and Comprehensive
Income - Year Ended December 31, 1999, Three Months
Ended December 31, 1998, Years Ended September 30,
1998 and 1997 . . . . . . . . . . . . . . . . . . .  F-5

Consolidated Statement of Cash Flows - Year Ended
December 31, 1999, Three Months Ended December 31,
1998, Years Ended September 30, 1998 and 1997 . . .  F-6 to F-7

Notes to Consolidated Financial Statements. . . . .  F-8 to F-37

</TABLE>

                                       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  statements  of  income  and comprehensive income and of cash flows
present  fairly,  in  all  material  respects,  the financial position of Anchor
National Life Insurance Company and its subsidiaries (the "Company") at December
31,  1999,  December  31, 1998, and September 30, 1998, and the results of their
operations  and  their  cash flows for the year ended December 31, 1999, for the
three months ended December 31, 1998 and for each of the two fiscal years in the
period  ended  September  30,  1998,  in  conformity  with accounting principles
generally  accepted  in  the  United States.  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 auditing standards generally
accepted  in the United States, 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.

PricewaterhouseCoopers  LLP
Los  Angeles,  California
January  31,  2000

                                       F-2

<PAGE>
<TABLE>
<CAPTION>

                           ANCHOR NATIONAL LIFE INSURANCE COMPANY
                                 CONSOLIDATED BALANCE SHEET


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

Investments:
  Cash and short-term investments . . . .  $   475,162,000  $ 3,303,454,000  $   333,735,000
  Bonds, notes and redeemable
    preferred stocks available for sale,
    at fair value (amortized cost:
    December 1999, $4,155,728,000;
    December 1998, $4,252,740,000;
    September 1998, $1,934,863,000) . . .    3,953,169,000    4,248,840,000    1,954,754,000
  Mortgage loans. . . . . . . . . . . . .      674,679,000      388,780,000      391,448,000
  Policy loans. . . . . . . . . . . . . .      260,066,000      320,688,000       11,197,000
  Separate account seed money                  141,499,000              ---              ---
  Common stocks available for sale,
    at fair value (cost: December 1999,
    $0; December 1998, $1,409,000;
    September 1998, $115,000)                          ---        1,419,000          169,000
  Partnerships. . . . . . . . . . . . . .        4,009,000        4,577,000        4,403,000
  Real estate . . . . . . . . . . . . . .       24,000,000       24,000,000       24,000,000
  Other invested assets . . . . . . . . .       19,385,000       15,185,000       15,036,000
                                           ---------------  ---------------  ---------------

  Total investments . . . . . . . . . . .    5,551,969,000    8,306,943,000    2,734,742,000

Variable annuity assets held in separate
  accounts. . . . . . . . . . . . . . . .   19,949,145,000   13,767,213,000   11,133,569,000
Accrued investment income . . . . . . . .       60,584,000       73,441,000       26,408,000
Deferred acquisition costs. . . . . . . .    1,089,979,000      866,053,000      539,850,000
Receivable from brokers for sales of
  securities. . . . . . . . . . . . . . .       54,760,000       22,826,000       23,904,000
Income taxes currently receivable                      ---              ---        5,869,000
Deferred income taxes                           53,445,000              ---              ---
Other assets. . . . . . . . . . . . . . .      114,612,000      109,857,000       85,926,000
                                           ---------------  ---------------  ---------------

TOTAL ASSETS. . . . . . . . . . . . . . .  $26,874,494,000  $23,146,333,000  $14,550,268,000
                                           ===============  ===============  ===============
</TABLE>

                             See accompanying notes

                                       F-3

<PAGE>

<TABLE>
<CAPTION>

                              ANCHOR NATIONAL LIFE INSURANCE COMPANY
                              CONSOLIDATED BALANCE SHEET (Continued)


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

Reserves, payables and accrued liabilities:
  Reserves for fixed annuity contracts . . .  $ 3,254,895,000   $ 5,500,157,000   $ 2,189,272,000
  Reserves for universal life insurance
    contracts                                   1,978,332,000     2,339,194,000               ---
  Reserves for guaranteed investment
    contracts. . . . . . . . . . . . . . . .      305,570,000       306,461,000       282,267,000
  Payable to brokers for purchases of
    securities                                        139,000               ---        50,957,000
  Income taxes currently payable                   23,490,000        11,123,000               ---
  Modified coinsurance deposit liability          140,757,000               ---               ---
  Other liabilities. . . . . . . . . . . . .      249,224,000       160,020,000       106,594,000
                                              ----------------  ----------------  ---------------

  Total reserves, payables
    and accrued liabilities. . . . . . . . .    5,952,407,000     8,316,955,000     2,629,090,000
                                              ----------------  ----------------  ---------------

Variable annuity liabilities related to
  separate accounts. . . . . . . . . . . . .   19,949,145,000    13,767,213,000    11,133,569,000
                                              ----------------  ----------------  ---------------

Subordinated notes payable to affiliates . .       37,816,000       209,367,000        39,182,000
                                              ----------------  ----------------  ---------------

Deferred income taxes                                     ---       105,772,000        95,758,000
                                              ----------------  ----------------  ---------------

Shareholder's equity:
  Common Stock . . . . . . . . . . . . . . .        3,511,000         3,511,000         3,511,000
  Additional paid-in capital . . . . . . . .      493,010,000       378,674,000       308,674,000
  Retained earnings. . . . . . . . . . . . .      551,158,000       366,460,000       332,069,000
  Accumulated other comprehensive
    income (loss). . . . . . . . . . . . . .     (112,553,000)       (1,619,000)        8,415,000
                                              ----------------  ----------------  ---------------

  Total shareholder's equity . . . . . . . .      935,126,000       747,026,000       652,669,000
                                              ----------------  ----------------  ---------------

TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY .  $26,874,494,000   $23,146,333,000   $14,550,268,000
                                              ================  ================  ===============
</TABLE>

                             See accompanying notes

                                       F-4

<PAGE>

<TABLE>
<CAPTION>

                               ANCHOR NATIONAL LIFE INSURANCE COMPANY
                      CONSOLIDATED STATEMENT OF INCOME AND COMPREHENSIVE INCOME

                                   Year  Ended    Three  Months  Ended Years  Ended  September  30,
                                                                      -----------------------------
                              December 31, 1999    December 31, 1998           1998            1997
                                  ----------------------------------  -------------  --------------
<S>                               <C>                  <C>            <C>             <C>
Investment income. . . . . . . .  $      521,953,000   $ 54,278,000   $ 221,966,000   $ 210,759,000
                                  -------------------  -------------  --------------  --------------

Interest expense on:
  Fixed annuity contracts. . . .        (231,929,000)   (22,828,000)   (112,695,000)   (109,217,000)
  Universal life insurance
    contracts                           (102,486,000)           ---             ---             ---
  Guaranteed investment
    contracts. . . . . . . . . .         (19,649,000)    (3,980,000)    (17,787,000)    (22,650,000)
  Senior indebtedness. . . . . .            (199,000)       (34,000)     (1,498,000)     (2,549,000)
  Subordinated notes payable
    to affiliates. . . . . . . .          (3,474,000)      (853,000)     (3,114,000)     (3,142,000)
                                  -------------------  -------------  --------------  --------------

  Total interest expense . . . .        (357,737,000)   (27,695,000)   (135,094,000)   (137,558,000)
                                  -------------------  -------------  --------------  --------------

NET INVESTMENT INCOME. . . . . .         164,216,000     26,583,000      86,872,000      73,201,000
                                  -------------------  -------------  --------------  --------------

NET REALIZED INVESTMENT
  GAINS (LOSSES) . . . . . . . .         (19,620,000)       271,000      19,482,000     (17,394,000)
                                  -------------------  -------------  --------------  --------------

Fee income:
  Variable annuity fees. . . . .         306,417,000     58,806,000     200,867,000     139,492,000
  Net retained commissions . . .          51,039,000     11,479,000      48,561,000      39,143,000
  Asset management fees. . . . .          43,510,000      8,068,000      29,592,000      25,764,000
  Universal life insurance
    fees                                  23,290,000            ---             ---             ---
  Surrender charges. . . . . . .          17,137,000      3,239,000       7,404,000       5,529,000
  Other fees . . . . . . . . . .          13,999,000      1,738,000       3,938,000       3,218,000
                                  -------------------  -------------  --------------  --------------

TOTAL FEE INCOME . . . . . . . .         455,392,000     83,330,000     290,362,000     213,146,000
                                  -------------------  -------------  --------------  --------------

GENERAL AND ADMINISTRATIVE
  EXPENSES . . . . . . . . . . .        (154,665,000)   (21,993,000)    (96,102,000)    (98,802,000)
                                  -------------------  -------------  --------------  --------------

AMORTIZATION OF DEFERRED
  ACQUISITION COSTS. . . . . . .        (116,840,000)   (27,070,000)    (72,713,000)    (66,879,000)
                                  -------------------  -------------  --------------  --------------

ANNUAL COMMISSIONS . . . . . . .         (40,760,000)    (6,624,000)    (18,209,000)     (8,977,000)
                                  -------------------  -------------  --------------  --------------

PRETAX INCOME. . . . . . . . . .         287,723,000     54,497,000     209,692,000      94,295,000

Income tax expense . . . . . . .        (103,025,000)   (20,106,000)    (71,051,000)    (31,169,000)
                                  -------------------  -------------  --------------  --------------

NET INCOME . . . . . . . . . . .         184,698,000     34,391,000     138,641,000      63,126,000
                                  -------------------  -------------  --------------  --------------

Other comprehensive income
  (loss), net of tax:

Net unrealized gains (losses)
  on debt and equity securities
    available for sale:
    Net unrealized gains
      (losses) identified in
      the current period . . . .        (118,669,000)   (10,249,000)     (4,027,000)     16,605,000
    Less reclassification
      adjustment for net
      realized (gains) losses
      included in net income . .           7,735,000        215,000      (5,963,000)      7,321,000
                                  -------------------  -------------  --------------  --------------

OTHER COMPREHENSIVE INCOME
  (LOSS) . . . . . . . . . . . .        (110,934,000)   (10,034,000)     (9,990,000)     23,926,000
                                  -------------------  -------------  --------------  --------------

COMPREHENSIVE INCOME . . . . . .  $       73,764,000   $ 24,357,000   $ 128,651,000   $  87,052,000
                                  ===================  =============  ==============  ==============
</TABLE>
                             See accompanying notes
                                       F-5

<PAGE>
<TABLE>
<CAPTION>
                                    ANCHOR NATIONAL LIFE INSURANCE COMPANY
                                     CONSOLIDATED STATEMENT OF CASH FLOWS

