VARIABLE ANNUITY ACCOUNT SEVEN
485BPOS, 2000-04-21
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<PAGE>   1
                                                          File Nos. 333-63511
                                                                    811-09003



                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM N-4
                   REGISTRATION STATEMENT UNDER THE SECURITIES
                                   ACT OF 1933                               [X]

                            Pre-Effective Amendment No.                      [ ]



                            Post-Effective Amendment No. 4                   [X]


                                     and/or

                   REGISTRATION STATEMENT UNDER THE INVESTMENT
                             COMPANY ACT OF 1940                             [X]



                               Amendment No. 5


                        (Check appropriate box or boxes)

                         VARIABLE ANNUITY ACCOUNT SEVEN
                           (Exact Name of Registrant)

                     Anchor National Life Insurance Company
                               (Name of Depositor)

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

                Depositor's Telephone Number, including Area Code
                                 (310) 772-6000

                              Susan L. Harris, Esq.
                     Anchor National Life Insurance Company
                               1 SunAmerica Center
                       Los Angeles, California 90067-6022
                     (Name and Address of Agent for Service)


Approximate date of proposed public offering:


It is proposed that this filing will become effective (check appropriate box)
[ ]  immediately upon filing pursuant to paragraph (b) of Rule 485


[ ]  on ___________________ pursuant to paragraph (b) of Rule 485

[ ]  60 days after filing pursuant to paragraph (a)(1) of Rule 485


[X]  on May 1, 2000 pursuant to paragraph (a)(1) of Rule 485


Title of securities being registered:

      Interests in a Separate Account under group and individual flexible
      payment deferred annuity contracts.



<PAGE>   2

                          VARIABLE ANNUITY ACCOUNT SEVEN

                              Cross Reference Sheet

                               PART A - PROSPECTUS

<TABLE>
<CAPTION>
Item Number in Form N-4                                   Caption
- -----------------------                                   -------
<S>     <C>                                               <C>
1.      Cover Page.............................           Cover Page

2.      Definitions............................           Glossary

3.      Synopsis...............................           Profile; Fee Tables;
                                                          Portfolio Expenses;
                                                          Examples

4.      Condensed Financial Information........           Examples

5.      General Description of Registrant,
        Depositor and Portfolio Companies......           The Polaris Plus
                                                          Variable Annuity;
                                                          Other Information

6.      Deductions.............................           Expenses

7.      General Description of
        Variable Annuity Contracts.............           The Polaris Plus
                                                          Variable Annuity;
                                                          Purchasing a Polaris
                                                          Plus Variable Annuity;
                                                          Investment Options

8.      Annuity Period.........................           Income Options

9.      Death Benefit..........................           Death Benefit

10.     Purchases and Contract Value...........           Purchasing a Polaris Plus
                                                          Variable Annuity

11.     Redemptions............................           Access To Your Money

12.     Taxes..................................           Taxes

13.     Legal Proceedings......................           Other Information - Legal
                                                          Proceedings

14.     Table of Contents of Statement
        of Additional Information..............           Table of Contents of
                                                          Statement of Additional
                                                          Information

</TABLE>



<PAGE>   3







               PART B - STATEMENT OF ADDITIONAL INFORMATION

        Certain information required in part B of the Registration Statement has
been included within the Prospectus forming part of this Registration Statement;
the following cross-references suffixed with a "P" are made by reference to the
captions in the Prospectus.

<TABLE>
<CAPTION>
Item Number in Form N-4                             Caption
- -----------------------                             -------
<S>     <C>                                         <C>
15.     Cover Page.............................     Cover Page

16.     Table of Contents......................     Table of Contents

17.     General Information and History........     The Variable
                                                    Annuity (P); Separate
                                                    Account; General Account;
                                                    Investment Options (P);
                                                    Other Information

18.     Services...............................     Other Information (P)

19.     Purchase of Securities Being Offered...     Purchasing a Polaris Plus
                                                    Variable Annuity (P)

20.     Underwriters...........................     Distribution of Contracts

21.     Calculation of Performance Data........     Performance Data

22.     Annuity Payments.......................     Income Options (P);
                                                    Income Payments;
                                                    Annuity Unit Values

23.     Financial Statements...................     Depositor: Other
                                                    Information - Financial
                                                    Statements; Registrant:
                                                    Financial Statements

</TABLE>


                                     PART C


        Information required to be included in Part C is set forth under the
appropriate item, so numbered, in Part C of this Registration Statement.



<PAGE>   4

                                  POLARIS PLUS LOGO

                                VARIABLE ANNUITY
                                    PROFILE


THIS PROFILE IS A SUMMARY OF SOME OF THE MORE IMPORTANT POINTS THAT YOU SHOULD
KNOW AND CONSIDER BEFORE PURCHASING THE POLARIS PLUS VARIABLE ANNUITY. THE
ANNUITY IS MORE FULLY DESCRIBED IN THE PROSPECTUS. PLEASE READ THE PROSPECTUS
CAREFULLY.

                                  May 1, 2000


- ----------------------------------------------------------------
- ----------------------------------------------------------------
                      1. THE POLARIS PLUS VARIABLE ANNUITY
- ----------------------------------------------------------------
- ----------------------------------------------------------------

The Polaris Plus Variable Annuity is issued by Anchor National Life Insurance
Company ("Anchor National") to Participants in certain employer sponsored
retirement plans qualified subject to Section 403(b) of the Internal Revenue
Code (the "IRC") and to certain individuals who qualify to purchase contracts
under Section 408(b). An annuity qualified under Section 403(b) of the IRC is
also known as a tax sheltered annuity ("TSA"). An annuity qualified under
Section 408(b) is commonly referred to as an Individual Retirement Annuity
("IRA").

A 403(b) Polaris Plus participant may choose to convert their 403(b) to an IRA
funded by Polaris Plus if they separate from service. Generally, all of the same
features, charges and benefits will apply to a contract issued as an IRA as was
applicable to a participant's TSA, so long as no conflict arises with the
appropriate provisions of the IRC. We will only specifically address IRA
contracts in this Profile to the extent that applicable IRC provisions and/or
any other state or federal laws, require different treatment.

This contract is designed to help you invest to meet long-term financial goals,
such as retirement funding. Your retirement plan allows you to invest money on
which you have not already paid taxes and your earnings grow tax deferred. In
addition, funding that plan with the Polaris Plus variable annuity provides a
wide range of underlying investment options and fixed accounts, a guaranteed
death benefit and an option to receive income for your lifetime.

Polaris Plus offers a diverse selection of money managers and investment
options. You may divide your money among any or all of our 26 variable
investment portfolios and several fixed account options, unless limited by any
applicable Plan. Your investment is not guaranteed. The value of your Polaris
Plus contract can fluctuate up or down, based on the performance of the
underlying investments you select. You may experience a loss.

Like most annuities, the contract has an accumulation phase and an income phase.
During the accumulation phase, you invest money in your contract. Your earnings
are based on the investment performance of the variable investment portfolios to
which your money is allocated and/or the interest rate(s) earned on the fixed
account option(s) in which you invest. Subject to certain IRC restrictions, you
may withdraw money from your contract during the accumulation phase. However, as
with other tax-deferred investments, your ability to withdraw money is
restricted and you will generally pay taxes on earnings and untaxed
contributions when you withdraw them. A federal tax penalty will typically apply
if you make withdrawals before age 59 1/2.

During the income phase, you receive income payments from your annuity. Among
other factors, the amount of money you are able to accumulate in your contract
during the accumulation phase will affect the amount of your income payments
during the income phase.

- ----------------------------------------------------------------
- ----------------------------------------------------------------
                               2. INCOME OPTIONS
- ----------------------------------------------------------------
- ----------------------------------------------------------------

You can select from one of five income options:
   (1) payments for your lifetime;
   (2) payments for your lifetime and your survivor's lifetime;
   (3) payments for your lifetime and your survivor's lifetime, but for not less
       than 10 or 20 years;
   (4) payments for your lifetime, but for not less than 10, 15 or 20 years,
       and;
   (5) payments for a specified period of 5 to 30 years.

You will also need to decide when your income payments begin and if you want
your income payments to fluctuate with investment performance or remain
constant. Once you begin receiving income payments, you cannot change your
income option.

For contracts which are part of a qualified retirement plan (including TSAs and
IRAs), funded with money on which you did not paid taxes, the entire income
payment is generally taxable as income. Further, under certain qualified
contracts your income option may not exceed your life expectancy.

In addition to the above income options, you may also enroll in the Income
Protector program which provides a minimum retirement income guarantee, subject
to the provisions thereof.
- ----------------------------------------------------------------
- ----------------------------------------------------------------
                     3. PURCHASING A POLARIS PLUS VARIABLE
                                ANNUITY CONTRACT
- ----------------------------------------------------------------
- ----------------------------------------------------------------

You can buy a contract with money from a direct transfer or a direct rollover
from an existing retirement plan and/or by establishing a salary reduction
agreement with your employer.

For qualified contracts issued as TSAs there is no minimum initial purchase
payment if you establish a salary reduction agreement with your employer. If you
fund a contract through a direct transfer or direct rollover, only, (without
setting up salary reduction contributions), the minimum initial purchase payment
is $2,000.
<PAGE>   5

                ----------------------------------------------------------------
                ----------------------------------------------------------------
                             4. INVESTMENT OPTIONS
                ----------------------------------------------------------------
                ----------------------------------------------------------------

You may allocate money to the following variable investment Portfolios of the
Anchor Series Trust and/or the SunAmerica Series Trust:

ANCHOR SERIES TRUST
  MANAGED BY WELLINGTON MANAGEMENT COMPANY, LLP
      - Capital Appreciation Portfolio
      - Growth Portfolio
      - Government and Quality Bond Portfolio

SUNAMERICA SERIES TRUST
  MANAGED BY ALLIANCE CAPITAL MANAGEMENT L.P.
      - Global Equities Portfolio
      - Alliance Growth Portfolio
      - Growth-Income Portfolio
  MANAGED BY DAVIS SELECTED ADVISERS, L.P.

      - Davis Venture Value Portfolio

      - Real Estate Portfolio
  MANAGED BY FIRST AMERICAN ASSET MANAGEMENT
      - Equity Income Portfolio
      - Equity Index Portfolio
      - Small Company Value Portfolio
  MANAGED BY FEDERATED INVESTORS
      - Federated Value Portfolio
      - Utility Portfolio
      - Corporate Bond Portfolio
  MANAGED BY GOLDMAN SACHS ASSET MANAGEMENT/
    GOLDMAN SACHS ASSET MANAGEMENT INTERNATIONAL
      - Asset Allocation Portfolio
      - Global Bond Portfolio
  MANAGED BY MORGAN STANLEY ASSET MANAGEMENT INC.
      - International Diversified Equities Portfolio
      - Worldwide High Income Portfolio
  MANAGED BY PUTNAM INVESTMENT MANAGEMENT, INC.
      - Putnam Growth Portfolio
      - International Growth and Income Portfolio
      - Emerging Markets Portfolio
  MANAGED BY SUNAMERICA ASSET MANAGEMENT CORP.
      - Aggressive Growth Portfolio
      - "Dogs" of Wall Street Portfolio
      - SunAmerica Balanced Portfolio
      - High-Yield Bond Portfolio
      - Cash Management Portfolio

If applicable, your Plan may limit the investment options available to you.

You may also allocate money to the 1, 3 and 5 year market value adjustment
("MVA") fixed account options (in Washington and Oregon only a 1 year fixed
account is available) and, under certain circumstances, the 6-month and 1-year
Dollar Cost Averaging ("DCA") fixed account options. Each fixed account option
may offer a different interest rate. Interest rates are guaranteed by Anchor
National. If applicable, your Plan may also limit the fixed account options
available to you.

Your contract value may be adjusted up or down for withdrawals or transfers from
the 1, 3 and 5 year MVA fixed account options prior to the end of the guarantee
period. The interest rates applicable for these fixed account options may differ
from time to time, however, we will never credit less than a 3% annual effective
rate. Once established, the rate will not change during the selected period.


                ----------------------------------------------------------------
                ----------------------------------------------------------------
                                  5. EXPENSES
                ----------------------------------------------------------------
                ----------------------------------------------------------------

We deduct insurance charges, annually as a percentage of the average daily value
of your contract allocated to the variable portfolios. Currently, the charges
range from .55% to 1.25%. The amount of the charge may vary by Plan or group.
The actual charge applicable to you can be obtained by calling your employer,
Plan Sponsor, financial adviser or by consulting your Contract Data page. There
are no insurance charges deducted against amounts allocated to the fixed account
options.

If you take money out of your contract, you may be assessed a withdrawal charge
which is a percentage of purchase payments withdrawn. The percentage may depend
on the number of years the withdrawn purchase payments have been invested in the
contract. If applicable, the percentage declines over the time the money is in
the contract. The applicable withdrawal charge schedule may also vary dependent
upon your employment status at the time of contract issue.

Currently, the withdrawal charges range from 0% to the maximum schedule, as
follows:


SEPARATED FROM SERVICE AT TIME OF ISSUE (SCHEDULE A)

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------
         YEAR              1        2        3        4        5        6
- -----------------------------------------------------------------------------
<S>                     <C>      <C>      <C>      <C>      <C>      <C>
 WITHDRAWAL CHARGE         6%       6%       5%       5%       4%       0%
- -----------------------------------------------------------------------------
</TABLE>

EMPLOYED AT TIME OF ISSUE (SCHEDULE B)

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
         YEAR              1        2        3        4        5        6        7
- --------------------------------------------------------------------------------------
<S>                     <C>      <C>      <C>      <C>      <C>      <C>      <C>
 WITHDRAWAL
 CHARGE                    6%       6%       5%       5%       4%       4%       0%
- --------------------------------------------------------------------------------------
</TABLE>

Withdrawal charges may vary by Plan or group contract. You can obtain
information on the withdrawal charge applicable to your contract by calling your
plan sponsor, employer, financial adviser or consulting your Contract Data page.


As with other professionally managed investments, there are also investment
charges imposed on contracts with money allocated to the variable portfolios. We
estimate these fees to range from .53 to 1.90.


Each year, you are allowed to make an unlimited number of transfers among the
variable portfolios without charge. We reserve the right in the future to limit
the number of transfers to 15 each year and to impose a $25.00 fee for each
transfer in excess of 15. (You will be notified of any future limitation.)

In a limited number of states, you may also be assessed a state premium tax of
up to 3.5%, depending upon the state.

The following charts are designed to help you understand the charges in your
contract. The column "Total Annual Charges" shows the total of the maximum 1.25%
insurance charges and the investment charges for each variable portfolio. If
your insurance charges are less than 1.25% your expenses will be lower.

The next two columns show two examples of the charges you would pay under the
contract. The examples assume that you invested $1,000 in a contract which earns
5% annually and that you withdraw your money: (1) at the end of year 1, and (2)
at the end of year 10. The premium tax is assumed to be 0% in both examples. In
calculating these examples we use the highest applicable insurance charges equal
to 1.25% annually (calculated daily) of the value of the variable portfolio. To
arrive at the numbers at the end of year 1, we use the highest possible
surrender charge of 6%. If the withdrawal charge or insurance charges applicable
under your contract are less, your expenses would be lower.
<PAGE>   6


<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
                                                                                               EXAMPLES:
                                         MAXIMUM                                                MAXIMUM          MAXIMUM
                                       TOTAL ANNUAL         TOTAL ANNUAL                     TOTAL EXPENSES   TOTAL EXPENSES
                                        INSURANCE            INVESTMENT       TOTAL ANNUAL     AT END OF        AT END OF
   ANCHOR SERIES TRUST PORTFOLIO         CHARGES              CHARGES           CHARGES          1 YEAR          10 YEARS
- ----------------------------------------------------------------------------------------------------------------------------
<S>                                    <C>                  <C>               <C>            <C>              <C>
Capital Appreciation                      1.25%                 .67%             1.92%            $ 79             $221
Growth                                    1.25%                 .73%             1.98%            $ 80             $227
Government and Quality Bond               1.25%                 .66%             1.91%            $ 79             $220
- ----------------------------------------------------------------------------------------------------------------------------
SUNAMERICA SERIES TRUST PORTFOLIO
Emerging Markets*                         1.25%                1.90%             3.15%            $ 92             $343
International Diversified Equities        1.25%                1.22%             2.47%            $ 85             $277
Global Equities                           1.25%                 .84%             2.09%            $ 81             $239
International Growth and Income*          1.25%                1.21%             2.46%            $ 85             $276
Aggressive Growth*                        1.25%                 .75%             2.00%            $ 80             $229
Small Company Value*                      1.25%                1.40%             2.65%            $ 87             $295
Real Estate*                              1.25%                 .92%             2.17%            $ 82             $247
Putnam Growth                             1.25%                 .80%             2.05%            $ 81             $234
Alliance Growth                           1.25%                 .63%             1.88%            $ 79             $217
"Dogs" of Wall Street*                    1.25%                 .67%             1.92%            $ 79             $221
Davis Venture Value                       1.25%                 .74%             1.99%            $ 80             $228
Federated Value*                          1.25%                 .77%             2.02%            $ 80             $231
Growth-Income                             1.25%                 .56%             1.81%            $ 78             $209
Equity Index*                             1.25%                 .55%             1.80%            $ 78             $208
Utility*                                  1.25%                 .84%             2.09%            $ 81             $239
Equity Income*                            1.25%                 .95%             2.20%            $ 82             $250
Asset Allocation                          1.25%                 .63%             1.88%            $ 79             $217
SunAmerica Balanced*                      1.25%                 .66%             1.91%            $ 79             $220
Worldwide High Income                     1.25%                1.12%             2.37%            $ 84             $267
High-Yield Bond                           1.25%                 .67%             1.92%            $ 79             $221
Corporate Bond                            1.25%                 .71%             1.96%            $ 80             $225
Global Bond                               1.25%                 .84%             2.09%            $ 81             $239
Cash Management                           1.25%                 .53%             1.78%            $ 78             $206
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>


* For these Portfolios, the adviser, SunAmerica Asset Management Corp., has
  voluntarily agreed to waive fees or reimburse expenses, if necessary, to keep
  operating expenses at or below an established maximum amount. All waivers or
  reimbursements may be terminated at any time. For more detailed information,
  see Fee Tables and Examples in the prospectus.

                ----------------------------------------------------------------
                ----------------------------------------------------------------
                                    6. TAXES
                ----------------------------------------------------------------
                ----------------------------------------------------------------

Unlike taxable investments where earnings are taxed in the year they are earned,
taxes on amounts contributed to and earned in a qualified contract (one
purchased with before-tax dollars, like a TSA or IRA), are generally taxable
when withdrawn.

You may be subject to a 10% federal tax penalty for distributions or withdrawals
before age 59 1/2.

                ----------------------------------------------------------------
                ----------------------------------------------------------------
                            7. ACCESS TO YOUR MONEY
                ----------------------------------------------------------------
                ----------------------------------------------------------------

During the accumulation phase withdrawals from your contract may be limited by
the IRC, any applicable employer plan and this contract. Contracts issued as
qualified TSAs or IRAs are subject to specific withdrawal restrictions imposed
by the IRC. SEE ACCESS TO YOUR MONEY ON PAGE 12 for details regarding
restrictions applicable to withdrawals.


Under this contract, certain withdrawals may be subject to a withdrawal charge.
Some types of withdrawals may be exempt from Company imposed withdrawal charges.
SEE EXPENSES ON PAGE 14 for details regarding possible withdrawal charge
exceptions.


In all cases after your tenth contract anniversary, Company imposed withdrawal
charges no longer apply. However, the IRC or any applicable Plan may still
impose restrictions on withdrawals at that point in time.

                ----------------------------------------------------------------
                ----------------------------------------------------------------
                                 8. PERFORMANCE
                ----------------------------------------------------------------
                ----------------------------------------------------------------

The value of your contract will fluctuate depending upon the investment
performance of the portfolio(s) you choose.

When you invest in the Polaris Plus Variable Annuity, your money is actually
invested in the underlying portfolios of the Anchor Series Trust and/or the
SunAmerica Series Trust. These trusts are older than the annuity itself and have
served as underlying investments for other variable annuity contracts. Some of
the advertised historical performance for this annuity will be derived from the
performance of the corresponding portfolios of the trusts, modified to reflect
the charges and expenses associated with this contract, as if this contract had
been in existence during the time period advertised. Of course, past performance
does not guarantee future results.
<PAGE>   7

                ----------------------------------------------------------------
                ----------------------------------------------------------------
                                9. DEATH BENEFIT
                ----------------------------------------------------------------
                ----------------------------------------------------------------

If you should die during the accumulation phase, your beneficiary will receive a
death benefit. The death benefit will be the greater of:

     1. Total purchase payments minus total withdrawals (including applicable
        fees and charges) at the time we receive satisfactory proof of death,
        or;

     2. The contract value at the time we receive satisfactory proof of death.

                ----------------------------------------------------------------
                ----------------------------------------------------------------
                             10. OTHER INFORMATION
                ----------------------------------------------------------------
                ----------------------------------------------------------------

FREE LOOK: You may cancel your contract within ten days (or longer if required
by your state) by mailing it to our Annuity Service Center. Your contract will
be treated as void on the date we receive it and we will pay you an amount equal
to the value of your contract on the date (unless otherwise required by state
law). Its value may be more or less than the money you initially invested.

ASSET ALLOCATION REBALANCING: If selected by you, this program maintains your
specified allocation mix in the variable investment portfolios by readjusting
your money on a calendar quarterly, semiannual or annual basis.

SYSTEMATIC WITHDRAWAL PROGRAM: If selected by you, and allowed by any applicable
plan, this program allows you to receive either monthly, quarterly, semiannual
or annual checks during the accumulation phase. Systematic withdrawals may also
be electronically transferred to your bank account. Of course, withdrawals may
be subject to a withdrawal charge and a 10% federal tax penalty may apply if you
are under age 59 1/2. This program is not available if you are not eligible to
make withdrawals under the IRC or an applicable employer plan.

DOLLAR COST AVERAGING: If selected by you and allowed by any applicable plan,
this program allows you to invest gradually in the variable portfolios and/or
certain fixed account options from any of the variable investment portfolios,
the 1-year MVA fixed account option, and under certain circumstances the 6-month
or the 1-year DCA fixed account options.

CONFIRMATIONS AND QUARTERLY STATEMENTS: During the accumulation phase, you will
receive confirmation of transactions within your contract. Transactions made
pursuant to contractual or systematic agreements, such as deduction of the
annual maintenance fee and dollar cost averaging, may be confirmed quarterly.
Purchase payments received through the automatic payment plan or a salary
reduction arrangement, may also be confirmed quarterly. For all other
transactions, we send confirmations immediately.

During the accumulation and income phases, you will receive a statement of your
transactions over the past quarter and a summary of your account values.

