SECURITIES AND EXCHANGE COMMISSION
                           WASHINGTON, D.C. 20549
                               ______________

                                  FORM 10-Q


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

      For the quarterly period ended            June 30, 1997
                                    --------------------------------------
                                     OR

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

      For the transition period from_________________to__________________

                        Commission file number 1-4618


                               SUNAMERICA INC.
           (Exact Name of Registrant as Specified in Its Charter)

                     Maryland                         86-0176061
      (State or Other Jurisdiction of     (IRS Employer Identification No.)
        Incorporation or Organization)

           1 SunAmerica Center, Los Angeles, California 90067-6022
           (Address of Principal Executive Offices)     (Zip Code)

      Registrant's telephone number, including area code:  (310) 772-6000


      Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days   Yes  X   No   .
                                               ---    ---

      Indicate the number of shares outstanding of each of the issuer's classes
of Common Stock, as of the latest practicable date:

      Common Stock, par value $1.00 per share, 162,785,982 shares outstanding

      Nontransferable Class B Stock, par value $1.00 per share, 16,272,702
shares outstanding






                                      



                               SUNAMERICA INC.

                                    INDEX


                                                                      Page
                                                                    Number(s)
                                                                    ---------
Part I - Financial Information 

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


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


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


      Notes to Consolidated Financial Statements (Unaudited)           8-13


      Management's Discussion and Analysis of Financial
        Condition and Results of Operations                           14-32

      
Part II - Other Information                                           33-34



                                SUNAMERICA INC.
                          CONSOLIDATED BALANCE SHEET
                          (In thousands - unaudited)




                                                     June 30,    September 30,
                                                        1997             1996 
                                                 ------------    -------------
ASSETS
Investments:
  Cash and short-term investments                $    959,247    $     529,363
  Bonds, notes and redeemable preferred stocks:
    Available for sale, at fair value 
      (amortized cost: June 30, 1997,  
      $17,353,484; September 30, 1996,
      $12,657,620)                                 17,493,099       12,582,024
  Mortgage loans                                    3,097,636        1,652,257
  Common stocks, at fair value 
    (cost: June 30, 1997, $34,942;
    September 30, 1996, $44,871)                       91,598           81,385
  Partnerships                                      1,211,543        1,071,857
  Real estate                                          88,969          105,321
  Other invested assets                               342,533          177,577
                                                 ------------    -------------
  Total investments                                23,284,625       16,199,784

Variable annuity assets                             8,377,439        6,380,458
Accrued investment income                             273,703          186,803
Deferred acquisition costs                          1,213,353          782,300
Other assets                                          294,828          177,476
                                                 ------------    -------------
TOTAL ASSETS                                     $ 33,443,948    $  23,726,821
                                                 ============    =============



See accompanying notes



                                SUNAMERICA INC.
                    CONSOLIDATED BALANCE SHEET (Continued)
                          (In thousands - unaudited)

                                                     June 30,    September 30,
                                                        1997             1996 
                                                 ------------    -------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Reserves, payables and accrued liabilities:
  Reserves for fixed annuity contracts           $ 14,750,327    $   9,654,674
  Reserves for guaranteed investment contracts      5,355,677        4,169,028
  Trust deposits                                      417,835          436,048
  Payable to brokers for purchases of securities      147,306           42,518
  Income taxes currently payable                        2,476           18,436
  Other liabilities                                   798,706          428,718
                                                 ------------    -------------
  Total reserves, payables
    and accrued liabilities                        21,472,327       14,749,422
                                                 ------------    -------------
Variable annuity liabilities                        8,377,439        6,380,458
                                                 ------------    -------------
Long-term notes and debentures                      1,004,585          573,335
                                                 ------------    -------------
Deferred income taxes                                 299,082          125,417
                                                 ------------    -------------
Company-obligated mandatorily redeemable
  preferred securities of subsidiary grantor
  trusts whose sole assets are junior
  subordinated debentures of the Company              495,000          237,631
                                                 ------------    -------------
Shareholders' equity:
  Preferred Stock                                     248,000          384,549
  Nontransferable Class B Stock                        16,273           10,848
  Common Stock                                        162,786          108,604
  Additional paid-in capital                          186,874          304,295
  Retained earnings                                 1,079,096          869,215
  Net unrealized gains (losses) on debt and
    equity securities available for sale              102,486          (16,953)
                                                 ------------    -------------
  Total shareholders' equity                        1,795,515        1,660,558
                                                 ------------    -------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY       $ 33,443,948    $  23,726,821
                                                 ============    =============


See accompanying notes

<TABLE>
                                SUNAMERICA INC.
                         CONSOLIDATED INCOME STATEMENT
       For the three months and nine months ended June 30, 1997 and 1996
             (In thousands, except per-share amounts - unaudited)
<CAPTION>
                                                 Three months             Nine months     
                                            ---------------------           ------------------------
                                                 1997        1996         1997        1996
                                            ---------   ---------   ----------   ---------
<S>                                        <C>         <C>         <C>          <C>       
Investment income                           $ 506,287   $ 347,544   $1,270,508   $ 889,072
                                            ---------   ---------   ----------   ---------
Interest expense on:
  Fixed annuity contracts                    (194,977)   (126,892)    (451,976)   (284,576)
  Guaranteed investment contracts             (83,464)    (64,440)    (226,959)   (185,782)
  Trust deposits                               (2,433)     (2,462)      (7,393)     (7,585)
  Senior indebtedness                         (28,269)    (20,046)     (71,169)    (53,112)
                                            ---------   ---------   ----------   ---------
  Total interest expense                     (309,143)   (213,840)    (757,497)   (531,055)
                                            ---------   ---------   ----------   ---------
Dividends paid on preferred
  securities of grantor trusts                (11,384)     (5,171)     (31,578)    (15,064)
                                            ---------   ---------   ----------   ---------
NET INVESTMENT INCOME                         185,760     128,533      481,433     342,953
                                            ---------   ---------   ----------   ---------
NET REALIZED INVESTMENT LOSSES                (12,136)    (12,629)     (30,882)    (14,814)
                                            ---------   ---------   ----------   ---------
Fee income:
  Variable annuity fees                        35,684      27,059       99,284      76,812
  Net retained commissions                     17,937      13,817       47,051      36,318
  Asset management fees                         6,202       6,371       18,925      19,235
  Loan servicing fees                           6,055       6,046       18,062      17,819
  Trust fees                                    4,413       4,237       13,300      12,558
                                            ---------   ---------   ----------   ---------
TOTAL FEE INCOME                               70,291      57,530      196,622     162,742
                                            ---------   ---------   ----------   ---------
Other income and expenses:
  Surrender charges                             8,772       7,433       21,779      15,046
  General and administrative expenses         (71,272)    (54,292)    (192,144)   (148,632)
  Amortization of deferred acquisition costs  (52,080)    (29,875)    (112,493)    (75,162)
  Other, net                                    3,586       2,757        7,408       7,351
                                            ---------   ---------   ----------   ---------
TOTAL OTHER INCOME AND EXPENSES              (110,994)    (73,977)    (275,450)   (201,397)
                                            ---------   ---------   ----------   ---------
PRETAX INCOME                                 132,921      99,457      371,723     289,484
Income tax expense                            (38,600)    (29,800)    (110,200)    (86,800)
                                            ---------   ---------   ----------   ---------
NET INCOME                                  $  94,321   $  69,657   $  261,523   $ 202,684
                                            =========   =========   ==========   =========
EARNINGS PER SHARE                          $    0.45   $    0.33   $     1.26   $    0.96
                                            =========   =========   ==========   =========
NET EARNINGS APPLICABLE TO COMMON STOCK
  (used in the computation of earnings
  per share)                                $  92,629   $  66,774   $  255,741   $ 194,035
                                            =========   =========   ==========   =========
AVERAGE SHARES OUTSTANDING                    204,521     204,234      203,740     201,789
                                            =========   =========   ==========   =========
See accompanying notes
</TABLE>


                                SUNAMERICA INC.
                     CONSOLIDATED STATEMENT OF CASH FLOWS
               For the nine months ended June 30, 1997 and 1996
                          (In thousands - unaudited)