                                       Year  Ended  Three  Months  Ended         Years  Ended  September  30,
                                                                            ---------------------------------
                                    December 31, 1999   December 31, 1998              1998              1997
                                    -----------------  -------------------  ---------------  ----------------
<S>                                  <C>                  <C>              <C>               <C>
CASH FLOWS FROM OPERATING
  ACTIVITIES:
  Net income. . . . . . . . . . . .  $      184,698,000   $   34,391,000   $   138,641,000   $    63,126,000
  Adjustments to reconcile net
    income to net cash provided
    by operating activities:
      Interest credited to:
        Fixed annuity contracts . .         231,929,000       22,828,000       112,695,000       109,217,000
        Universal life insurance
          contracts                         102,486,000              ---               ---               ---
        Guaranteed investment
          contracts . . . . . . . .          19,649,000        3,980,000        17,787,000        22,650,000
      Net realized investment
        losses (gains). . . . . . .          19,620,000         (271,000)      (19,482,000)       17,394,000
      Amortization (accretion) of
        net premiums (discounts)
        on investments. . . . . . .         (18,343,000)      (1,199,000)          447,000       (18,576,000)
      Universal life insurance
        fees                                (23,290,000)             ---               ---               ---
      Amortization of goodwill. . .             776,000          356,000         1,422,000         1,187,000
      Provision for deferred
        income taxes. . . . . . . .        (100,013,000)      15,945,000        34,087,000       (16,024,000)
  Change in:
    Accrued investment income . . .           9,155,000       (1,512,000)       (4,649,000)       (2,084,000)
    Deferred acquisition costs. . .        (208,228,000)     (34,328,000)     (160,926,000)     (113,145,000)
    Other assets. . . . . . . . . .          (5,661,000)     (21,070,000)      (19,374,000)      (14,598,000)
    Income taxes currently
      payable . . . . . . . . . . .          12,367,000       16,992,000       (38,134,000)       10,779,000
    Other liabilities . . . . . . .          49,504,000        5,617,000        (2,248,000)       14,187,000
  Other, net. . . . . . . . . . . .          15,087,000        5,510,000        (5,599,000)          418,000
                                     -------------------  ---------------  ----------------  ----------------

NET CASH PROVIDED BY OPERATING
  ACTIVITIES. . . . . . . . . . . .         289,736,000       47,239,000        54,667,000        74,531,000
                                     -------------------  ---------------  ----------------  ----------------

CASH FLOWS FROM INVESTING
  ACTIVITIES:
  Purchases of:
    Bonds, notes and redeemable
      preferred stocks. . . . . . .      (4,130,682,000)    (392,515,000)   (1,970,502,000)   (2,566,211,000)
    Mortgage loans. . . . . . . . .        (331,398,000)      (4,962,000)     (131,386,000)     (266,771,000)
    Other investments, excluding
      short-term investments               (227,268,000)      (1,992,000)              ---       (75,556,000)
  Sales of:
    Bonds, notes and redeemable
      preferred stocks. . . . . . .       2,660,931,000      265,039,000     1,602,079,000     2,299,063,000
    Other investments, excluding
      short-term investments. . . .          65,395,000          142,000        42,458,000         6,421,000
  Redemptions and maturities of:
    Bonds, notes and redeemable
      preferred stocks. . . . . . .       1,274,764,000       37,290,000       424,393,000       376,847,000
    Mortgage loans. . . . . . . . .          46,760,000        7,699,000        80,515,000        25,920,000
    Other investments, excluding
      short-term investments. . . .          33,503,000          853,000        67,213,000        23,940,000
  Cash and short-term investments
    acquired in coinsurance
    transaction with MBL Life
    Assurance Corporation                           ---    3,083,211,000               ---               ---
  Short-term investments
    transferred to First
    SunAmerica Life Insurance
    Company in assumption
    reinsurance transaction with
    MBL Life Assurance Corporation         (371,634,000)             ---               ---               ---
                                     -------------------  ---------------  ----------------  ----------------

NET CASH PROVIDED (USED) BY
  INVESTING ACTIVITIES. . . . . . .        (979,629,000)   2,994,765,000       114,770,000      (176,347,000)
                                     -------------------  ---------------  ----------------  ----------------
</TABLE>


                                       F-6
<PAGE>
<TABLE>
<CAPTION>

                                   ANCHOR NATIONAL LIFE INSURANCE COMPANY
                              CONSOLIDATED STATEMENT OF CASH FLOWS (Continued)

                                       Year  Ended  Three  Months  Ended      Years  Ended  September  30,
                                                                         ---------------------------------
                                     December 31, 1999 December 31, 1998            1998              1997
                                     ---------------------------------   ---------------  ----------------
<S>                                 <C>                  <C>              <C>               <C>
CASH FLOWS FROM FINANCING
  ACTIVITIES:
  Premium receipts on:
    Fixed annuity contracts. . . .  $    2,016,851,000   $  351,616,000   $ 1,512,994,000   $1,097,937,000
    Universal life insurance
      contracts                             78,864,000              ---               ---              ---
    Guaranteed investment
      contracts                                    ---              ---         5,619,000       55,000,000
  Net exchanges from the fixed
    accounts of variable annuity
    contracts. . . . . . . . . . .      (1,821,324,000)    (448,762,000)   (1,303,790,000)    (620,367,000)
  Withdrawal payments on:
    Fixed annuity contracts. . . .      (2,232,374,000)     (41,554,000)     (191,690,000)    (242,589,000)
    Universal life insurance
      contracts                            (81,634,000)             ---               ---              ---
    Guaranteed investment
      contracts. . . . . . . . . .         (19,742,000)      (3,797,000)      (36,313,000)    (198,062,000)
  Claims and annuity payments on:
    Fixed annuity contracts. . . .         (46,578,000)      (9,333,000)      (40,589,000)     (35,731,000)
    Universal life insurance
      contracts                           (158,043,000)             ---               ---              ---
  Net receipts from (repayments
    of) other short-term
    financings . . . . . . . . . .        (129,512,000)       9,545,000       (10,944,000)      34,239,000
  Net receipt/(payment) related
    to a modified coinsurance
    transaction                            140,757,000     (170,436,000)      166,631,000              ---
  Receipts from issuance of
    subordinated note payable
    to affiliate                                   ---      170,436,000               ---              ---
  Net of capital contributions
    and return of capital                  114,336,000       70,000,000               ---       28,411,000
  Dividends paid                                   ---              ---       (51,200,000)     (25,500,000)
                                    -------------------  ---------------  ----------------  ---------------

NET CASH  PROVIDED (USED) BY
  FINANCING ACTIVITIES . . . . . .      (2,138,399,000)     (72,285,000)       50,718,000       93,338,000
                                    -------------------  ---------------  ----------------  ---------------

NET INCREASE (DECREASE) IN CASH
  AND SHORT-TERM INVESTMENTS . . .      (2,828,292,000)   2,969,719,000       220,155,000       (8,478,000)

CASH AND SHORT-TERM INVESTMENTS
  AT BEGINNING OF PERIOD . . . . .       3,303,454,000      333,735,000       113,580,000      122,058,000
                                    -------------------  ---------------  ----------------  ---------------

CASH AND SHORT-TERM INVESTMENTS
  AT END OF PERIOD . . . . . . . .  $      475,162,000   $3,303,454,000   $   333,735,000   $  113,580,000
                                    ===================  ===============  ================  ===============


SUPPLEMENTAL CASH FLOW
  INFORMATION:

  Interest paid on indebtedness. .  $        3,787,000   $    1,169,000   $     3,912,000   $    7,032,000
                                    ===================  ===============  ================  ===============

  Net income taxes paid
    (refunded) . . . . . . . . . .  $      190,126,000   $  (12,302,000)  $    74,932,000   $   36,420,000
                                    ===================  ===============  ================  ===============
</TABLE>

                             See accompanying notes

                                       F-7

<PAGE>

                     ANCHOR NATIONAL LIFE INSURANCE COMPANY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.     NATURE  OF  OPERATIONS

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

The  Company  is  an  indirect wholly owned subsidiary of American International
Group,  Inc.  ("AIG"), an international insurance and financial services holding
company.  At  December  31,  1998,  the  Company  was  a  wholly  owned indirect
subsidiary  of  SunAmerica  Inc.,  a  Maryland Corporation.  On January 1, 1999,
SunAmerica  Inc.  merged with and into AIG in a tax-free reorganization that has
been  treated  as  a  pooling  of  interests  for  accounting  purposes.  Thus,
SunAmerica Inc. ceased to exist on that date.  However, immediately prior to the
date  of the merger, substantially all of the net assets of SunAmerica Inc. were
contributed to a newly formed subsidiary of AIG named SunAmerica Holdings, Inc.,
a Delaware Corporation.  SunAmerica Holdings, Inc. subsequently changed its name
to  SunAmerica  Inc.  ("SunAmerica").

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,  the  strength,  weakness  and volatility of equity
markets,  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
risk.  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  items  have been reclassified to conform to the current
period's  presentation.

                                       F-8

<PAGE>

                     ANCHOR NATIONAL LIFE INSURANCE COMPANY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2.     SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES  (Continued)

Under  generally  accepted  accounting  principles,  premiums  collected  on the
non-traditional  life  and annuity insurance products, such as those sold by the
Company,  are  not reflected as revenues in the Company's statement of earnings,
as  they  are  recorded  directly  to  policyholders  liabilities  upon receipt.

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.

INVESTED  ASSETS:  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  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.  Policy  loans  are  carried  at  unpaid  balances.  Separate
account  seed  money  consists of seed money for mutual funds used as investment
vehicles  for  the Company's variable annuity separate accounts and is valued at
market.  Limited  partnerships  are  accounted  for  by  the  cost  method  of
accounting.  Real  estate  is carried at cost, reduced by impairment provisions.
Other  invested  assets  include  collateralized  bond  obligations.

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

INTEREST  RATE  SWAP AGREEMENTS:  The net differential to be paid or received on
interest  rate  swap  agreements  ("Swap Agreements") entered into to reduce the
impact  of  changes  in  interest  rates  is  recognized  over  the lives of the
agreements, and such differential is classified as Investment Income or Interest
Expense  in  the  income statement. Initially, Swap Agreements are designated as
hedges  and,  therefore,  are  not  marked  to  market.  However,  when a hedged
asset/liability is sold or repaid before the related Swap Agreement matures, the
Swap  Agreement  is  marked  to  market and any gain/loss is classified with any
gain/loss  realized  on  the  disposition  of  the  hedged  asset/liability.
Subsequently,  the  Swap  Agreement is marked to market and the resulting change
in  fair  value  is  included  in  Investment  Income  in  the  income

                                       F-9
<PAGE>

                     ANCHOR NATIONAL LIFE INSURANCE COMPANY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2.     SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES  (Continued)

statement.  When  a  Swap  Agreement that is designated as a hedge is terminated
before  its contractual maturity, any resulting gain/loss is credited/charged to
the  carrying  value  of  the asset/liability that it hedged and is treated as a
premium/discount  for  the  remaining  life  of  the  asset/liability.