                ----------------------------------------------------------------
                ----------------------------------------------------------------
                                 11. INQUIRIES
                ----------------------------------------------------------------
                ----------------------------------------------------------------

If you have questions about your contract or need to make changes, call your
financial representative or contact us at:

      Anchor National Life Insurance Company
      Annuity Service Center
      P.O. Box 54299
      Los Angeles, California 90054-0299
      Toll Free Telephone Number: 877-999-9205

If money accompanies your correspondence, you should direct it to:

      Anchor National Life Insurance Company
      P.O. Box 100330
      Pasadena, California 91189-0001
<PAGE>   8

                               POLARIS PLUS LOGO
                                VARIABLE ANNUITY

                                   PROSPECTUS

                                  MAY 1, 2000



<TABLE>
<S>                                   <C>     <C>
Please read this prospectus carefully         FLEXIBLE PAYMENT GROUP AND INDIVIDUAL DEFERRED ANNUITY
before investing and keep it for              CONTRACTS
future reference. It contains                 issued by
important information about the               ANCHOR NATIONAL LIFE INSURANCE COMPANY
Polaris Plus Variable Annuity.                in connection with
                                              VARIABLE ANNUITY ACCOUNT SEVEN
To learn more about the annuity               The annuity has 31 investment choices - 5 fixed account
offered by this prospectus, obtain a          options and 26 variable investment Portfolios listed below.
copy of the Statement of Additional           The 5 fixed account options include market value adjustment
Information ("SAI") dated May 1,              fixed accounts for specified periods of 1, 3, and 5 years.
2000. The SAI is on file with the             In addition there are 2 Dollar Cost Averaging Accounts for
Securities and Exchange Commission            6-month and 1-year periods. The 26 variable investment
("SEC") and is incorporated by                portfolios are part of the Anchor Series Trust or the
reference into this prospectus. The           SunAmerica Series Trust.
Table of Contents of the SAI appears
on page 22 of this prospectus. For a          ANCHOR SERIES TRUST:
free copy of the SAI, call us at              MANAGED BY WELLINGTON MANAGEMENT COMPANY, LLP
(877) 999-9205 or write to us at our          - Capital Appreciation Portfolio
Annuity Service Center, P.O. Box              - Growth Portfolio
54299, Los Angeles, California                - Government and Quality Bond Portfolio
90054-0299.
                                              SUNAMERICA SERIES TRUST:
In addition, the SEC maintains a              MANAGED BY ALLIANCE CAPITAL MANAGEMENT L.P.
website (http://www.sec.gov) that             - Global Equities Portfolio
contains the SAI, materials                   - Alliance Growth Portfolio
incorporated by reference and other           - Growth-Income Portfolio
information filed electronically with         MANAGED BY DAVIS SELECTED ADVISERS, L.P.
the SEC by Anchor National.                   - Davis Venture Value Portfolio
                                              - Real Estate Portfolio
ANNUITIES INVOLVE RISKS, INCLUDING            MANAGED BY FEDERATED INVESTORS
POSSIBLE LOSS OF PRINCIPAL. ANNUITIES         - Federated Value Portfolio
ARE NOT A DEPOSIT OR OBLIGATION OF,           - Utility Portfolio
OR GUARANTEED OR ENDORSED BY, ANY             - Corporate Bond Portfolio
BANK. THEY ARE NOT FEDERALLY INSURED          MANAGED BY FIRST AMERICAN ASSET MANAGEMENT
BY THE FEDERAL DEPOSIT INSURANCE              - Equity Income Portfolio
CORPORATION, THE FEDERAL RESERVE              - Equity Index Portfolio
BOARD OR ANY OTHER AGENCY.                    - Small Company Value Portfolio
                                              MANAGED BY GOLDMAN SACHS ASSET MANAGEMENT/
                                              GOLDMAN SACHS ASSET MANAGEMENT INTERNATIONAL
                                              - Asset Allocation Portfolio
                                              - Global Bond Portfolio
                                              MANAGED BY MORGAN STANLEY ASSET MANAGEMENT
                                              - International Diversified Equities Portfolio
                                              - Worldwide High Income Portfolio
                                              MANAGED BY PUTNAM INVESTMENT MANAGEMENT, INC.
                                              - Putnam Growth Portfolio
                                              - International Growth and Income Portfolio
                                              - Emerging Markets Portfolio
                                              MANAGED BY SUNAMERICA ASSET MANAGEMENT CORP.
                                              - Aggressive Growth Portfolio
                                              - "Dogs" of Wall Street Portfolio
                                              - SunAmerica Balanced Portfolio
                                              - High-Yield Bond Portfolio
                                              - Cash Management Portfolio
</TABLE>


    THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
        AND EXCHANGE COMMISSION, NOR HAS THE COMMISSION PASSED UPON THE
          ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
                     TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>   9

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
                               TABLE OF CONTENTS
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------

<TABLE>
 <S>   <C>                                              <C>
 GLOSSARY.............................................     3

 FEE TABLES...........................................     4
 Owner Transaction Expenses...........................     4
 The Income Protector Expense.........................     4
 Annual Separate Account Expenses.....................     4
 Portfolio Expenses...................................     4

 EXAMPLES.............................................     5

 THE POLARIS PLUS VARIABLE ANNUITY....................     7

 PURCHASING A POLARIS PLUS VARIABLE ANNUITY...........     7
 Allocation of Purchase Payments......................     8
 Accumulation Units...................................     8
 Free Look............................................     8

 INVESTMENT OPTIONS...................................     8
 Variable Portfolios..................................     8
     Anchor Series Trust..............................     9
     SunAmerica Series Trust..........................     9
 Fixed Account Options................................     9
 Market Value Adjustment ("MVA")......................    10
 Transfers During the Accumulation Phase..............    10
 Dollar Cost Averaging ("DCA")........................    11
 Asset Allocation Rebalancing.........................    11
 Voting Rights........................................    12
 Substitution.........................................    12

 ACCESS TO YOUR MONEY.................................    12
 Withdrawal Restrictions..............................    12
 Texas Optional Retirement Program....................    12
 Systematic Withdrawal Program........................    13
 Loans................................................    13
 Free Withdrawal Amount...............................    13
 Minimum Contract Value...............................    13

 DEATH BENEFIT........................................    13

 EXPENSES.............................................    14
 Insurance Charges....................................    14
 Withdrawal Charges...................................    14
 Exceptions to Withdrawal Charge......................    14
 Investment Charges...................................    15
 Transfer Fee.........................................    15
 Premium Tax..........................................    15
 Income Taxes.........................................    15
 Reduction or Elimination of Charges and Expenses, and
   Additional Amounts Credited........................    15
 INCOME OPTIONS.......................................    15
 Annuity Date.........................................    15
 Income Options.......................................    15
 Fixed or Variable Income Payments....................    16
 Income Payments......................................    16
 Transfers During the Income Phase....................    16
 Deferment of Payments................................    16
 The Income Protector.................................    16

 TAXES................................................    19
 Annuity Contracts in General.........................    19
 Tax Treatment of Distributions -
   Qualified Contracts................................    19
 TSA Plans............................................    19
 Individual Retirement Annuities......................    20
 Minimum Distributions................................    20
 Diversification......................................    20

 PERFORMANCE..........................................    20

 OTHER INFORMATION....................................    21
 The Separate Account.................................    21
 The General Account..................................    21
 Distribution of the Contract.........................    21
 Administration.......................................    21
 Year 2000............................................    22
 Legal Proceedings....................................    22
 Custodian............................................    22
 Additional Information...............................    22

 TABLE OF CONTENTS OF STATEMENT OF ADDITIONAL
 INFORMATION..........................................    22

 APPENDIX A -- PREMIUM TAXES..........................   A-1

 APPENDIX B -- MARKET VALUE ADJUSTMENT................   B-1

 APPENDIX C -- CONDENSED FINANCIAL INFORMATION........   C-1
</TABLE>


                                        2
<PAGE>   10

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
                                    GLOSSARY
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

We have capitalized some of the technical terms used in this prospectus. To help
you understand these terms, we have defined them in this glossary.

ACCUMULATION PHASE - The period during which you invest money in your contract.

ACCUMULATION UNITS - A measurement we use to calculate the value of the variable
portion of your contract during the Accumulation Phase.

ANNUITANT(S) - The person(s) on whose life (lives) we base annuity payments. For
a contract issued pursuant to IRC Section 403(b), the Participant must be the
Annuitant. Under an IRA the owner is always the Annuitant.

ANNUITY DATE - The date on which annuity payments are to begin, as selected by
you.

ANNUITY UNITS - A measurement we use to calculate the mount of annuity payments
you receive from the variable portion of your contract during the Income Phase.

BENEFICIARY (IES) - The person(s) designated to receive any benefits under the
contract if you or the Annuitant dies.

COMPANY  - Anchor National Life Insurance Company, Anchor National, We, Us, the
insurer that issues this contract.

CONTRACT - The variable annuity contract issued by Anchor National Life
Insurance Company ("Anchor National"). This includes any applicable group master
contract, certificate and endorsement.

CONTRACTHOLDER - The party named as the Contractholder on the annuity Contract
issued by Anchor National. The Contractholder may be an Employer, a retirement
plan trust, an association or any other entity allowed under the law.

EMPLOYER - The organization specified in the Contract which offers the Plan to
its employees.

ERISA - Employee Retirement Income Security Act of 1974 (as amended).

INCOME PHASE - The period during which we make annuity payments to you.

IRA - An Individual Retirement Annuity qualified under and issued in accordance
with the provisions of Section 408(b) of the IRC.

IRC - The Internal Revenue Code of 1986, as amended, and all regulations
thereto.

IRS - The Internal Revenue Service.

NON-QUALIFIED (CONTRACT) - A contract purchased with after-tax dollars. In
general, these contracts are not under any pension plan, specially sponsored
program or individual retirement account ("IRA").

PARTICIPANT - An employee or other person affiliated with the Contractholder on
whose behalf an account is maintained under the terms of the Contract.

PLAN - A retirement program offered by an Employer to its employees for which a
Contract is used to accumulate funds which may or may not be regulated by ERISA.

PURCHASE PAYMENTS - The money you give us to buy the contract, as well as any
additional money you give us to invest in the contract after you own it.

QUALIFIED (CONTRACT) - A contract purchased with pretax dollars. These contracts
are generally purchased under a pension plan, specially sponsored program or
IRA.

TRUSTS - Refers to the Anchor Series Trust and the SunAmerica Series Trust
collectively.

TSA - A tax sheltered annuity qualified under and issued in accordance with the
provisions of Section 403(b) of the IRC.

VARIABLE PORTFOLIO(S) - The variable investment options available under the
contract. Each Portfolio has its own investment objective and is invested in the
underlying investments of the Anchor Series Trust or the SunAmerica Series
Trust.

                                        3
<PAGE>   11

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
                                   FEE TABLES
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

OWNER TRANSACTION EXPENSES+
MAXIMUM WITHDRAWAL CHARGE (AS A PERCENTAGE OF PURCHASE PAYMENTS)

<TABLE>
<CAPTION>
   YEARS:       1     2     3     4     5     6     7
<S>            <C>   <C>   <C>   <C>   <C>   <C>   <C>
Schedule A*      6%  6  %  5  %  5  %  4  %  0  %    0%
Schedule B**     6%  6  %  5  %  5  %  4  %  4  %    0%
</TABLE>

 * This Withdrawal Charge schedule applies to participants who are separated
   from service at the time of contract issue.
** This Withdrawal Charge schedule applies to all other participants.
THE INCOME PROTECTOR EXPENSE
(THE INCOME PROTECTOR PROGRAM IS OPTIONAL AND IF ELECTED THE APPROPRIATE FEE IS
DEDUCTED ANNUALLY FROM CONTRACT VALUE)

<TABLE>
<CAPTION>
         THE INCOME PROTECTOR             FEE AS A PERCENTAGE OF YOUR
             ALTERNATIVES                     INCOME BENEFIT BASE
         --------------------             ---------------------------
<S>                                     <C>
Income Protector Plus..................              .15%
Income Protector Max...................              .30%
</TABLE>

MAXIMUM ANNUAL SEPARATE ACCOUNT EXPENSES+
(AS A PERCENTAGE OF AVERAGE ACCOUNT VALUE)

<TABLE>
<S>                                                         <C>
  Maximum Mortality and Expense Risk Charge Insurance
    Charge................................................  1.25%
                                                            -----
      TOTAL SEPARATE ACCOUNT EXPENSES                       1.25%
                                                            =====
</TABLE>

- ---------------

+ Withdrawal and insurance charges applicable to your contract may be lower.
  Consult your plan sponsor, employer, financial adviser or your Contract Data
  page for details.
                               PORTFOLIO EXPENSES

                              ANCHOR SERIES TRUST

(AS A PERCENTAGE OF AVERAGE NET ASSETS FOR THE TRUST'S TWELVE-MONTH PERIOD ENDED
                               DECEMBER 31, 1999)



<TABLE>
<CAPTION>
                                                              MANAGEMENT         OTHER        TOTAL ANNUAL
                         PORTFOLIO                                FEE          EXPENSES         EXPENSES
<S>                                                           <C>              <C>            <C>
- -----------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------
Capital Appreciation                                              .63%            .04%             .67%
- -----------------------------------------------------------------------------------------------------------
Growth                                                            .68%            .05%             .73%
- -----------------------------------------------------------------------------------------------------------
Government and Quality Bond                                       .60%            .06%             .66%
- -----------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------
</TABLE>


                            SUNAMERICA SERIES TRUST
(AS A PERCENTAGE OF AVERAGE NET ASSETS AFTER REIMBURSEMENT OR WAIVER OF EXPENSES
                       FOR THE TRUST'S FISCAL YEAR ENDED

                               JANUARY 31, 2000)



<TABLE>
<CAPTION>
                                                              MANAGEMENT         OTHER        TOTAL ANNUAL
                         PORTFOLIO                                FEE          EXPENSES         EXPENSES
<S>                                                           <C>              <C>            <C>
- -----------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------
Emerging Markets                                                 1.25%            .65%            1.90%
- -----------------------------------------------------------------------------------------------------------
International Diversified Equities                               1.00%            .22%            1.22%
- -----------------------------------------------------------------------------------------------------------
Global Equities                                                   .72%            .12%             .84%
- -----------------------------------------------------------------------------------------------------------
International Growth and Income                                   .98%            .23%            1.21%
- -----------------------------------------------------------------------------------------------------------
Aggressive Growth                                                 .70%            .05%             .75%
- -----------------------------------------------------------------------------------------------------------
Small Company Value*                                             1.00%            .40%            1.40%
- -----------------------------------------------------------------------------------------------------------
Real Estate                                                       .80%            .12%             .92%
- -----------------------------------------------------------------------------------------------------------
Putnam Growth                                                     .76%            .04%             .80%
- -----------------------------------------------------------------------------------------------------------
Alliance Growth+                                                  .60%            .03%             .63%
- -----------------------------------------------------------------------------------------------------------
"Dogs" of Wall Street**                                           .60%            .07%             .67%
- -----------------------------------------------------------------------------------------------------------
Davis Venture Value                                               .71%            .03%             .74%
- -----------------------------------------------------------------------------------------------------------
Federated Value                                                   .71%            .06%             .77%
- -----------------------------------------------------------------------------------------------------------
Growth-Income                                                     .53%            .03%             .56%
- -----------------------------------------------------------------------------------------------------------
Equity Index*                                                     .40%            .15%             .55%
- -----------------------------------------------------------------------------------------------------------
Utility                                                           .75%            .09%             .84%
- -----------------------------------------------------------------------------------------------------------
Equity Income*                                                    .65%            .30%             .95%
- -----------------------------------------------------------------------------------------------------------
Asset Allocation                                                  .58%            .05%             .63%
- -----------------------------------------------------------------------------------------------------------
SunAmerica Balanced                                               .62%            .04%             .66%
- -----------------------------------------------------------------------------------------------------------
Worldwide High Income                                            1.00%            .12%            1.12%
- -----------------------------------------------------------------------------------------------------------
High-Yield Bond                                                   .62%            .05%             .67%
- -----------------------------------------------------------------------------------------------------------
Corporate Bond                                                    .62%            .09%             .71%
- -----------------------------------------------------------------------------------------------------------
Global Bond                                                       .69%            .15%             .84%
- -----------------------------------------------------------------------------------------------------------
Cash Management                                                   .49%            .04%             .53%
- -----------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------
</TABLE>



 * Absent fee waivers or reimbursement of expenses by the adviser, the Total
   Annual Expenses during the last fiscal year: for Small Company Value (2.25%),
   Equity Index (0.85%) and Equity Income (1.56%).



** Absent recoupment of expenses by the adviser, the total annual expenses
   during the last fiscal year for the "Dogs" of Wall Street Portfolio would
   have been (.67%) and for the Emerging Markets Portfolio would have been
   (1.77%).



     THE ABOVE PORTFOLIO EXPENSES WERE PROVIDED BY THE TRUSTS. WE HAVE NOT

            INDEPENDENTLY VERIFIED THE ACCURACY OF THE INFORMATION.

                                        4
<PAGE>   12

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
                                    EXAMPLES
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

You will pay the following expenses on a $1,000 investment in each Portfolio,
assuming a 5% annual return on assets and:

        (a) Surrender of the contract at the end of the stated time period under
            either of the maximum withdrawal charge schedules;
        (b) If the contract is not Surrendered or is annuitized.+


<TABLE>
<CAPTION>
                       PORTFOLIO                          1 YEAR     3 YEARS     5 YEARS     10 YEARS
<S>                                                      <C>         <C>         <C>         <C>
- -----------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------
Capital Appreciation                                     (a) $79     (a) $109    (a) $142    (a) $221
                                                         (b) $19     (b) $ 59    (b) $102    (b) $221
- -----------------------------------------------------------------------------------------------------
Growth                                                   (a) $80     (a) $111    (a) $145    (a) $227
                                                         (b) $20     (b) $ 61    (b) $105    (b) $227
- -----------------------------------------------------------------------------------------------------
Government and Quality Bond                              (a) $79     (a) $109    (a) $142    (a) $220
                                                         (b) $19     (b) $ 59    (b) $102    (b) $220
- -----------------------------------------------------------------------------------------------------
Emerging Markets                                         (a) $92     (a) $146    (a) $203    (a) $343
                                                         (b) $32     (b) $ 96    (b) $163    (b) $343
- -----------------------------------------------------------------------------------------------------
International Diversified Equities                       (a) $85     (a) $126    (a) $170    (a) $277
                                                         (b) $25     (b) $ 76    (b) $130    (b) $277
- -----------------------------------------------------------------------------------------------------
Global Equities                                          (a) $81     (a) $115    (a) $151    (a) $239
                                                         (b) $21     (b) $ 65    (b) $111    (b) $239
- -----------------------------------------------------------------------------------------------------
International Growth and Income                          (a) $85     (a) $176    (a) $169    (a) $276
                                                         (b) $25     (b) $ 76    (b) $129    (b) $276
- -----------------------------------------------------------------------------------------------------
Aggressive Growth                                        (a) $80     (a) $112    (a) $146    (a) $229
                                                         (b) $20     (b) $ 62    (b) $106    (b) $229
- -----------------------------------------------------------------------------------------------------
Small Company Value                                      (a) $87     (a) $131    (a) $179    (a) $295
                                                         (b) $27     (b) $ 81    (b) $139    (b) $295
- -----------------------------------------------------------------------------------------------------
Real Estate                                              (a) $82     (a) $117    (a) $155    (a) $247
                                                         (b) $22     (b) $ 67    (b) $115    (b) $247
- -----------------------------------------------------------------------------------------------------
Putnam Growth                                            (a) $81     (a) $113    (a) $149    (a) $234
                                                         (b) $21     (b) $ 63    (b) $109    (b) $234
- -----------------------------------------------------------------------------------------------------
Alliance Growth                                          (a) $79     (a) $108    (a) $140    (a) $217
                                                         (b) $19     (b) $ 58    (b) $100    (b) $217
- -----------------------------------------------------------------------------------------------------
"Dogs" of Wall Street                                    (a) $79     (a) $109    (a) $142    (a) $221
                                                         (b) $19     (b) $ 59    (b) $102    (b) $221
- -----------------------------------------------------------------------------------------------------
Davis Venture Value                                      (a) $80     (a) $112    (a) $146    (a) $228
                                                         (b) $20     (b) $ 62    (b) $106    (b) $228
- -----------------------------------------------------------------------------------------------------
Federated Value                                          (a) $80     (a) $112    (a) $147    (a) $231
                                                         (b) $20     (b) $ 62    (b) $107    (b) $231
- -----------------------------------------------------------------------------------------------------
Growth-Income                                            (a) $78     (a) $106    (a) $136    (a) $209
                                                         (b) $18     (b) $ 56    (b) $ 96    (b) $209
- -----------------------------------------------------------------------------------------------------
Equity Index                                             (a) $78     (a) $106    (a) $136    (a) $208
                                                         (b) $18     (b) $ 56    (b) $ 96    (b) $208
- -----------------------------------------------------------------------------------------------------
</TABLE>


                                        5
<PAGE>   13


<TABLE>
<CAPTION>
                       PORTFOLIO                          1 YEAR     3 YEARS     5 YEARS     10 YEARS
<S>                                                      <C>         <C>         <C>         <C>
- -----------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------
Utility                                                  (a) $81     (a) $115    (a) $151    (a) $239
                                                         (b) $21     (b) $ 65    (b) $111    (b) $239
- -----------------------------------------------------------------------------------------------------
Equity Income                                            (a) $82     (a) $118    (a) $156    (a) $250
                                                         (b) $22     (b) $ 68    (b) $116    (b) $250
- -----------------------------------------------------------------------------------------------------
Asset Allocation                                         (a) $79     (a) $108    (a) $140    (a) $217
                                                         (b) $19     (b) $ 58    (b) $100    (b) $217
- -----------------------------------------------------------------------------------------------------
SunAmerica Balanced                                      (a) $79     (a) $109    (a) $142    (a) $220
                                                         (b) $19     (b) $ 59    (b) $102    (b) $220
- -----------------------------------------------------------------------------------------------------
Worldwide High Income                                    (a) $84     (a) $123    (a) $165    (a) $267
                                                         (b) $24     (b) $ 73    (b) $125    (b) $267
- -----------------------------------------------------------------------------------------------------
High-Yield Bond                                          (a) $79     (a) $109    (a) $142    (a) $221
                                                         (b) $19     (b) $ 59    (b) $102    (b) $221
- -----------------------------------------------------------------------------------------------------
Corporate Bond                                           (a) $80     (a) $111    (a) $144    (a) $225
                                                         (b) $20     (b) $ 61    (b) $104    (b) $225
- -----------------------------------------------------------------------------------------------------
Global Bond                                              (a) $81     (a) $115    (a) $151    (a) $239
                                                         (b) $21     (b) $ 65    (b) $111    (b) $239
- -----------------------------------------------------------------------------------------------------
Cash Management                                          (a) $78     (a) $105    (a) $135    (a) $206
                                                         (b) $18     (b) $ 55    (b) $ 95    (b) $206
- -----------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------
</TABLE>


  * See Page 4 for an explanation of Schedule A.

 ** See Page 4 for an explanation of Schedule B.

  + We do not currently charge a surrender charge upon annuitization, unless the
    contract is annuitized under the Income Protector program. We will assess
    any applicable surrender charges upon annuitizations effected using the
    Income Protector program as if you had fully surrendered your contract.
    These examples assume the highest fees and charges possible.

EXPLANATION OF FEE TABLES AND EXAMPLES

1.  The purpose of the Fee Tables is to show you the maximum expenses you may
    incur directly and indirectly by investing in the contract.