                                                         1997             1996
                                                 ------------     ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income                                     $    261,523     $    202,684
  Adjustments to reconcile net income to net
    cash provided by operating activities:
      Interest credited to:
        Fixed annuity contracts                       451,976          284,576
        Guaranteed investment contracts               226,959          185,782
        Trust deposits                                  7,393            7,585
      Net realized investment losses                   30,882           14,814
      Accretion of net discounts on investments       (21,829)         (18,806)
      Provision for deferred income taxes             100,363          (58,280)
      Change in:
        Accrued investment income                     (37,398)         (33,703)
        Deferred acquisition costs                    (59,560)         (39,907)
        Other assets                                  (24,747)         (18,837)
        Income taxes currently payable                (99,102)          51,414
        Other liabilities                             104,510          109,301
      Other, net                                       (2,020)           5,331
                                                 ------------     ------------
NET CASH PROVIDED BY OPERATING ACTIVITIES             938,950          691,954
                                                 ------------     ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of:
    Bonds, notes and redeemable preferred
      stocks                                      (14,846,335)      (8,737,845)
    Mortgage loans                                   (799,089)        (181,390)
    Partnerships                                     (767,308)        (517,957)
    Other investments, excluding short-term
      investments                                    (199,406)         (97,261)
    Net assets of CalFarm Life Insurance Company           --         (168,665)
    Net assets of Advantage Capital Corporation            --           (2,072)
    Net assets of Ford Life Insurance Company              --            6,677
    Annuity contracts from The Central National
      Life Insurance Company of Omaha                      --          224,778
    The annuity business of John Alden Financial
      Corporation                                     173,818               --
  Sales of:
    Bonds, notes and redeemable preferred
      stocks                                       10,386,620        5,746,713
    Mortgage loans                                    346,064               --
    Partnerships                                      440,085          163,777
    Other investments, excluding short-term
      investments                                     108,891           55,590
  Redemptions and maturities of:
    Bonds, notes and redeemable preferred
      stocks                                        3,197,919        2,190,330
    Mortgage loans                                    254,481          130,478
    Partnerships                                      368,457          130,855
    Other investments, excluding short-term
      investments                                      11,437           23,786
                                                 ------------     ------------
NET CASH USED BY INVESTING ACTIVITIES              (1,324,366)      (1,032,206)
                                                 ------------     ------------



                                SUNAMERICA INC.
               CONSOLIDATED STATEMENT OF CASH FLOWS (Continued)
               For the nine months ended June 30, 1997 and 1996
                          (In thousands - unaudited)

                                                         1997             1996
                                                 ------------     ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Payments of cash dividends to shareholders     $    (51,642)    $    (46,830)
  Premium receipts on:
    Fixed annuity contracts                         1,149,842          703,136
    Guaranteed investment contracts                 1,551,926          822,525
  Net exchanges from the fixed accounts
    of variable annuity contracts                    (431,245)        (185,743)
  Receipts of trust deposits                          596,253          339,604
  Withdrawal payments on:
    Fixed annuity contracts                          (961,205)        (548,636)
    Guaranteed investment contracts                  (592,278)        (511,990)
    Trust deposits                                   (621,857)        (349,907)
  Claims and annuity payments on fixed
    annuity contracts                                (273,560)        (157,567)
  Net proceeds from issuances of long-term
    notes                                             429,383           47,478
  Net repayments of other short-term financings       (46,073)        (321,676)
  Net proceeds from issuances of preferred
    securities of subsidiary grantor trusts           299,541          179,543
  Payment for redemption of preferred
    securities of a subsidiary grantor trust          (52,631)              --
  Payments for redemptions of Series C and D
    Preferred Stock                                  (136,549)              --
  Net proceeds from issuance of Series E
    Preferred Stock                                        --          240,556
  Payment of issuance costs of 8-1/2% Premium
    Equity Redemption Cumulative Security Units       (44,605)              --
                                                 ------------     ------------
NET CASH PROVIDED BY FINANCING ACTIVITIES             815,300          210,493
                                                 ------------     ------------
NET INCREASE (DECREASE) IN CASH AND 
  SHORT-TERM INVESTMENTS                              429,884         (129,759)

CASH AND SHORT-TERM                                          
  INVESTMENTS AT BEGINNING OF PERIOD                  529,363          855,350
                                                 ------------     ------------
CASH AND SHORT-TERM
  INVESTMENTS AT END OF PERIOD                   $    959,247     $    725,591
                                                 ============     ============
SUPPLEMENTAL CASH FLOW INFORMATION:

  Interest paid on indebtedness                  $     97,528     $     50,872
                                                 ============     ============
  Income taxes paid, net of refunds received     $    108,939     $     93,666
                                                 ============     ============
See accompanying notes



                               SUNAMERICA INC.
                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 (Unaudited)

1.    Basis of Presentation
      ---------------------
      In the opinion of the Company, the accompanying unaudited consolidated
      financial statements contain all adjustments (consisting of only normal
      recurring accruals) necessary to present fairly the Company's
      consolidated financial position as of June 30, 1997 and September 30,
      1996, the results of its consolidated operations for the three months and
      nine months ended June 30, 1997 and 1996 and its consolidated cash flows
      for the nine months ended June 30, 1997 and 1996. The results of
      operations for the three months and nine months ended June 30, 1997 are
      not necessarily indicative of the results to be expected for the full
      year.  The accompanying unaudited consolidated financial statements
      should be read in conjunction with the audited consolidated financial
      statements for the fiscal year ended September 30, 1996, contained in the
      Company's 1996 Annual Report to Shareholders. 
   
      On August 1, 1997, the Company announced a three-for-two stock split (to
      be effected in the form of a stock dividend) on the Company's Common
      Stock and Nontransferable Class B Stock.  The stock split is payable on
      August 29, 1997 to holders of record on August 20, 1997.  The par value
      of the shares to be paid in connection with the stock split has been
      charged to Additional Paid-In Capital in the accompanying consolidated
      balance sheet at June 30, 1997.  Per-share amounts and average shares
      outstanding have been restated, for all periods presented, to reflect the
      stock split.

2.    Acquisitions
      ------------                                           
      On March 31, 1997, the Company completed the acquisition of 1) a block
      of annuity contracts from John Alden Life Insurance Company, a subsidiary
      of John Alden Financial Corporation, and 2) all of the outstanding common
      stock of John Alden Life Insurance Company of New York, for a total cash
      purchase price of approximately $238,000,000 (collectively, the "John
      Alden Acquisition").  The Company has acquired assets having an aggregate
      fair value of $5,039,489,000, composed primarily of invested assets
      totaling $4,988,765,000.  Liabilities assumed in this transaction totaled
      $5,221,526,000, including $5,164,776,000 of fixed annuity reserves.  An
      amount equal to the sum of the purchase price and the fair value of the
      net liabilities assumed, amounting to $403,634,000 at June 30, 1997, is
      included in Deferred Acquisition Costs in the balance sheet, and is being
      amortized, with interest, in relation to the incidence of estimated gross
      profits to be realized over the estimated lives of the assumed annuity
      contracts.  This deferred acquisition cost is substantially less than a
      computation of the present value of estimated future profits discounted
      at the related weighted average crediting rate.


                               SUNAMERICA INC.
                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 (Unaudited)



2.    Acquisitions   (Continued)
      ------------                                           

      The Company acquired all of the outstanding stock of CalFarm Life
      Insurance Company ("CalFarm") and of Ford Life Insurance Company ("Ford
      Life") on December 29, 1995 and February 29, 1996, respectively.  On
      April 1, 1996, the Company completed the acquisition of a block of
      annuity contracts (the "Central National Annuity Contracts") from The
      Central National Life Insurance Company of Omaha, a subsidiary of
      Beneficial Corp.  These acquisitions, and the John Alden Acquisition,
      have been accounted for by using the purchase method of accounting. 
      Accordingly, the income statements for the three months and nine months
      ended June 30, 1996 include the results of CalFarm's operations for only
      the period from January 1, 1996 through June 30, 1996; Ford Life's
      operations for only the period from March 1, 1996 through June 30, 1996;
      the operations associated with the Central National Annuity Contracts for
      only the period from April 1, 1996 through June 30, 1996 and do not
      include the results of operations associated with the John Alden
      Acquisition. The income statements for the three months and nine months
      ended June 30, 1997 include the operations associated with the John Alden
      Acquisition for only the period from April 1, 1997 through June 30, 1997. 
      On a pro forma basis, assuming these acquisitions occurred on October 1,
      1995, the beginning of the earliest period presented herein, revenues
      (investment income, net realized investment losses and fee income) would
      have been $484,469,000 and net income would have been $80,213,000 ($0.38
      per share) for the three months ended June 30, 1996.  For the nine months
      ended June 30, 1997 and 1996, revenues would have been $1,621,058,000 and
      $1,444,120,000 respectively, and net income would have been $285,703,000
      ($1.37 per share) and $249,405,000 ($1.19 per share), respectively. 



                               SUNAMERICA INC.
                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 (Unaudited)
                                 (Continued)



3.    Company-Obligated Preferred Securities of Subsidiary Grantor Trusts
      -------------------------------------------------------------------

      Preferred securities of subsidiary grantor trusts comprise $185,000,000
      liquidation amount of 8.35% Trust Originated Preferred Securities issued
      by SunAmerica Capital Trust II in October 1995 and $310,000,000
      liquidation amount of 8.30% Trust Originated Preferred Securities issued
      by SunAmerica Capital Trust III in November 1996.