DEFERRED  ACQUISITION  COSTS:  Policy  acquisition  costs  are  deferred  and
amortized,  with  interest,  in  relation  to  the  incidence of estimated gross
profits  to  be  realized  over  the  estimated  lives of the annuity contracts.
Estimated  gross  profits  are  composed  of  net  interest income, net realized
investment  gains  and  losses,  variable annuity fees, universal life insurance
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 ("DAC") 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 DAC 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 accumulated other
comprehensive  income/(loss)  that  is  credited  or  charged  directly  to
shareholder's  equity.  DAC  has  been  increased by $29,400,000 at December 31,
1999,  increased by $1,400,000 at December 31, 1998, and decreased by $7,000,000
at  September  30,  1998  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 $22,206,000 at December 31, 1999, is amortized
by  using  the  straight-line  method  over  periods  averaging  25 years and is
included  in  Other  Assets  in  the  balance  sheet.  Goodwill is evaluated for
impairment  when  events  or  changes  in  economic conditions indicate that the
carrying  amount  may  not  be  recoverable.

CONTRACTHOLDER  RESERVES:  Contractholder  reserves for fixed annuity contracts,
universal  life  insurance  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).

MODIFIED  COINSURANCE  DEPOSIT LIABILITY:  Cash received as part of the modified
coinsurance  transaction described in Note 8 is recorded as a deposit liability.

                                      F-10
<PAGE>

                     ANCHOR NATIONAL LIFE INSURANCE COMPANY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2.     SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES  (Continued)

FEE  INCOME:  Variable  annuity  fees,  asset  management  fees,  universal life
insurance  fees  and  surrender  charges  are recorded in income as earned.  Net
retained  commissions  are  recognized  as  income  on  a  trade  date  basis.

INCOME  TAXES:  The  Company  files  as  a  "life  insurance  company" under the
provisions  of the Internal Revenue Code of 1986.  Its federal income tax return
is  consolidated  with  those  of  its  direct parent, SunAmerica Life Insurance
Company  (the  "Parent"),  and  its  affiliate,  First SunAmerica Life Insurance
Company.  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.

RECENTLY  ISSUED  ACCOUNTING STANDARDS:  In June 1998, the FASB issued Statement
of  Financial  Accounting  Standards  No.  133,  "Accounting  for  Derivative
Instruments  and  Hedging  Activities"  ("SFAS  133").  SFAS  133  addresses the
accounting  for derivative instruments, including certain derivative instruments
embedded  in other contracts, and hedging activities.  SFAS 133 was postponed by
SFAS  137,  and  now  will  be  effective for the Company as of January 1, 2001.
Therefore,  it  is  not  included in the accompanying financial statements.  The
Company has not completed its analysis of the effect of SFAS 133, but management
believes  that  it  will  not have a material impact on the Company's results of
operations,  financial  condition  or  liquidity.

Statement of Financial Accounting Standards No. 131, "Disclosures about Segments
of  an  Enterprise  and  Related  Information,"  was  adopted for the year ended
December  31,  1999  and  is  included  in Note 14 of the accompanying financial
statements.

3.     FISCAL  YEAR  CHANGE

Effective  December  31,  1998,  the  Company  changed  its fiscal year end from
September 30 to December 31.  Accordingly, the consolidated financial statements
include  the results of operations and cash flows for the three-month transition
period  ended December 31, 1998.  Such results are not necessarily indicative of
operations  for a full year. The consolidated financial statements as of and for
the  three months ended December 31, 1998 were originally filed as the Company's
unaudited  Transition  Report  on  Form  10-Q.

     Results  for  the  comparable  prior  year  period  are  summarized  below.
<TABLE>
<CAPTION>

                            Three  Months  Ended
                               December 31, 1997
                               -----------------
<S>                            <C>
Investment income . . . . . .         59,855,000

Net investment income . . . .         26,482,000

Net realized investment gains         20,935,000

Total fee income. . . . . . .         63,984,000

Pretax income . . . . . . . .         67,654,000

Net income. . . . . . . . . .         44,348,000
                               =================
</TABLE>

                                      F-11
<PAGE>

                     ANCHOR NATIONAL LIFE INSURANCE COMPANY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

4.     ACQUISITION

On  December 31, 1998, the Company acquired the individual life business and the
individual  and  group  annuity business of MBL Life Assurance Corporation ("MBL
Life")  ("the  Acquisition"),  via  a  100%  coinsurance transaction, for a cash
purchase  price  of  $128,420,000.  As  part  of  this  transaction, the Company
acquired  assets  having  an  aggregate  fair  value of $5,718,227,000, composed
primarily  of  invested  assets totaling $5,715,010,000.  Liabilities assumed in
this  acquisition  totaled  $5,831,266,000,  including  $3,460,503,000  of fixed
annuity  reserves,  $2,308,742,000 of universal life reserves and $24,011,000 of
guaranteed  investment contract reserves.  The excess of the purchase price over
the  fair  value of net assets received amounted to $104,509,000 at December 31,
1999,  after  adjustment  for  the  transfer  of  the New York business to First
SunAmerica  Life  Insurance  Company  (see  below),  and is included in Deferred
Acquisition  Costs  in  the accompanying consolidated balance sheet.  The income
statement  for  the  year  ended  December  31,  1999 includes the impact of the
Acquisition.  On  a  pro  forma  basis,  assuming  the  Acquisition  had  been
consummated  on  October  1,  1996,  the  beginning  of  the  prior-year periods
discussed  within, investment income would have been $517,606,000 and net income
would  have  been  $158,887,000  for the year ended September 30, 1998.  For the
year  ended  September  30, 1997, investment income would have been $506,399,000
and  net  income  would  have  been  $83,372,000.

Included  in  the  block  of business acquired from MBL Life were policies whose
owners  are  residents  of New York State ("the New York Business").  On July 1,
1999,  the  New  York Business was acquired by the Company's New York affiliate,
First  SunAmerica  Life Insurance Company ("FSA"), via an assumption reinsurance
agreement, and the remainder of the business converted to assumption reinsurance
in  the  Company,  which  superseded the coinsurance agreement.  As part of this
transfer,  invested  assets  equal  to  $678,272,000,  life  reserves  equal  to
$282,247,000, group pension reserves equal to $406,118,000, and other net assets
of  $10,093,000  were  transferred  to  FSA.

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

As  part  of  the Acquisition, the Company received $242,473,000 from MBL to pay
policy  enhancements  guaranteed  by  the  MBL  Life rehabilitation agreement to
policyholders  meeting  certain  requirements.  A  primary  requirement was that
annuity policyholders must have converted their MBL Life policy to a policy type
currently  offered by the Company or one of its affiliates by December 31, 1999.
The  enhancements  are  to  be credited in four installments on January 1, 2000,
June  30,  2001,  June  30,  2002  and June 30, 2003, to eligible policies still
active on each of those dates.  On December 31, 1999 the enhancement reserve for
such  payments totaled $223,032,000, which includes interest accredited at 6.75%
on  the  original  reserve.  Of  this  amount,  $69,836,000  was  credited  to
policyholders  in  February  2000  for  the  January  1,  2000  installment.

                                      F-12
<PAGE>
<TABLE>
<CAPTION>

                     ANCHOR NATIONAL LIFE INSURANCE COMPANY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

5.     INVESTMENTS

The  amortized  cost  and  estimated  fair  value of bonds, notes and redeemable
preferred  stocks  available  for  sale  by  major  category  follow:

                                                       Estimated
                                      Amortized            Fair
                                           Cost           Value
                                 --------------  --------------
<S>                              <C>             <C>
AT DECEMBER 31, 1999:

Securities of the United States
  Government. . . . . . . . . .  $   24,688,000  $   22,884,000
Mortgage-backed securities. . .   1,505,729,000   1,412,134,000
Securities of public utilities.     114,933,000     107,596,000
Corporate bonds and notes . . .   1,676,006,000   1,596,469,000
Redeemable preferred stocks . .       4,375,000       4,547,000
Other debt securities . . . . .     829,997,000     809,539,000
                                 --------------  --------------

  Total . . . . . . . . . . . .  $4,155,728,000  $3,953,169,000
                                 ==============  ==============

AT DECEMBER 31, 1998:

Securities of the United States
  Government. . . . . . . . . .  $    6,033,000  $    6,272,000
Mortgage-backed securities. . .     546,790,000     553,990,000
Securities of public utilities.     208,074,000     205,119,000
Corporate bonds and notes . . .   2,624,330,000   2,616,073,000
Redeemable preferred stocks . .       6,125,000       7,507,000
Other debt securities . . . . .     861,388,000     859,879,000
                                 --------------  --------------

  Total . . . . . . . . . . . .  $4,252,740,000  $4,248,840,000
                                 ==============  ==============

AT SEPTEMBER 30, 1998:

Securities of the United States
  Government. . . . . . . . . .  $   84,377,000  $   88,239,000
Mortgage-backed securities. . .     569,613,000     584,007,000
Securities of public utilities.     108,431,000     106,065,000
Corporate bonds and notes . . .     883,890,000     884,209,000
Redeemable preferred stocks . .       6,125,000       6,888,000
Other debt securities . . . . .     282,427,000     285,346,000
                                 --------------  --------------

  Total . . . . . . . . . . . .  $1,934,863,000  $1,954,754,000
                                 ==============  ==============
</TABLE>

                                      F-13
<PAGE>
<TABLE>
<CAPTION>

                     ANCHOR NATIONAL LIFE INSURANCE COMPANY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

5.     INVESTMENTS  (Continued)

     The  amortized cost and estimated fair value of bonds, notes and redeemable
preferred  stocks available for sale by contractual maturity, as of December 31,
1999,  follow:

                                                   Estimated
                                   Amortized            Fair
                                        Cost           Value
                              --------------  --------------
<S>                           <C>             <C>
Due in one year or less. . .  $  199,679,000  $  199,198,000
Due after one year through
  five years . . . . . . . .     552,071,000     530,289,000
Due after five years through
  ten years. . . . . . . . .   1,243,298,000   1,187,044,000
Due after ten years. . . . .     654,951,000     624,504,000
Mortgage-backed securities .   1,505,729,000   1,412,134,000
                              --------------  --------------