2.  For certain Portfolios, the adviser, SunAmerica Asset Management Corp., has
    voluntarily agreed to waive fees or reimburse certain expenses, if
    necessary, to keep annual operating expenses at or below the lesser of the
    maximum allowed by any applicable stated expense limitations or the
    following percentages of each Portfolio's average net assets: Emerging
    Markets (1.90%); International Growth and Income (1.60%); Aggressive Growth
    (.90%); Small Company Value (1.40%); Real Estate (1.25%); "Dogs" of Wall
    Street (.85%); Federated Value (1.03%); Equity Index (.55%); Utility
    (1.05%); Equity Income (.95%); SunAmerica Balanced (1.00%). The adviser also
    may voluntarily waive or reimburse additional amounts to increase a
    Portfolio's investment return. All waivers and/or reimbursements may be
    terminated at any time. Furthermore, the adviser may recoup any waivers or
    reimbursements within two years after such waivers or reimbursements are
    granted, provided that the Portfolio is able to make such payment and remain
    in compliance with the foregoing expense limitations.

3.  Although premium taxes may apply in certain states, they are not reflected
    in the Examples. In addition, the examples do not reflect the fees
    associated with the optional Income Protector Program. SEE INCOME OPTIONS ON
    PAGE 15.

4.  THESE EXAMPLES SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
    EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.

THE HISTORICAL ACCUMULATION UNIT VALUES ARE CONTAINED IN APPENDIX C -- CONDENSED
                             FINANCIAL INFORMATION.

                                        6
<PAGE>   14

- ----------------------------------------------------------------
- ----------------------------------------------------------------
                       THE POLARIS PLUS VARIABLE ANNUITY
- ----------------------------------------------------------------
- ----------------------------------------------------------------

We issue the Polaris Plus variable annuity to certain groups and/or individuals
which qualify to purchase Contracts to fund their Tax Sheltered Annuity ("TSA")
pursuant to Section 403(b) of the Internal Revenue Code ("IRC") or IRA
retirement savings investments pursuant to Section 408(b) of the IRC. For TSA
contracts, the contract may be issued to a group contract holder (usually your
employer or plan trustee) for the benefit of the Participants in the group (you
and other employees in the group).

As a Participant under a group contract you will receive a certificate which
explains your rights under the contract. In certain situations an individual
contract will be issued directly to you. When we use the term Contract in this
prospectus we are referring to either your certificate if a group Participant or
an actual contract if an individual contract is issued.

A TSA Polaris Plus participant may choose to convert their 403(b) to an IRA if
they separate from service. Generally, all of the same features, charges and
benefits will apply to a contract converted to an IRA, as was applicable to a
participant's TSA, so long as no conflict arises with the appropriate provisions
of the IRC. We will only specifically address IRAs in this Prospectus to the
extent that applicable IRC provisions and/or any other state or federal laws,
require different treatment.

Generally, an annuity is a contract between you and an insurance company. For
Plans governed by ERISA, the Contract may be owned by Plan Sponsor, Trustee or
some other employee association. Your retirement plan allows you to invest money
on which you have not already paid taxes and your earnings grow tax deferred. In
addition, funding that Plan with a variable annuity provides certain benefits.
You should decide whether the benefits are right for you. Among other features
the contract offers:

     - Investment Options: Various investment options available in one contract,
       including both variable and fixed-rate investing.

     - Death Benefit: If you die during the Accumulation Phase, the insurance
       company pays a death benefit to your Beneficiary.

     - Guaranteed Income: You receive a stream of income for your lifetime if
       elected, or another available period you select.

We developed this variable annuity to help you contribute to your retirement
savings. Your contributions may come from payroll deductions arranged through
your employer for TSAs. Contracts may also be funded by direct transfers or
direct rollovers from other retirement savings plans. Existing Polaris Plus
403(b) contracts may be converted to an IRA upon a separation from service.
Additionally, those IRA contract holders may make on-going contributions subject
to restrictions set forth in the IRC.

This Contract has two stages, the Accumulation Phase and the Income Phase. Your
Contract is in the Accumulation Phase when you make payments into the Contract.
During the Accumulation Phase, generally you have the advantage of making
Purchase Payments before paying taxes on the contributions. In addition, as a
function of IRC provisions, taxes on your earnings are deferred until
withdrawal. The Income Phase begins when you request that we start making income
payments to you out of the money accumulated in your Contract.

The Contract is called a "variable" annuity because it allows you to invest in
Variable Portfolios which, like mutual funds, have different investment
objectives and performance which vary with market conditions. You can gain or
lose money if you invest in these Variable Portfolios. The amount of money you
accumulate in your Contract depends on the performance of the Variable
Portfolios in which you invest. This Contract currently offers 26 variable
investment Portfolios, which may be limited by any applicable Plan.

The Contract also offers several fixed account options for varying time periods
(which also may be limited by any applicable Plan). Fixed account options earn
interest at a rate set and guaranteed by Anchor National. If you allocate money
to the fixed account options, the amount of money that accumulates in the
Contract depends on the total interest credited to the particular fixed account
option(s) in which you are invested.

For more information on investment options available under this contract SEE
INVESTMENT OPTIONS ON PAGE 8.

Anchor National is a stock life insurance company organized under the laws of
the state of Arizona. Its principal place of business is 1 SunAmerica Center,
Los Angeles, California 90067. The Company conducts life insurance and annuity
business in the District of Columbia and all states except New York. Anchor
National is an indirect, wholly owned subsidiary of American International
Group, Inc., a Delaware Corporation.
- ----------------------------------------------------------------
- ----------------------------------------------------------------
                   PURCHASING A POLARIS PLUS VARIABLE ANNUITY
- ----------------------------------------------------------------
- ----------------------------------------------------------------

A Purchase Payment is the money you give us to buy a contract. Any additional
money you give us to invest in your contract after purchase is a subsequent
Purchase Payment. You make payments into your Contract in two ways:

- - salary reduction contributions, arranged through your employer; and/or

- - direct transfer or direct rollover from an existing retirement plans.

If you enter into a salary reduction agreement with your employer to make
Purchase Payments, there is no minimum initial payment. If you do not establish
such a salary reduction agreement, and only contribute through direct transfer
or direct rollover, the minimum initial Purchase Payment is $2,000.


You must have prior Company approval before we can accept Purchase Payments
greater than $1,500,000. The Company reserves the right to refuse any Purchase
Payment or subsequent Purchase Payments, including but not limited to

                                        7
<PAGE>   15


any Purchase Payments which would cause the contract value to exceed $1,500,000
at the time of the Purchase Payment.


In general, we will not issue you a TSA or IRA contract if you are age 70 1/2 or
older, unless you certify that the minimum distributions required by the IRC are
being made. Upon proof satisfactory to us that minimum distribution requirements
are being satisfied or are not yet required, we may issue you a contract prior
to your reaching age 80.

ALLOCATION OF PURCHASE PAYMENTS

We invest your Purchase Payments in the fixed and variable investment options
according to your instructions. If we receive a Purchase Payment without
allocation instructions, we will invest the money according to your last
allocation instructions. SEE INVESTMENTS OPTIONS ON PAGE 8.

In order to issue your Contract, we must receive your completed enrollment form,
Purchase Payment, allocation instructions and any other required paper work at
our principal place of business. We allocate your initial Purchase Payment
within two days of receiving it. If we do not have the complete information
necessary to issue your contract, we will contact you. If we do not have the
information necessary to issue your Contract within 5 business days we will:

     - Send your money back to you, or;

     - Ask your permission to keep your money until we get the information
       necessary to issue the Contract.

ACCUMULATION UNITS

The value of the variable portion of your Contract will go up and down dependent
on the investment performance of the Variable Portfolios you choose. To
calculate the value of your Contract, we use a measure called an Accumulation
Unit.

We calculate the value of an Accumulation Unit each day that the New York Stock
Exchange ("NYSE") is open, as follows:

     1. We determine the total value of money invested in a particular
        Portfolio;

     2. We subtract from that amount all applicable contract charges; and

     3. We divide this amount by the number of outstanding Accumulation Units.

When you make a Purchase Payment, we credit your Contract with Accumulation
Units. We determine the number of Accumulation Units credited by dividing the
Purchase Payment by the Accumulation Unit value for the specific Portfolio.

     EXAMPLE:

     We receive a $25,000 Purchase Payment from you on Wednesday. You allocate
     the money to the Global Bond Portfolio. We determine that the value of an
     Accumulation Unit for the Global Bond Portfolio is $11.10 when the NYSE
     closes on Wednesday. We then divide $25,000 by $11.10 and credit your
     Contract on Wednesday night with 2252.25 Accumulation Units for the Global
     Bond Portfolio.

Performance of the Variable Portfolios in which you are invested and the
insurance charges and expenses under your contract affect your Accumulation Unit
values. These factors may cause the value of your Contract to go up or down.

FREE LOOK

You may cancel your Contract within ten days after receiving it (or longer if
required by state law). We call this a "free look." To cancel, you must mail the
Contract along with your free look request to our Annuity Service Center at P.O.
Box 54299, Los Angeles, California 90054-0299. We will refund to you the value
of your Contract on the day we receive your request. The amount refunded to you
may be more or less than the amount you originally invested.

Certain states (and all contracts issued as IRAs) require us to return your
Purchase Payments upon a free look request. With respect to those contracts, we
reserve the right to put your money in the Cash Management Portfolio or the
1-year fixed account option during the free look period. If you cancel your
Contract during the free look period, we return your Purchase Payments or the
value of your Contract, whichever is larger. At the end of the free look period,
we reallocate your money according to your instructions.
- ----------------------------------------------------------------
- ----------------------------------------------------------------
                               INVESTMENT OPTIONS
- ----------------------------------------------------------------
- ----------------------------------------------------------------

VARIABLE PORTFOLIOS

The Contract currently offers 26 Variable Portfolios, however an applicable Plan
may limit the number available under your Contract. These Portfolios invest in
shares of the Anchor Series Trust and the SunAmerica Series Trust (the
"Trusts"). Additional Portfolios may be available in the future. These
Portfolios operate similarly to a mutual fund but are only available through the
purchase of certain insurance contracts.

SunAmerica Asset Management Corp., an indirect wholly owned subsidiary of
SunAmerica Inc., is the investment adviser to the Trusts. The Trusts serve as
the underlying investment vehicles for other variable annuity contracts issued
by Anchor National Life Insurance Company, and other affiliated and unaffiliated
insurance companies. Neither Anchor National nor the Trusts believe that
offering shares of the Trusts in this manner is disadvantageous to you. The
fund's management monitors the Trusts for any conflicts between contract owners.
Other funds may be available through the Trusts which are not available for
investment under your Contract.

                                        8
<PAGE>   16

The Portfolios along with their respective subadvisers are listed below:

     ANCHOR SERIES TRUST

Wellington Management Company, LLP serves as subadviser to the Anchor Series
Trust Portfolios. The 3 available Portfolios are:

  MANAGED BY WELLINGTON MANAGEMENT COMPANY, LLP

       - Capital Appreciation Portfolio
       - Growth Portfolio
       - Government and Quality Bond Portfolio

     SUNAMERICA SERIES TRUST

Various subadvisers provide investment advice for the SunAmerica Series Trust
Portfolios. The 23 available Portfolios and the subadvisers are:

  MANAGED BY ALLIANCE CAPITAL MANAGEMENT L.P.

       - Global Equities Portfolio
       - Alliance Growth Portfolio
       - Growth-Income Portfolio

  MANAGED BY DAVIS SELECTED ADVISERS, L.P.

       - Venture Value Portfolio
       - Real Estate Portfolio

  MANAGED BY FEDERATED INVESTORS

       - Federated Value Portfolio
       - Utility Portfolio
       - Corporate Bond Portfolio

  MANAGED BY FIRST AMERICAN ASSET MANAGEMENT

       - Equity Income Portfolio
       - Equity Index Portfolio
       - Small Company Value Portfolio

  MANAGED BY GOLDMAN SACHS ASSET MANAGEMENT/GOLDMAN
  SACHS ASSET MANAGEMENT INTERNATIONAL

       - Asset Allocation Portfolio
       - Global Bond Portfolio

  MANAGED BY MORGAN STANLEY ASSET MANAGEMENT

       - International Diversified Equities Portfolio
       - Worldwide High Income Portfolio

  MANAGED BY PUTNAM INVESTMENT MANAGEMENT

       - Putnam Growth Portfolio
       - International Growth and Income Portfolio
       - Emerging Markets Portfolio

  MANAGED BY SUNAMERICA ASSET MANAGEMENT, INC.

       - Aggressive Growth Portfolio
       - "Dogs" of Wall Street Portfolio
       - SunAmerica Balanced Portfolio
       - High-Yield Bond Portfolio
       - Cash Management Portfolio

YOU SHOULD READ THE PROSPECTUSES FOR THE TRUSTS CAREFULLY. THESE PROSPECTUSES
CONTAIN DETAILED INFORMATION ABOUT THE PORTFOLIOS, INCLUDING EACH PORTFOLIO'S
INVESTMENT OBJECTIVE AND RISK FACTORS.

If applicable, your Plan may limit the Variable Portfolios available under your
Contract.

FIXED ACCOUNT OPTIONS

The Contract offers fixed account options; the 1, 3 and 5 year fixed market
value adjustment ("MVA") accounts (the 3 and 5 year fixed account options are
not available in Washington or Oregon). In addition we have two Dollar Cost
Averaging ("DCA") fixed accounts available under the contract.

The 1, 3 and 5 year MVA fixed account options and the 6 month and 1-year DCA
fixed accounts are not registered under the Securities Act of 1933 and are not
subject to other provisions of the Investment Company Act of 1940. If
applicable, your Plan may limit the fixed account options available under your
Contract.

The 1, 3 and 5 year MVA fixed accounts pay interest at rates set and guaranteed
by Anchor National. Interest rates may differ from time to time and are set at
Anchor National's sole discretion. We will never credit less than a 3% annual
effective rate to any of the fixed investment options.

Each guarantee period may offer a different interest rate. Once established the
rates for specified payments do not change during the guarantee period. The
guarantee period is that period for which we credit the applicable rate (one,
three or five years).

There are three scenarios in which you may put money into the MVA fixed account
options. In each scenario your money may be credited a different rate of
interest as follows:

       - Initial Rate: Rate credited to new purchase payments allocated to the
         fixed account when you purchase your contract.

       - Current Rate: Rate credited to subsequent purchase payments allocated
         to the fixed account.

       - Renewal Rate: Rate credited to money transferred to a fixed account
         from another fixed account or from one of the Variable Portfolios.

Each of these rates may differ from one another. Once declared, the applicable
rate is guaranteed until the end of the calendar year in which the guarantee
period expires.

At the end of the calendar year during which a guarantee period ends, you may
leave your money in the same fixed account option. You may also reallocate your
money to another fixed account option or to the Variable Portfolios. If you want
to reallocate your money to a different fixed or variable investment option, you
must contact us within 30 days after the end of the current interest guarantee
period and instruct us how to reallocate the money. We do not contact you. If we
do not hear from you, your money will remain in the same fixed account option,
where it will earn

                                        9
<PAGE>   17

interest at the renewal rate then in effect for the fixed account option.


The DCA fixed accounts also credit a fixed rate of interest for a predetermined
amount of time. The interest rate in the 1-year or 6-month DCA fixed account is
credited for one year or 6 months while your investment is systematically
transferred to the Variable Portfolios. The rates applicable to the DCA fixed
accounts may differ from each other and/or the other fixed account options. See
DOLLAR COST AVERAGING ON PAGE 11 for more information.


MARKET VALUE ADJUSTMENT ("MVA")


If you take money out of the 1, 3, or 5 year MVA fixed investment options before
the end of the interest crediting period, we may make an adjustment to your
Contract. We call this a market value adjustment or "MVA". This market value
adjustment reflects any difference in the interest rates between the time you
originally place your money in the fixed investment option and the time when you
withdraw or transfer that money. This adjustment can increase or decrease your
Contract value. However, the market value adjustment will never result in your
earning less than 3% in any particular guarantee period. You have 30 days after
the end of each guarantee period to reallocated your funds without incurring any
MVA.


We calculate the market value adjustment by comparing the current interest rates
being offered by us for subsequent Purchase Payments made to the same fixed
account option and the interest rate earned in your current fixed investment
option.

Generally, if interest rates drop more than one half of a percent between the
time you put your money into the fixed investment options and the time you take
it out, we credit a positive adjustment to your contract. Conversely, if
interest rates increase during the same period, we post a negative adjustment to
your contract.


Where the market value adjustment is negative, we first deduct the adjustment
from any money remaining in the fixed investment option. If there is not enough
money in the fixed investment option to meet the negative deduction, we deduct
the remainder from your withdrawal. Where the market value adjustment is
positive, we add the adjustment to your withdrawal from the fixed investment
option. For withdrawals under the systematic withdrawal program that result in a
negative MVA, the MVA amount will be deducted from your withdrawal.


Please see Appendix B for more information on how we calculate the Market Value
Adjustment.

TRANSFERS DURING THE ACCUMULATION PHASE

During the Accumulation Phase you may transfer funds between the Variable
Portfolios and/or the fixed account options. Funds already in your Contract
cannot be transferred into the DCA fixed accounts. You must transfer at least
$100 and at least $100 (or $0) must remain in any Portfolio after a transfer.

We do not currently limit the number of transfers you can make. We reserve the
right to limit the number of transfers in the future to 15 for all existing and
new owners. If we do impose such a limit you may be charged $25 for each
transfer in excess of that limit. We will provide notice of any limitation. If a
limit is ever imposed, transfers resulting from your participation in the DCA
program count against your allotted number of free transfers. However, transfers
resulting from your participation in the Automatic Asset Rebalancing program
would not count against your allotted number.

You may request transfers of your account value between the Variable Portfolios
and/or the fixed account options in writing or by telephone (unless you have
indicated on your enrollment form that you do not wish to make telephone
transfer requests). Internet account access and/or transactions may be available
by visiting our website at www.sunamerica.com and completing the registration
process.

When receiving instructions over the telephone or the internet/website, we
follow appropriate procedures to provide reasonable assurance that the
transactions executed are genuine. Thus, we are not responsible for any claim,
loss or expense from any error resulting from instructions received over the
telephone. If we fail to follow our procedures, we may be liable for any losses
due to unauthorized or fraudulent instructions.

We can also limit the number of transfers in any contract year or refuse any
transfer request for you or others invested in the contract if we believe that
excessive trading or a specific transfer request or a group of transfer requests
may have a detrimental effect on unit values or the share prices of the
underlying Portfolios.

Where permitted by law, we may accept your authorization for a third party to
make transfers for you subject to our rules. We reserve the right to suspend or
cancel such acceptance at any time and will notify you accordingly.
Additionally, we may restrict the investment options available for transfers
during any period in which such third party acts for you. We notify such third
party beforehand regarding any restrictions. However, we will not enforce these
restrictions if we are satisfied that:

     - such third party has been appointed by a court of competent jurisdiction
       to act on your behalf; or

     - such third party is a trustee/fiduciary for you or appointed by you to
       act on your behalf for all your financial affairs.

                                       10
<PAGE>   18

We may provide administrative or other support services to independent third
parties you authorize to make transfers on your behalf. We do not currently
charge you extra for providing these support services. This includes, but is not
limited to, transfers between investment options in accordance with market
timing strategies. Such independent third parties may or may not be appointed
with us for the sale of annuities. However, WE DO NOT ENGAGE ANY THIRD PARTIES
TO OFFER INVESTMENT ALLOCATION SERVICES OF ANY TYPE. WE TAKE NO RESPONSIBILITY
FOR THE INVESTMENT ALLOCATION AND TRANSFERS TRANSACTED ON YOUR BEHALF BY SUCH
THIRD PARTIES OR FOR ANY INVESTMENT ALLOCATION RECOMMENDATIONS MADE BY SUCH
PARTIES.

For information regarding transfers during the Income Phase, SEE INCOME OPTIONS
ON PAGE 15.

We reserve the right to modify, suspend, waive or terminate these transfer
provisions at any time.

DOLLAR COST AVERAGING ("DCA")

The Dollar Cost Averaging program allows you to invest gradually in the Variable
Portfolios. Under the program you systematically transfer a set dollar amount or
percentage of investment option value from one Variable Portfolio or the 1-year
fixed account option (source accounts) to any other Variable Portfolio(s) or the
non-DCA fixed account options (target accounts). Transfers may be monthly or
quarterly. You may change the frequency at any time by notifying us in writing.
The minimum transfer amount under the DCA program is $100, regardless of the
source account.

We also offer a 6-month and a 1-year DCA fixed account exclusively to facilitate
DCA of your direct transfer and/or direct rollover Purchase Payments. If you
allocate a Purchase Payment into a DCA fixed account, we transfer all your money
allocated to that account into the Variable Portfolios or the non-DCA fixed
accounts over the selected 6-month or 1-year period. You cannot change the
option or the frequency of transfers once selected, if you are using these DCA
accounts.

Any single allocation of funds placed into the 6-month DCA fixed account must be
$600.00 or larger. We transfer all of your money out of the 6-month DCA fixed
account to the Variable Portfolio(s) you select by the end of the six month
period. Transfers out of the 6-month DCA fixed account must occur monthly

Transfers out of the 1-year DCA fixed account must be made quarterly or monthly.
If you select monthly transfers the minimum amount you must place in the account
is $1,200. If you select quarterly transfers the minimum amount you must place
in the account is $400. The amount of each transfer from the 1-year DCA fixed
account equals the total amount of money allocated to the account divided by the
frequency of transfers selected.

You may terminate your DCA program at any time. If money remains in the DCA
fixed accounts, we transfer the remaining money to the 1-year fixed account
option, unless we receive different instructions from you.

The DCA program is designed to lessen the impact of market fluctuations on your
investment. However, we cannot ensure that you will make a profit. When you
participate in the DCA Program, you are continuously investing in securities
regardless of fluctuating price levels. You should consider your tolerance for
investing through periods of fluctuating price levels.

We reserve the right to modify, suspend or terminate this program at any time.

     EXAMPLE:

     Assume that you want to gradually move $750 each quarter from the Cash
     Management Portfolio to the Aggressive Growth Portfolio over six quarters.
     You set up dollar cost averaging and purchase Accumulation Units at the
     following values:

<TABLE>
<CAPTION>
- -------------------------------------------
                ACCUMULATION      UNITS
   QUARTER          UNIT        PURCHASED
- -------------------------------------------
<S>            <C>            <C>
      1            $ 7.50          100
      2            $ 5.00          150
      3            $10.00          75
      4            $ 7.50          100
      5            $ 5.00          150
      6            $ 7.50          100
- -------------------------------------------
</TABLE>

     You paid an average price of only $6.67 per Accumulation Unit over six
     quarters, while the average market price actually was $7.08. By investing
     an equal amount of money each month, you automatically buy more
     Accumulation Units when the market price is low and fewer Accumulation
     Units when the market price is high. This example is for illustrative
     purposes only.

ASSET ALLOCATION REBALANCING

Earnings in your Contract may cause the percentage of your investment in each
investment option to differ from your original allocations. The Automatic Asset
Rebalancing program addresses this situation. At your election, we periodically
rebalance your investments in the Variable Portfolios to return your allocations
to their original percentages. You request quarterly, semi-annual or annual
rebalancing.

We reserve the right to modify, suspend or terminate this program at any time.

     EXAMPLE:

     Assume that you want your initial Purchase Payment split between two
     Portfolios. You want 50% in the Corporate Bond Portfolio and 50% in the
     Growth Portfolio. Over the next calendar quarter, the bond

                                       11
<PAGE>   19

     market does very well while the stock market performs poorly. At the end of
     the calendar quarter, the Corporate Bond Portfolio now represents 60% of
     your holdings because it has increased in value and the Growth Portfolio
     represents 40% of your holdings. If you had chosen quarterly rebalancing,
     on the last day of that quarter, we would sell some of your units in the
     Corporate Bond Portfolio to bring its holdings back to 50% and use the
     money to buy more units in the Growth Portfolio to increase those holdings
     to 50%.