      In connection with the issuance of the 8.35% Trust Originated Preferred
      Securities and the related purchase by the Company of the grantor trust's
      common securities, the Company issued to the grantor trust $191,224,250
      principal amount of 8.35% junior subordinated debentures, due 2044, which
      are redeemable at the option of the Company on or after September 30,
      2000 at a redemption price of $25 per debenture plus accrued and unpaid
      interest.   
  
      In connection with the issuance of the 8.30% Trust Originated Preferred
      Securities and the related purchase by the Company of the grantor trust's
      common securities, the Company issued to the grantor trust $320,670,000
      principal amount of 8.30% junior subordinated debentures, due 2045, which
      are redeemable at the option of the Company on or after November 13, 2001
      at a redemption price of $25 per debenture plus accrued and unpaid
      interest.  

      On June 16, 1997, SunAmerica Capital Trust I redeemed $52,630,875
      liquidation amount of the 9.95% Trust Originated Preferred Securities for
      a cash payment equal to the liquidation amount of $52,630,875 plus
      accrued and unpaid dividends to the redemption date of $1,105,541. 
      Concurrently, the Company redeemed all of the related 9.95% junior
      subordinated debentures, due 2044, for a liquidation of $54,258,650 plus
      accrued interest of $1,139,733.

      The grantor trusts are wholly owned subsidiaries of the Company. The
      debentures issued to the grantor trusts and the common securities
      purchased by the Company from the grantor trusts are eliminated in the
      balance sheet.








                               SUNAMERICA INC.
                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 (Unaudited)
                                 (Continued)


  
4.    Earnings per Share
      ------------------

      The calculation of earnings per share is made by dividing applicable
      earnings by the weighted average number of shares of Common Stock and
      Nontransferable Class B Stock (collectively referred to as "Common
      Stock") outstanding during each period, adjusted for the incremental
      shares attributed to common stock equivalents.  Common stock equivalents
      include outstanding employee stock options, phantom shares arising from
      other employee stock plans, Premium Equity Redemption Cumulative Security
      Units issued in November 1996 and convertible preferred stock, which
      includes the Series D and E Depositary Shares issued in March 1993 and
      November 1995, respectively.  Common stock equivalents are included in
      the computation only if their effect is dilutive. Net Earnings Applicable
      to Common Stock are reduced by preferred stock dividend requirements,
      which amounted to $1,692,000 and $2,883,000 for the three months ended
      June 30, 1997 and 1996, respectively, and $5,782,000 and $8,649,000 for
      the nine months ended June 30, 1997 and 1996, respectively.  These
      preferred stock dividend requirements do not include dividends paid on
      the convertible issues, which amounted to $3,100,000 in each of the three
      months ended June 30, 1997 and 1996 and $9,300,000 and $12,428,000 in the
      nine months ended June 30, 1997 and 1996, respectively.   

5.    Preferred Stock
      ----------------

      In June 1997, the Company redeemed all 3,514,765 shares of its
      outstanding 9-1/4% Preferred Stock, Series B, for a cash payment equal
      to the total liquidation amount of $87,869,125 plus accrued and unpaid
      dividends to the redemption date of $2,031,974. 



                                      SUNAMERICA INC.
                        NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                        (Unaudited)
                                        (Continued)

<TABLE>

6.    Ratios of Earnings to Fixed Charges
      -----------------------------------

      The ratios of earnings to fixed charges for the three months and nine months ended
      June 30, 1997 and 1996 are as follows:
<CAPTION>
                                                  Three months          Nine months  
                                                 ---------------      ---------------
                                                  1997      1996       1997      1996
                                                 -----     -----      -----     ----- 
      <S>                                       <C>       <C>        <C>       <C>   
      Ratio of earnings to fixed charges 
      (which include dividends paid on
      preferred securities of grantor trusts
      and interest incurred on senior debt,
      but exclude interest incurred on fixed
      annuities, guaranteed investment
      contracts and trust deposits)                4.4x      4.9x       4.6x      5.2x
                                                 =====     =====      =====     =====
      Ratio of earnings to fixed charges
      (which include dividends paid on
      preferred securities of grantor
      trusts and interest incurred on
      senior debt, fixed annuities,
      guaranteed investment contracts
      and trust deposits)                          1.4x      1.5x       1.5x      1.5x
                                                 =====     =====      =====     =====
      Ratio of earnings to combined fixed
      charges and preferred stock dividends
      (which include dividends paid on
      preferred securities of grantor trusts
      and interest incurred on senior debt,
      but exclude interest incurred on fixed
      annuities, guaranteed investment
      contracts and trust deposits)                3.7x      3.7x       3.8x      3.6x
                                                  ====      ====       ====      ====
      Ratio of earnings to combined fixed
      charges and preferred stock dividends
      (which include dividends paid on
      preferred securities of grantor trusts
      and interest incurred on senior debt,
      fixed annuities, guaranteed investment
      contracts and trust deposits)                1.4x      1.4x       1.4x      1.5x
                                                  ====      ====       ====      ====
</TABLE>


                               SUNAMERICA INC.
                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 (Unaudited)
                                 (Continued)



7.  Subsequent Event
    ----------------

    In July 1997, the Company issued, under a shelf registration filed in
    October 1996, 10,669,745 shares of its Common Stock for net proceeds of
    approximately $577,000,000.  Also in July 1997, under a shelf registration
    filed that month, the Company issued, at a discount, $175,000,000 of its
    5.60% debentures due July 31, 2097.  Discounted proceeds totaled
    approximately $130,000,000.  Under the shelf registration filed in July
    1997, the Company may issue up to an additional $3,325,000,000 of
    securities in the form of debt; preferred stock; common stock; warrants to
    purchase debt, preferred stock or common stock; stock purchase contracts
    or stock purchase units; or preferred securities of the Company's
    subsidiary grantor trusts.  


<PAGE>
         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 SunAmerica Inc. (the "Company") for the three months and nine
months ended June 30, 1997 and 1996 follows.  In connection with, and because
it desires to take advantage of, the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995, the Company cautions readers
regarding certain forward-looking statements contained in the following
discussion and in any other statements made by, or on behalf of, the Company,
whether or not in future filings with the Securities and Exchange Commission
(the "SEC").  Forward-looking statements are statements not based on historical
information and which relate to future operations, strategies, financial
results, or other developments.  In particular, statements using verbs such as
"expect," "anticipate," "believe" or words of similar import generally involve
forward-looking statements.  Without limiting the foregoing, forward-looking
statements include statements which represent the Company's beliefs concerning
future or projected levels of sales and redemptions of the Company's products,
investment spreads and yields, or the earnings and profitability of the
Company's activities.

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

RESULTS OF OPERATIONS
      
      NET INCOME totaled $94.3 million or $0.45 per share in the third quarter
of 1997, up from $69.7 million or $0.33 per share in the third quarter of 1996. 
For the nine months, net income amounted to $261.5 million or $1.26 per share
in 1997, compared with $202.7 million or $0.96 per share in 1996.  On March 31,
1997, the Company acquired certain annuity contracts from John Alden Life
Insurance Company and all of the outstanding common stock of John Alden Life
Insurance Company of New York (collectively, the "John Alden Acquisition"). 
During fiscal 1996, the Company acquired CalFarm Life Insurance Company
("CalFarm") on December 29, 1995; Ford Life Insurance Company ("Ford Life") on
February 29, 1996; and certain annuity contracts from The Central National Life
Insurance Company of Omaha (the "Central National Annuity Contracts") on April
1, 1996 (collectively, the "1996 Acquisitions").  The John Alden Acquisition
and the 1996 Acquisitions (collectively, the "Acquisitions") were accounted for
under the purchase method of accounting, and, therefore, results of operations
include those of the Acquisitions only from their respective dates of
acquisition.  If the Acquisitions had been consummated at the beginning of the
prior-year periods discussed herein, net income would have been $80.2 million
($0.38 per share) for the third quarter of 1996, $285.7 million ($1.37 per
share) for the nine months of 1997 and $249.4 million ($1.19 per share) for the
nine months of 1996.  On August 1, 1997, the Company announced a three-for-two
stock split of the Company's Common Stock and Nontransferable Class B Stock
payable on August 29, 1997  (see Note 1 of Notes to Consolidated Financial
Statements).  Accordingly,  per-share amounts have been restated to reflect the
stock split for all periods presented.

      PRETAX INCOME totaled $132.9 million in the third quarter of 1997 and
$99.5 million in the third quarter of 1996.  For the nine months, pretax income
totaled $371.7 million in 1997, compared with $289.5 million in 1996.  These
improvements primarily resulted from increased net investment income and fee
income, partially offset by additional general and administrative expenses,
amortization of deferred acquisition costs and, in the nine months, increased
net realized investment losses.