  Total. . . . . . . . . . .  $4,155,728,000  $3,953,169,000
                              ==============  ==============
</TABLE>


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

                                      F-14

<PAGE>
                     ANCHOR NATIONAL LIFE INSURANCE COMPANY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

5.     INVESTMENTS  (Continued)

     Gross  unrealized gains and losses on bonds, notes and redeemable preferred
stocks  available  for  sale  by  major  category  follow:
<TABLE>
<CAPTION>

                                       Gross          Gross
                                  Unrealized     Unrealized
                                       Gains         Losses
                                 ----------- --------------
<S>                              <C>          <C>
AT DECEMBER 31, 1999:

Securities of the United States
  Government. . . . . . . . . .  $    47,000  $  (1,852,000)
Mortgage-backed securities. . .    3,238,000    (96,832,000)
Securities of public utilities.       13,000     (7,350,000)
Corporate bonds and notes . . .   10,222,000    (89,758,000)
Redeemable preferred stocks          172,000            ---
Other debt securities . . . . .    4,275,000    (24,734,000)
                                 -----------  --------------

  Total . . . . . . . . . . . .  $17,967,000  $(220,526,000)
                                 ===========  ==============

AT DECEMBER 31, 1998:

Securities of the United States
  Government                     $   239,000  $         ---
Mortgage-backed securities. . .    9,398,000     (2,198,000)
Securities of public utilities.      926,000     (3,881,000)
Corporate bonds and notes . . .   22,227,000    (30,484,000)
Redeemable preferred stocks        1,382,000            ---
Other debt securities . . . . .    2,024,000     (3,533,000)
                                 -----------  --------------

  Total . . . . . . . . . . . .  $36,196,000  $ (40,096,000)
                                 ===========  ==============

AT SEPTEMBER 30, 1998:

Securities of the United States
  Government                     $ 3,862,000  $         ---
Mortgage-backed securities. . .   15,103,000       (709,000)
Securities of public utilities.    2,420,000     (4,786,000)
Corporate bonds and notes . . .   31,795,000    (31,476,000)
Redeemable preferred stocks          763,000            ---
Other debt securities . . . . .    5,235,000     (2,316,000)
                                 -----------  --------------

  Total . . . . . . . . . . . .  $59,178,000  $ (39,287,000)
                                 ===========  ==============
</TABLE>


     There  were  no  gross  unrealized gains on equity securities available for
sale  at  December  31,  1999.  Gross  unrealized  gains  on  equity  securities
available  for  sale  aggregated  $10,000  and  $54,000 at December 31, 1998 and
September  30,  1998, respectively.  There were no unrealized losses at December
31,  1999,  December  31,  1998,  or  September  30,  1998.

                                      F-15
<PAGE>
                     ANCHOR NATIONAL LIFE INSURANCE COMPANY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

5.     INVESTMENTS  (Continued)

     Gross  realized  investment gains and losses on sales of investments are as
follows:
<TABLE>
<CAPTION>

                          Year  Ended Three  Months  Ended Years  Ended  September  30,
                                                           ---------------------------
                       December 31, 1999 December 31, 1998         1998           1997
              ----------------------  -------------------  ------------  -------------
<S>                     <C>                  <C>           <C>            <C>
BONDS, NOTES AND
  REDEEMABLE PREFERRED
  STOCKS:
  Realized gains . . .  $        8,333,000   $ 6,669,000   $ 28,086,000   $ 22,179,000
  Realized losses. . .         (26,113,000)   (5,324,000)    (4,627,000)   (25,310,000)

COMMON STOCKS:
  Realized gains . . .           4,239,000        12,000        337,000      4,002,000
  Realized losses                  (11,000)       (9,000)           ---       (312,000)

OTHER INVESTMENTS:
  Realized gains                       ---       573,000      8,824,000      2,450,000

IMPAIRMENT WRITEDOWNS.          (6,068,000)   (1,650,000)   (13,138,000)   (20,403,000)
                        -------------------  ------------  -------------  -------------

Total net realized
  investment gains
  and losses . . . . .  $      (19,620,000)  $   271,000   $ 19,482,000   $(17,394,000)
                        ===================  ============  =============  =============
</TABLE>


The  sources  and  related  amounts  of  investment  income  are  as  follows:
<TABLE>
<CAPTION>

                         Year  Ended  Three  Months  Ended Years  Ended  September  30,
                                                             -------------------------
                      December 31,1999    December 31, 1998         1998          1997
                      -----------------  ------------------- ----------- -------------
<S>                       <C>                  <C>          <C>            <C>
Short-term investments .  $       61,764,000   $ 4,649,000  $ 12,524,000   $ 11,780,000
Bonds, notes and
  redeemable preferred
  stocks . . . . . . . .         348,373,000    39,660,000   156,140,000    163,038,000
Mortgage loans . . . . .          47,480,000     7,904,000    29,996,000     17,632,000
Common stocks                          7,000           ---        34,000         16,000
Real estate. . . . . . .            (525,000)       13,000      (467,000)      (296,000)
Cost-method partnerships           6,631,000       352,000    24,311,000      6,725,000
Other invested assets. .          58,223,000     1,700,000      (572,000)    11,864,000
                          -------------------  -----------  -------------  -------------

  Total investment
    income . . . . . . .  $      521,953,000   $54,278,000  $221,966,000   $210,759,000
                          ===================  ===========  =============  =============
</TABLE>


Expenses incurred to manage the investment portfolio amounted to $10,014,000 for
the  year  ended December 31, 1999, $500,000 for the three months ended December
31,  1998,  $1,910,000  for the year ended September 30, 1998 and $2,050,000 for
the  year  ended  September  30,  1997,  and  are  included  in  General  and
Administrative  Expenses  in  the  income  statement.  Investment  expenses have
increased  significantly because the size of the portfolio increased as a result
of  the  Acquisition.

                                      F-16
<PAGE>
<TABLE>
<CAPTION>

                     ANCHOR NATIONAL LIFE INSURANCE COMPANY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

5.     INVESTMENTS  (Continued)

At  December  31,  1999, the following investments exceeded 10% of the Company's
consolidated  shareholder's  equity  of  $935,126,000:

                                       Amortized          Fair
                                            Cost         Value
                                    ------------  ------------
<S>                                 <C>           <C>
Provident Institutional Funds Inc.
  Del Treasury Trust Fund. . . . .   113,000,000   113,000,000
Salomon Smith Barney Repurchase
  Agreement. . . . . . . . . . . .    97,000,000    97,000,000
                                    ------------  ------------

  Total. . . . . . . . . . . . . .  $210,000,000  $210,000,000
                                    ============  ============
</TABLE>

     At  December  31,  1999,  mortgage  loans were collateralized by properties
located  in  29  states,  with loans totaling approximately 36% of the aggregate
carrying  value of the portfolio secured by properties located in California and
approximately  11%  by  properties  located in New York.  No more than 8% of the
portfolio  was  secured  by  properties  in  any  other  single  state.

     At December 31, 1999, bonds, notes and redeemable preferred stocks included
$377,149,000  of  bonds and notes not rated investment grade. The Company had no
material  concentrations  of  non-investment-grade  assets at December 31, 1999.

     At  December  31,  1999, the carrying value of investments in default as to
the  payment  of  principal  or interest was $1,529,000, composed of $870,000 of
bonds  and  $659,000  of  mortgage loans.  Such nonperforming investments had an
estimated  fair  value  of  $872,000.

     As  a component of its asset and liability management strategy, the Company
utilizes  Swap  Agreements  to  match  assets more closely to liabilities.  Swap
Agreements are agreements to exchange with a counterparty interest rate payments
of  differing  character  (for  example,  variable-rate  payments  exchanged for
fixed-rate  payments)  based  on  an  underlying  principal  balance  (notional
principal)  to  hedge  against  interest  rate  changes.  The  Company typically
utilizes  Swap  Agreements  to  create  a  hedge  that  effectively  converts
floating-rate assets and liabilities to fixed-rate instruments.  At December 31,
1999,  the  Company had one outstanding Swap Agreement with a notional principal
amount  of  $21,538,000,  which matures in December 2024.  The net interest paid
amounted to $215,000 for the year ended December 31, 1999, $54,000 for the three
months  ended December 31, 1998, $278,000 for the year ended September 30, 1998,
and  $125,000 for the year ended September 30, 1997, and is included in Interest
Expense  on  Guaranteed  Investment  Contracts  in  the  income  statement.

     At  December  31,  1999,  $7,418,000  of  bonds, at amortized cost, were on
deposit  with  regulatory authorities in accordance with statutory requirements.

6.     FAIR  VALUE  OF  FINANCIAL  INSTRUMENTS

     The  following  estimated  fair  value  disclosures  are   limited  to

                                      F-17

<PAGE>
                     ANCHOR NATIONAL LIFE INSURANCE COMPANY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

6.     FAIR  VALUE  OF  FINANCIAL  INSTRUMENTS  (Continued)

     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 real estate
investments  and  other invested assets except for cost-method partnerships) 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.

     SEPARATE  ACCOUNT  SEED  MONEY:  Carrying  value is the market value of the
underlying  securities.

     COMMON  STOCKS:  Fair  value  is  based  principally on independent pricing
services,  broker  quotes  and  other  independent  information.

     COST-METHOD PARTNERSHIPS:  Fair value of limited partnerships accounted for
by  using  the cost method is based upon the fair value of the net assets of the
partnerships  as  determined  by  the  general  partners.

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

     RESERVES  FOR  FIXED  ANNUITY  CONTRACTS:  Deferred  annuity  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  UNIVERSAL  LIFE  INSURANCE  CONTRACTS:  Universal  life  and

                                      F-18
<PAGE>
                     ANCHOR NATIONAL LIFE INSURANCE COMPANY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

6.     FAIR  VALUE  OF  FINANCIAL  INSTRUMENTS  (Continued)

     single  life  premium  life  contracts  are  assigned a fair value equal to
current  net  surrender  value.

     RESERVES  FOR  GUARANTEED INVESTMENT CONTRACTS:  Fair value is based on the
present  value  of  future cash flows at current pricing rates and is net of the
estimated  fair  value  of a hedging Swap Agreement, determined from independent
broker  quotes.

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

     MODIFIED COINSURANCE DEPOSIT LIABILITY:  Fair value is based on discounting
the  liability  by  the  appropriate  cost  of funds, and therefore approximates
carrying  value.

     VARIABLE  ANNUITY LIABILITIES RELATED TO SEPARATE ACCOUNTS:  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 AFFILIATES:  Fair value is estimated based on
the  quoted  market  prices  for  similar  issues.