VOTING RIGHTS

Anchor National is the legal owner of the Trusts' shares. However, when a
Portfolio solicits proxies in conjunction with a vote of shareholders, we must
obtain your instructions on how to vote those shares. We vote all of the shares
we own in proportion to your instructions. This includes any shares we own on
our own behalf. Should we determine that we are no longer required to comply
with these rules, we will vote the shares in our own right.

SUBSTITUTION

If Portfolios become unavailable for investment, we may be required to
substitute shares of another Portfolio. We will seek prior approval of the SEC
and give you notice before substituting shares.

- ----------------------------------------------------------------
- ----------------------------------------------------------------
                              ACCESS TO YOUR MONEY
- ----------------------------------------------------------------
- ----------------------------------------------------------------

You can access money in your Contract in three ways:

     - by receiving income payments during the Income Phase, SEE INCOME OPTIONS
       ON PAGE 15; or

     - by taking a loan in accordance with the provisions of your Plan and/or
       this Contract (TSA only); or

     - subject to the restrictions described below, by making a partial or total
       withdrawal.

We may be required to suspend or postpone the payment of a withdrawal for any
period of time when: (1) the NYSE is closed (other than a customary weekend and
holiday closings); (2) trading with the NYSE is restricted; (3) an emergency
exists such that disposal of or determination of the value of shares of the
Portfolios is not reasonably practicable; (4) the SEC, by order, so permits for
the protection of contract owners.

Additionally, we reserve the right to defer payments for a withdrawal from a
fixed account option. Such deferrals are limited to no longer than six months.


We may deduct a withdrawal charge applicable to any total or partial withdrawal,
and a market value adjustment if a total or partial withdrawal comes from the 1,
3 or 5 year MVA fixed accounts unless the withdrawal qualifies for withdrawal
charge exception. SEE INVESTMENT OPTIONS ON PAGE 8 AND EXPENSES ON PAGE 14.


We may establish certain minimum withdrawal amounts or require that a minimum
amount remain in a Portfolio upon withdrawal. Please consult the Annuity Service
Center for additional information. You must send a written withdrawal request.
Unless you provide us with different instructions, partial withdrawals will be
made pro rata from each Variable Portfolio and each fixed account option in
which you are invested.

WITHDRAWAL RESTRICTIONS

Withdrawals under Section 403(b) Contracts are subject to the limitations under
Section 403(b)(11) of the IRC and any applicable Plan document. Section 403(b)
provides that salary reduction contributions deposited and earnings credited on
any salary reduction contributions after December 31, 1988 may only be withdrawn
upon (1) death; (2) disability; (3) reaching age 59 1/2; (4) separation from
service; or (5) occurrence of a hardship. Amounts accumulated in one Section
403(b)(1) Contract may be transferred to another Section 403(b)(1) Contract or
Section 403(b)(7) custodial account without a penalty under the IRC. Amounts
accumulated in a Section 403(b)(7) custodial account and deposited in a contract
will be subject to the same withdrawal restrictions as are applicable to
post-1988 salary reduction contributions. For more information on these
provisions. SEE TAXES ON PAGE 19.

If your Plan is subject to Title I of ERISA, your withdrawal request must be
authorized by the Contractholder on your behalf. All withdrawal requests will
require the Contractholder's written authorization and written documentation
specifying the portion of your Contract value which is available for
distribution to you.


If your Plan is not subject to Title I of ERISA and you own a TSA, you must
certify to Anchor National that, one of the events listed in the IRC has
occurred (and provide supporting information, if requested) and that Anchor
National may rely on such representation in granting such a withdrawal request.
The above does not apply to transfers to other Qualified investment
alternatives. SEE TAXES ON PAGE 19. You should consult your tax adviser as well
as review the provisions of any applicable Plan before requesting a withdrawal.


In addition to the restrictions noted above, a Plan may contain additional
withdrawal or transfer restrictions.

Early withdrawals from a TSA or IRA, as defined under Section 72(q) and 72(t) of
the IRC, may be subject to 10% penalty tax.


TEXAS OPTIONAL RETIREMENT PROGRAM



If you participate in the Texas Optional Retirement Program ("ORP") you must
obtain a certificate of termination from


                                       12
<PAGE>   20


your employer before you can redeem contract. We impose this requirement on you
because the Texas Attorney General ruled that participants in ORP may redeem
their contract only upon termination of their employment by Texas public
institutions of higher education, or upon retirement death or total disability.


SYSTEMATIC WITHDRAWAL PROGRAM

If you elect and the terms of any applicable Plan and/or the IRC allow, then we
use money in your contract to pay you monthly, quarterly, semiannual or annual
payments during the Accumulation Phase. Electronic transfer of these funds to
your bank account is also available. However, any such payments you elect to
receive are subject to all applicable withdrawal charges, market value
adjustments, income taxes, tax penalties and other withdrawal restrictions
affecting your Contract. The minimum amount of each withdrawal is $50. There
must be a least $500 remaining in your contract at all times. Withdrawals may be
taxable and a 10% IRS tax penalty may apply if you are under age 59 1/2 at the
time of withdrawal. There is no additional charge for participating in this
program.

The program is not available to everyone. Please check with our Annuity Service
Center, which can provide the necessary enrollment forms. We reserve the right
to modify, suspend or terminate this program at any time.

WITHDRAWAL CHARGES, MARKET VALUE ADJUSTMENTS, INCOME TAXES, TAX PENALTIES AND
CERTAIN WITHDRAWAL RESTRICTIONS MAY APPLY TO ANY WITHDRAWAL YOU MAKE, INCLUDING
SYSTEMATIC WITHDRAWALS.

LOANS

If you own a TSA and, if applicable, your Plan permits, you may take a loan from
your Contract during the Accumulation Period. You may apply for a loan under the
contract by completing a loan application available from Anchor National. Loans
are secured by a portion of your Contract value. Under certain Contracts, we may
charge a one-time fee of up to $75 to set up a loan. More information about
loans, including interest rates, restrictions, terms of repayment and applicable
fees and charges is available in the Certificate, Endorsement and the Loan
Agreement as well as from Anchor National's Annuity Service Center.


FREE WITHDRAWAL AMOUNT



If your contract is subject to withdrawal charge schedule A, you may be able to
withdraw 15% of your Purchase Payments each contract year, free of a contractual
withdrawal charge. The amount available for free withdrawal each year is reduced
by the amount of any Purchase Payment previously withdrawn in that contract
year.


MINIMUM CONTRACT VALUE
Where permitted by state law, we may terminate your contract if both of the
following occur: (1) your contract is less than $500 as a result of withdrawals;
and (2) you have not made any Purchase Payments during the past three years. We
will provide you with sixty days written notice. At the end of the notice
period, we will distribute the contract's remaining value to you.

- ----------------------------------------------------------------
- ----------------------------------------------------------------
                                 DEATH BENEFIT
- ----------------------------------------------------------------
- ----------------------------------------------------------------

If you die during the Accumulation Phase of your contract, we pay a death
benefit to your Beneficiary. The death benefit (unless limited by your Plan)
equals the greater of:

     1. Total Purchase Payments minus total withdrawals (and any fees and
        charges applicable to those withdrawals) at the time we receive
        satisfactory proof of death, or;

     2. Contract Value at the time we receive satisfactory proof of death.

We do not pay the death benefit if you die after you switch to the Income Phase.
However, if you die during the Income Phase, your Beneficiary receives any
remaining guaranteed income payments (or a portion thereof) in accordance with
the income option you selected. SEE INCOME OPTIONS ON PAGE 15.

You name your Beneficiary. You may change the Beneficiary at any time, unless
you previously made an irrevocable Beneficiary designation. Plans subject to
Title 1 of ERISA may impose additional restrictions on beneficiary designation
which are discussed in the Beneficiary Designation Form.

We pay the death benefit when we receive satisfactory proof of death. We
consider the following satisfactory proof of death:

     1. a certified copy of the death certificate; or

     2. a certified copy of a decree of a court of competent jurisdiction as to
        the finding of death; or

     3. a written statement by a medical doctor who attended the deceased at the
        time of death; or

     4. any other proof satisfactory to us.

We may require additional proof before we pay the death benefit.

The death benefit payment must begin immediately upon receipt of all necessary
documents. In any event, the death benefit must be paid by December 31 of the
calendar year containing the fifth anniversary of the date of death unless the
Beneficiary elects to have it payable in the form of an income option. If the
Beneficiary elects an income option, it must be paid over the Beneficiary's
lifetime or for a period not

                                       13
<PAGE>   21

extending beyond the Beneficiary's life expectancy. Payments must begin on or
before December 31 of the calendar year immediately following the year of your
death.

If the Beneficiary is the Participant's surviving spouse, the surviving spouse
may elect to receive the entire death benefit in equal or substantially equal
payments over their life or over a period not longer than their life expectancy,
commencing at any date prior to the later of:

      (i) December 31 of the calendar year immediately following the calendar
          year in which the Participant died, and

     (ii) December 31 of the calendar year in which the Participant would have
          attained age 70 1/2.

- ----------------------------------------------------------------
- ----------------------------------------------------------------
                                    EXPENSES
- ----------------------------------------------------------------
- ----------------------------------------------------------------

There are charges and expenses associated with your contract. These charges and
expenses reduce your investment return. We will not increase the insurance and
withdrawal fees and charges under your contract. However, investment charges may
increase or decrease. Some states may require that we charge less than the
amounts described below.

INSURANCE CHARGES

Insurance charges may vary by Plan or group contract. Currently, the insurance
charge on this contract ranges from .55% to a maximum of 1.25% annually of the
average daily value of your contract allocated to the Variable Portfolios. The
insurance charges applicable to your contract can be obtained by contacting your
Plan Sponsor, Employer or financial advisor or consulting your Contract Data
page. We deduct this charge daily. There is no insurance charge deducted against
amounts allocated to the fixed account options.

The insurance charge compensates us for the mortality and expense risks and the
costs of contract distribution assumed by Anchor National.

If these charges do not cover all of our expenses, we will pay the difference.
Likewise, if these charges exceed our expenses, we will keep the difference.

WITHDRAWAL CHARGES

A withdrawal charge may apply against each Purchase Payment you put into the
contract if you seek withdrawal of that payment prior to the end of a specified
period.

The withdrawal charge amount may vary by Plan. If applicable, the withdrawal
charge equals a percentage of the Purchase Payment you take out of the contract.
The withdrawal charge percentage may decline over time for each Purchase Payment
in the contract. The applicable withdrawal charge schedule will appear on your
Contract Data Page.

Currently, the withdrawal charges range from 0% to the maximum withdrawal
charge, as noted:

SEPARATED FROM SERVICE AT CONTRACT ISSUE
(SCHEDULE A)

<TABLE>
<CAPTION>
- ----------------------------------------------------------------
               YEAR                  1    2    3    4    5    6
- ----------------------------------------------------------------
<C>                                 <S>  <C>  <C>  <C>  <C>  <C>
        WITHDRAWAL CHARGE           6%   6%   5%   5%   4%   0%
- ----------------------------------------------------------------
</TABLE>

EMPLOYED AT CONTRACT ISSUE
(SCHEDULE B)

<TABLE>
<CAPTION>
- ----------------------------------------------------------------
            YEAR                1    2    3    4    5    6    7
- ----------------------------------------------------------------
<C>                            <S>  <C>  <C>  <C>  <C>  <C>  <C>
      WITHDRAWAL CHARGE        6%   6%   5%   5%   4%   4%   0%
- ----------------------------------------------------------------
</TABLE>

You may obtain information as to the withdrawal charge applicable to your
contract by contacting your Plan Sponsor, Employer, financial adviser or by
consulting your Contract Data page.

When calculating the withdrawal charge, we treat withdrawals as coming first
from the Purchase Payments that have been in your contract the longest. However,
for tax purposes, your withdrawals are considered earnings first, then Purchase
Payments.

Whenever possible, we deduct the withdrawal charge from the money remaining in
your contract. If you withdraw all of your contract value, we deduct any
applicable withdrawal charge from the amount withdrawn.

We calculate charges due on a total withdrawal as of the day after we receive
your request and your contract. We return your contract value less any
applicable fees and charges. You will not receive the benefit of any available
and prior free withdrawal amounts (applicable only to those subject to
withdrawal charge Schedule A) if you make a complete withdrawal of your
contract.

Both the insurance charges and the withdrawal charges may vary by Plan and/or
group contract based on certain objective factors. SEE REDUCTION OR ELIMINATION
OF CHARGES AND EXPENSES, AND ADDITIONAL AMOUNTS CREDITED.

EXCEPTIONS TO WITHDRAWAL CHARGE

If a withdrawal charge applies to your contract a withdrawal charge is not
applicable to withdrawals requested in the following situations:

     - Annuitization (except if under the Income Protector Program) SEE INCOME
       OPTIONS ON PAGE 15;
     - Death Benefits, SEE DEATH BENEFIT ON PAGE 13;
     - After your 10th contract anniversary;
     - If you are subject to withdrawal charge Schedule A, 15% of your Purchase
       Payments each contract year;
     - Disability occurring after contract issue;
     - Hardship occurring after contract issue;
     - After separation from service occurring after contract issue.
     - loans in accordance with the requirements of ERISA and/or the IRC, the
       Plan and the Contract; and

                                       14
<PAGE>   22

     - to avoid Federal Income Tax penalties or satisfy income tax rules
       applicable to the Contract from which the withdrawal is made.

Additionally, upon conversion to an IRA from an existing Polaris Plus 403(b)
contract, IRA contract holders will receive credit for time served in their
prior Polaris Plus TSA variable annuity investment. This means we will carry
over the 403(b) Purchase Payment history with respect to any potential
withdrawal charges under the IRA.

Withdrawals made prior to age 59 1/2 may result in tax penalties. SEE TAXES ON
PAGE 19.

INVESTMENT CHARGES

Charges are deducted from your Variable Portfolios for the advisory and other
expenses of the Portfolios. THE FEE TABLES LOCATED ON PAGE 4 illustrate these
charges and expenses. For more detailed information on these investment charges,
refer to the prospectuses for the Trusts, enclosed or attached.

TRANSFER FEE

We currently permit an unlimited number of transfers between investment options,
every year. We reserve the right to limit the number of transfers to 15 per
year, in the future, for both new and existing contract holders. If we do impose
such a limit you will be charged $25 for each transfer over that limit. SEE
INVESTMENT OPTIONS ON PAGE 8.

PREMIUM TAX

Certain states charge the Company a tax on the premiums you pay into the
contract. Currently we deduct the charge for premium taxes when you make a full
withdrawal or annuitize the contract. In the future, we may assess this
deduction at the time you put Purchase Payment(s) into the contract or upon
payment of a death benefit.

APPENDIX A provides more information about premium taxes.

INCOME TAXES

We do not currently deduct income taxes from your contract. We reserve the right
to do so in the future.

REDUCTION OR ELIMINATION OF CHARGES AND EXPENSES, AND ADDITIONAL AMOUNTS
CREDITED

Sometimes sales of the contracts to groups of similarly situated individuals may
lower our administrative and/or sales expenses. We reserve the right to reduce
or waive certain charges and expenses when this type of sale occurs. In
addition, we may also credit additional interest to policies sold to such
groups. We determine which groups are eligible for such treatment. Some of the
criteria we evaluate to make a determination are: size of the group; amount of
expected Purchase Payments; relationship existing between us and prospective
purchaser; nature of the purchase; length of time a group of contracts is
expected to remain active; purpose of the purchase and whether that purpose
increases the likelihood that our expenses will be reduced; and/or any other
factors that we believe indicate that administrative and/or sales expenses may
be reduced.

Anchor National may make a similar determination regarding sales to its
employees, its affiliates' employees and employees of currently contracted
broker-dealers; its registered representatives and immediate family members of
all of those described.

We reserve the right to change or modify any such determination or the treatment
applied to a particular group, at any time.

- ----------------------------------------------------------------
- ----------------------------------------------------------------
                                 INCOME OPTIONS
- ----------------------------------------------------------------
- ----------------------------------------------------------------

ANNUITY DATE

During the Income Phase, the money in your contract is used to make regular
income payments to you. You may switch to the Income Phase any time. You select
the month and year in which you want income payments to begin. The first day of
that month is the Annuity Date. You may change your Annuity Date, so long as you
do so at least seven days before the income payments are scheduled to begin.
Once you begin receiving income payments, you cannot change your income option.
Except as indicated under option 5, once you begin receiving income payments,
you cannot otherwise access your money through withdrawal or surrender.


Generally, for Qualified contracts, the Annuity Date may be any day after you
reach age 59 1/2 but not later than your 75th birthday. However, you may be
required to begin taking minimum distributions by April 1 following the later
of, the year in which you turn age 70 1/2 or the calendar year in which you
retire. SEE TAXES ON PAGE 19.


As to TSAs and IRAs, an income payment is generally considered a withdrawal.
Therefore, IRC withdrawal restrictions may limit the time at which income
payments may begin. SEE ACCESS TO YOUR MONEY ON PAGE 12.

If the Annuity Date is past your 85th birthday, your contract could lose its
status as an annuity under Federal tax laws. This may cause you to incur adverse
tax consequences.

INCOME OPTIONS

Currently, this contract offers 5 income options. If you elect to receive income
payments but do not select an option, your income payments will be made in
accordance with option 4 for a period of 10 years. For income payments selected
for joint lives, we pay according to option 3.

We base our calculation of income payments on the life of the Annuitant and the
annuity rates set forth in your contract. Under a TSA you, as the Participant,
are always the Annuitant. Under an IRA You as the Owner must always be the
Annuitant. UNDER CERTAIN QUALIFIED CONTRACTS THE INCOME OPTION YOU SELECT MAY
NOT EXCEED YOUR LIFE EXPECTANCY.

                                       15
<PAGE>   23

     OPTION 1 - LIFE INCOME ANNUITY

This option provides income payments for the life of the Annuitant. Income
payments stop when the Annuitant dies.

     OPTION 2 - JOINT AND SURVIVOR LIFE ANNUITY

This option provides income payments for the life of the Annuitant and for the
life of another designated person. Upon the death of either person, we will
continue to make income payments during the lifetime of the survivor. Income
payments stop whenever the survivor dies.

     OPTION 3 - JOINT AND SURVIVOR LIFE ANNUITY WITH
     10 OR 20 YEARS GUARANTEED

This option is similar to option 2 above, with an additional guarantee of income
payments for at least 10 or 20 years. If the Annuitant and the Survivor die
before all of the guaranteed income payments have been made, the remaining
payments are made to the Beneficiary under your contract.

     OPTION 4 - LIFE ANNUITY WITH 10, 15 OR 20 YEARS GUARANTEED

This option is similar to option 1 above. In addition, this option provides a
guarantee that income payments will be made for at least 10, 15 or 20 years. You
select the number of years. If the Annuitant dies before all guaranteed income
payments are made, the remaining income payments go to the Beneficiary under
your contract.

     OPTION 5 - INCOME FOR A SPECIFIED PERIOD

This option provides income payments for a guaranteed period ranging from 5 to
30 years. If the Annuitant dies before all the guaranteed income payments are
made, the remaining income payments are made to the Beneficiary under your
contract. Additionally, if variable income payments are elected under this
option, you (or the Beneficiary under the contract if the Annuitant dies prior
to all guaranteed payments being made) may redeem the contract value after the
Annuity Date. The amount available upon such redemption would be the discounted
present value of any remaining guaranteed payments.

The value of an Annuity Unit, regardless of the option chosen, takes into
account the Mortality and Expense Risk Charge. Since annuity option 5, Income
for a Specified Period, does not contain an element of mortality risk, the payee
is not getting the benefit of this Charge. There shall be no right to terminate
the Contract during the Income Phase if the option elected contains an element
of mortality risk.

FIXED OR VARIABLE INCOME PAYMENTS

You can choose income payments that are fixed, variable or both. If at the date
when income payments begin you are invested in the Variable Portfolios only,
your income payments will be variable. If your money is only in fixed accounts
at that time, your income payments will be fixed in amount. Further, if you are
invested in both fixed and variable investment options when income payments
begin, your payments will be fixed and variable. Anchor National guarantees any
amount of each payment which is invested in a fixed account during the income
phase. If the income payments are variable the amount is not guaranteed.

INCOME PAYMENTS

Your income payments will vary if you are invested in the Variable Portfolios
after the Annuity Date depending on four things:

     - for life options, your age when payments begin, and;

     - the value of your contract in the Variable Portfolios on the Annuity
       Date, and;

     - the 3.5% assumed investment rate used in the annuity table for the
       contract, and;

     - the performance of the Variable Portfolios in which you are invested
       during the time you receive income payments.

If you are invested in both the fixed account options and the Variable
Portfolios after the Annuity Date, the allocation of funds between the fixed and
variable options also impacts the amount of your annuity payments.

We make income payments on a monthly, quarterly, semi-annual or annual basis.
You instruct us to send you a check or to have the payments directly deposited
into your bank account. If state law allows, we distribute annuities with a
contract value of $5,000 or less in a lump sum. Also, if the selected income
option results in income payments of less than $50 per payment, we may decrease
the frequency of the payments, state law allowing.

TRANSFERS DURING THE INCOME PHASE

If you are invested in the Variable Portfolios during the Income Phase, one
transfer per month is permitted between the Variable Portfolios. No other
transfers are allowed during the Income Phase.

DEFERMENT OF PAYMENTS

We may defer making fixed payments for up to six months, or less if required by
law. Interest is credited to you during the deferral period.

Please read the Statement of Additional Information ("SAI") for a more detailed
discussion of the income options.

THE INCOME PROTECTOR

If elected, this feature provides a future "safety net" in the event that, when
you choose to begin receiving income payments, your contract has not performed
within a historically anticipated range. The Income Protector program offers you
the ability to receive a guaranteed fixed minimum retirement income upon
annuitization. With the Income Protector you can know the level of minimum
income that will be available to you if, when you chose to begin the income
phase of your contract, down markets have negatively impacted your contract
value. We reserve the right to modify,

                                       16
<PAGE>   24

suspend or terminate the Income Protector program at any time.

The Income Protector provides two levels of minimum retirement income. The two
available options are the Income Protector Plus and Max. If you enroll in the
Income Protector program, we charge a fee based on the level of protection you
select. The amount of the fee and how to enroll are described below. In order to
utilize the benefit of the program you must follow the provisions discussed
below.

Certain IRC restrictions on income options available to Qualified retirement
investors may have an impact on your ability to benefit from this feature.
Qualified investors should read NOTE TO QUALIFIED CONTRACT HOLDERS, below.

     HOW WE DETERMINE THE AMOUNT OF YOUR MINIMUM
     GUARANTEED INCOME

We base the amount of minimum income available to you if you take income
payments using the Income Protector upon a calculation we call the Income
Benefit Base. At the time your enrollment in the Income Protector program
becomes effective, your Income Benefit Base is equal to your contract value.
Your participation becomes effective on either the date of issue of the contract
(if elected at the time of application) or on the contract anniversary following
your enrollment in the program.

The Income Benefit Base is only a calculation. It does not represent a contract
value, nor does it guarantee performance of the Variable Portfolios in which you
invest.