      NET INVESTMENT INCOME, which is the spread between the income earned on
invested assets and the interest paid on fixed annuities and other
interest-bearing liabilities, increased to $185.8 million in the third quarter
of 1997 from $128.5 million in the third quarter of 1996. These amounts
represent 3.13% on average invested assets (computed on a daily basis) of
$23.72 billion in the third quarter of 1997 and 3.08% on average invested
assets of $16.71 billion in the third quarter of 1996.  For the nine months,
net investment income increased to $481.4 million in 1997 from $343.0 million
in 1996, representing 3.26% on average invested assets of $19.69 billion in
1997 and 3.35% on average invested assets of $13.65 billion in 1996. The
invested assets associated with the Acquisitions were primarily 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. 
As a result of the Acquisitions, net investment income as a percent of average
invested assets in the nine months of 1997 has declined.  However, if the
Acquisitions had been consummated at the beginning of the prior-year periods,
net investment income on related average invested assets would have been 2.84%
for the third quarter of 1996, and 3.11% and 2.86% for the nine months of 1997
and 1996, respectively.  
      
      Net investment spreads include the effect of income earned on the excess
of average invested assets over average interest-bearing liabilities.  This
excess amounted to $900.5 million in the third quarter of 1997, $1.06 billion
in the third quarter of 1996, $1.09 billion in the nine months of 1997 and
$1.04 billion in the nine months of 1996.  The difference between the Company's
yield on average invested assets and the rate paid on average interest-bearing
liabilities was 2.92% in the third quarter of 1997, 2.72% in the third quarter
of 1996, 2.95% in the nine months of 1997 and 2.90% in the nine months of 1996. 
If the Acquisitions had been consummated at the beginning of the prior-year
periods, the difference between the Company's yield on average invested assets
and the rate paid on average interest-bearing liabilities would have been 2.67%
for the third quarter of 1996 and 2.91% and 2.72% for the nine months of 1997
and 1996, respectively.

      Investment income totaled $506.3 million in the third quarter of 1997,
up from $347.5 million in the third quarter of 1996. For the nine months,
investment income amounted to $1.27 billion in 1997, up $381.4 million from the
$889.1 million recorded in 1996.  These amounts represent yields on average
invested assets of 8.54% and 8.32% in the third quarters of 1997 and 1996,
respectively, and 8.61% and 8.68% in the nine months of 1997 and 1996,
respectively.  Investment income and the related yields reflect the effects of
the Acquisitions from their respective dates of acquisition.  If the
Acquisitions had been consummated at the beginning of the prior-year periods,
the yields on related average invested assets would have been 8.54% for the
third quarter of 1997, 8.19% for the third quarter of 1996, 8.50% for the nine
months of 1997 and 8.29% for the nine months of 1996.  These increased yields
in 1997 reflect higher returns from the Company's investments in partnerships
and, in the quarter, total return bond swap agreements (the "Total Return
Agreements").  (See "Asset-Liability Matching" for additional discussion of
Total Return Agreements.)  The increases in investment income in 1997 also
reflect increases in average invested assets (in excess of those contributed
by the Acquisitions). 

      Partnership income increased to $55.1 million (representing a yield of
19.12% on related average assets of $1.15 billion) in the third quarter of
1997, compared with $46.9 million (representing a yield of 18.71% on related
average assets of $1.00 billion) in the third quarter of 1996.  For the nine
months, partnership income amounted to $181.7 million (representing a yield of
21.42% on related average assets of $1.13 billion) in 1997, compared with
$112.9 million (representing a yield of 16.92% on related average assets of
$889.7 million).  Partnership income includes income recognized by using the
cost method of accounting, which amounted to $14.0 million in the third quarter
of 1997, $13.8 million in the third quarter of 1996, $64.1 million in the nine
months of 1997 and $40.4 million in the nine months of 1996.  Such income is
based upon cash distributions received from limited partnerships, the
operations of which the Company does not significantly influence. 
Consequently, such income is not predictable and there can be no assurance that
the Company will realize comparable levels of such income in the future.

      The Company has enhanced investment yield from time to time through Total
Return Agreements.  The Company recorded income of $15.0 million on the Total
Return Agreements in the third quarter of 1997, compared with the $6.8 million
recorded in the third quarter of 1996.  The improved results in the third
quarter of 1997 principally reflect increases in the fair value of the
underlying assets, resulting primarily from improved relative overall
performance of the non-investment-grade bonds underlying the Total Return
Agreements.  For the nine months, income recorded on the Total Return
Agreements amounted to $22.7 million in 1997, compared with $26.0 million in
1996. This reduced income in the nine months of 1997 principally resulted from
less favorable general performance in the non-investment grade bond sector
during the first two fiscal quarters. 

      Total interest and dividend expense aggregated $320.5 million in the
third quarter of 1997 and $219.0 million in the third quarter of 1996.  For the
nine months, interest and dividend expense aggregated $789.1 million in 1997,
compared with $546.1 million in 1996.  The average rate paid on all
interest-bearing liabilities was 5.62% (5.26% on fixed annuity contracts and
6.32% on guaranteed investment contracts ("GICs")) in the third quarter of
1997, compared with 5.60% (5.27% on fixed annuity contracts and 6.34% on GICs)
in the third quarter of 1996.  For the nine months, the average rate paid on
all interest-bearing liabilities decreased to 5.66% (5.27% on fixed annuity
contracts and 6.29% on GICs) in 1997 from 5.78% (5.40% on fixed annuity
contracts and 6.46% on GICs) in 1996.  Interest-bearing liabilities averaged
$22.82 billion during the third quarter of 1997, $15.65 billion during the
third quarter of 1996, $18.59 billion during the nine months of 1997 and $12.61
billion during the nine months of 1996.  If the Acquisitions had occurred at
the beginning of the prior-year periods, the average rate on all interest-
bearing liabilities would have been 5.52% (5.27% on fixed annuity contracts)
for the third quarter of 1996, and 5.59% (5.26% on fixed annuity contracts) and
5.57% (5.31% on fixed annuity contracts) for the nine months of 1997 and 1996,
respectively.
      
      The increase during the third quarter of 1997 in the average rate paid
on all interest-bearing liabilities primarily resulted from the effects of
increases in the percentage of GICs and preferred securities of subsidiary
grantor trusts relative to other interest-bearing liabilities.  GICs and
preferred securities of subsidiary grantor trusts generally bear higher
interest rates than the average interest rate on the Company's other interest-
bearing liabilities.   

      GROWTH IN AVERAGE INVESTED ASSETS since the 1996 periods primarily
reflects the impact of the Acquisitions.   As part of the Acquisitions, the
Company acquired $722.5 million of invested assets of CalFarm on December 29,
1995, $3.10 billion of invested assets of Ford Life on February 29, 1996,
$908.8 million of invested assets associated with the Central National Annuity
Contracts on April 1, 1996 and $4.99 billion of invested assets associated with
the John Alden Acquisition on March 31, 1997.  The Company intends to continue
to pursue a strategy of enhancing its internal growth with complementary
acquisitions.

       Average invested assets also increased in 1997 as a result of the
receipt of fixed-rate premiums, consisting of both fixed annuity premiums
(including those from the fixed accounts of variable annuity products) and GIC
premiums, and $728.9 million of net proceeds from the issuance of long-term
notes and preferred securities of a subsidiary grantor trust.  Since June 30,
1996, fixed annuity premiums have totaled $1.44 billion and GIC premiums have
aggregated $1.75 billion.  Fixed annuity premiums totaled $325.7 million in the
third quarter of 1997, $184.8 million in the third quarter of 1996, $1.15
billion in the nine months of 1997 and $703.1 million in the nine months of
1996.  These premiums include premiums for the fixed accounts of variable
annuities totaling $198.0 million, $141.9 million, $932.5 million and $535.9
million, respectively.  The increases in premiums for the fixed accounts of
variable annuities resulted primarily from greater inflows into the one-year
fixed account of the Company's Polaris product.  The Company has observed that
many purchasers of its variable annuity contracts allocate new premiums to the
one-year fixed account and concurrently elect the option to dollar cost average
into one or more variable funds.  Accordingly, the Company anticipates that it
will see a large portion of these premiums transferred into the variable funds.

      GIC premiums totaled $319.3 million in the third quarter of 1997, up from
$307.6 million in the third quarter of 1996, and increased by $729.4 million 
to $1.55 billion in the nine months of 1997 from $822.5 million in the nine
months of 1996.  The increases in GIC premiums in the nine months reflect an
expansion of the GIC client base due, in part, to a broadening of the Company's
distribution channels and product line, including its AAA/Aaa-rated credit-
enhanced GIC product.  This increase also reflects increased sales of longer-
maturity products to banks and asset management firms.