                                      F-19

<PAGE>
                     ANCHOR NATIONAL LIFE INSURANCE COMPANY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

6.     FAIR  VALUE  OF  FINANCIAL  INSTRUMENTS  (Continued)

     The  estimated  fair  values  of  the  Company's  financial  instruments at
December  31, 1999, December 31, 1998 and September 30, 1998 compared with their
respective  carrying  values,  are  as  follows:
<TABLE>
<CAPTION>

                                                Carrying             Fair
                                                   Value            Value
                                         ---------------  ---------------

DECEMBER 31, 1999:
<S>                                      <C>              <C>
ASSETS:
  Cash and short-term investments . . .  $   475,162,000  $   475,162,000
  Bonds, notes and redeemable
    preferred stocks. . . . . . . . . .    3,953,169,000    3,953,169,000
  Mortgage loans. . . . . . . . . . . .      674,679,000      673,781,000
  Separate account seed money . . . . .      141,499,000      141,499,000
  Common stocks                                      ---              ---
  Cost-method partnerships. . . . . . .        4,009,000        9,114,000
  Variable annuity assets held in
    separate accounts . . . . . . . . .   19,949,145,000   19,949,145,000
  Receivable from brokers for sales
    of securities . . . . . . . . . . .       54,760,000       54,760,000

LIABILITIES:
  Reserves for fixed annuity contracts.    3,254,895,000    3,053,660,000
  Reserves for universal life insurance
    contracts . . . . . . . . . . . . .    1,978,332,000    1,853,442,000
  Reserves for guaranteed investment
    contracts . . . . . . . . . . . . .      305,570,000      305,570,000
  Payable to brokers for purchases
    of securities . . . . . . . . . . .          139,000          139,000
  Modified coinsurance deposit
    liability . . . . . . . . . . . . .      140,757,000      140,757,000
  Variable annuity liabilities related
    to separate accounts. . . . . . . .   19,949,145,000   19,367,834,000
  Subordinated notes payable to
    affiliates. . . . . . . . . . . . .       37,816,000       38,643,000
                                         ===============  ===============

DECEMBER 31, 1998:

ASSETS:
  Cash and short-term investments . . .  $ 3,303,454,000  $ 3,303,454,000
  Bonds, notes and redeemable
    preferred stocks. . . . . . . . . .    4,248,840,000    4,248,840,000
  Mortgage loans. . . . . . . . . . . .      388,780,000      411,230,000
  Separate account seed money                        ---              ---
  Common stocks . . . . . . . . . . . .        1,419,000        1,419,000
  Cost-method partnerships. . . . . . .        4,577,000       12,802,000
  Variable annuity assets held in
    separate accounts . . . . . . . . .   13,767,213,000   13,767,213,000
  Receivable from brokers for sales
    of securities . . . . . . . . . . .       22,826,000       22,826,000

LIABILITIES:
  Reserves for fixed annuity contracts.    5,500,157,000    5,437,045,000
  Reserves for universal life
    insurance contracts . . . . . . . .    2,339,194,000    2,339,061,000
  Reserves for guaranteed investment
    contracts . . . . . . . . . . . . .      306,461,000      306,461,000
  Variable annuity liabilities related
    to separate accounts. . . . . . . .   13,767,213,000   13,287,434,000
  Subordinated notes payable to
    affiliates. . . . . . . . . . . . .      209,367,000      211,058,000
                                         ===============  ===============
</TABLE>

                                      F-20

<PAGE>
                     ANCHOR NATIONAL LIFE INSURANCE COMPANY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

6.     FAIR  VALUE  OF  FINANCIAL  INSTRUMENTS  (Continued)
<TABLE>
<CAPTION>

                                              Carrying              Fair
                                                 Value             Value
                                       ---------------   ---------------

SEPTEMBER 30, 1998:
<S>                                     <C>              <C>
ASSETS:
  Cash and short-term investments. . .  $   333,735,000  $   333,735,000
  Bonds, notes and redeemable
    preferred stocks . . . . . . . . .    1,954,754,000    1,954,754,000
  Mortgage loans . . . . . . . . . . .      391,448,000      415,981,000
  Separate account seed money                       ---              ---
  Common stocks. . . . . . . . . . . .          169,000          169,000
  Cost-method partnerships . . . . . .        4,403,000       12,744,000
  Variable annuity assets held in
    separate accounts. . . . . . . . .   11,133,569,000   11,133,569,000
  Receivable from brokers for sales
    of securities. . . . . . . . . . .       23,904,000       23,904,000

LIABILITIES:
  Reserves for fixed annuity contracts    2,189,272,000    2,116,874,000
  Reserves for guaranteed investment
    contracts. . . . . . . . . . . . .      282,267,000      282,267,000
  Payable to brokers for purchases
    of securities. . . . . . . . . . .       50,957,000       50,957,000
  Variable annuity liabilities related
    to separate accounts . . . . . . .   11,133,569,000   10,696,607,000
  Subordinated notes payable to
    affiliates . . . . . . . . . . . .       39,182,000       41,272,000
                                        ===============  ===============
</TABLE>


7.     SUBORDINATED  NOTES  PAYABLE  TO  AFFILIATES

     At  December  31, 1998, Subordinated Notes Payable to Affiliates included a
surplus  note  (the  "Note")  payable  to  its immediate parent, SunAmerica Life
Insurance  Company  (the  "Parent"),  for  $170,436,000.  On  June 30, 1999, the
Parent  cancelled the Note and forgave the interest earned.  Funds received were
reclassified  to  Additional  Paid-in  Capital  in the accompanying consolidated
balance  sheet.

     Subordinated  notes  and  accrued  interest  payable  to affiliates totaled
$37,816,000  at  interest  rates ranging from 8% to 9% at December 31, 1999, and
require  principal  payments  of  $5,400,000  in  2000,  $10,000,000 in 2001 and
$22,060,000  in  2002.

8.     REINSURANCE

The  business which was assumed from MBL Life is subject to existing reinsurance
ceded  agreements.  At  December  31,  1998, the maximum retention on any single
life was $2,000,000, and a total credit of $5,057,000 was taken against the life
insurance  reserves,  representing  predominantly  yearly  renewable  term
reinsurance.  In  order to limit even further the exposure to loss on any single
insured  and  to  recover  an  additional portion of the benefits paid over such
limits,  the Company entered into a reinsurance treaty effective January 1, 1999
under  which  the  Company  retains  no  more  than  $100,000  of  risk  on  any

                                      F-21
<PAGE>
                     ANCHOR NATIONAL LIFE INSURANCE COMPANY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

8.     REINSURANCE  (Continued)

one  insured  life.  At  December 31, 1999, a total reserve credit of $3,560,000
was  taken  against  the  life  insurance  reserves.  With  respect  to  these
coinsurance  agreements,  the Company could become liable for all obligations of
the  reinsured  policies  if  the  reinsurers  were to become unable to meet the
obligations  assumed  under  the respective reinsurance agreements.  The Company
monitors  its credit exposure with respect to these agreements.  However, due to
the  high  credit  ratings  of  the  reinsurers, such risks are considered to be
minimal.

On  August 1, 1999, the Company entered into a modified coinsurance transaction,
approved  by  the  Arizona Department of Insurance, which involved the ceding of
approximately  $6,000,000,000  of  variable annuities to ANLIC Insurance Company
(Hawaii), a non-affiliated stock life insurer.  The transaction is accounted for
as  reinsurance  for  statutory reporting purposes.  As part of the transaction,
the  Company  received  cash  in  the  amount  of  $150,000,000  and  recorded a
corresponding  deposit  liability.  As  payments  are made to the reinsurer, the
deposit liability is relieved.  The cost of this program, $3,621,000 in 1999, is
classified  as  General  and  Administrative  Expenses  in the income statement.

On  August  11,  1998,  the  Company entered into a similar modified coinsurance
transaction, approved by the Arizona Department of Insurance, which involved the
ceding  of approximately $6,000,000,000 of variable annuities to ANLIC Insurance
Company  (Cayman),  a  Cayman  Islands  stock  life insurance company, effective
December  31,  1997.  As  a  part of this transaction, the Company received cash
amounting  to approximately $188,700,000, and recorded a corresponding reduction
of  DAC  related  to  the  coinsured  annuities.  As  payments  were made to the
reinsurer,  the reduction of DAC was relieved.  Certain expenses related to this
transaction  were  charged directly to DAC amortization in the income statement.
The  net  effect  of  this transaction in the income statement was not material.

On  December  31,  1998,  the Company recaptured this business.  As part of this
recapture, the Company paid cash of $170,436,000 and recorded an increase in DAC
of  $167,202,000  with  the  balance  of  $3,234,000  being  recorded  as  DAC
amortization  in  the  income  statement.

9.     CONTINGENT  LIABILITIES

The  Company has entered into four agreements in which it has provided liquidity
support  for  certain  short-term  securities  of  municipalities and non-profit
organizations  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.
The  maximum  liability  under  these guarantees is $359,400,000.  The Company's
Parent  currently shares in the liabilities and fees of two of these agreements.
The Parent's share in these liabilities will increase by $150,000,000 subsequent
to  December  31,  1999,  and the Company's share will decrease to $209,400,000.
Management  does not anticipate any material future losses with respect to these
liquidity  support  facilities.

                                      F-22
<PAGE>
                     ANCHOR NATIONAL LIFE INSURANCE COMPANY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

9.     CONTINGENT  LIABILITIES  (Continued)

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 relating
to  such  litigation are adequate and any further liabilities and costs will not
have a material adverse impact upon the Company's financial position, results of
operations  or  cash  flows.

The  Company's  current  financial strength and counterparty credit ratings from
Standard  &  Poor's  are  based  in part on a guarantee (the "Guarantee") of the
Company's  insurance  policy  obligations  by  American  Home  Assurance Company
("American  Home"),  a  subsidiary  of  AIG, and a member of an AIG intercompany
pool,  and  the  belief  that the Company is viewed as a strategically important
member  of  AIG.  The  Guarantee  is  unconditional  and  irrevocable,  and
policyholders  have the right to enforce the Guarantee directly against American
Home.