Your Income Benefit Base increases if you make subsequent Purchase Payments and
decreases if you withdraw money from your contract. The exact Income Benefit
Base calculation is equal to (a) plus (b) minus (c) where:

     (a) is,

          - for the first year of calculation, your contract value on the date
            your participation in the program became effective, or;

          - for each subsequent year of calculation, the Income Benefit Base on
            the prior contract anniversary, and;

     (b) is the sum of all Purchase Payments made into the contract since the
         last contract anniversary, and;

     (c) is all withdrawals and applicable fees and charges since the last
         contract anniversary (excluding any positive MVA), in an amount
         proportionate to the amount by which such withdrawals decreased your
         contract value.

The Income Benefit Base accumulates at one of the following annual growth rates
from the date your enrollment becomes effective through your election to begin
receiving income under the program:

<TABLE>
<CAPTION>
- ----------------------------------------------------
               Options                 Growth Rate*
- ----------------------------------------------------
<S>                                   <C>
      The Income Protector Plus         3.25%
- ----------------------------------------------------
      The Income Protector Max          5.25%
- ----------------------------------------------------
</TABLE>

* If you elect the Plus or Max feature on a subsequent anniversary, the Growth
  Rates may be different.

The growth rates for the Plus or Max features cease on the contract anniversary
following the Annuitant's 90th birthday.

     ENROLLING IN THE PROGRAM

If you decide that you want the protection offered by the Income Protector
program, you must elect the option of your choice by completing the Income
Protector Election Form available through our Annuity Service Center. You may
only elect one of the options, you can not change your election once made, and
you can not terminate your enrollment. In order to obtain the benefit of the
Income Protector program you may not begin the income phase for at least seven
years following your enrollment.

     STEP-UP OF YOUR INCOME BENEFIT BASE

You may also have the opportunity to "Step-Up" your Income Benefit Base. The
Step-Up feature allows you to increase your Income Benefit Base to the amount of
your contract value on your contract anniversary. You can only elect to Step-Up
within the 30 days before the next contract anniversary. The seven year waiting
period required prior to electing income payments through the Income Protector
is restarted if you step-up your Income Benefit Base.

You must complete the appropriate portion of the Income Protector Election Form
to effect a Step-Up.

     ELECTING TO RECEIVE INCOME PAYMENTS

You may elect to begin the Income Phase of your contract using the Income
Protector Program ONLY within the 30 days after the seventh or later contract
anniversary following the later of,

     - the effective date of your enrollment in the Income Protector program, or

     - the contract anniversary of your most recent Step-Up.

The contract anniversary prior to your election to begin receiving income
payments is your Income Benefit Date. This is the date as of which we calculate
your Income Benefit Base to use in determining your guaranteed minimum fixed
retirement income. To arrive at the minimum guaranteed fixed retirement income
available to you, we apply the annuity rates stated in your Income Protector
Endorsement for the income option you select to your final Income Benefit Base.

                                       17
<PAGE>   25

You then choose if you would like to receive that income annually, quarterly or
monthly for the time guaranteed under your selected annuity option. Your final
Income Benefit Base is equal to (a) minus (b) where:

     (a) is your Income Benefit Base as your Income Benefit Date, and;

     (b) is any partial withdrawals of contract value and any charges applicable
         to those withdrawals (excluding any positive MVA) and any withdrawal
         charges otherwise applicable, calculated as if you fully surrender your
         contract as the Income Benefit Date, and any applicable premium taxes.

The income options available when using the Income Protector program to receive
your retirement income are:

     - Life Annuity with 10 Year Period Certain, or

     - Joint and 100% Survivor Annuity with 20 Year Period Certain

At the time you elect to begin the income phase, we will calculate your annual
income using both your final Income Benefit Base and your contract value. We
will use the same income option for each calculation, however, the annuity
factors used to calculate your income under the Income Protector will be
different. You will receive whichever provides a greater stream of income. If
you take Income Payments using the Income Protector your payments will be fixed
in amount. You are not required to use the Income Protector to receive your
Income Payments. The general provisions of your contract provide other income
options. However, we will not refund fees paid for the Income Protector if you
begin taking Income Payments under the general provisions of your contract. YOU
MAY NEVER NEED TO RELY UPON THE INCOME PROTECTOR, IF YOUR CONTRACT PERFORMS
WITHIN A HISTORICALLY ANTICIPATED RANGE. HOWEVER, PAST PERFORMANCE IS NO
GUARANTEE OF FUTURE RESULTS.

     IMPORTANT NOTE

Qualified contracts generally require that you select an income option which
does not exceed your life expectancy. That restriction may limit the benefit of
the Income Protector program. To utilize the Income Protector you must take
income payments under one of two income options. If those income options exceed
your life expectancy you may be prohibited from receiving your guaranteed fixed
income under the program. If you own a Qualified contract to which this
restriction applies and you elect the Income Protector program, you may pay for
this minimum guarantee and not be able to realize the benefit.

Generally, for qualified contracts:

     - for the Life Annuity with 10 Year Period Certain, you must annuitize
       before age 79, and

     - for the Joint and 100% Survivor Annuity with 20 Year Period Certain, both
       Annuitants must be 70 or younger or one of the annuitants must be 65 or
       younger upon annuitization. Other age combinations may be available.

You should consult your tax advisor for information concerning your particular
circumstances.

     FEES ASSOCIATED WITH THE INCOME PROTECTOR

We charge a fee for the Income Protector program, as follows:

<TABLE>
<CAPTION>
- -------------------------------------------------------
                                        Fee As a % of
                                        Your Income
                Options                 Benefit Base
- -------------------------------------------------------
<S>                                     <C>
         Income Protector Plus            .15%
- -------------------------------------------------------
         Income Protector Max             .30%
- -------------------------------------------------------
</TABLE>

Since the Income Benefit Base is only a calculation and does not provide a
contract value, we deduct the fee from your actual contract value beginning on
the contract anniversary on which your enrollment in the program becomes
effective.

If you elect to participate in the Income Protector program at contract issue,
we begin deducting the annual fee for the Plus or Max option when your
participation becomes effective. If you elect to participate in the Income
Protector program at some time after contract issue, we begin deducting the
annual fee on the contract anniversary of or following election. We will deduct
this charge from your contract value on every contract anniversary up to and
including your Income Benefit Date. Additionally, we deduct the entire annual
fee from any full surrender of your contract requested prior to your contract
anniversary.

After a Step-Up, the fee for the Income Protector Max or Plus will be based on
your Stepped-Up Income Benefit Base, and will be deducted from your contract
value beginning on the effective date of the step-up.

                                       18
<PAGE>   26

         HYPOTHETICAL EXAMPLE OF THE OPERATION OF THE INCOME PROTECTOR

This table assumes a $100,000 initial investment in a qualified contract with no
further premiums, no withdrawals, no step-ups, no premium taxes, current growth
rates; and the election of optional Income Protector alternatives at contract
issue.

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
                                                                                                    INCOME
       IF AT ISSUE    ANNUAL INCOME IF YOU ANNUITIZE ON THE FOLLOWING CONTRACT ANNIVERSARIES:     PROTECTOR
         YOU ARE         1 - 6            7             10             15             20            LEVEL
- --------------------------------------------------------------------------------------------------------------
     <S>                 <C>             <C>            <C>           <C>            <C>         <C>
     Unisex               N/A           5,494          6,378          8,279         10,920       TIP Plus
     Age 45*              N/A           6,284          7,727         11,039         16,027       TIP Max
- --------------------------------------------------------------------------------------------------------------
     Male, Age 45         N/A           4,879          5,601          7,115          9,168       TIP Plus
     Female Age 45**      N/A           5,580          6,786          9,488         13,456       TIP Max
- --------------------------------------------------------------------------------------------------------------
</TABLE>

 * Life Annuity with 10 year Period Certain
** Joint and 100% Survivor Annuity with 20 Year Period Certain

The Income Protector may not be available in your state. Please consult your
financial adviser for information regarding availability of this program in your
state.

- ----------------------------------------------------------------
- ----------------------------------------------------------------
                                     TAXES
- ----------------------------------------------------------------
- ----------------------------------------------------------------

NOTE: WE PREPARED THE FOLLOWING INFORMATION ON TAXES AS A GENERAL DISCUSSION OF
THE SUBJECT. IT IS NOT TAX ADVICE. WE CAUTION YOU TO SEEK COMPETENT TAX ADVICE
ABOUT YOUR OWN CIRCUMSTANCES. WE DO NOT GUARANTEE THE TAX STATUS OF YOUR
ANNUITY. TAX LAWS CONSTANTLY CHANGE, THEREFORE WE CAN NOT GUARANTEE THAT THE
INFORMATION CONTAINED HEREIN IS COMPLETE AND/OR ACCURATE.

ANNUITY CONTRACTS IN GENERAL

If you purchase your Contract under a pension plan, a specially sponsored
employer program or as an individual retirement account, your contract is
referred to as a Qualified contract. Examples of Qualified plans are: IRAs,
TSAs, H.R. 10 Plans (referred to as Keogh Plans) as well as pension and profit
sharing plans, including 401(k) plans. Typically you have not paid any tax on
the Purchase Payments used to buy your contract and therefore, you have no cost
basis in your Contract.

The IRC provides for special rules regarding the tax treatment of annuity
contracts. Generally, taxes on the earnings in your annuity contract are
deferred until you take the money out. Different rules apply depending on how
you take the money out and whether your contract is Qualified or Non-qualified.

TAX TREATMENT OF DISTRIBUTIONS -
QUALIFIED CONTRACTS

Generally, you have not paid any taxes on the Purchase Payments used to buy a
Qualified contract. Any amount of money you take out as a withdrawal or as
income payments is taxable income. The IRC further provides for a 10% penalty
tax on any withdrawal or income payment paid to you other than in conjunction
with the following circumstances: (1) after reaching age 59 1/2; (2) when paid
to your Beneficiary after you die; (3) after you become disabled (as defined in
the IRC); (4) in a series of substantially equal installments made for your life
or for the joint lives of you and your Beneficiary; (5) to the extent such
withdrawals do not exceed limitations set by the IRC for amounts paid during the
taxable year for medical care; (6) to fund higher education expenses (as defined
in IRC); (7) to fund certain first-time home purchase expenses; and, except in
the case of an IRA; (8) when you separate from service after attaining age 55;
and (9) when paid to an alternate payee pursuant to a qualified domestic
relations order.

TSA PLANS

Section 403(b) of the IRC permits the purchase of TSA by public schools and
certain charitable, educational and scientific organizations described in
Section 501(c)(3) of the IRC. A qualifying Employer may make contributions to
the Contract for the benefit of an employee who is a Participant, and/or the
Participant may enter into a salary reduction agreement with the Participant's
Employer authorizing the Employer to contribute a percentage of the
Participant's salary to the Section 403(b) contract. All contributions made to a
Section 403(b) contract are subject to the limitations described in IRC Sections
402(g) regarding elective deferral amounts, 403(b)(2) regarding the maximum
exclusion allowance, and 415(a)(2) and 415(c) regarding the limitations on
annual additions. Most contributions to a 403(b) contract are not includible in
the Participant's gross income until the Participant receives distributions from
the Contract.

A Participant who makes a withdrawal from a Section 403(b) contract must declare
that amount in current income, therefore it is taxed at ordinary income tax
rates. In addition, Section 403(b)(11) of the IRC requires that salary reduction
contributions made, and/or earnings credited on any salary reduction
contributions after December 31, 1988, may not be withdrawn from the
Participant's Section 403(b) contract prior to an "eligible event", such as the
Participant having
                                       19
<PAGE>   27

(1) attained age 59 1/2, (2) separated from service, (3) become disabled (as
defined by the IRC), (4) died or (5) incurred a hardship (as defined by the
IRC). Hardship withdrawals may not include any earnings credited after December
31, 1988 attributable to salary reduction contributions. The Internal Revenue
Service has decided in Revenue Ruling 90-24 that amounts may be transferred
between Section 403(b) investment vehicles as long as the transferred funds
retain withdrawal restrictions at least as restrictive as that of the
transferring investment vehicle. Such transferred amounts are considered
withdrawals under the Contract and will be subject to withdrawal charges, if
applicable. (SEE EXPENSES ON PAGE 14 for more complete information).

Section 403(b)(8) of the IRC permits tax-free rollovers from Section 403(b)
contracts to IRAs or other Section 403(b) contracts under certain circumstances.
Qualified distributions eligible for rollover treatment may be subject to a 20%
federal tax withholding depending on whether or not the distribution is paid
directly to an eligible retirement plan.

The IRC sets forth additional restrictions governing Section 403(b) contracts on
such items as transferability, distributions, nondiscrimination and withdrawals.

INDIVIDUAL RETIREMENT ANNUITIES

Section 408(b) of the Code permits eligible individuals to contribute to an
individual retirement program known as an "Individual Retirement Annuity"
("IRA"). Under applicable limitations, certain amounts may be contributed to an
IRA which will be deductible from the individual's gross income. These IRAs are
subject to limitations on eligibility, contributions, transferability and
distributions. Sales of contracts for use with IRAs are subject to special
requirements imposed by the IRC, including the requirement that certain
informational disclosure be given to persons desiring to establish an IRA.
Purchasers of contracts to be qualified as IRAs should obtain competent tax
advice as to the tax treatment and suitability of such an investment.

Under certain circumstances, the IRC may impose a 10% penalty tax on the taxable
portion of any distribution form a 408(b) arrangement.

The 10% penalty tax applies to the taxable portion of a distribution unless one
or more of the following have occurred: (1) You have attained age 59 1/2; (2)
You have become totally and permanently disabled (as defined by the IRC); (3)
You have died; (4) The distribution is rolled over in accordance with the IRC;
(5) The distribution is made in substantially equal periodic payments (at least
annually) over your life or life expectancy or the joint lives or joint life
expectancies of you and your beneficiary; (6) The distribution equals
unreimbursed medical expenses that qualify for a deduction as specified in the
IRC; (7) The distribution is used to pay for health insurance premiums for
certain unemployed individuals; (8) The amount withdrawn is for a first-time
home purchase; or (9) The amount withdrawn is for higher education expenses

Competent tax advice should be obtained as to the tax treatment and suitability
of purchasing a Contract or converting an existing contract to an IRA.

MINIMUM DISTRIBUTIONS

If your Contract is issued under a Section 403(b) or other Qualified Plan,
generally the IRS requires that you begin taking annual minimum distributions
from qualified annuity contracts by April 1 of the calendar year following the
later of (1) the calendar year in which the Participant attains age 70 1/2 or
(2) the calendar year in which the Participant retires. Failure to satisfy the
minimum distribution requirements may result in a federal tax penalty. You
should consult your tax adviser for more information.

DIVERSIFICATION

The IRC imposes certain diversification requirements on the underlying
investments for a variable annuity. We believe that each underlying Portfolios'
management monitors the Variable Portfolios so as to comply with these
requirements. To be treated as a variable annuity for tax purposes, the
underlying investments must meet these requirements.

The diversification regulations do not provide guidance as to the circumstances
under which you, because of the degree of control you exercise over the
underlying investments, and not Anchor National, would be considered the owner
of the shares of the Portfolios. It is unknown to what extent owners are
permitted to select investments, to make transfers among Portfolios or the
number and type of Portfolios owners may select from. If any guidance is
provided which is considered a new position, then the guidance would generally
be applied prospectively. However, if such guidance is considered not to be a
new position, it may be applied retroactively. This would mean you, as the owner
of the contract, could be treated as an owner of the underlying variable
investment Portfolios. Due to the uncertainty in this area, we reserve the right
to modify the contract in an attempt to maintain favorable tax treatment.

- ----------------------------------------------------------------
- ----------------------------------------------------------------
                                  PERFORMANCE
- ----------------------------------------------------------------
- ----------------------------------------------------------------

We may advertise the Cash Management Portfolio's yield and effective yield. In
addition, the other Variable Portfolios may advertise total return, gross yield
and yield-to-maturity. These figures represent past performance of the
Portfolios. These performance numbers do not indicate future results.

From time to time, we may advertise performance for periods prior to the date
the contracts were first issued, we derive the figures from the performance of
the corresponding Portfolios for the Trusts, if available. These Trusts have
been in existence for some time. We do this to demonstrate how the historical
investment experience of the funds affects

                                       20
<PAGE>   28

accumulation unit values. We modify these numbers to reflect charges and
expenses as if the contract was in existence during the period stated in the
advertisement. Figures calculated in this manner do not represent actual
historic performance of the particular Portfolio. Consult the SAI for more
detailed information regarding the calculation of performance data.

The performance of each Portfolio may also be measured against unmanaged market
indices. The indices we use include but are not limited to the Dow Jones
Industrial Average, the Standard & Poor's 500, the Russell 1000 Growth Index,
the Morgan Stanley Capital International Europe, Australia and Far East Index
("EAFE") and the Morgan Stanley Capital International World Index. We may
compare the Portfolios' performance to that of other variable annuities with
similar objectives and policies as reported by independent ranking agencies such
as Morningstar, Inc., Lipper Analytical Services, Inc. or Variable Annuity
Research & Data Service ("VARDS").

Anchor National may also advertise the rating and other information assigned to
it by independent industry ratings organizations. Some of those organizations
are A.M. Best Company ("A.M. Best"), Moody's Investor's Service ("Moody's"),
Standard & Poor's Insurance Rating Services ("S&P"), and Duff & Phelps. A.M.
Best's and Moody's ratings reflect their current opinion of our financial
strength and performance in comparison to others in the life and health
insurance industry. S&P's and Duff & Phelps' ratings measure the ability of an
insurance company to meet its obligations under insurance policies it issues.
These two ratings do not measure the insurer's ability to meet non-policy
obligations. Ratings in general do not relate to the performance of the Variable
Portfolios.

- ----------------------------------------------------------------
- ----------------------------------------------------------------
                               OTHER INFORMATION
- ----------------------------------------------------------------
- ----------------------------------------------------------------

Anchor National is a stock life insurance company originally organized under the
laws of the state of California in April 1965. On January 1, 1996, Anchor
National redomesticated under the laws of the state of Arizona.

Anchor National and its affiliates, SunAmerica Life Insurance Company, First
SunAmerica Life Insurance Company, SunAmerica National Life Insurance Company,
SunAmerica Asset Management Company, Resources Trust Company, and six
broker-dealers, specialize in retirement savings and investment products and
services. Business focuses include; fixed and variable annuities, mutual funds,
premium finance, broker-dealer services and trust administration services.

THE SEPARATE ACCOUNT
Anchor National established a separate account, Variable Annuity Account Seven
("Separate Account"), under Arizona law on August 28, 1998. The Separate Account
is registered with the SEC as a unit investment trust under the Investment
Company Act of 1940, as amended.

Anchor National owns the assets in the Separate Account. However, the assets in
the Separate Account are not chargeable with liabilities arising out of any
other business conducted by Anchor National. Income gains and losses (realized
and unrealized) resulting from assets in the Separate Account are credited to or
charged against the Separate Account without regard to other income, gains or
losses of Anchor National.

THE GENERAL ACCOUNT

Money allocated to the fixed account options goes into Anchor National's general
account. The general account consists of all of Anchor National's assets other
than assets attributable to a separate account. All of the assets in the general
account are chargeable with the claims of any Anchor National contract holders
as well as all of its creditors. The general account funds are invested as
permitted under state insurance laws.

DISTRIBUTION OF THE CONTRACT

Registered representatives of broker-dealers sell the contract. We pay
commissions to these representatives for the sale of the contracts. We do not
expect the total commissions to exceed 5% of your Purchase Payments. We may also
pay a bonus to representatives for contracts which stay active for a particular
period of time, in addition to standard commissions. We do not deduct
commissions paid to registered representatives directly from your Purchase
Payments.

From time to time, we may pay or allow additional promotional incentives in the
form of cash or other compensation. We reserve the right to offer these
additional incentives only to certain broker-dealers that sell, or are expected
to sell the contract or other contracts offered by us. Promotional incentives
may change at any time.

SunAmerica Capital Services, Inc., 733 Third Avenue, 4th Floor, New York, New
York 10017 distributes the contracts. SunAmerica Capital Services is an
affiliate of Anchor National, is registered as a broker-dealer under the
Exchange Act of 1934 and is a member of the National Association of Securities
Dealers, Inc. No underwriting fees are paid in connection with the distribution
of this contract.

ADMINISTRATION

We are responsible for the administrative servicing of your contract. Please
contact our Annuity Service Center at 1-877-999-9205, if you have any comment,
question or service request.

CONFIRMATIONS AND QUARTERLY STATEMENTS: During the accumulation phase you will
receive confirmation of transactions within your contract. Transactions made
pursuant to contractual or systematic agreements, such as deduction of the
annual maintenance fee and dollar cost averaging, may be confirmed quarterly.
Purchase payments

                                       21
<PAGE>   29

received through the automatic payment plan or a salary reduction arrangement,
may also be confirmed quarterly. For all other transactions, we send
confirmations immediately.

During the accumulation and income phases, you will receive a statement of your
transactions over the past quarter and a summary of your account values. It is
your responsibility to review these documents carefully and notify us of any
inaccuracies immediately. We investigate all inquiries. To the extent that we
believe we made an error, we retroactively adjust your contract, provided you
notify us within 30 days of receiving the transaction confirmation or quarterly
statement. Any other adjustments we deem warranted are made as of the time we
receive notice of the error.

YEAR 2000


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



LEGAL PROCEEDINGS


There are no pending legal proceeding affecting the Separate Account. Anchor
National and its subsidiaries engage in various kinds of routine litigation. In
management's opinion, these matters are not of material importance to their
respective total assets nor are they material with respect to the Separate
Account.

CUSTODIAN

State Street Bank and Trust Company, 255 Franklin Street, Boston, Massachusetts
02110, serves as the custodian of the assets of the Separate Account. Anchor
National pays State Street Bank for services provided, based on a schedule of
fees.

ADDITIONAL INFORMATION

Anchor National is subject to the informational requirements of the Securities
and Exchange Act of 1934 (as amended). We file reports and other information
with the SEC to meet those requirements. You can inspect and copy this
information at SEC public facilities at the following locations:

WASHINGTON, DISTRICT OF COLUMBIA
450 Fifth Street, N.W., Room 1024
Washington, D.C. 20549

CHICAGO, ILLINOIS
500 West Madison Street
Chicago, IL 60661

NEW YORK, NEW YORK
7 World Trade Center, 13th Fl.
New York, NY 10048

To obtain copies by mail, contact the Washington, D.C. location. After you pay
the fees as prescribed by the rules and regulations of the SEC, the requested
documents are mailed.

Registration Statements under the Securities Act of 1933, as amended, related to
the contracts offered by this prospectus are on file with the SEC. This
prospectus does not contain all of the information contained in the registration
statement and its exhibits. For further information regarding the Separate
Account, Anchor National and its general account, the Portfolios and the
contract, please refer to the registration statement and its exhibits.

The SEC also maintains a website (http://www.sec.gov) that contains the SAI,
materials incorporated by reference and other information filed electronically
with the SEC by Anchor National.