      The GICs issued by the Company generally guarantee the payment of
principal and interest at a fixed rate for a fixed term of three to five years. 
In the case of GICs sold to pension plans, certain withdrawals may be made at
book value in the event of circumstances specified in the plan document, such
as employee retirement, death, disability, hardship withdrawal or employee
termination.  The Company generally imposes surrender penalties in the event
of other withdrawals prior to maturity.  GICs purchased by banks or state and
local governmental entities either prohibit withdrawals or permit scheduled
book value withdrawals subject to the terms of the underlying indenture or
agreement.  GICs purchased by asset management firms 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 $12.1 million in the third quarter
of 1997, compared with $12.6 million in the third quarter of 1996.  Net
realized investment losses include impairment writedowns of $26.3 million in
the third quarter of 1997 and $6.7 million in the third quarter of 1996. 
Therefore, net gains from sales of investments totaled $14.2 million in the
third quarter of 1997, compared with $5.9 million of net losses in the third
quarter of 1996.  For the nine months, net realized investment losses totaled
$30.9 million in 1997, compared with $14.8 million in 1996 and include
impairment writedowns of $46.5 million and $22.1 million, respectively. 
Therefore, for the nine months, net gains from sales of investments totaled
$15.6 million in 1997 and $7.3 million in 1996.

      The Company sold invested assets, principally bonds and notes,
aggregating $5.10 billion, $1.64 billion, $11.01 billion and $5.89 billion in
the third quarters of 1997 and 1996 and the nine months of 1997 and 1996,
respectively.  Net gains and losses from sales of investments fluctuate from
period to period, and represent 0.24%, 0.14%, 0.11% and 0.07%, respectively,
of average invested assets for the third quarters of 1997 and 1996 and the nine
months of 1997 and 1996.

      Impairment writedowns primarily have been applied to defaulted bonds and
mortgage loans.  Impairment writedowns, on an annualized basis, represent
0.44%, 0.16%, 0.31% and 0.22% of average invested assets for the third quarters
of 1997 and 1996 and the nine months of 1997 and 1996, respectively.  For the
eleven quarters beginning October 1, 1994, impairment writedowns as an
annualized percentage of average invested assets have ranged from 0.16% to
0.71% and have averaged 0.32%.  Such writedowns are based upon estimates of the
net realizable value of the applicable assets.  Actual realization will be
dependent upon future events.

      VARIABLE ANNUITY FEES are based on the market value of assets supporting
variable annuity contracts in separate accounts.  Such fees totaled $35.7
million in the third quarter of 1997 and $27.1 million in the third quarter of
1996.  For the nine months, variable annuity fees totaled $99.3 million in
1997, compared with $76.8 million in 1996.  These increased fees reflect growth
in average variable annuity assets principally due to the receipt of variable
annuity premiums, increased market values and net exchanges into the separate
accounts from the fixed accounts of variable annuity contracts, partially
offset by surrenders.  Variable annuity assets averaged $7.74 billion during
the third quarter of 1997 and $5.97 billion during the third quarter of 1996. 
For the nine months, variable annuity assets averaged $7.21 billion in 1997,
compared with $5.64 billion in 1996.  Variable annuity premiums, which exclude
premiums allocated to the fixed accounts of variable annuity products, have
aggregated $1.11 billion since June 30, 1996.  Variable annuity premiums
increased to $338.8 million in the third quarter of 1997 from $269.1 million
in the third quarter of 1996.  For the nine months, variable annuity premiums
totaled $884.5 million in 1997, compared with $703.6 million in 1996.  Sales
of variable annuity products (which include premiums allocated to the fixed
accounts) amounted to $536.8 million, $411.0 million, $1.82 billion and $1.24
billion for the third quarters of 1997 and 1996 and the nine months of 1997 and
1996, respectively. These increases may be attributed, in part, to market share
gains through enhanced distribution, strong investor interest in equity
investments, as well as broad consumer demand for flexible retirement savings
products that offer a variety of fixed and variable investment choices.  The
Company has encountered increased competition in the variable annuity
marketplace during recent years and anticipates that the market will remain
highly competitive for the foreseeable future. 

      NET RETAINED COMMISSIONS are primarily derived from commissions on the
sales of nonproprietary investment products by the Company's broker-dealer
subsidiaries, after deducting the substantial portion of such commissions that
is passed on to registered representatives.  Net retained commissions totaled
$17.9 million in the third quarter of 1997 and $13.8 million in the third
quarter of 1996.  For the nine months, net retained commissions totaled $47.1
million in 1997, compared with $36.3 million in 1996.  Broker-dealer sales
(mainly sales of general securities, mutual funds and annuities) totaled $4.46
billion in the third quarter of 1997 and $3.71 billion in the third quarter of
1996.  For the nine months, such sales totaled $12.06 billion in 1997 and $9.70
billion in 1996.  The increases in sales and net retained commissions during
1997 reflect a greater number of registered representatives, higher average
production per representative and generally favorable market conditions. The
greater number of registered representatives was largely due to recruiting
efforts; the January 22, 1997 acquisition of The Financial Group, Inc., which,
through its subsidiary, Keogler Morgan & Company, licenses more than 300
independent registered representatives; and, in the nine months, the January
3, 1996 acquisition of Advantage Capital Corporation, a Houston-based broker-
dealer, which licenses approximately 1,000 independent registered
representatives. Increases in net retained commissions may not be proportionate
to increases in sales primarily due to differences in sales mix.

      ASSET MANAGEMENT FEES, which include investment advisory fees and 12b-1
distribution fees, are based on the market value of assets managed in mutual
funds by SunAmerica Asset Management Corp.  Such fees totaled $6.2 million on
average assets managed of $2.31 billion in the third quarter of 1997 and
$6.4 million on average assets managed of $2.15 billion in the third quarter
of 1996.  For the nine months, asset management fees totaled $18.9 million on
average assets managed of $2.27 billion in 1997, compared with $19.2 million
on average assets managed of $2.15 billion in 1996.  Asset management fees
decreased slightly in 1997, despite increases in average assets managed,
principally due to changes in product mix.  Sales of mutual funds, excluding
sales of money market accounts, have aggregated $354.1 million since June 30,
1996.  Mutual fund sales totaled $114.4 million in the third quarter of 1997,
up $48.3 million from the $66.1 million recorded in the third quarter of 1996. 
For the nine months, such sales totaled $296.7 million in 1997, up from $166.0
million in 1996.  The significant increases in sales in the 1997 periods
principally resulted from the introduction in November 1996 of the Company's
"Style Select Series" product.  Redemptions of mutual funds, excluding
redemptions of money market accounts, amounted to $102.1 million in the third
quarter of 1997 and $95.4 million in the third quarter of 1996. For the nine
months, such redemptions amounted to $316.3 million in 1997 and $295.0 million
in 1996.

      LOAN SERVICING FEES are earned by Imperial Premium Finance, Inc.
("Imperial").  Imperial provides short-term installment loans for borrowers to
fund their property and casualty insurance premiums.  These loans are secured
by the unearned premium associated with the underlying insurance policies. 
Currently, Imperial sells most of the short-term loans it originates and earns
fee income by servicing the sold loans.  Such fee income totaled $6.1 million
on average loans serviced of $487.1 million in the third quarter of 1997,
compared with $6.0 million on average loans serviced of $462.0 million in the
third quarter of 1996.  For the nine months, loan servicing fees totaled $18.1
million on average loans serviced of $484.6 million in 1996, compared with
$17.8 million on average loans serviced of $452.8 million in 1996.  Though
average loans serviced have increased during 1997, loan servicing fees have
remained relatively constant, largely due to increased competition in the
premium finance marketplace. 

      TRUST FEES are earned by Resources Trust Company for providing
administrative and custodial services primarily for individual retirement
accounts, as well as for other qualified pension plans.  Trust fees increased
to $4.4 million in the third quarter of 1997 (on an average of 202,900 trust
accounts) from $4.2 million in the third quarter of 1996 (on an average of
203,600 trust accounts).  For the nine months, trust fees increased to $13.3
million (on an average of 203,200 trust accounts) from $12.6 million (on an
average of 201,000 trust accounts).



      SURRENDER CHARGES on fixed and variable annuities totaled $8.8 million
in the third quarter of 1997, $7.4 million in the third quarter of 1996, $21.8
million in the nine months of 1997 and $15.0 million in nine months of 1996 and
include surrender charges attributable to the Acquisitions of $6.2 million,
$4.3 million, $14.0 million and $6.6 million, respectively. Surrender charges
generally are assessed on annuity withdrawals at declining rates during the
first seven years of an annuity contract.  Withdrawal payments, which include
surrenders and lump-sum annuity benefits, totaled $649.7 million (including
$356.8 million attributable to the Acquisitions) in the third quarter of 1997
and $412.0 million (including $82.1 million attributable to the Acquisitions)
in the third quarter of 1996.  These payments, annualized, represent 12.0%
(15.7% of average fixed annuity reserves associated with the Acquisitions) and
11.1% (7.3% of average fixed annuity reserves associated with the
Acquisitions), respectively, of average fixed and variable annuity reserves. 
For the nine months, withdrawal payments totaled $1.55 billion (including
$620.9 million attributable to the Acquisitions) in 1997 and $1.03 billion
(including $105.3 million attributable to the Acquisitions) in 1996 and,
annualized, represent 11.6% (13.9% of average fixed annuity reserves associated
with the Acquisitions) and 11.4% (6.9% of average fixed annuity reserves
associated with the Acquisitions), respectively, of average fixed and variable
annuity reserves.   Withdrawals include variable annuity payments from the
separate accounts totaling $199.4 million in the third quarter of 1997,
$174.0 million in the third quarter of 1996, $593.2 million in the nine months
of 1997 and $481.6 million in the nine months of 1996.  Consistent with the
assumptions used in connection with the John Alden Acquisition, management
anticipates that the level of withdrawal payments will continue to reflect
higher relative withdrawal rates in the near future as a result of surrenders
on the annuity business acquired as part of the John Alden Acquisition.