The Company's current financial strength rating from Moody's is based in part on
a  support  agreement  between  the  Company  and AIG (the "Support Agreement"),
pursuant  to  which AIG has agreed that AIG will cause the Company to maintain a
policyholder's  surplus  of  not  less than $1 million or such greater amount as
shall  be  sufficient to enable the Company to perform its obligations under any
policy  issued  by  it.  The Support Agreement also provides that if the Company
needs  funds  not  otherwise  available  to  it  to  make  timely payment of its
obligations  under  policies  issued  by  it, AIG will provide such funds at the
request  of  the  Company.  The  Support  Agreement  is not a direct or indirect
guarantee  by  AIG  to  any  person  of  any obligation of the Company.  AIG may
terminate  the  Support Agreement with respect to outstanding obligations of the
Company  only under circumstances where the Company attains, without the benefit
of the Support Agreement, a financial strength rating equivalent to that held by
the  Company  with the benefit of the support agreement.  Policyholders have the
right to cause the Company to enforce its rights against AIG and, if the Company
fails  or  refuses  to take timely action to enforce the Support Agreement or if
the Company defaults in any claim or payment owed to such policyholder when due,
have  the  right  to  enforce  the  Support  Agreement  directly  against  AIG.

American Home does not publish financial statements, although it files statutory
annual and quarterly reports with the New York State Insurance Department, where
such  reports  are available to the public. AIG is a reporting company under the
Securities  Exchange  Act of 1934, and publishes annual reports on Form 10-K and
quarterly  reports  on  Form  10-Q,  which are available from the Securities and
Exchange  Commission.

                                      F-23

<PAGE>
                     ANCHOR NATIONAL LIFE INSURANCE COMPANY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

10.     SHAREHOLDER'S  EQUITY

The  Company  is authorized to issue 4,000 shares of its $1,000 par value Common
Stock.  At  December  31,  1999, December 31, 1998 and September 30, 1998, 3,511
shares  were  outstanding.

Changes  in  shareholder's  equity  are  as  follows:
<TABLE>
<CAPTION>

                       Year  Ended     Three  Months  Ended Years  Ended  September  30,
                                                                 -----------------------
                         December 31, 1999   December 31, 1998          1998         1997
                      --------------------  -------------------  ----------- ------------
<S>                       <C>                  <C>            <C>            <C>
ADDITIONAL PAID-IN
  CAPITAL:
  Beginning balances . .  $      378,674,000   $308,674,000   $308,674,000   $280,263,000
  Reclassification of
    Note by the Parent           170,436,000            ---            ---            ---
  Return of capital             (170,500,000)           ---            ---            ---
  Capital contributions
    received                     114,250,000     70,000,000            ---     28,411,000
  Contribution of
    partnership
    investment                       150,000            ---            ---            ---
                          -------------------  -------------  -------------  -------------

Ending balances. . . . .  $      493,010,000   $378,674,000   $308,674,000   $308,674,000
                          ===================  =============  =============  =============

RETAINED EARNINGS:
  Beginning balances . .  $      366,460,000   $332,069,000   $244,628,000   $207,002,000
  Net income . . . . . .         184,698,000     34,391,000    138,641,000     63,126,000
  Dividends paid                         ---            ---    (51,200,000)   (25,500,000)
                          -------------------  -------------  -------------  -------------

Ending balances. . . . .  $      551,158,000   $366,460,000   $332,069,000   $244,628,000
                          ===================  =============  =============  =============

ACCUMULATED OTHER
  COMPREHENSIVE INCOME
  (LOSS):
    Beginning balances .  $       (1,619,000)  $  8,415,000   $ 18,405,000   $ (5,521,000)
    Change in net
      unrealized gains
      (losses) on debt
      securities
      available for sale        (198,659,000)   (23,791,000)   (23,818,000)    57,463,000
    Change in net
      unrealized gains
      (losses) on equity
      securities
      available for sale             (10,000)       (44,000)      (950,000)       (55,000)
    Change in adjustment
      to deferred
      acquisition costs.          28,000,000      8,400,000      9,400,000    (20,600,000)
    Tax effects of net
      changes. . . . . .  $       59,735,000      5,401,000      5,378,000    (12,882,000)
                          -------------------  -------------  -------------  -------------

Ending balances. . . . .  $     (112,553,000)  $ (1,619,000)  $  8,415,000   $ 18,405,000
                          ===================  =============  =============  =============
</TABLE>

                                      F-24
<PAGE>
                     ANCHOR NATIONAL LIFE INSURANCE COMPANY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

10.     SHAREHOLDER'S  EQUITY  (Continued)

     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  less  equity  in  undistributed income or loss of subsidiaries
included  in  net investment income if, after paying the dividend, the Company's
capital  and  surplus would be adequate in the opinion of the Arizona Department
of Insurance.  No dividends were paid in the year ended December 31, 1999 or the
three  months  ended December 31, 1998.  Dividends in the amounts of $51,200,000
and  $25,500,000  were  paid  on  June  4, 1998 and April 1, 1997, respectively.
Dividends  of  $69,000,000  were  paid  on  March  1,  2000.

     Under  statutory  accounting  principles utilized in filings with insurance
regulatory authorities, the Company's net income for the year ended December 31,
1999  was  $261,539,000.  The statutory net loss for the year ended December 31,
1998  was $98,766,000.  The statutory net income for the year ended December 31,
1997  totaled  $74,407,000.  The Company's statutory capital and surplus totaled
$694,621,000  at  December  31,  1999,  $443,394,000  at  December  31, 1998 and
$537,542,000  at  September  30,  1998.

On  June  30,  1999,  the Parent cancelled the Company's surplus note payable of
$170,436,000  and funds received were reclassified to Additional Paid-in Capital
in  the  accompanying  consolidated  balance  sheet.  On  September 9, 1999, the
Company  paid  $170,500,000  to its Parent as a return of capital.  On September
14,  1999 and October 25, 1999, the Parent contributed additional capital to the
Company  in  the  amounts of $54,250,000 and $60,000,000, respectively.  Also on
December  31,  1999,  the  Parent  made  a  $150,000 contribution of partnership
investments.

                                      F-25
<PAGE>
                     ANCHOR NATIONAL LIFE INSURANCE COMPANY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

11.     INCOME  TAXES

     The  components of the provisions for federal income taxes on pretax income
consist  of  the  following:
<TABLE>
<CAPTION>

                                Net  Realized
                                   Investment
                                 Gains (Losses)    Operations        Total
                                 ---------------  -------------  --------------
<S>                              <C>              <C>            <C>
YEAR ENDED DECEMBER 31, 1999:

Currently payable . . . . . . .  $    6,846,000   $196,192,000   $ 203,038,000
Deferred. . . . . . . . . . . .     (13,713,000)   (86,300,000)   (100,013,000)
                                 ---------------  -------------  --------------

  Total income tax expense
    (benefit) . . . . . . . . .  $   (6,867,000)  $109,892,000   $ 103,025,000
                                 ===============  =============  ==============

THREE MONTHS ENDED DECEMBER
31, 1998:

Currently payable . . . . . . .  $      740,000   $  3,421,000   $   4,161,000
Deferred. . . . . . . . . . . .        (620,000)    16,565,000      15,945,000
                                 ---------------  -------------  --------------

  Total income tax expense. . .  $      120,000   $ 19,986,000   $  20,106,000
                                 ===============  =============  ==============

YEAR ENDED SEPTEMBER 30, 1998:

Currently payable . . . . . . .  $    4,221,000   $ 32,743,000   $  36,964,000
Deferred. . . . . . . . . . . .        (550,000)    34,637,000      34,087,000
                                 ---------------  -------------  --------------

  Total income tax expense. . .  $    3,671,000   $ 67,380,000   $  71,051,000
                                 ===============  =============  ==============

YEAR ENDED SEPTEMBER 30, 1997:

Currently payable . . . . . . .  $   (3,635,000)  $ 50,828,000   $  47,193,000
Deferred. . . . . . . . . . . .      (2,258,000)   (13,766,000)    (16,024,000)
                                 ---------------  -------------  --------------

  Total income tax expense
    (benefit) . . . . . . . . .  $   (5,893,000)  $ 37,062,000   $  31,169,000
                                 ===============  =============  ==============
</TABLE>

                                      F-26
<PAGE>
                     ANCHOR NATIONAL LIFE INSURANCE COMPANY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

11.     INCOME  TAXES  (Continued)

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

                             Year  Ended Three  Months  Ended Years  Ended  September  30,
                                                               ---------------------------
                             December 31, 1999 December 31, 1998       1998          1997
                               ---------------  -------------  ------------  ------------
<S>                         <C>                  <C>           <C>           <C>
Amount computed at
  statutory rate . . . . .  $      100,703,000   $19,074,000   $73,392,000   $33,003,000
Increases (decreases)
  resulting from:
    Amortization of
      differences between
      book and tax bases
      of net assets
      acquired . . . . . .             609,000       146,000       460,000       666,000
    State income taxes,
      net of federal tax
      benefit. . . . . . .           7,231,000     1,183,000     5,530,000     1,950,000
    Dividends-received
      deduction. . . . . .          (3,618,000)     (345,000)   (7,254,000)   (4,270,000)
    Tax credits. . . . . .          (1,346,000)   (1,296,000)     (318,000)
    Other, net . . . . . .            (554,000)       48,000       219,000       138,000
                            -------------------  ------------  ------------  ------------

    Total income tax
      expense. . . . . . .  $      103,025,000   $20,106,000   $71,051,000   $31,169,000
                            ===================  ============  ============  ============
</TABLE>


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  December  31,  1999.  The  Company  does  not  anticipate  any
transactions  which  would  cause  any  part  of  this  surplus  to  be taxable.