- ----------------------------------------------------------------
- ----------------------------------------------------------------

                              TABLE OF CONTENTS OF
                      STATEMENT OF ADDITIONAL INFORMATION
- ----------------------------------------------------------------
- ----------------------------------------------------------------

<TABLE>
<S>                                               <C>
Separate Account..............................      3
General Account...............................      3
Performance Data..............................      4
Income Payments...............................      8
Annuity Unit Values...........................      8
Taxes.........................................     11
Distribution of Contracts.....................     13
Financial Statements..........................     13
</TABLE>

                                       22
<PAGE>   30

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
                           APPENDIX A - PREMIUM TAXES
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Premium taxes vary according to the state and are subject to change without
notice. In many states, there is no tax at all. Listed below are the current
premium tax rates in those states that assess a premium tax. For current
information, you should consult your tax adviser.

<TABLE>
<CAPTION>
                                                              QUALIFIED    NON-QUALIFIED
                           STATE                              CONTRACT       CONTRACT
<S>                                                           <C>          <C>
========================================================================================
California                                                        .50%          2.35%
- ----------------------------------------------------------------------------------------
Maine                                                               0%             2%
- ----------------------------------------------------------------------------------------
Nevada                                                              0%           3.5%
- ----------------------------------------------------------------------------------------
South Dakota                                                        0%          1.25%
- ----------------------------------------------------------------------------------------
West Virginia                                                       1%             1%
- ----------------------------------------------------------------------------------------
Wyoming                                                             0%             1%
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
</TABLE>

                                       A-1
<PAGE>   31

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
                     APPENDIX B -- MARKET VALUE ADJUSTMENT
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

The market value adjustment reflects the impact that changing interest rate have
on the value of money invested at a fixed interest rate. The longer the period
of time remaining in the term you initially agreed to leave your money in the
fixed investment option, the greater the impact of changing interest rates. The
impact of the market value adjustment can be either positive or negative, and is
computed by multiplying the amount withdrawn, transferred, or annuitized by the
following formula:
                                          (N-T)/12)
                        [(1+I/(1+J+0.005)]          - 1

  where:

        I = The Guarantee Period interest rate in effect for the Guarantee
        Period on the Certificate

        J = The Current Interest Rate available for the same Guarantee Period

        n = The original term in number of full months rounded up to the nearest
        integer for the Guarantee Period to the end of the Calendar Year

        t = Time expired in months rounded up to the nearest integer for the
        Guarantee Period to the end of the Calendar Year

        (n-t) = The number of full months remaining in the Guarantee Period to
        the end of the Calendar Year.

The market value adjustment is applied only if the absolute difference between
the Guarantee Period Interest Rate in effect for the Guarantee Period and the
Current Interest Rate for a new Purchase Payment is greater than 0.50%.
Additionally, if the market value adjustment is negative, it may not reduce the
Certificate Value below the sum of Purchase payments made less withdrawals,
accumulated at an effective annual rate of 3% from the date of receipt or
withdrawal to the date of surrender. If the market value adjustment is positive,
the amount added to the Certificate Value may not exceed the amount that if
negative, could be deducted.

EXAMPLES OF THE MARKET VALUE ADJUSTMENT

The examples below assume the following:

     (1) You made an initial Purchase Payment of $10,000 on October 1, 1998 and
         allocated it to the 5-Year Fixed MVA account option. Thus, the original
         term, in number of full months, for the Guarantee Period is 63 months
         (n=63).

     (2) The Guarantee Period Interest rate for the Guarantee Period is 6.00%
         (I=0.0600). Therefore, the Certificate Value on the date of withdrawal
         is $10,884.66 (assumes 531 days of interest).

     (3) You make a partial withdrawal of $5,000 on March 15, 2000, after the
         funds have been in the 5-Year Fixed MVA account option for 17 1/2
         months. (t=18).

     (4) You have not made any transfers, additional Purchase Payments, or
         withdrawals with respect to the 5-Year Fixed MVA account.

The sum of purchase payments, less withdrawals, accumulated at an annual
effective rate of 3.00% from the date of deposit or withdrawal to the date of
surrender defines the minimum remaining Certificate Value after the application
of a negative market value adjustment and is calculated as follows ($10,439.40
assumes 531 days of interest at an annual effective rate of 3.00%):

                          10,439.40-5,000.00=$5,439.40

Therefore, if the market value adjustment is negative, the maximum amount by
which the Certificate Value can be reduced is the Certificate Value prior to the
application of the market value adjustment less the minimum remaining
Certificate Value. Similarly, if the market value adjustment is positive, the
maximum amount by which the Certificate Value is increased, is the Certificate
Value prior to the application of the market value adjustment less the minimum
remaining Certificate Value. In the examples that follow, the maximum market
value adjustment, either positive or negative, is:

                           5,884.66-5,439.40=$445.26

The market value adjustment is not applied to amounts withdrawn to pay fees or
charges.

                                       B-1
<PAGE>   32

NEGATIVE ADJUSTMENT

Assume that on the date of withdrawal, the Current Interest Rate for the same
Guarantee Period is 6.75% (J=0.0675). Because the absolute difference between
the Guarantee Period Interest Rate (6.00%) and the Current Interest Rate (6.75%)
is greater than 0.50%, the market value adjustment is applicable.


The market value adjustment factor equals:
                                                          (n-t)/12)
                                    = [(1+I)/(1+J+0.0050)]          - 1
                                                              (63-18)/12)
                                    = [(1.06)/(1.0675+0.0050)]           - 1
                                                       (45/12)
                                    = [(1.06)/(1.0725)]        - 1
                                                (3.75)
                                    = (0.988345)       - 1
                                    = 0.95699 - 1
                                    = -(0.043011)

The requested withdrawal amount is multiplied by the market value adjustment
factor to determine the market value adjustment:

                          -0.043011x5,000.00 = -215.05

Because the market value adjustment, in absolute value, is less than the maximum
market value adjustment ($445.26), the full market value adjustment is assessed.
The remaining Certificate Value is further reduced by withdrawal charges applied
only to the requested withdrawal amount of $5,000.00. The withdrawal charge is
not applied to the market value adjustment.

POSITIVE ADJUSTMENT

Assume that on the date of withdrawal, the Current Interest Rate for the same
Guarantee Period is 5.25% (J = 0.0525). Because the absolute difference between
the Guarantee Period Interest Rate (6.00%) and the Current Interest Rate (5.25%)
is greater than 0.50%, the market value adjustment is applicable.

The market value adjustment factor equals:
                                                          (n-t)/12)
                                    = [(1+I)/(1+J+0.0050)]          - 1
                                                              (63-18)/12)
                                    = [(1.06)/(1.0525+0.0050)]            - 1
                                                       (45/12)
                                    = [(1.06)/(1.0575)]        - 1
                                                (3.75)
                                    = (1.002364)       - 1
                                    = (1.008894)-1
                                    = (0.008894)

The requested withdrawal amount is multiplied by the market value adjustment
factor to determine the market value adjustment:

                            0.008894x5,000.00=44.47

Because the market value adjustment, in absolute value, is less than the maximum
market value adjustment ($445.26), the full market value adjustment is assessed.
The remaining Certificate Value is further reduced by withdrawal charges applied
only to the requested withdrawal amount of $5,000.00. The withdrawal charge is
not applied to the market value adjustment.

                                       B-2
<PAGE>   33

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
                  APPENDIX C - CONDENSED FINANCIAL INFORMATION
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------


<TABLE>
<CAPTION>
                           ACCUMULATION UNIT VALUES AND ACCUMULATION UNITS
                                                              INCEPTION TO FISCAL     FOR THE PERIOD
              POLARIS PLUS VARIABLE PORTFOLIOS                 YEAR END 4/30/99      4/30/99 - 1/31/00
- ------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------
<S>                                                           <C>                    <C>
Capital Appreciation (Inception Date - 3/19/99)
  Beginning AUV.............................................           27.21                  28.69
  Ending AUV................................................           28.69                  42.93
  Ending Number of AUs......................................       52,735.90             763,614.89
- ------------------------------------------------------------------------------------------------------
Growth (Inception Date - 3/19/99)
  Beginning AUV.............................................           27.45                  28.24
  Ending AUV................................................           28.24                  31.52
  Ending Number of AUs......................................       49,892.23             741,898.03
- ------------------------------------------------------------------------------------------------------
Government and Quality Bond (Inception Date - 3/19/99)
  Beginning AUV.............................................           13.60                  13.60
  Ending AUV................................................           13.60                  13.24
  Ending Number of AUs......................................      180,433.96           3,077,576.75
- ------------------------------------------------------------------------------------------------------
Emerging Markets (Inception Date - 3/23/99)
  Beginning AUV.............................................            6.60                   7.63
  Ending AUV................................................            7.63                  10.70
  Ending Number of AUs......................................       18,837.90             537,155.19
- ------------------------------------------------------------------------------------------------------
International Diversified Equities (Inception
  Date - 3/19/99)
  Beginning AUV.............................................           13.99                  14.36
  Ending AUV................................................           14.36                  15.69
  Ending Number of AUs......................................       22,527.95             356,489.01
- ------------------------------------------------------------------------------------------------------
Global Equities (Inception Date - 3/19/99)
  Beginning AUV.............................................           21.05                  21.42
  Ending AUV................................................           21.42                  25.71
  Ending Number of AUs......................................       14,587.48             521,700.59
- ------------------------------------------------------------------------------------------------------
International Growth and Income (Inception Date - 3/24/99)
  Beginning AUV.............................................           11.81                  12.87
  Ending AUV................................................           12.87                  13.42
  Ending Number of AUs......................................       14,725.35             534,044.24
- ------------------------------------------------------------------------------------------------------
Aggressive Growth (Inception Date - 3/19/99)
  Beginning AUV.............................................           15.48                  16.18
  Ending AUV................................................           16.18                  23.64
  Ending Number of AUs......................................       28,486.50             726,995.66
- ------------------------------------------------------------------------------------------------------
Real Estate (Inception Date - 3/31/99)
  Beginning AUV.............................................            9.06                   9.98
  Ending AUV................................................            9.98                   8.62
  Ending Number of AUs......................................        5,242.33             168,101.91
- ------------------------------------------------------------------------------------------------------
Putnam Growth (Inception Date - 3/19/99)
  Beginning AUV.............................................           25.97                  26.04
  Ending AUV................................................           26.04                  29.78
  Ending Number of AUs......................................      149,215.14           1,851,304.23
- ------------------------------------------------------------------------------------------------------
Alliance Growth (Inception Date - 3/19/99)
  Beginning AUV.............................................           40.86                  40.20
  Ending AUV................................................           40.20                  46.34
  Ending Number of AUs......................................      147,759.02           2,675,854.51
- ------------------------------------------------------------------------------------------------------
"Dogs" of Wall Street (Inception Date - 3/19/99)
  Beginning AUV.............................................            9.42                  10.22
  Ending AUV................................................           10.22                   8.42
  Ending Number of AUs......................................       30,614.54             667,120.31
- ------------------------------------------------------------------------------------------------------
Venture Value (Inception Date - 3/19/99)
  Beginning AUV.............................................           25.34                  26.76
  Ending AUV................................................           26.76                  27.54
  Ending Number of AUs......................................       37,451.99             679,652.98
- ------------------------------------------------------------------------------------------------------
Federated Value (Inception Date - 3/19/99)
  Beginning AUV.............................................           16.63                  17.58
  Ending AUV................................................           17.58                  16.18
  Ending Number of AUs......................................       25,264.63             383,123.05
- ------------------------------------------------------------------------------------------------------
Growth-Income (Inception Date - 3/19/99)
  Beginning AUV.............................................           29.83                  30.82
  Ending AUV................................................           30.82                  34.48
  Ending Number of AUs......................................      124,671.88           2,279,838.30
- ------------------------------------------------------------------------------------------------------
</TABLE>


                                       C-1
<PAGE>   34


<TABLE>
<CAPTION>
                           ACCUMULATION UNIT VALUES AND ACCUMULATION UNITS
                                                              INCEPTION TO FISCAL     FOR THE PERIOD
              POLARIS PLUS VARIABLE PORTFOLIOS                 YEAR END 4/30/99      4/30/99 - 1/31/00
- ------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------
<S>                                                           <C>                    <C>
Equity Index (Inception Date - 3/19/99)
  Beginning AUV.............................................           10.00                  10.26
  Ending AUV................................................           10.26                  10.42
  Ending Number of AUs......................................      400,093.36           6,093,373.58
- ------------------------------------------------------------------------------------------------------
Utility (Inception Date - 3/19/99)
  Beginning AUV.............................................           14.44                  14.98
  Ending AUV................................................           14.98                  15.17
  Ending Number of AUs......................................       16,154.31             439,534.77
- ------------------------------------------------------------------------------------------------------
Equity Income (Inception Date - 3/23/99)
  Beginning AUV.............................................           10.00                  10.58
  Ending AUV................................................           10.58                   9.89
  Ending Number of AUs......................................       36,062.72             674,580.21
- ------------------------------------------------------------------------------------------------------
Asset Allocation (Inception Date - 3/23/99)
  Beginning AUV.............................................           18.47                  19.16
  Ending AUV................................................           19.16                  29.21
  Ending Number of AUs......................................       27,027.34             548,019.91
- ------------------------------------------------------------------------------------------------------
SunAmerica Balanced (Inception Date - 3/19/99)
  Beginning AUV.............................................           17.30                  17.48
  Ending AUV................................................           17.48                  19.14
  Ending Number of AUs......................................      254,772.99           4,720,724.68
- ------------------------------------------------------------------------------------------------------
Worldwide High Income (Inception Date - 3/31/99)
  Beginning AUV.............................................           13.99                  14.77
  Ending AUV................................................           14.77                  15.66
  Ending Number of AUs......................................        4,827.60             101,515.24
- ------------------------------------------------------------------------------------------------------
High - Yield Bond (Inception Date - 3/19/99)
  Beginning AUV.............................................           14.71                  15.15
  Ending AUV................................................           15.15                  14.97
  Ending Number of AUs......................................       23,707.21             356,845.95
- ------------------------------------------------------------------------------------------------------
Corporate Bond (Inception Date - 3/23/99)
  Beginning AUV.............................................           13.09                  13.15
  Ending AUV................................................           13.15                  12.77
  Ending Number of AUs......................................       32,037.15             564,545.43
- ------------------------------------------------------------------------------------------------------
Global Bond (Inception Date - 3/19/99)
  Beginning AUV.............................................           14.43                  14.54
  Ending AUV................................................           14.54                  14.13
  Ending Number of AUs......................................       40,453.77             496,164.83
- ------------------------------------------------------------------------------------------------------
Small Company Value (Inception Date - 3/23/99)
  Beginning AUV.............................................           10.00                  10.96
  Ending AUV................................................           10.96                  11.77
  Ending Number of AUs......................................        4,634.20             239,113.76
- ------------------------------------------------------------------------------------------------------
Cash Management (Inception Date - 3/23/99)
  Beginning AUV.............................................           11.95                  11.99
  Ending AUV................................................           11.99                  12.32
  Ending Number of AUs......................................      337,271.23           2,440,650.36
</TABLE>


- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
        AUV - Accumulation Unit Value
        AU - Accumulation Units

                                       C-2
<PAGE>   35

- --------------------------------------------------------------------------------

   Please forward a copy (without charge) of the Polaris Plus Variable Annuity
   Statement of Additional Information to:

              (Please print or type and fill in all information.)

        ------------------------------------------------------------------------
        Name

        ------------------------------------------------------------------------
        Address

        ------------------------------------------------------------------------
        City/State/Zip


        Date: ______________________   Signed: _________________________________


   Return to: Anchor National Life Insurance Company, Annuity Service Center,
   P.O. Box 52499, Los Angeles, California 90054-0299
- --------------------------------------------------------------------------------
<PAGE>   36








                       STATEMENT OF ADDITIONAL INFORMATION

                               GROUP & INDIVIDUAL

                   FLEXIBLE PAYMENT DEFERRED ANNUITY CONTRACTS

                                    ISSUED BY

                     ANCHOR NATIONAL LIFE INSURANCE COMPANY

                               IN CONNECTION WITH

                         VARIABLE ANNUITY ACCOUNT SEVEN

              (Portion Relating to Polaris Plus Variable Annuity)








This Statement of Additional Information is not a prospectus; it should be read
with the prospectus of the same date relating to the annuity contracts described
above. A copy of the prospectus may be obtained without charge by calling
(877) 999-9205 or writing us at:

                     ANCHOR NATIONAL LIFE INSURANCE COMPANY
                             ANNUITY SERVICE CENTER
                                 P.O. BOX 54299
                       LOS ANGELES, CALIFORNIA 90054-0299






                               May 1, 2000




<PAGE>   37



                                TABLE OF CONTENTS



<TABLE>
<CAPTION>
                                                              PAGE
                                                              ----
<S>                                                             <C>
Separate Account...........................................     3

General Account............................................     3

Performance Data ..........................................     4

Annuity Payments...........................................     8

Annuity Unit Values........................................     8

Taxes......................................................    11

Distribution of Contracts..................................    14

Financial Statements.......................................    15
</TABLE>







                                      -2-


<PAGE>   38


                                SEPARATE ACCOUNT


        Variable Annuity Account Seven (the "Separate Account") was originally
established by Anchor National Life Insurance Company (the "Company") on August
28, 1998, pursuant to the provisions of Arizona law, as a segregated asset
account of the Company. The Separate Account meets the definition of a "Separate
Account" under the federal securities laws and is registered with the Securities
and Exchange Commission (the "SEC") as a unit investment trust under the
Investment Company Act of 1940. This registration does not involve supervision
of the management of the Separate Account or the Company by the SEC.

        The assets of the Separate Account are the property of the Company.
However, the assets of the Separate Account, equal to its reserves and other
contract liabilities, are not chargeable with liabilities arising out of any
other business the Company may conduct. Income, gains, and losses, whether or
not realized, from assets allocated to the Separate Account are credited to or
charged against the Separate Account without regard to other income, gains, or
losses of the Company.

        The Separate Account is divided into Portfolios, with the assets of each
Portfolio invested in the shares of one of the underlying funds. The Company
does not guarantee the investment performance of the Separate Account, its
Portfolios or the underlying funds. Values allocated to the Separate Account and
the amount of variable annuity payments will vary with the values of shares of
the underlying funds, and are also reduced by contract charges.

        The basic objective of a variable annuity contract is to provide
variable annuity payments which will be to some degree responsive to changes in
the economic environment, including inflationary forces and changes in rates of
return available from various types of investments. The contract is designed to
seek to accomplish this objective by providing that variable annuity payments
will reflect the investment performance of the Separate Account with respect to
amounts allocated to it both before and after the Annuity Date. Since the
Separate Account is always fully invested in shares of the underlying funds, its
investment performance reflects the investment performance of those entities.
The values of such shares held by the Separate Account fluctuate and are subject
to the risks of changing economic conditions as well as the risk inherent in the
ability of the underlying funds' managements to make necessary changes in their
Portfolios to anticipate changes in economic conditions. Therefore, the owner
bears the entire investment risk that the basic objectives of the contract may
not be realized, and that the adverse effects of inflation may not be lessened.
There can be no assurance that the aggregate amount of variable annuity payments
will equal or exceed the Purchase Payments made with respect to a particular
account for the reasons described above, or because of the premature death of an
Annuitant.

        Another important feature of the contract related to its basic objective
is the Company's promise that the dollar amount of variable annuity payments
made during the lifetime of the Annuitant will not be adversely affected by the
actual mortality experience of the Company or by the actual expenses incurred by
the Company in excess of expense deductions provided for in the contract
(although the Company does not guarantee the amounts of the variable annuity
payments).


                                 GENERAL ACCOUNT


        The general account is made up of all of the general assets of the
Company other than those




                                      -3-

<PAGE>   39

allocated to the Separate Account or any other segregated asset account of the
Company. A Purchase Payment may be allocated to the 1, 3, or 5 year market value
adjustment fixed account options and the DCA fixed account options available
in connection with the general account, as elected by the owner at the time of
purchasing a contract or when making a subsequent Purchase Payment. Assets
supporting amounts allocated to fixed investment options become part of the
Company's general account assets and are available to fund the claims of all
classes of customers of the Company, as well as of its creditors. Accordingly,
all of the Company's assets held in the general account will be available to
fund the Company's obligations under the contracts as well as such other claims.

        The Company will invest the assets of the general account in the manner
chosen by the Company and allowed by applicable state laws regarding the nature
and quality of investments that may be made by life insurance companies and the
percentage of their assets that may be committed to any particular type of
investment. In general, these laws permit investments, within specified limits
and subject to certain qualifications, in federal, state and municipal
obligations, corporate bonds, preferred and common stocks, real estate
mortgages, real estate and certain other investments.


                                PERFORMANCE DATA


PERFORMANCE INFORMATION

        From time to time the Separate Account may advertise the Cash Management
Portfolio's "yield" and "effective yield." Both yield figures are based on
historical earnings and are not intended to indicate future performance. The
"yield" of the Cash Management Portfolio refers to the net income generated for
a contract funded by an investment in the Portfolio (which invests in shares of
the Cash Management Portfolio of SunAmerica Series Trust) over a seven-day
period (which period will be stated in the advertisement). This income is then
"annualized." That is, the amount of income generated by the investment during
that week is assumed to be generated each week over a 52-week period and is
shown as a percentage of the investment. The "effective yield" is calculated
similarly but, when annualized, the income earned by an investment in the
Portfolio is assumed to be reinvested at the end of each seven day period. The
"effective yield" will be slightly higher than the "yield" because of the
compounding effect of this assumed reinvestment. Neither the yield nor the
effective yield takes into consideration the effect of any capital changes that
might have occurred during the seven day period, nor do they reflect the impact
of premium taxes or any withdrawal charges. The impact of other recurring
charges (including the mortality and expense risk charge, distribution expense
charge and contract maintenance fee) on both yield figures is, however,
reflected in them to the same extent it would affect the yield (or effective
yield) for a contract of average size.

        In addition, the Separate Account may advertise "total return" data for
its other Portfolios from the inception of the Separate Account. Like the yield
figures described above, total return figures are based on historical data and
are not intended to indicate future performance. The "total return" is a
computed rate of return that, when compounded annually over a stated period of
time and applied to a hypothetical initial investment in a Portfolio made at the
beginning of the period, will produce the same contract value at the end of the
period that the hypothetical investment would have produced over the same period
(assuming a complete redemption of the contract at the end of the period).
Recurring contract charges are reflected in the total return figures in the same
manner as they are reflected in the yield data for contracts funded through the
Cash Management Portfolio.

        For periods starting prior to the date the contracts were first offered
to the public, the total return data for the Portfolios of the Separate Account
will be derived from the performance of the corresponding Portfolios of Anchor
Series Trust and SunAmerica Series Trust, modified to reflect the charges and




                                      -4-
<PAGE>   40

expenses as if the Separate Account Portfolio had been in existence since the
inception date of each respective Anchor Series Trust and SunAmerica Series
Trust Portfolio. Thus, such performance figures should not be construed to be
actual historic performance of the relevant Separate Account Portfolio. Rather,
they are intended to indicate the historical performance of the corresponding
Portfolios of Anchor Series Trust and SunAmerica Series Trust, adjusted to
provide direct comparability to the performance of the Portfolios after the date
the contracts were first offered to the public (which will reflect the effect of
fees and charges imposed under the contracts). Anchor Series Trust and
SunAmerica Series Trust have served since their inception as underlying
investment media for Separate Accounts of other insurance companies in
connection with variable contracts not having the same fee and charge schedules
as those imposed under the contracts.

        Performance data for the various Portfolios are computed in the manner
described below.


CASH MANAGEMENT PORTFOLIO

        The annualized current yield and the effective yield for the Cash
Management Portfolio for the 7 day period ending January 31, 2000, were 4.17%
and 4.26%, respectively.