      Excluding the effects of the Acquisitions, annualized withdrawal payments
represented 9.8% of related average fixed and variable annuity reserves in the
third quarter of 1997, 12.7% in the third quarter of 1996, 10.6% in the nine
months of 1997 and 12.3% in the nine months of 1996.   These lower surrender
rates in 1997 reflect a decrease in the percentage of non-acquisition-related
reserves that are free of surrender charges.   

      GENERAL AND ADMINISTRATIVE EXPENSES totaled $71.3 million in the third
quarter of 1997 and $54.3 million in the third quarter of 1996.  For the nine
months, general and administrative expenses totaled $192.1 million in 1997,
compared with $148.6 million in 1996.  Expenses in 1997 include a $6.0 million
($3.0 million in the third quarter) provision for estimated programming costs
associated with the year 2000.  Expenses in 1997 also reflect the impact of the
Acquisitions, including Advantage Capital Corporation and The Financial Group,
Inc., and a 19% increase in the total number of employees since June 1996. 
Expenses remain closely controlled through a company-wide cost containment
program and continue to represent approximately 1% of average total assets on
an annualized basis. 

      AMORTIZATION OF DEFERRED ACQUISITION COSTS totaled $52.1 million in the
third quarter of 1997 and $29.9 million in the third quarter of 1996.  For the
nine months, such amortization totaled $112.5 million in 1997, compared with
$75.2 million in 1996.  The increase in amortization during 1997 primarily
reflects the amortization of the deferred acquisition costs attributable to the
Acquisitions, which aggregated $39.7 million in 1997 ($23.8 million in the
third quarter), compared with the $9.3 million recorded in 1996 ($6.9 million
in the third quarter).  Amortization has also increased due to additional fixed
and variable annuity and mutual fund sales and the subsequent amortization of
related deferred commissions and other acquisition costs. 

      INCOME TAX EXPENSE totaled $38.6 million in the third quarter of 1997 and
$29.8 million in the third quarter of 1996, representing effective annualized
tax-rates of 29% and 30%, respectively.  For the nine months, income tax
expense totaled $110.2 million in 1997 and $86.8 million in 1996, representing
effective annualized tax rates of 30% in both periods.  These tax rates reflect
the favorable impact of tax credits associated with tax-advantaged investments
in affordable housing partnerships owned by the Company.

FINANCIAL CONDITION AND LIQUIDITY

      SHAREHOLDERS' EQUITY increased to $1.80 billion at June 30, 1997 from
$1.65 billion at March 31, 1997, primarily as a result of a $102.5 million net
unrealized gain on debt and equity securities available for sale, versus the
$58.0 million net unrealized loss on such securities recorded at March 31,
1997, and the $94.3 million of net income recorded in third quarter of 1997. 
These increases were partially offset by an $87.9 million reduction in
outstanding preferred stock, resulting from the redemption of the Series B
Preferred Stock (see Note 5 of Notes to Consolidated Financial Statements) and
by $17.1 million of dividends paid to shareholders in the third quarter of
1997.  

      BOOK VALUE PER SHARE amounted to $9.30 at June 30, 1997, compared with
$8.01 at March 31, 1997.  Excluding net unrealized gains and losses on debt and
equity securities available for sale, book value per share amounted to $8.77
at June 30, 1997 and $8.31 at March 31, 1997.  On a pro forma basis, assuming
that the 8-1/2% Premium Equity Redemption Cumulative Security Units were
converted to Common Stock, book value per share would have been $10.59 at June
30, 1997, compared with $9.39 at March 31, 1997 and, excluding net unrealized
gains and losses on debt and equity securities available for sale, such book
value would have been $10.10 at June 30, 1997 and $9.67 at March 31, 1997.

      TOTAL ASSETS increased by $1.52 billion to $33.44 billion at June 30,
1997 from $31.92 billion at March 31, 1997, principally as a result of a $1.28
billion increase in the separate accounts for variable annuities and a $204.2
million increase in invested assets.  

      INVESTED ASSETS at June 30, 1997 totaled $23.28 billion, compared with
$23.08 billion at March 31, 1997.  This increase primarily resulted from the
$196.3 million net unrealized gain recorded on debt and equity securities
available for sale at June 30, 1997, versus the $108.4 million net unrealized
loss recorded on such securities at March 31, 1997.  In addition, invested
assets increased as a result of sales of GICs.   These factors resulting in
increased invested assets were partially offset by the redemption of $87.9
million of the Series B Preferred Stock and $52.6 million of preferred
securities of a subsidiary grantor trust.  The Company manages most of its
invested assets internally.  The Company's general investment philosophy is to
hold fixed maturity assets for long-term investment.  Thus, it does not have
a trading portfolio.  However, the Company has determined that all of its
portfolio of bonds, notes and redeemable preferred stocks (the "Bond
Portfolio") is available to be sold in response to changes in market interest
rates, changes in relative value of securities, changes in prepayment risk,
changes in the credit quality outlook for certain securities, the Company's
need for liquidity and other similar factors. 

      THE BOND PORTFOLIO had an aggregate fair value that exceeded its
amortized cost by $139.6 million at June 30, 1997.  At March 31, 1997, the
amortized cost exceeded the fair value of the Bond Portfolio by $153.5 million. 
The net unrealized gain on the Bond Portfolio since March 31, 1997 principally
reflects the lower relative prevailing interest rates at June 30, 1997 and
their corresponding effect on the fair value of the Bond Portfolio.

      At June 30, 1997, the Bond Portfolio (excluding $146.3 million of
redeemable preferred stocks) included $16.55 billion (at amortized cost) 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 $655.7 million (at amortized cost) of bonds rated by the Company pursuant
to statutory ratings guidelines established by the NAIC.  At June 30, 1997,
approximately $15.69 billion (at amortized cost) of the Bond Portfolio was
investment grade, including $7.53 billion of U.S. government/agency securities
and mortgage-backed securities ("MBSs").

      At June 30, 1997, the Bond Portfolio included $1.51 billion (at amortized
cost with a fair value of $1.55 billion) of bonds that were not investment
grade.  Based on their June 30, 1997 amortized cost, these non-investment-grade
bonds accounted for 4.5% of the Company's total assets and 6.6% of its invested
assets.  In addition to its direct investment in non-investment-grade bonds,
the Company has entered into Total Return Agreements with an aggregate notional
principal amount of $492.8 million at June 30, 1997 (see "Asset-Liability
Matching").

      Non-investment-grade securities generally provide higher yields and
involve greater risks than investment-grade securities because their issuers
typically are more highly leveraged and more vulnerable to adverse economic
conditions than investment-grade issuers.  In addition, the trading market for
these securities is usually more limited than for investment-grade securities. 
The Company had no material concentrations of non-investment-grade securities
at June 30, 1997.  The table on the following page summarizes the Company's
rated bonds by rating classification.