                                      F-27
<PAGE>
                     ANCHOR NATIONAL LIFE INSURANCE COMPANY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

11.     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:
<TABLE>
<CAPTION>

                                December  31,     December  31,     September  30,
                                     1999            1998            1998
                                --------------  --------------  --------------
<S>                             <C>             <C>             <C>
DEFERRED TAX LIABILITIES:
Investments. . . . . . . . . .  $  23,208,000   $  18,174,000   $  17,643,000
Deferred acquisition costs . .    272,697,000     222,943,000     223,392,000
State income taxes . . . . . .      5,203,000       3,143,000       2,873,000
Other liabilities. . . . . . .     18,658,000      13,906,000         144,000
Net unrealized gains on debt
  and equity securities
  available for sale                      ---             ---       4,531,000
                                --------------  --------------  --------------
Total deferred tax liabilities  $ 319,766,000     258,166,000     248,583,000
                                --------------  --------------  --------------

DEFERRED TAX ASSETS:
Contractholder reserves. . . .   (261,781,000)   (148,587,000)   (149,915,000)
Guaranty fund assessments. . .     (2,454,000)     (2,935,000)     (2,910,000)
Deferred income                   (48,371,000)            ---             ---
Other assets                              ---             ---             ---
Net unrealized losses on
  debt and equity securities
  available for sale              (60,605,000)      ( 872,000)            ---
                                --------------  --------------  --------------
Total deferred tax assets. . .   (373,211,000)   (152,394,000)   (152,825,000)
                                --------------  --------------  --------------
Deferred income taxes. . . . .  $ (53,445,000)  $ 105,772,000   $  95,758,000
                                ==============  ==============  ==============
</TABLE>

12.     COMPREHENSIVE  INCOME

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

                                      F-28
<PAGE>
                     ANCHOR NATIONAL LIFE INSURANCE COMPANY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

12.     COMPREHENSIVE  INCOME  (Continued)

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

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

YEAR  ENDED  DECEMBER  31,
1999:
<S>                                  <C>             <C>            <C>
  Net unrealized losses on debt and
    equity securities available
    for sale identified in the
    current period. . . . . . . . .  $(217,259,000)  $ 76,041,000   $(141,218,000)

  Increase in deferred acquisition
    cost adjustment identified in
    the current period. . . . . . .     34,690,000    (12,141,000)     22,549,000
                                     --------------  -------------  --------------

  Subtotal. . . . . . . . . . . . .   (182,569,000)    63,900,000    (118,669,000)
                                     --------------  -------------  --------------

  Reclassification adjustment for:
    Net realized losses included
      in net income . . . . . . . .     18,590,000     (6,507,000)     12,083,000
    Related change in deferred
      acquisition costs . . . . . .     (6,690,000)     2,342,000      (4,348,000)
                                     --------------  -------------  --------------
    Total reclassification
      adjustment. . . . . . . . . .     11,900,000     (4,165,000)      7,735,000
                                     --------------  -------------  --------------

  Total other comprehensive
    loss. . . . . . . . . . . . . .  $(170,669,000)  $ 59,735,000   $(110,934,000)
                                     ==============  =============  ==============

</TABLE>

<TABLE>
<CAPTION>

THREE  MONTHS  ENDED  DECEMBER  31,
1998:
<S>                                  <C>            <C>           <C>
  Net unrealized losses on debt
    and equity securities available
    for sale identified in the
    current period. . . . . . . . .  $(24,345,000)  $ 8,521,000   $(15,824,000)

  Increase in deferred acquisition
    cost adjustment identified in
    the current period. . . . . . .     8,579,000    (3,004,000)     5,575,000
                                     -------------  ------------  -------------

  Subtotal. . . . . . . . . . . . .   (15,766,000)    5,517,000    (10,249,000)
                                     -------------  ------------  -------------

  Reclassification adjustment for:
    Net realized losses included
      in net income . . . . . . . .       510,000      (179,000)       331,000
  Related change in deferred
    acquisition costs . . . . . . .      (179,000)       63,000       (116,000)
                                     -------------  ------------  -------------
    Total reclassification
      adjustment. . . . . . . . . .       331,000      (116,000)       215,000
                                     -------------  ------------  -------------

  Total other comprehensive loss. .  $(15,435,000)  $ 5,401,000   $(10,034,000)
                                     =============  ============  =============
</TABLE>

                                      F-29

<PAGE>
                     ANCHOR NATIONAL LIFE INSURANCE COMPANY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

12.     COMPREHENSIVE  INCOME  (Continued)
<TABLE>
<CAPTION>

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

YEAR  ENDED  SEPTEMBER  30,
1998:
<S>                                  <C>            <C>           <C>
  Net unrealized losses on debt and
    equity securities available
    for sale identified in the
    current period. . . . . . . . .  $(10,281,000)  $ 3,598,000   $(6,683,000)

  Increase in deferred acquisition
    cost adjustment identified in
    the current period. . . . . . .     4,086,000    (1,430,000)    2,656,000
                                     -------------  ------------  ------------

  Subtotal. . . . . . . . . . . . .    (6,195,000)    2,168,000    (4,027,000)
                                     -------------  ------------  ------------

  Reclassification adjustment for:
    Net realized losses included
      in net income . . . . . . . .   (14,487,000)    5,070,000    (9,417,000)
  Related change in deferred
    acquisition costs . . . . . . .     5,314,000    (1,860,000)    3,454,000
                                     -------------  ------------  ------------
    Total reclassification
      adjustment. . . . . . . . . .    (9,173,000)    3,210,000    (5,963,000)
                                     -------------  ------------  ------------

  Total other comprehensive loss. .  $(15,368,000)  $ 5,378,000   $(9,990,000)
                                     =============  ============  ============
</TABLE>

<TABLE>
<CAPTION>

YEAR  ENDED  SEPTEMBER  30,
1997:
<S>                                  <C>            <C>            <C>
  Net unrealized gains on debt
    and equity securities available
    for sale identified in the
    current period. . . . . . . . .  $ 40,575,000   $(14,201,000)  $26,374,000

  Decrease in deferred acquisition
    cost adjustment identified in
    the current period. . . . . . .   (15,031,000)     5,262,000    (9,769,000)
                                     -------------  -------------  ------------

  Subtotal. . . . . . . . . . . . .    25,544,000     (8,939,000)   16,605,000
                                     -------------  -------------  ------------

  Reclassification adjustment for:
    Net realized losses included
      in net income . . . . . . . .    16,832,000     (5,891,000)   10,941,000
    Related change in deferred
      acquisition costs . . . . . .    (5,569,000)     1,949,000    (3,620,000)
                                     -------------  -------------  ------------
    Total reclassification
      adjustment. . . . . . . . . .    11,263,000     (3,942,000)    7,321,000
                                     -------------  -------------  ------------

  Total other comprehensive
    income. . . . . . . . . . . . .  $ 36,807,000   $(12,881,000)  $23,926,000
                                     =============  =============  ============
</TABLE>

                                      F-30
<PAGE>
                     ANCHOR NATIONAL LIFE INSURANCE COMPANY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

13.     RELATED-PARTY  MATTERS

     The  Company  pays  commissions  to  five affiliated companies:  SunAmerica
Securities,  Inc.;  Advantage  Capital  Corp.;  Financial Services Corp.; Sentra
Securities  Corp.;  and  Spelman  &  Co.  Inc.  Commissions  paid  to  these
broker-dealers  totaled  $37,435,000  in  the  year  ended  December  31,  1999,
$6,977,000  in  the three months ended December 31, 1998, and $32,946,000 in the
year  ended  September  30, 1998 and $25,492,000 in the year ended September 30,
1997.  These  broker-dealers,  when  combined  with  the  Company's wholly owned
broker-dealer,  represent  a  significant  portion  of  the  Company's business,
amounting to approximately 35.6% of premiums in the year ended December 31, 1999
and  the three months ended December 31, 1998, 33.6% in the year ended September
30,  1998  and  36.1%  in  the  year  ended  September  30,  1997.

     The  Company  purchases  administrative, investment management, accounting,
marketing  and  data  processing  services  from  its  Parent and SunAmerica, an
indirect  parent.  Amounts  paid  for such services totaled $105,059,000 for the
year  ended  December  31, 1999, $21,593,000 for the three months ended December
31,  1998, $84,975,000 for the year ended September 30, 1998 and $86,116,000 for
the year ended September 30, 1997.  The marketing component of such costs during
these  periods amounted to $53,385,000, $9,906,000, $39,482,000 and $31,968,000,
respectively,  and  are  deferred  and amortized as part of Deferred Acquisition
Costs.  The  other  components  of  such  costs  are  included  in  General  and
Administrative  Expenses  in  the  income  statement.

     At  December 31, 1999 and 1998, the Company held bonds with a fair value of
$50,000  and  $84,965,000,  respectively,  which  were  issued by its affiliate,
International Lease Finance Corp.  The amortized cost of these bonds is equal to
the fair value.  At September 30, 1998 and 1997, the Company held no investments
issued  by  any  of  its  affiliates.

During  the  year  ended  December  31, 1999, the Company transferred short-term
investments  and  bonds  to  FSA with an aggregate fair value of $634,596,000 as
part of the transfer of the New York Business from the Acquisition (See Note 7).
The  Company recorded a net realized loss of $5,144,000 on the transfer of these
assets.

During  the year ended December 31, 1999, the Company purchased certain invested
assets  from  SunAmerica  for  cash  equal  to  their  current  market  value of
$161,159,000.

     For the three months ended December 31, 1998, the Company made no purchases
or  sales  of  invested  assets  from  or  to  the  Parent  or  its  affiliates.

During  the  year  ended  September  30, 1998, the Company sold various invested
assets  to  SunAmerica  for  cash  equal  to  their  current  market  value  of
$64,431,000.  The  Company  recorded  a net gain aggregating $16,388,000 on such
transactions.

     During  the  year  ended  September 30, 1998, the Company purchased certain
invested  assets  from  SunAmerica,  the  Parent  and  CalAmerica Life Insurance
Company  ("CalAmerica"),  a wholly-owned subsidiary of the Parent that has since
merged  into  the  Parent,  for cash equal to their  current  market value which
aggregated  $20,666,000,  $10,468,000

                                      F-31
<PAGE>
                     ANCHOR NATIONAL LIFE INSURANCE COMPANY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

13.     RELATED-PARTY  MATTERS  (Continued)

     and  $61,000,  respectively.

     During the year ended September 30, 1997, the Company sold various invested
assets to the Parent and CalAmerica for cash equal to their current market value
of  $15,776,000  and  $15,000,  respectively.  The  Company  recorded a net gain
aggregating  $276,000  on  such  transactions.

     During  the  year  ended  September 30, 1997, the Company purchased certain
invested  assets  from the Parent and CalAmerica for cash equal to their current
market  value  of  $8,717,000  and  $284,000,  respectively.

14.     BUSINESS  SEGMENTS

     Effective  January  1,  1999,  the  Company  adopted Statement of Financial
Accounting  Standards  No.  131  ("SFAS 131"), "Disclosures about Segments of an
Enterprise  and  Related  Information,"  which requires the reporting of certain
financial information by business segment.  For the purpose of providing segment
information, the Company has three business segments:  annuity operations, asset
management  operations  and  broker-dealer  operations.  The  annuity operations
focus  primarily  on  the  marketing  of  variable  annuity  products  and  the
administration  of  the  universal  life business acquired from MBL Life in 1998
(See  Note  4).  The Company's variable annuity products 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  on
investments  in the variable options and net investment income on the fixed-rate
options.  The  asset  management  operations  are  conducted  by  the  Company's
registered  investment  advisor  subsidiary,  SunAmerica  Asset Management Corp.
("SunAmerica  Asset Management"), and its related distributor.  SunAmerica Asset
Management earns fee income by distributing and managing a diversified family of
mutual  funds,  by  managing  certain  subaccounts within the Company's variable
annuity  products  and  by  providing  professional  management  of  individual,
corporate  and  pension  plan  portfolios.  The  broker-dealer  operations  are
conducted  by the Company's broker-dealer subsidiary, Royal Alliance Associates,
Inc. ("Royal"), which sells proprietary annuities and mutual funds, as well as a
full  range  of  non-proprietary  investment  products.