        Current yield is computed by first determining the Base Period Return
attributable to a hypothetical contract having a balance of one Accumulation
Unit at the beginning of a 7 day period using the formula:

               Base Period Return = (EV-SV)/(SV)

        where:

              SV = value of one Accumulation Unit at the start of a 7 day period

              EV = value of one Accumulation Unit at the end of the 7 day period


        The change in the value of an Accumulation Unit during the 7 day period
reflects the income received, minus any expenses accrued, during such 7 day
period.

        The current yield is then obtained by annualizing the Base Period
Return:

               Current Yield = (Base Period Return) x (365/7)

        The Cash Management Portfolio also quotes an "effective yield" that
differs from the current yield given above in that it takes into account the
effect of dividend reinvestment in the underlying fund. The




                                      -5-
<PAGE>   41

effective yield, like the current yield, is derived from the Base Period Return
over a 7 day period. However, the effective yield accounts for dividend
reinvestment by compounding the current yield according to the formula:

                                                          365/7
               Effective Yield = [(Base Period Return + 1)      - 1]

        The yield quoted should not be considered a representation of the yield
of the Cash Management Portfolio in the future since the yield is not fixed.
Actual yields will depend on the type, quality and maturities of the investments
held by the underlying fund and changes in interest rates on such investments.

        Yield information may be useful in reviewing the performance of the Cash
Management Portfolio and for providing a basis for comparison with other
investment alternatives. However, the Cash Management Portfolio's yield
fluctuates, unlike bank deposits or other investments that typically pay a fixed
yield for a stated period of time.


OTHER PORTFOLIOS

        The Portfolios of the Separate Account other than the Cash Management
Portfolio also compute their performance data as "total return."




                            STANDARDIZED PERFORMANCE
                 HISTORICAL PERFORMANCE OF THE SEPARATE ACCOUNT
                             FOR THE PERIOD ENDING
                               JANUARY 31, 2000
                          AVERAGE ANNUAL TOTAL RETURN
<TABLE>
<CAPTION>


                                                                             SINCE INCEPTION         SINCE INCEPTION
                                                     INCEPTION             (WITHOUT REDEMPTION)      (WITH REDEMPTION)
                                                --------------------       --------------------      -----------------
<S>                                             <C>                        <C>                        <C>
Capital Appreciation                                   3/19/99                   57.77%                   51.77%
Growth                                                 3/19/99                   14.83%                    8.83%
Government and Quality Bond                            3/19/99                   -2.85%                   -8.65%

Corporate Bond                                         3/23/99                   -2.45%                   -8.45%
Global Bond                                            3/19/99                   -2.11%                   -8.11%
High Yield                                             3/19/99                    1.77%                   -4.23%
Worldwide High Income                                  3/31/99                   11.91%                    5.91%
Asset Allocation                                       3/23/99                    4.01%                   -1.99%
Growth & Income                                        3/19/99                   15.56%                    9.56%
Venture Value                                          3/19/99                    8.65%                    2.65%
Putnam Growth                                          3/19/99                   14.66%                    8.66%
Alliance Growth                                        3/19/99                   13.42%                    7.42%
Global Equities                                        3/19/99                   22.14%                   16.14%
Federated Utility                                      3/19/99                    5.04%                   -0.96%
SunAmerica Balanced                                    3/19/99                   10.62%                    4.62%
Federated Value                                        3/19/99                   -2.69%                   -8.69%
Aggressive Growth                                      3/19/99                   52.70%                   46.70%
International Diversified Equities                     3/19/99                   12.20%                    6.20%
Emerging Markets                                       3/23/99                   62.19%                   56.19%
International Growth & Income                          3/24/99                   13.67%                    7.67%
Real Estate                                            3/31/99                   -4.79%                  -10.79%
"Dogs" of Wall Street                                  3/19/99                  -10.58%                  -16.58%
Equity Income                                          3/23/99                   -1.13%                   -7.13%
Equity Index                                           3/19/99                    4.19%                   -1.81%
Small Company Value                                    3/23/99                   17.66%                   11.66%
</TABLE>


     ADJUSTED HISTORICAL PERFORMANCE OF UNDERLYING FUNDS FOR PERIODS ENDING
                               JANUARY 31, 2000:

                                AFTER REDEMPTION


<TABLE>
<CAPTION>                                              FUND                                                           10 YEARS OR
                                                     INCEPTION*              1 YEAR                   5 YEAR         SINCE INCEPTION
                                                --------------------  --------------------       ----------------    ---------------
<S>                                             <C>                   <C>                        <C>                  <C>
Capital Appreciation                                  3/23/87               50.46%                   32.13%               23.07%
Growth                                                8/13/84               10.62%                   24.80%               16.47%
Government and Quality Bond                           8/13/84               -9.92%                    5.16%                6.35%

Corporate Bond                                         7/1/93              -10.04%                    4.84%                4.00%
Global Bond                                            7/1/93               -9.05%                    7.04%                5.62%
High Yield                                             2/9/93               -2.25%                    7.08%                6.20%
Worldwide High Income                                10/31/94               11.75%                    9.76%                8.60%
Asset Allocation                                       7/1/93               -1.81%                   12.74%               10.66%
Growth & Income                                        2/9/93               10.86%                   26.94%               19.63%
Venture Value                                        10/31/94                5.97%                   21.98%               21.15%
Putnam Growth                                          2/9/93                9.01%                   24.68%               17.15%
Alliance Growth                                        2/9/93                6.65%                   33.57%               24.80%
Global Equities                                        2/9/93               15.89%                   18.19%               14.73%
Federated Utility                                      6/3/96               -2.34%                      N/A               11.27%
SunAmerica Balanced                                    6/3/96                5.34%                      N/A               18.74%
Federated Value                                        6/3/96               -7.05%                      N/A               13.33%
Aggressive Growth                                      6/3/96               52.35%                      N/A               25.96%
International Diversified Equities                   10/31/94                8.39%                   11.04%                8.64%
Emerging Markets                                       6/2/97               67.93%                      N/A                0.92%
International Growth & Income                          6/2/97               10.58%                      N/A               10.30%
Real Estate                                            6/2/97              -15.13%                      N/A               -7.23%
"Dogs" of Wall Street                                  4/1/98              -17.05%                      N/A              -12.30%
Equity Income                                             N/A                  N/A                      N/A               -7.13%
Equity Index                                              N/A                  N/A                      N/A               -1.81%
Small Company Value                                       N/A                  N/A                      N/A               11.66%
</TABLE>


* For portfolios with six years of performance withdrawal charge Schedule B (as
  defined in the prospectus) was used. Under withdrawal charge Schedule A (as
  defined in the prospectus) no surrender charge would apply. Year six is the
  only year in which the schedules differ.


                               BEFORE REDEMPTION

<TABLE>
<CAPTION>
<S>                                  <C>            <C>            <C>             <C>
                                                                                       10 Years or
                                     Inception      1 Year         5 Year          Since Inception
                                  ----------------------------------------------------------------
Capital Appreciation                   3/23/87      56.46%         32.39%                  23.07%
Growth                                 8/13/84      16.62%         25.13%                  16.47%
Government and Quality Bond            8/13/84      -3.92%          5.81%                   6.35%

Corporate Bond                          7/1/93      -4.04%          5.50%                   4.00%
Global Bond                             7/1/93      -3.05%          7.64%                   5.62%
High Yield                              2/9/93       3.75%          7.68%                   6.20%
Worldwide High Income                 10/31/94      17.75%         10.31%                   9.13%
Asset Allocation                        7/1/93       4.19%         13.23%                  10.66%
Growth & Income                         2/9/93      16.86%         27.25%                  19.63%
Venture Value                         10/31/94      11.97%         22.34%                  21.48%
Putnam Growth                           2/9/93      15.01%         25.01%                  17.15%
Alliance Growth                         2/9/93      12.65%         33.82%                  24.80%
Global Equities                         2/9/93      21.89%         18.59%                  14.73%
Federated Utility                       6/3/96       3.66%            N/A                  12.29%
SunAmerica Balanced                     6/3/96      11.34%            N/A                  19.59%
Federated Value                         6/3/96      -1.05%            N/A                  14.30%
Aggressive Growth                       6/3/96      58.35%            N/A                  26.69%
International Diversified Equities    10/31/94      14.39%         11.04%                   8.64%
Emerging Markets                        6/2/97      73.93%            N/A                   2.75%
International Growth & Income           6/2/97      16.58%            N/A                  11.88%
Real Estate                             6/2/97      -9.13%            N/A                  -5.14%
"Dogs" of Wall Street                   4/1/98     -11.05%            N/A                  -8.71%
Equity Income                          3/23/99         N/A            N/A                  -1.13%
Equity Index                           3/19/99         N/A            N/A                   4.19%
Small Company Value                    3/23/99         N/A            N/A                  17.66%

</TABLE>






                                      -6-

<PAGE>   42
Total return for a Portfolio represents a single computed annual rate of return
that, when compounded annually over a specified time period (one, five, and ten
years, or since inception) and applied to a hypothetical initial investment in a
contract funded by that Portfolio made at the beginning of the period, will
produce the same contract value at the end of the period that the hypothetical
investment would have produced over the same period. The total rate of return
(T) is computed so that it satisfies the formula:

               P(1+T)n = ERV

where:         P = a hypothetical initial payment of $1,000
               T = average annual total return
               n = number of years




                                      -7-
<PAGE>   43

             ERV    = ending redeemable value of a hypothetical $1,000 payment
                      made at the beginning of the 1, 5, or 10 year period as of
                      the end of the period (or fractional portion thereof).

        As with the Cash Management Portfolio yield figures, total return
figures are derived from historical data and are not intended to be a projection
of future performance.


                                INCOME PAYMENTS

INITIAL MONTHLY ANNUITY PAYMENTS

        The initial income payment is determined by applying separately that
portion of the contract value allocated to the fixed account options and the
Variable Portfolio(s), less any premium tax, and then applying it to the annuity
table specified in the contract for fixed and variable annuity payments. Those
tables are based on a set amount per $1,000 of proceeds applied. The appropriate
rate must be determined by the sex (except where, as in the case of certain
Qualified contracts and other employer-sponsored retirement plans, such
classification is not permitted) and age of the Annuitant and designated second
person, if any, and the income option selected.

        The dollars applied are then divided by 1,000 and the result multiplied
by the appropriate annuity factor appearing in the table to compute the amount
of the first monthly annuity payment. In the case of a variable annuity, that
amount is divided by the value of an Annuity Unit as of the Annuity Date to
establish the number of Annuity Units representing each variable annuity
payment. The number of Annuity Units determined for the first variable annuity
payment remains constant for the second and subsequent monthly variable annuity
payments, assuming that no reallocation of contract values is made.

SUBSEQUENT MONTHLY PAYMENTS

        For fixed income payments, the amount of the second and each subsequent
monthly income payment is the same as that determined above for the first
monthly payment.

        For variable income payments, the amount of the second and each
subsequent monthly annuity payment is determined by multiplying the number of
Annuity Units, as determined in connection with the determination of the initial
monthly payment, above, by the Annuity Unit value as of the day preceding the
date on which each income payment is due.

INCOME PAYMENTS UNDER THE INCOME PROTECTOR PROGRAM

        If contract holders elect to begin Income Payments using the Income
Protector Program, the income benefit base if determined as described in the
prospectus. The initial Income Payment is determined by applying the income
benefit base to the annuity table specifically designated for use in conjunction
with the Income Protector Program, either in the contract or in the endorsement
to the contract. Those tables are based on a set amount per $1,000 of income
benefit base applied. Income proceeds applied. The appropriate rate must be
determined by the sex (except where, as in the case of certain Qualified
contracts and other employer-sponsored retirement plans, such classification is
not permitted) and age of the Annuitant and designated second person, if any,
and the Income Option selected.

        The income benefit base is applied and then divided by 1,000 and the
result multiplied by the appropriate annuity factor appearing in the table to
compute the amount of the first monthly Income Payment. The amount of the second
and each subsequent income payment is the same as that determined above for the
first monthly payment.


                               ANNUITY UNIT VALUES

        The value of an Annuity Unit is determined independently for each
Portfolio.

        The annuity tables contained in the contract are based on a 3.5% per
annum assumed investment rate. If the actual net investment rate experienced by
a Portfolio exceed 3.5%, variable income payments derived from allocations to
that Portfolio will increase over time. Conversely, if the actual rate is less
than 3.5%, variable income payments will decrease over time. If the net
investment rate equals 3.5%, the variable income payments will remain constant.
If a higher assumed investment rate had been used, the




                                      -8-
<PAGE>   44

initial monthly payment would be higher, but the actual net investment rate
would also have to be higher in order for income payments to increase (or not
to decrease).

        The payee receives the value of a fixed number of Annuity Units each
month. The value of a fixed number of Annuity Units will reflect the investment
performance of the Variable Portfolios elected, and the amount of each income
payment will vary accordingly.

        For each Variable Portfolio, the value of an Annuity Unit is determined
by multiplying the Annuity Unit value for the preceding month by the Net
Investment Factor for the month for which the Annuity Unit value is being
calculated. The result is then multiplied by a second factor which offsets the
effect of the assumed net investment rate of 3.5% per annum which is assumed in
the annuity tables contained in the contract.

NET INVESTMENT FACTOR

        The Net Investment Factor ("NIF") is an index applied to measure the net
investment performance of a Portfolio from one day to the next. The NIF may be
greater or less than or equal to one; therefore, the value of an Annuity Unit
may increase, decrease or remain the same.

        The NIF for any Portfolio for a certain month is determined by dividing
(a) by (b) where:

        (a)    is the Accumulation Unit value of the Portfolio determined as of
               the end of that month, and

        (b)    is the Accumulation Unit value of the Portfolio determined as of
               the end of the preceding month.

        The NIF for a Portfolio for a given month is a measure of the net
investment performance of the Portfolio from the end of the prior month to the
end of the given month. A NIF of 1.000 results in no change; a NIF greater than
1.000 results in an increase; and a NIF less than 1.000 results in a decrease.
The NIF is increased (or decreased) in accordance with the increases (or
decreases, respectively) in the value of a share of the underlying fund in which
the Portfolio invests; it is also reduced by Separate Account asset charges.

        ILLUSTRATIVE EXAMPLE

        Assume that one share of a given Portfolio had an Accumulation Unit
value of $11.46 as of the close of the New York Stock Exchange ("NYSE") on the
last business day in September; that its Accumulation Unit value had been $11.44
at the close of the NYSE on the last business day at the end of the previous
month. The NIF for the month of September is:

                      NIF = ($11.46/$11.44)

                          = 1.00174825

        The change in Annuity Unit value for a Portfolio from one month to the
next is determined in part by multiplying the Annuity Unit value at the prior
month end by the NIF for that Portfolio for the new month. In addition, however,
the result of that computation must also be multiplied by an additional factor
that takes into account, and neutralizes, the assumed investment rate of 3.5
percent per annum upon which the annuity payment tables are based. For example,
if the net investment rate for a Portfolio (reflected in the NIF) were equal to
the assumed investment rate, the variable annuity payments should remain
constant (i.e., the Annuity Unit value should not change). The monthly factor
that neutralizes the assumed




                                      -9-
<PAGE>   45


investment rate of 3.5 percent per annum is:

                         (1/12)
               1/[(1.035)      ] = 0.99713732

        In the example given above, if the Annuity Unit value for the Portfolio
was $10.103523 on the last business day in August, the Annuity Unit value on the
last business day in September would have been:

               $10.103523 x 1.00174825 x 0.99713732 = $10.092213

VARIABLE INCOME PAYMENTS

        ILLUSTRATIVE EXAMPLE

        Assume that a male owner, P, owns a contract in connection with which P
has allocated all of his contract value to a single Portfolio. P is also the
sole Annuitant and, at age 60, has elected to annuitize his contract under
Option 4, a Life Annuity With 120 Monthly Payments Guaranteed. As of the last
valuation preceding the Annuity Date, P's Account was credited with 7543.2456
Accumulation Units each having a value of $15.432655, (i.e., P's account value
is equal to 7543.2456 x $15.432655 = $116,412.31). Assume also that the Annuity
Unit value for the Portfolio on that same date is $13.256932, and that the
Annuity Unit value on the day immediately prior to the second income payment
date is $13.327695.

        P's first variable income payment is determined from the annuity factor
tables in P's contract, using the information assumed above. From these tables,
which supply monthly annuity factors for each $1,000 of applied contract value,
P's first variable annuity payment is determined by multiplying the factor of
4.92 (Option 4 tables, male Annuitant age 60 at the Annuity Date) by the result
of dividing P's account value by $1,000:

             First Payment = 4.92 x ($116,412.31/$1,000) = $572.75

        The number of P's Annuity Units (which will be fixed; i.e., it will not
change unless he transfers his Account to another Account) is also determined at
this time and is equal to the amount of the first variable income payment
divided by the value of an Annuity Unit on the day immediately prior to
annuitization:

             Annuity Units = $572.75/$13.256932 = 43.203812

        P's second variable annuity payment is determined by multiplying the
number of Annuity Units by the Annuity Unit value as of the day immediately
prior to the second payment due date:

             Second Payment = 43.203812 x $13.327695 = $575.81

        The third and subsequent variable income payments are computed in a
manner similar to the second variable annuity payment.

        Note that the amount of the first variable income payment depends on
the contract value in the relevant Portfolio on the Annuity Date and thus
reflects the investment performance of the Portfolio net of fees and charges
during the Accumulation Phase. The amount of that payment determines the number
of Annuity Units, which will remain constant during the Annuity Phase (assuming
no transfers from the Portfolio). The net investment performance of the
Portfolio during the Annuity Phase is reflected in continuing changes during
this phase in the Annuity Unit value, which determines the amounts of the




                                      -10-
<PAGE>   46

second and subsequent variable annuity payments.


                                      TAXES

GENERAL

        Section 72 of the Internal Revenue Code of 1986, as amended (the "Code")
governs taxation of annuities in general. An owner is not taxed on increases in
the value of a contract until distribution occurs, either in the form of a
non-annuity distribution or as annuity payments under the annuity option
elected. For a lump sum payment received as a total surrender (total
redemption), the recipient is taxed on the portion of the payment that exceeds
the cost basis of the contract. For a payment received as a withdrawal (partial
redemption), federal tax liability is determined on a last-in, first-out basis,
meaning taxable income is withdrawn before the cost basis of the contract is
withdrawn. For contracts issued in connection with Nonqualified plans, the cost
basis is generally the Purchase Payments, while for contracts issued in
connection with Qualified plans there may be no cost basis. The taxable portion
of the lump sum payment is taxed at ordinary income tax rates. Tax penalties may
also apply.

        For annuity payments, the taxable portion is determined by a formula
which establishes the ratio that the cost basis of the contract bears to the
total value of annuity payments for the term of the annuity contract. The
taxable portion is taxed at ordinary income tax rates. Owners, Annuitants and
Beneficiaries under the contracts should seek competent financial advice about
the tax consequences of distributions under the retirement plan under which the
contracts are purchased.

        The Company is taxed as a life insurance company under the Code. For
federal income tax purposes, the Separate Account is not a separate entity from
the Company and its operations form a part of the Company.

WITHHOLDING TAX ON DISTRIBUTIONS

        The Code generally requires the Company (or, in some cases, a plan
administrator) to withhold tax on the taxable portion of any distribution or
withdrawal from a contract. For "eligible rollover distributions" from contracts
issued under certain types of Qualified plans, 20% of the distribution must be
withheld, unless the payee elects to have the distribution "rolled over" to
another eligible plan in a direct "trustee to trustee" transfer. This
requirement is mandatory and cannot be waived by the owner. Withholding on other
types of distributions can be waived.

        An "eligible rollover distribution" is the estimated taxable portion of
any amount received by a covered employee from a plan qualified under Section
401(a) or 403(a) of the Code, or from a tax-sheltered annuity qualified under
Section 403(b) of the Code (other than (1) annuity payments for the life (or
life expectancy) of the employee, or joint lives (or joint life expectancies) of
the employee and his or her designated Beneficiary, or for a specified period of
ten years or more; and (2) distributions required to be made under the Code).
Failure to "roll over" the entire amount of an eligible rollover distribution
(including an amount equal to the 20% portion of the distribution that was
withheld) could have adverse tax consequences, including the imposition of a
penalty tax on premature withdrawals, described later in this section.

        Withdrawals or distributions from a contract other than eligible
rollover distributions are also subject to withholding on the estimated taxable
portion of the distribution, but the owner may elect in such cases to waive the
withholding requirement. If not waived, withholding is imposed (1) for periodic




                                      -11-
<PAGE>   47

payments, at the rate that would be imposed if the payments were wages, or (2)
for other distributions, at the rate of 10%. If no withholding exemption
certificate is in effect for the payee, the rate under (1) above is computed by
treating the payee as a married individual claiming 3 withholding exemptions.

DIVERSIFICATION - SEPARATE ACCOUNT INVESTMENTS

        Section 817(h) of the Code imposes certain diversification standards on
the underlying assets of variable annuity contracts. The Code provides that a
variable annuity contract will not be treated as an annuity contract for any
period (and any subsequent period) for which the investments are not adequately
diversified, in accordance with regulations prescribed by the United States
Treasury Department ("Treasury Department"). Disqualification of the contract as
an annuity contract would result in imposition of federal income tax to the
owner with respect to earnings allocable to the contract prior to the receipt of
any payments under the contract. The Code contains a safe harbor provision which
provides that annuity contracts, such as your contract, meet the diversification
requirements if, as of the close of each calendar quarter, the underlying assets
meet the diversification standards for a regulated investment company, and no
more than 55% of the total assets consist of cash, cash items, U.S. government
securities and securities of other regulated investment companies.

        The Treasury Department has issued regulations which establish
diversification requirements for the investment portfolios underlying variable
contracts such as the contracts. The regulations amplify the diversification
requirements for variable contracts set forth in the Code and provide an
alternative to the safe harbor provision described above. Under the regulations
an investment portfolio will be deemed adequately diversified if (1) no more
than 55% of the value of the total assets of the portfolio is represented by any
one investment; (2) no more than 70% of the value of the total assets of the
portfolio is represented by any two investments; (3) no more than 80% of the
value of the total assets of the portfolio is represented by any three
investments; and (4) no more than 90% of the value of the total assets of the
portfolio is represented by any four investments. For purposes of determining
whether or not the diversification standards imposed on the underlying assets of
variable contracts by Section 817(h) of the Code have been met, "each United
States government agency or instrumentality shall be treated as a separate
issuer."

MULTIPLE CONTRACTS

        Multiple annuity contracts which are issued within a calendar year to
the same contract owner by one company or its affiliates are treated as one
annuity contract for purposes of determining the tax consequences of any
distribution. Such treatment may result in adverse tax consequences including
more rapid taxation of the distributed amounts from such multiple contracts. The
Company believes that Congress intended to affect the purchase of multiple
deferred annuity contracts which may have been purchased to avoid withdrawal
income tax treatment. Owners should consult a tax adviser prior to purchasing
more than one annuity contract in any calendar year.