<PAGE>
<TABLE>
                                          RATED BONDS BY RATING CLASSIFICATION
                                                 (Dollars in thousands)
<CAPTION>
                                                 Issues not rated by S&P/Moody's/
    Issues rated by S&P/Moody's/DCR/Fitch          DCR/Fitch, by NAIC category                      Total             
----------------------------------------------  -----------------------------------  ----------------------------------
 S&P/(Moody's)/                      Estimated    NAIC                   Estimated               Percent of  Estimated
 [DCR]/{Fitch}         Amortized        fair    category   Amortized        fair     Amortized    invested      fair
  category(1)             cost         value       (2)        cost         value        cost       assets(3)   value
---------------        ----------   ----------  --------   ----------   -----------  ----------   ---------  ----------  
<S>                   <C>           <C>         <C>        <C>          <C>          <C>          <C>        <C>          
AAA to A-
  (Aaa to A3)
  [AAA to A-]
  {AAA to A-}         $10,771,623  $10,815,817       1     $1,376,279   $1,393,727  $12,147,902     52.61%  $12,209,544
BBB+ to BBB-
  (Baa1 to Baa3)
  [BBB+ to BBB-]
  {BBB+ to BBB-}        3,074,992    3,095,557       2        471,825      479,987    3,546,817     15.36     3,575,544
BB+ to BB-
  (Ba1 to Ba3)
  [BB+ to BB-]
  {BB+ to BB-}            117,404      126,440       3        116,514      119,526      233,918      1.01       245,966
B+ to B- 
  (B1 to B3)
  [B+ to B-]
  {B+ to B-}              900,778      922,298       4        238,994      242,558    1,139,772      4.94     1,164,856
CCC+ to C
  (Caa to C)
  [CCC]
  {CCC+ to C-}             51,836       55,805       5         71,685       71,680      123,521      0.53       127,485
CI to D
  [DD]
  {D}                          --           --       6         15,228       14,009       15,228      0.07        14,009
                      -----------  -----------             ----------   ----------  -----------             -----------
TOTAL RATED ISSUES    $14,916,633  $15,015,917             $2,290,525   $2,321,487  $17,207,158             $17,337,404
                      ===========  ===========             ==========   ==========  ===========             ===========

Footnotes appear on the following page.
</TABLE>
</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 $655.7 million (at amortized cost) of
      assets that were rated by the Company pursuant to applicable NAIC rating
      guidelines.

(3)   At amortized cost.



      Senior Secured Loans ("Secured Loans") are included in the Bond Portfolio
and their amortized cost aggregated $2.10 billion at June 30, 1997.  Secured
Loans are senior to subordinated debt and equity, and are secured by assets of
the issuer.  At June 30, 1997, Secured Loans consisted of loans to
approximately 307 borrowers spanning 45 industries, with 22% of these assets
(at amortized cost) concentrated in financial institutions and 13% concentrated
in utilities.  No other industry concentration constituted more than 7% of
these assets.

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

      MORTGAGE LOANS aggregated $3.10 billion at June 30, 1997 and consisted
of 1,315 commercial first mortgage loans with an average loan balance of
approximately $2.4 million, collateralized by properties located in 45 states. 
Approximately 29% of this portfolio was multifamily residential, 29% was
retail, 17% was office, 7% was manufactured housing, 7% was industrial and 11%
was other types.  At June 30, 1997, approximately 17%, 13%, 9% and 9% of this
portfolio was secured by properties located in California, New York, Florida
and Texas, respectively, and no more than 5% of this portfolio was secured by
properties located in any other single state.  At June 30, 1997, there were 53
mortgage loans with outstanding balances of $10 million or more, which loans
collectively aggregated approximately 30% of this portfolio.  At the time of
their origination or purchase by the Company, virtually all mortgage loans had
loan-to-value ratios of 75% or less.  At June 30, 1997, approximately 37% of
the mortgage loan portfolio consisted of loans with balloon payments due before
July 1, 2000.  During the third quarters and nine months of 1997 and 1996,
loans delinquent by more than 90 days, foreclosed loans and restructured loans
have not been significant in relation to the total mortgage loan portfolio.  
At June 30, 1997, the mortgage loan portfolio included $858.5 million of
commercial mortgage loans obtained as part of the John Alden Acquisition. 
During the third quarter of 1997, the Company sold $343.6 million of single-
family residential mortgage loans obtained as part of the John Alden
Acquisition.

      At June 30, 1997, approximately 50% 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
effects of general economic conditions on these commercial properties. 
However, due to the seasoned nature of the Company's mortgage loan portfolio,
its emphasis on multifamily loans and its strict underwriting standards, the
Company believes that it has reduced the risk attributable to its mortgage loan
portfolio while maintaining attractive yields.

      PARTNERSHIP investments totaled $1.21 billion at June 30, 1997,
constituting investments in approximately 600 separate partnerships with an
average size of approximately $2.0 million.  This portfolio includes:
(i) $611.7 million of partnerships managed by independent money managers that
invest in a broad selection of equity and fixed-income securities, currently
including approximately 3,600 separate issuers; (ii) $512.1 million of partner-
ships that make tax-advantaged investments in affordable housing properties,
currently involving approximately 480 multifamily properties in 41 states; and
(iii) $87.7 million of partnerships that invest in mortgage loans and
income-producing real estate.  At June 30, 1997, $646.4 million of the
Company's partnerships was accounted for by using the cost method and $565.1
million by using the equity method.  The risks generally associated with
partnerships include those related to their underlying investments (i.e. equity
securities, debt securities and real estate), plus a level of illiquidity,
which is mitigated, to some extent, a) for the affordable housing partnerships
by the marketability of the tax credits they generate; and b) in the case of
many of the other partnerships, by the existence of contractual termination
provisions.

      ASSET-LIABILITY MATCHING is utilized by the Company to minimize the risks
of interest rate fluctuations and disintermediation.  The Company believes that
its fixed-rate liabilities should be backed by a portfolio principally composed
of fixed maturities that generate predictable rates of return.  The Company
does not have a specific target rate of return.  Instead, its rates of return
vary over time depending on the current interest rate environment, the slope
of the yield curve, the spread at which fixed maturities are priced over the
yield curve and general 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 designs its fixed-rate products and conducts its investment
operations in order to closely match the duration of the assets in its
investment portfolio to its annuity and GIC obligations.  The Company seeks to
achieve a predictable spread between what it earns on its assets and what it
pays on its liabilities by investing principally in fixed-rate securities.  The
Company's fixed-rate products incorporate surrender charges, two-tiered
interest rate structures or other limitations in order to encourage
persistency.  Approximately  86% of the Company's fixed annuity and GIC
reserves had surrender penalties or other restrictions at June 30, 1997.

      As part of its asset-liability matching discipline, the Company conducts
detailed computer simulations that model its fixed-maturity assets and
liabilities under commonly used stress-test interest rate scenarios.  Based on
the results of these computer simulations, the investment portfolio has been
constructed with a view to maintaining a desired investment spread between the
yield on portfolio assets and the rate paid on its interest-bearing liabilities
under a variety of possible future interest rate scenarios.  At June 30, 1997,
the weighted average life of the Company's investments was approximately 5.2
years and the duration was approximately 3.7.  Weighted average life is the
average time to receipt of all principal, incorporating the effects of
scheduled amortization and expected prepayments, weighted by book value. 
Duration is a common option-adjusted measure for the price sensitivity of a
fixed-income portfolio to changes in interest rates. It measures the
approximate percentage change in the market value of a portfolio if interest
rates change by 100 basis points, recognizing the changes in portfolio
cashflows resulting from embedded options such as prepayments and bond calls.
  
      As a component of its asset and liability management strategy, the
Company utilizes interest rate swap agreements ("Swap Agreements") to match
assets more closely to liabilities.  Swap Agreements are agreements to exchange
with a counterparty interest rate payments of differing character (for example,
variable-rate payments exchanged for fixed-rate payments) based on an
underlying principal balance (notional principal) to hedge against interest
rate changes.  The Company typically utilizes Swap Agreements to create a hedge
that effectively converts floating-rate assets and liabilities into fixed-rate
instruments.  At June 30, 1997, the Company had 29 outstanding Swap Agreements
with an aggregate notional principal amount of $1.12 billion.  These agreements
mature in various years through 2003 and have an average remaining maturity of
31 months.

      The Company also seeks to provide liquidity from time to time by using
reverse repurchase agreements ("Reverse Repos"), dollar roll transactions
("Dollar Rolls") and by investing in MBSs.  It also seeks to enhance its spread
income by using Reverse Repos, Dollar Rolls and Total Return Agreements. 
Reverse Repos involve a sale of securities and an agreement to repurchase the
same securities at a later date at an agreed upon price and are generally
over-collateralized.  Dollar Rolls are similar to Reverse Repos except that the
repurchase involves securities that are only substantially the same as the
securities sold and the arrangement is not collateralized, nor is it governed
by a repurchase agreement.  Total Return Agreements effectively exchange a
fixed rate of interest on the notional amount for the coupon income plus or
minus the increase or decrease in the fair value of specified
non-investment-grade bonds.  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 risks associated with Total Return Agreements are the
credit risk on the underlying non-investment-grade bonds, the risk of potential
loss due to bond market fluctuations and the risk associated with counterparty
nonperformance.  The primary risk associated with the Company's Dollar Rolls,
Reverse Repos and Swap Agreements is counterparty risk.  The Company believes,
however, that the counterparties to its Total Return Agreements, Dollar Rolls,
Reverse Repos and Swap Agreements are financially responsible and that the
counterparty risk associated with those transactions is minimal.  Counterparty
risk associated with Dollar Rolls is further mitigated by the Company's
participation in an MBS trading clearinghouse.  The sell and buy transactions
that are submitted to this clearinghouse are marked to market on a daily basis
and each participant is required to over-collateralize its net loss position
by 30% with either cash, letters of credit or government securities.  In
addition to counterparty risk, Swap Agreements also have interest rate risk. 
However, the Company's Swap Agreements typically hedge variable-rate assets or
liabilities, and interest rate fluctuations that adversely affect the net cash
received or paid under the terms of a Swap Agreement would be offset by
increased interest income earned on the variable-rate assets or reduced
interest expense paid on the variable-rate liabilities.  The primary risk
associated with MBSs is that a changing interest rate environment might cause
prepayment of the underlying obligations at speeds slower or faster than
anticipated at the time of their purchase.