                                      F-32

<PAGE>
                     ANCHOR NATIONAL LIFE INSURANCE COMPANY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

14.     BUSINESS  SEGMENTS  (Continued)

     Summarized  data  for  the  Company's  business  segments  follow:
<TABLE>
<CAPTION>

                                                      Asset          Broker
                                       Annuity      Management       Dealer
                                    Operations      Operations      Operations          Total
                                  ------------     -----------     -----------     ----------

YEAR  ENDED  DECEMBER  31,
1999:
<S>                           <C>               <C>            <C>           <C>
  Total assets . . . . . . .  $26,649,310,000   $150,966,000   $74,218,000   $26,874,494,000
  Expenditures for long-
    lived assets                          ---      2,563,000     2,728,000         5,291,000
  Investment in subsidiaries              ---            ---           ---               ---

  Revenue from external
    customers. . . . . . . .      790,697,000     54,652,000    41,185,000       886,534,000
  Intersegment revenue                    ---     62,998,000     8,193,000        71,191,000
                              ----------------  -------------  ------------  ----------------

  Total revenue. . . . . . .      790,697,000    117,650,000    49,378,000       957,725,000
                              ================  =============  ============  ================


  Investment income. . . . .      511,914,000      9,072,000       967,000       521,953,000
  Interest expense . . . . .     (354,263,000)    (3,085,000)     (389,000)     (357,737,000)
  Depreciation and
    amortization expense . .      (95,408,000)   (23,249,000)   (3,234,000)     (121,891,000)
  Income from unusual
    transactions                          ---            ---           ---               ---
  Pretax income. . . . . . .      199,333,000     67,779,000    20,611,000       287,723,000
  Income tax expense . . . .      (65,445,000)   (28,247,000)   (9,333,000)     (103,025,000)
  Income from extraordinary
    items                                 ---            ---           ---               ---
  Net income . . . . . . . .  $   133,888,000   $ 39,532,000   $11,278,000   $   184,698,000
                              ================  =============  ============  ================


  Significant non-cash
    items                     $           ---   $        ---   $       ---   $           ---
                              ================  =============  ============  ================
</TABLE>


                                      F-33

<PAGE>

                     ANCHOR NATIONAL LIFE INSURANCE COMPANY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

14.     BUSINESS  SEGMENTS  (Continued)
<TABLE>
<CAPTION>

                                                      Asset        Broker-
                                     Annuity       Management       Dealer
                                   Operations      Operations      Operations          Total
                                 ------------     -----------     -----------     ----------

THREE  MONTHS  ENDED
DECEMBER  31,  1998:

<S>                           <C>               <C>            <C>           <C>
  Total assets . . . . . . .  $22,982,323,000   $104,473,000   $59,537,000   $23,146,333,000
  Expenditures for long-
    lived assets                          ---        328,000     1,005,000         1,333,000
  Investment in subsidiaries              ---            ---           ---               ---

  Revenue from external
    customers. . . . . . . .      103,626,000     11,103,000     9,605,000       124,334,000
  Intersegment revenue                    ---     11,871,000     1,674,000        13,545,000
                              ----------------  -------------  ------------  ----------------

  Total revenue. . . . . . .      103,626,000     22,974,000    11,279,000       137,879,000
                              ================  =============  ============  ================


  Investment income. . . . .       53,149,000        971,000       158,000        54,278,000
  Interest expense . . . . .      (26,842,000)      (752,000)     (101,000)      (27,695,000)
  Depreciation and
    amortization expense . .      (23,236,000)    (4,204,000)     (561,000)      (28,001,000)
  Income from unusual
    transactions                          ---            ---           ---               ---
  Pretax income. . . . . . .       36,961,000     13,092,000     4,444,000        54,497,000
  Income tax expense . . . .      (12,978,000)    (5,181,000)   (1,947,000)      (20,106,000)
  Income from extraordinary
    items                                 ---            ---           ---               ---
  Net income . . . . . . . .  $    23,983,000   $  7,911,000   $ 2,497,000   $    34,391,000
                              ================  =============  ============  ================


  Significant non-cash
    items                     $           ---   $        ---   $       ---   $           ---
                              ================  =============  ============  ================
</TABLE>

                                      F-34

<PAGE>
                     ANCHOR NATIONAL LIFE INSURANCE COMPANY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

14.     BUSINESS  SEGMENTS  (Continued)
<TABLE>
<CAPTION>

                                                     Asset         Broker-
                                     Annuity       Management       Dealer
                                   Operations      Operations      Operations          Total
                                 ------------     -----------     -----------     ----------

YEAR  ENDED  SEPTEMBER  30,
1998:
<S>                           <C>               <C>            <C>            <C>
  Total assets . . . . . . .  $14,389,922,000   $104,476,000   $ 55,870,000   $14,550,268,000
  Expenditures for long-
    lived assets                          ---        477,000      5,289,000         5,766,000
  Investment in subsidiaries              ---            ---            ---               ---

  Revenue from external
    customers. . . . . . . .      410,011,000     34,396,000     39,729,000       484,136,000
  Intersegment revenue                    ---     40,040,000      7,634,000        47,674,000
                              ----------------  -------------  -------------  ----------------

  Total revenue. . . . . . .      410,011,000     74,436,000     47,363,000       531,810,000
                              ================  =============  =============  ================


  Investment income. . . . .      218,044,000      2,839,000      1,083,000       221,966,000
  Interest expense . . . . .     (131,980,000)    (2,709,000)      (405,000)     (135,094,000)
  Depreciation and
    amortization expense . .      (60,731,000)   (14,780,000)    (1,770,000)      (77,281,000)
  Income from unusual
    transactions                          ---            ---            ---               ---
  Pretax income. . . . . . .      148,084,000     39,207,000     22,401,000       209,692,000
  Income tax expense . . . .      (44,706,000)   (15,670,000)   (10,675,000)      (71,051,000)
  Income from extraordinary
    items                                 ---            ---            ---               ---
  Net income . . . . . . . .  $   103,378,000   $ 23,537,000   $ 11,726,000   $   138,641,000
                              ================  =============  =============  ================


  Significant non-cash
    items                     $           ---   $        ---   $        ---   $           ---
                              ================  =============  =============  ================
</TABLE>


                                      F-35
<PAGE>
                     ANCHOR NATIONAL LIFE INSURANCE COMPANY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

14.     BUSINESS  SEGMENTS  (Continued)
<TABLE>
<CAPTION>

                                                      Asset         Broker-
                                     Annuity       Management        Dealer
                                  Operations       Operations      Operations          Total
                                ------------     ------------     -----------     ----------

YEAR  ENDED  SEPTEMBER  30,
1997:
<S>                           <C>               <C>            <C>           <C>
  Total assets . . . . . . .  $12,440,311,000   $ 81,518,000   $51,400,000   $12,573,229,000
  Expenditures for long-
    lived assets                          ---        804,000     4,527,000         5,331,000
  Investment in subsidiaries              ---            ---           ---               ---

  Revenue from external
    customers. . . . . . . .      317,061,000     28,655,000    31,678,000       377,394,000
  Intersegment revenue                    ---     22,790,000     6,327,000        29,117,000
                              ----------------  -------------  ------------  ----------------

  Total revenue. . . . . . .      317,061,000     51,445,000    38,005,000       406,511,000
                              ================  =============  ============  ================


  Investment income. . . . .      208,382,000      1,445,000       932,000       210,759,000
  Interest expense . . . . .     (134,416,000)    (2,737,000)     (405,000)     (137,558,000)
  Depreciation and
    amortization expense . .      (55,675,000)   (16,357,000)     (689,000)      (72,721,000)
  Income from unusual
    transactions                          ---            ---           ---               ---
  Pretax income. . . . . . .       58,291,000     19,299,000    16,705,000        94,295,000
  Income tax expense . . . .      (16,318,000)    (7,850,000)   (7,001,000)      (31,169,000)
  Income from extraordinary
    items                                 ---            ---           ---               ---
  Net income . . . . . . . .  $    41,973,000   $ 11,449,000   $ 9,704,000   $    63,126,000
                              ================  =============  ============  ================


  Significant non-cash
    items                     $           ---   $        ---   $       ---   $           ---
                              ================  =============  ============  ================
</TABLE>

     Substantially  all  of  the  Company's revenues are derived from the United
States.

The  accounting  policies  of  the  segments  are as described in the summary of
significant  accounting  policies  (Note  2).  The Parent makes expenditures for
long-lived  assets for the annuity operations segment and allocates depreciation
of  such  assets  to the annuity operations segment.  The annuity operations and
asset  management  operations  pay  commissions  to  Royal  for  sales  of their
proprietary  products.  Approximately  90%  of  these commission payments are in
turn  paid  to  registered  representatives  of Royal, with the remainder of the
revenue  reflected  in  Net  Retained  Commissions.  In  addition, premiums from
variable  annuity policies sold by the Company are held in trusts that are owned
by  the  Company, although the assets directly support policyholder obligations.
SunAmerica Asset Management is the Investment Advisor for all of the subaccounts
of these trusts, for which service it receives fees which are direct expenses of
the trusts.  Such fees are reported as Variable Annuity Fees in the consolidated
income statement and are shown as intersegment revenues in the business segments
disclosure above, although there is no corresponding expense on the books of any
segment.

     The  annuity  operations  segment's  products are marketed through over 800
independent  broker-dealers,  full-service  securities  firms  and  financial
institutions,  in  addition  to  the  Company's  affiliated   broker-dealers.
Those  independent  selling  organizations

                                      F-36
<PAGE>
                     ANCHOR NATIONAL LIFE INSURANCE COMPANY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

14.     BUSINESS  SEGMENTS  (Continued)

     responsible  for  over  10% of sales represented 12.0% of sales in the year
ended  December  31,  1999,  14.7%  in the three months ended December 31, 1998,
16.8%  in  the  year  ended  September 30, 1998, and 18.4% and 10.2% in the year
ended  September  30,  1997.  Registered  representatives  sell products for the
Company's  asset  management  operations  and  sell  products  offered  by  the
broker-dealer  operations.  Revenue from any single registered representative or
group  of  registered  representatives  do  not compose a material percentage of
total  revenues  in  either the asset management operations or the broker-dealer
operations.

15.     SUBSEQUENT  EVENTS

     On  March 1, 2000, the Company paid dividends of $69,000,000 to the Parent.

                                      F-37