      INVESTED ASSETS EVALUATION routinely includes a review by the Company of
its portfolio of debt securities.  Management identifies monthly those
investments that require additional monitoring and carefully reviews the
carrying 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 collateral (if
any), compliance with contractual covenants, the borrower's recent financial
performance, news reports and other externally generated information concerning
the creditor's affairs.  In the case of publicly traded bonds, management also
considers market value quotations, if available.  For mortgage loans,
management generally considers information concerning the mortgaged property
and, among other things, factors impacting the current and expected payment
status of the loan and, if available, the current fair value of the underlying
collateral.

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

      DEFAULTED INVESTMENTS, comprising all investments that are in default as
to the payment of principal or interest, totaled $43.7 million at June 30, 1997
(at amortized cost after impairment writedowns, with a fair value of $42.5
million), including $20.3 million of bonds and notes and $23.4 million of
mortgage loans.  At June 30, 1997, defaulted investments constituted 0.2% of
total invested assets.  At March 31, 1997, defaulted investments totaled
$54.5 million and constituted 0.2% of total invested assets.

      SOURCES OF LIQUIDITY are readily available to the Company in the form of
the Company's existing portfolio of cash and short-term investments, Reverse
Repo capacity on invested assets and, if required, proceeds from invested asset
sales.  At June 30, 1997, approximately $12.04 billion of the Company's Bond
Portfolio had an aggregate unrealized gain of $254.8 million, while
approximately $5.31 billion of the Bond Portfolio had an aggregate unrealized
loss of $115.2 million.  In addition, subsequent to the Company's July 1997
issuance of $175 million of 5.60% debentures, $3.33 billion remains available
to the Company to issue securities under a shelf registration statement filed
in July 1997 (see Note 7 of Notes to Consolidated Financial Statements). 
Further, the Company's investment portfolio currently provides approximately
$182.3 million of monthly cash flow from scheduled principal and interest
payments.

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

      In a declining rate environment, the Company's cost of funds would
decrease over time, reflecting lower interest crediting rates on its fixed
annuities and GICs.  Should increased liquidity be required for withdrawals,
the Company believes that a significant portion of its investments could be
sold without adverse consequences in light of the general strengthening that
would be expected in the bond market.

      On a parent company stand-alone basis, SunAmerica Inc. (the "Parent"),
at June 30, 1997, had invested assets with a fair value of $1.78 billion and
outstanding senior indebtedness of $1.00 billion, comprising all of the
Company's outstanding senior indebtedness.  Additionally, as of June 30, 1997,
the Parent had three GICs purchased by local government entities which
aggregated $231.3 million.

      During November 1996 and October 1995, respectively, the Parent purchased
the common securities of SunAmerica Capital Trust III and SunAmerica Capital
Trust II (the "Grantor Trusts") and issued an aggregate of $511.9 million of
junior subordinated debentures (the "Debentures") to the Grantor Trusts in
connection with the public issuance of the preferred securities of the Grantor
Trusts.  (See Note 3 of Notes to Consolidated Financial Statements.) 

      The Parent's annual debt service with respect to its senior indebtedness,
GIC obligations and Debentures, including its recently issued 5.60% debentures,
totals $30.7 million for the remainder of fiscal 1997, $176.8 million for
fiscal 1998, $285.2 million for fiscal 1999, $567.9 million for fiscal 2000,
$132.2 million for fiscal 2001 and $4.43 billion, in the aggregate, thereafter.
On or before October 31, 1999, the Company is contractually scheduled to
receive $431.3 million upon delivery of 11.5 million or fewer shares of the
Company's Common Stock in accordance with the terms of the Company's 8-1/2%
Premium Equity Redemption Cumulative Security Units.

      The Parent received dividends from its regulated life insurance
subsidiaries of $118.7 million in April 1997, $94.3 million in March 1996 and
$69.2 million in March 1995.  The Parent also received dividends of
$7.6 million during fiscal 1997 and $16.0 million during fiscal 1996 from its
other directly owned subsidiaries.  There are no dividends available to the
Parent from its regulated life insurance subsidiaries for the remainder of
calendar year 1997.

      The Company has transferred to third-party investors certain of its
interests in various partnerships that make tax-advantaged affordable housing
investments.  As part of these transactions, the Parent has agreed to advance
monies to support the operations of the underlying housing projects, if
required, and has guaranteed that the transferred partnerships will provide,
as of the transfer date and under then current tax laws, a specified level of
associated tax credits and deductions to the third-party investors.  Based on
an evaluation of the underlying housing projects, management does not
anticipate any material cash payments with respect to the guarantees.

REGULATION                       

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

      During the last decade, the insurance regulatory framework has been
placed under increased scrutiny by various states, the federal government and
the NAIC.  Various states have considered or enacted legislation that changes,
and in many cases increases, the states' authority to regulate insurance
companies.  Legislation has been introduced from time to time in Congress that
could result in the federal government assuming some role in the regulation of
insurance companies or allowing combinations between insurance companies, banks
and other entities.  In recent years, the NAIC has approved and recommended to
the states for adoption and implementation several regulatory initiatives
designed to reduce the risk of insurance company insolvencies and market
conduct violations.  These initiatives include investment reserve requirements,
risk-based capital standards, new investment standards and restrictions on an
insurance company's ability to pay dividends to its stockholders.  The NAIC is
also currently developing model laws relating to product design and
illustrations for annuity products. Current proposals are still being debated
and the Company is monitoring developments in this area and the effects any
changes would have on the Company.

      SunAmerica Asset Management Corp. is registered with the SEC as a
registered investment advisor under the Investment Advisors 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's life insurance
subsidiaries are subject to regulation by the SEC under the Securities Act of
1933 and the Investment Company Act of 1940. 

      Resources Trust Company is subject to regulation by the Colorado State
Banking Board and the Federal Deposit Insurance Corporation. 

      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
National Association of Securities Dealers, Inc. (the "NASD"). The NASD has
broad administrative and supervisory powers relative to all aspects of business
and may examine the subsidiaries' business and accounts at any time.

      The Company's premium finance business is subject to regulation and
supervision by substantially all of the states in which it is authorized to
transact business.  State premium finance laws establish supervisory agencies
with broad administrative and supervisory powers related to granting and
revoking licenses to transact business, approving finance agreement forms,
regulating certain finance charge rates, regulating marketing and other trade
practices (including the procedures to cancel financed insurance policies for
non-payment), prescribing the form and content of required financial statements
and reports, performing financial and other examinations and other related
matters.



                               SUNAMERICA INC.
                         PART II - OTHER INFORMATION



ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
-----------------------------------------
EXHIBITS

3(i)  Articles of Amendment, dated February 14, 1997, are incorporated herein
      by reference to the Company's  Notice of Annual Meeting of Shareholders
      and Proxy Statement, filed December 30, 1996.

11    Statement re computation of per-share earnings.

27    Financial Data Schedule.

REPORTS ON FORM 8-K

      On April 15, 1997, the Company filed a Current Report on Form 8-K, as
      amended on June 16, 1997, concerning the completion of its acquisition
      of the annuity business of John Alden Financial Corporation.

      On July 16, 1997, the Company filed a Current Report on Form 8-K to file
      exhibits in connection with the issuance of 10,669,745 shares of its
      Common Stock pursuant to the Company's Registration Statement on Form S-3
      (File No. 333-14201).

      On July 31, 1997, the Company filed a Current Report on Form 8-K to file
      exhibits in connection with the issuance of its 5.60% Debentures due July
      31, 2097 pursuant to the Company's Registration Statement on Form S-3
      (File No. 333-31619).



                               SUNAMERICA INC.
                         PART II - OTHER INFORMATION
                                 (Continued)




                                 SIGNATURES
                                 ----------

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.


                                          SUNAMERICA INC.
                                          -----------------------------------
                                          Registrant


Dated      August 13, 1997                /s/ JAY S. WINTROB
     ----------------------------         -----------------------------------
                                          Jay S. Wintrob
                                          Vice Chairman


Dated      August 13, 1997                 /s/ SCOTT L. ROBINSON
     ----------------------------         -----------------------------------
                                          Scott L. Robinson
                                          Senior Vice President and Controller





                               SUNAMERICA INC.
                                      


LISTS OF EXHIBITS FILED
-----------------------

11    Statement re computation of per-share earnings.

27    Financial Data Schedule.