Partial 1035 Exchanges

         Section 1035 of the Code provides that an annuity contract may be
exchanged in a tax-free transaction for another annuity contract. Historically,
it was presumed that only the exchange of an entire contract, as opposed to a
partial exchange, would be accorded tax-free status. In 1998 in Conway vs.
Commissioner, the Tax Court held that the direct transfer of a portion of an
annuity contract into another annuity contract qualified as a non-taxable
exchange. On November 22, 1999, the Internal Revenue Service filed an Action on
Decision which indicated that it acquiesced in the Tax Court decision in Conway.
However, in its acquiesence with the decision of the Tax Court, the Internal
Revenue Service stated hat it will challenge transactions where taxpayers enter
into a series of partial exchanges and annuitizations as part of a design to
avoid application of the 10% premature distribution penalty or other limitations
imposed on annuity contracts under Section 72 of the Code. In the absence of
further guidance from the Internal Revenue Service it is unclear what specific
types of partial exchange designs and transactions will be challenged by the
Internal Revenue Service. Due to the uncertainty in this area owners should
seek their own tax advice.


TAX TREATMENT OF ASSIGNMENTS

        An assignment of a contract may have tax consequences, and may also be
prohibited by ERISA in some circumstances. Owners should therefore consult
competent legal advisers should they wish to assign their contracts.





                                      -12-
<PAGE>   48

                            DISTRIBUTION OF CONTRACTS

        The contracts are offered through SunAmerica Capital Services, Inc.,
located at 733 Third Avenue, 4th Floor, New York, New York 10017. SunAmerica
Capital Services, Inc. is registered as a broker-dealer under the Securities
Exchange Act of 1934, as amended, and is a member of the National Association of
Securities Dealers, Inc. The Company and SunAmerica Capital Services, Inc. are
each an indirect wholly owned subsidiary of SunAmerica Inc.

        Contracts are offered on a continuous basis.


                              FINANCIAL STATEMENTS


        The audited consolidated financial statements of the Company as of
December 31, 1999, December 31, 1998 and September 30, 1998 and for the year
ended December 31, 1999, for the three months ended December 31, 1998 and for
each of the two fiscal years in the period ended September 30, 1998 are
presented in this Statement of Additional Information. These financial
statements of the Company should be considered only as bearing on the ability of
the Company to meet its obligation under the contracts for amounts allocated to
the 1, 3, and 5 year market value adjustment fixed account options and the
1-year and 6-month DCA fixed accounts. Financial Statements of the Separate
Account as of January 31, 2000, and for the nine month period from May 1, 1999
to January 31, 2000 and for the period from inception to April 30, 1999, are
also included in this Statement of Additional Information.


        PricewaterhouseCoopers LLP, 400 South Hope Street, Los Angeles,
California 90071, serves as the independent accountants for the Separate Account
and the Company. The financial statements of the Company and the Separate
Account have been so included in reliance on the reports of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.





                                      -13-
<PAGE>   49
                        Report of Independent Accountants



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


In our opinion, the accompanying consolidated balance sheet and the related
consolidated statements of income and comprehensive income and of cash flows
present fairly, in all material respects, the financial position of Anchor
National Life Insurance Company and its subsidiaries (the "Company") at December
31, 1999, December 31, 1998, and September 30, 1998, and the results of their
operations and their cash flows for the year ended December 31, 1999, for the
three months ended December 31, 1998 and for each of the two fiscal years in the
period ended September 30, 1998, in conformity with accounting principles
generally accepted in the United States. These financial statements are the
responsibility of the Company's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these statements in accordance with auditing standards generally
accepted in the United States, which require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.




PricewaterhouseCoopers LLP
Los Angeles, California
January 31, 2000






                                       14
<PAGE>   50


                     ANCHOR NATIONAL LIFE INSURANCE COMPANY
                           CONSOLIDATED BALANCE SHEET

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

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

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

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

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



                             See accompanying notes

                                       15
<PAGE>   51

                     ANCHOR NATIONAL LIFE INSURANCE COMPANY
                     CONSOLIDATED BALANCE SHEET (Continued)

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

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

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

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

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

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

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

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

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



                             See accompanying notes


                                       16
<PAGE>   52



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


<TABLE>
<CAPTION>
                                                                                  Years Ended September 30,
                                        Year Ended       Three Months Ended    --------------------------------
                                     December 31, 1999   December 31, 1998        1998                1997
                                     -----------------   -------------------   ------------     ---------------
<S>                                  <C>                 <C>                 <C>                <C>
Investment income                     $ 521,953,000       $  54,278,000       $ 221,966,000       $ 210,759,000
                                      -------------       -------------       -------------       -------------
Interest expense on:
   Fixed annuity contracts             (231,929,000)        (22,828,000)       (112,695,000)       (109,217,000)
   Universal life insurance
     contracts                         (102,486,000)                ---                 ---                 ---
   Guaranteed investment
     contracts                          (19,649,000)         (3,980,000)        (17,787,000)        (22,650,000)
   Senior indebtedness                     (199,000)            (34,000)         (1,498,000)         (2,549,000)
   Subordinated notes payable
     to affiliates                       (3,474,000)           (853,000)         (3,114,000)         (3,142,000)
                                      -------------       -------------       -------------       -------------

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

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

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

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

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

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

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

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

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

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

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

Other comprehensive income
 (loss), net of tax:

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

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

COMPREHENSIVE INCOME                  $  73,764,000       $  24,357,000       $ 128,651,000       $  87,052,000
                                      =============       =============       =============       =============
</TABLE>

                             See accompanying notes


                                       17
<PAGE>   53


                     ANCHOR NATIONAL LIFE INSURANCE COMPANY
                      CONSOLIDATED STATEMENT OF CASH FLOWS

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

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

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

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



                                       18

<PAGE>   54


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

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

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

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

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

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


SUPPLEMENTAL CASH FLOW
   INFORMATION:

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

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



                             See accompanying notes


                                       19

<PAGE>   55

                            ANCHOR NATIONAL LIFE INSURANCE COMPANY

                          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.      NATURE OF OPERATIONS

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

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

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

2.      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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


                                       20
<PAGE>   56

                     ANCHOR NATIONAL LIFE INSURANCE COMPANY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2.      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

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

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

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

        Bonds, notes and redeemable preferred stocks available for sale and
        common stocks are carried at aggregate fair value and changes in
        unrealized gains or losses, net of tax, are credited or charged directly
        to shareholder's equity. Bonds, notes and redeemable preferred stocks
        are reduced to estimated net realizable value when necessary for
        declines in value considered to be other than temporary. Estimates of
        net realizable value are subjective and actual realization will be
        dependent upon future events.

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

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

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


                                       21
<PAGE>   57


                     ANCHOR NATIONAL LIFE INSURANCE COMPANY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2.      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

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

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

        As debt and equity securities available for sale are carried at
        aggregate fair value, an adjustment is made to DAC equal to the change
        in amortization that would have been recorded if such securities had
        been sold at their stated aggregate fair value and the proceeds
        reinvested at current yields. The change in this adjustment, net of tax,
        is included with the change in accumulated other comprehensive
        income/(loss) that is credited or charged directly to shareholder's
        equity. DAC has been increased by $29,400,000 at December 31, 1999,
        increased by $1,400,000 at December 31, 1998, and decreased by
        $7,000,000 at September 30, 1998 for this adjustment.

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

        GOODWILL: Goodwill, amounting to $22,206,000 at December 31, 1999, is
        amortized by using the straight-line method over periods averaging 25
        years and is included in Other Assets in the balance sheet. Goodwill is
        evaluated for impairment when events or changes in economic conditions
        indicate that the carrying amount may not be recoverable.

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

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



                                       22

<PAGE>   58

                     ANCHOR NATIONAL LIFE INSURANCE COMPANY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2.      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

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

        INCOME TAXES: The Company files as a "life insurance company" under the
        provisions of the Internal Revenue Code of 1986. Its federal income tax
        return is consolidated with those of its direct parent, SunAmerica Life
        Insurance Company (the "Parent"), and its affiliate, First SunAmerica
        Life Insurance Company. Income taxes have been calculated as if the
        Company filed a separate return. Deferred income tax assets and
        liabilities are recognized based on the difference between financial
        statement carrying amounts and income tax bases of assets and
        liabilities using enacted income tax rates and laws.

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

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

3.      FISCAL YEAR CHANGE

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

        Results for the comparable prior year period are summarized below.

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

Net investment income              26,482,000

Net realized investment gains      20,935,000

Total fee income                   63,984,000

Pretax income                      67,654,000

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



                                       23

<PAGE>   59


                     ANCHOR NATIONAL LIFE INSURANCE COMPANY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

4.      ACQUISITION

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

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

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


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



                                       24
<PAGE>   60

                     ANCHOR NATIONAL LIFE INSURANCE COMPANY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

5.      INVESTMENTS

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

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

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

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

AT DECEMBER 31, 1998:

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

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

AT SEPTEMBER 30, 1998:

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

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


                                       25
<PAGE>   61

                            ANCHOR NATIONAL LIFE INSURANCE COMPANY

                    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

5.      INVESTMENTS (Continued)

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

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

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

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


                                       26
<PAGE>   62


                     ANCHOR NATIONAL LIFE INSURANCE COMPANY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

5.      INVESTMENTS (Continued)

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

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

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

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

AT DECEMBER 31, 1998:

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

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

AT SEPTEMBER 30, 1998:

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

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


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


                                       27
<PAGE>   63

                            ANCHOR NATIONAL LIFE INSURANCE COMPANY

                    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

5.      INVESTMENTS (Continued)

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

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

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

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

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

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

        The sources and related amounts of investment income are as follows:

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

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

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


                                       28
<PAGE>   64

                            ANCHOR NATIONAL LIFE INSURANCE COMPANY

                    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

5.      INVESTMENTS (Continued)

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

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

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


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

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

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

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

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

6.      FAIR VALUE OF FINANCIAL INSTRUMENTS

        The  following  estimated  fair  value  disclosures  are   limited  to


                                       29
<PAGE>   65

                     ANCHOR NATIONAL LIFE INSURANCE COMPANY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

6.      FAIR VALUE OF FINANCIAL INSTRUMENTS (Continued)

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

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

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

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

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

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

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

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

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

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

        RESERVES FOR FIXED ANNUITY CONTRACTS: Deferred annuity contracts are
        assigned a fair value equal to current net surrender value. Annuitized
        contracts are valued based on the present value of future cash flows at
        current pricing rates.

        RESERVES FOR UNIVERSAL LIFE INSURANCE CONTRACTS:  Universal  life  and


                                       30

<PAGE>   66

                     ANCHOR NATIONAL LIFE INSURANCE COMPANY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

6.      FAIR VALUE OF FINANCIAL INSTRUMENTS (Continued)

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

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

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

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

        VARIABLE ANNUITY LIABILITIES RELATED TO SEPARATE ACCOUNTS: Fair values
        of contracts in the accumulation phase are based on net surrender
        values. Fair values of contracts in the payout phase are based on the
        present value of future cash flows at assumed investment rates.

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



                                       31
<PAGE>   67

                     ANCHOR NATIONAL LIFE INSURANCE COMPANY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

6.      FAIR VALUE OF FINANCIAL INSTRUMENTS (Continued)

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

<TABLE>
<CAPTION>
                                                 Carrying              Fair
                                                  Value                Value
                                             ---------------      ---------------
<S>                                          <C>                  <C>
DECEMBER 31, 1999:

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

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

DECEMBER 31, 1998:

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

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


                                       32
<PAGE>   68

                     ANCHOR NATIONAL LIFE INSURANCE COMPANY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

6.      FAIR VALUE OF FINANCIAL INSTRUMENTS (Continued)

<TABLE>
<CAPTION>
                                               Carrying              Fair
                                                Value                Value
                                            ---------------      ---------------
<S>                                         <C>                  <C>
SEPTEMBER 30, 1998:

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

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


7.      SUBORDINATED NOTES PAYABLE TO AFFILIATES

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

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

8.      REINSURANCE

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


                                       33
<PAGE>   69

                     ANCHOR NATIONAL LIFE INSURANCE COMPANY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

8.      REINSURANCE (Continued)

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

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

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

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

9.      CONTINGENT LIABILITIES

        The Company has entered into four agreements in which it has provided
        liquidity support for certain short-term securities of municipalities
        and non-profit organizations by agreeing to purchase such securities in
        the event there is no other buyer in the short-term marketplace. In
        return the Company receives a fee. The maximum liability under these
        guarantees is $359,400,000. The Company's Parent currently shares in the
        liabilities and fees of two of these agreements. The Parent's share in
        these liabilities will increase by $150,000,000 subsequent to December
        31, 1999, and the Company's share will decrease to $209,400,000.
        Management does not anticipate any material future losses with respect
        to these liquidity support facilities.


                                       34

<PAGE>   70

                     ANCHOR NATIONAL LIFE INSURANCE COMPANY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

9.      CONTINGENT LIABILITIES (Continued)

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

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

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

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



                                       35
<PAGE>   71

                            ANCHOR NATIONAL LIFE INSURANCE COMPANY

                    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

10.     SHAREHOLDER'S EQUITY

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

        Changes in shareholder's equity are as follows:

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

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

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

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

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

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



                                       36
<PAGE>   72

                            ANCHOR NATIONAL LIFE INSURANCE COMPANY

                    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

10.     SHAREHOLDER'S EQUITY (Continued)

        Dividends that the Company may pay to its shareholder in any year
        without prior approval of the Arizona Department of Insurance are
        limited by statute. The maximum amount of dividends which can be paid to
        shareholders of insurance companies domiciled in the state of Arizona
        without obtaining the prior approval of the Insurance Commissioner is
        limited to the lesser of either 10% of the preceding year's statutory
        surplus or the preceding year's statutory net gain from operations less
        equity in undistributed income or loss of subsidiaries included in net
        investment income if, after paying the dividend, the Company's capital
        and surplus would be adequate in the opinion of the Arizona Department
        of Insurance. No dividends were paid in the year ended December 31, 1999
        or the three months ended December 31, 1998. Dividends in the amounts of
        $51,200,000 and $25,500,000 were paid on June 4, 1998 and April 1, 1997,
        respectively. Dividends of $69,000,000 were paid on March 1, 2000.

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

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


                                       37
<PAGE>   73


                     ANCHOR NATIONAL LIFE INSURANCE COMPANY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

11.     INCOME TAXES

        The components of the provisions for federal income taxes on pretax
        income consist of the following:

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

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

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

THREE MONTHS ENDED DECEMBER 31, 1998:

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

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

YEAR ENDED SEPTEMBER 30, 1998:

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

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

YEAR ENDED SEPTEMBER 30, 1997:

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

  Total income tax expense
    (benefit)                              $  (5,893,000)      $  37,062,000       $  31,169,000
                                           =============       =============       =============

</TABLE>


                                       38
<PAGE>   74

                     ANCHOR NATIONAL LIFE INSURANCE COMPANY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

11.     INCOME TAXES (Continued)

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


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

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


        For United States federal income tax purposes, certain amounts from life
        insurance operations are accumulated in a memorandum policyholders'
        surplus account and are taxed only when distributed to shareholders or
        when such account exceeds prescribed limits. The accumulated
        policyholders' surplus was $14,300,000 at December 31, 1999. The Company
        does not anticipate any transactions which would cause any part of this
        surplus to be taxable.


                                       39
<PAGE>   75


                     ANCHOR NATIONAL LIFE INSURANCE COMPANY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

11.     INCOME TAXES (Continued)

        Deferred income taxes reflect the net tax effects of temporary
        differences between the carrying amounts of assets and liabilities for
        financial reporting purposes and the amounts used for income tax
        reporting purposes. The significant components of the liability for
        Deferred Income Taxes are as follows:

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

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


12.     COMPREHENSIVE INCOME


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




                                       40

<PAGE>   76

                            ANCHOR NATIONAL LIFE INSURANCE COMPANY

                    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

12.     COMPREHENSIVE INCOME (Continued)

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

<TABLE>
<CAPTION>
                                                            Tax Benefit
                                         Before Tax          (Expense)          Net of Tax
                                       -------------       -------------       -------------
<S>                                    <C>                 <C>                 <C>
YEAR ENDED DECEMBER 31,
1999:

Net unrealized losses on debt and
  equity securities available
  for sale identified in the
  current period                       $(217,259,000)      $  76,041,000       $(141,218,000)

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

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

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

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

THREE MONTHS ENDED DECEMBER 31,
1998:

Net unrealized losses on debt
  and equity securities available
  for sale identified in the
  current period                       $ (24,345,000)      $   8,521,000       $ (15,824,000)

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

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

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

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

                                       41
<PAGE>   77

                     ANCHOR NATIONAL LIFE INSURANCE COMPANY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

12.     COMPREHENSIVE INCOME (Continued)

<TABLE>
<CAPTION>
                                                          Tax Benefit
                                        Before Tax         (Expense)          Net of Tax
                                       ------------       ------------       ------------
<S>                                    <C>                <C>                <C>
YEAR ENDED SEPTEMBER 30,
1998:

Net unrealized losses on debt and
  equity securities available
  for sale identified in the
  current period                       $(10,281,000)      $  3,598,000       $ (6,683,000)

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

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

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

Total other comprehensive loss         $(15,368,000)      $  5,378,000       $ (9,990,000)
                                       ============       ============       ============

YEAR ENDED SEPTEMBER 30,
1997:

Net unrealized gains on debt
  and equity securities available
  for sale identified in the
  current period                       $ 40,575,000       $(14,201,000)      $ 26,374,000

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

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

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

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


                                       42
<PAGE>   78

                            ANCHOR NATIONAL LIFE INSURANCE COMPANY

                          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

13.     RELATED-PARTY MATTERS

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

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

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


        During the year ended December 31, 1999, the Company transferred
        short-term investments and bonds to FSA with an aggregate fair value of
        $634,596,000 as part of the transfer of the New York Business from the
        Acquisition (See Note 4). The Company recorded a net realized loss of
        $5,144,000 on the transfer of these assets.


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

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

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

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


                                       43
<PAGE>   79

                     ANCHOR NATIONAL LIFE INSURANCE COMPANY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

13.     RELATED-PARTY MATTERS (Continued)

        and $61,000, respectively.

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

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

14.     BUSINESS SEGMENTS

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



                                       44
<PAGE>   80

                     ANCHOR NATIONAL LIFE INSURANCE COMPANY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

14.     BUSINESS SEGMENTS (Continued)

        Summarized data for the Company's business segments follow:

<TABLE>
<CAPTION>
                                                               Asset                Broker
                                      Annuity               Management              Dealer
                                     Operations             Operations             Operations               Total
                                   ----------------       ----------------       ----------------       ----------------
<S>                                <C>                    <C>                    <C>                    <C>
YEAR ENDED DECEMBER 31, 1999:

Total assets                       $ 26,649,310,000       $    150,966,000       $     74,218,000       $ 26,874,494,000
Expenditures for long-
  lived assets                                  ---              2,563,000              2,728,000              5,291,000
Investment in subsidiaries                      ---                    ---                    ---                    ---

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

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


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


Significant non-cash
  items                            $            ---       $            ---       $            ---       $            ---
                                   ================       ================       ================       ================

</TABLE>


                                       45
<PAGE>   81


                            ANCHOR NATIONAL LIFE INSURANCE COMPANY

                    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

14.     BUSINESS SEGMENTS (Continued)

<TABLE>
<CAPTION>
                                                           Asset                Broker-
                                    Annuity              Management              Dealer
                                   Operations            Operations             Operations               Total
                                ----------------       ----------------       ----------------       ----------------
<S>                             <C>                    <C>                    <C>                    <C>
THREE MONTHS ENDED
DECEMBER 31, 1998:

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

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

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


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


Significant non-cash
  item                          $            ---       $            ---       $            ---       $            ---
                                ================       ================       ================       ================

</TABLE>


                                       46
<PAGE>   82

                     ANCHOR NATIONAL LIFE INSURANCE COMPANY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

14.     BUSINESS SEGMENTS (Continued)

<TABLE>
<CAPTION>
                                                               Asset                 Broker-
                                         Annuity             Management              Dealer
                                       Operations            Operations             Operations               Total
                                    ----------------       ----------------       ----------------       ----------------
<S>                                 <C>                    <C>                    <C>                    <C>
YEAR ENDED SEPTEMBER 30, 1998:

Total assets                        $ 14,389,922,000       $    104,476,000       $     55,870,000       $ 14,550,268,000
Expenditures for long-
  lived assets                                   ---                477,000              5,289,000              5,766,000
Investment in subsidiaries                       ---                    ---                    ---                    ---

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

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


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


Significant non-cash
  items                             $            ---       $            ---       $            ---       $            ---
                                    ================       ================       ================       ================

</TABLE>


                                       47
<PAGE>   83


                            ANCHOR NATIONAL LIFE INSURANCE COMPANY

                    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

14.     BUSINESS SEGMENTS (Continued)

<TABLE>
<CAPTION>
                                                                Asset               Broker-
                                        Annuity              Management             Dealer
                                       Operations            Operations            Operations                 Total
                                    ----------------       ----------------       ----------------       ----------------
<S>                                 <C>                    <C>                    <C>                    <C>
YEAR ENDED SEPTEMBER 30, 1997:

Total assets                        $ 12,440,311,000       $     81,518,000       $     51,400,000       $ 12,573,229,000
Expenditures for long-
  lived assets                                   ---                804,000              4,527,000              5,331,000
Investment in subsidiaries                       ---                    ---                    ---                    ---

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

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


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


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


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

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

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

                                       48
<PAGE>   84

                     ANCHOR NATIONAL LIFE INSURANCE COMPANY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

14.     BUSINESS SEGMENTS (Continued)

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

15.     SUBSEQUENT EVENTS

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


                                       49
<PAGE>   85
                         VARIABLE ANNUITY ACCOUNT SEVEN
             (PORTION RELATING TO THE POLARIS PLUS VARIABLE ANNUITY)

                                       OF

                     ANCHOR NATIONAL LIFE INSURANCE COMPANY

                              FINANCIAL STATEMENTS

                                JANUARY 31, 2000







                                       50

<PAGE>   86
                        REPORT OF INDEPENDENT ACCOUNTANTS


To the Board of Directors of Anchor National Life Insurance Company
and the Contractholders of its separate account,
Variable Annuity Account Seven
(Portion Relating to the POLARIS PLUS Variable Annuity)


In our opinion, the accompanying statement of net assets, including the schedule
of portfolio investments, and the related statements of operations and of
changes in net assets present fairly, in all material respects, the financial
position of the Variable Accounts constituting Variable Annuity Account Seven
(Portion Relating to the POLARIS PLUS Variable Annuity), a separate account of
Anchor National Life Insurance Company (the "Separate Account") at January 31,
2000, the results of their operations and the changes in their net assets for
the nine month period from May 1, 1999 to January 31, 2000 and the changes in
their net assets for the period from inception to April 30, 1999, in conformity
with accounting principles generally accepted in the United States. These
financial statements are the responsibility of the Separate Account's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these financial
statements in accordance with auditing standards generally accepted in the
United States which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities owned at January 31, 2000 by
correspondence with the custodian, provides a reasonable basis for the opinion
expressed above.




PricewaterhouseCoopers LLP
Los Angeles, California
March 31, 2000




                                       51
<PAGE>   87
                         VARIABLE ANNUITY ACCOUNT SEVEN
             (Portion Relating to the POLARIS PLUS Variable Annuity)
                                       OF
                     ANCHOR NATIONAL LIFE INSURANCE COMPANY

                             STATEMENT OF NET ASSETS
                                JANUARY 31, 2000

<TABLE>
<CAPTION>
                                                             Government    International
                                 Capital                         and        Diversified     Global       Aggressive       Venture
                               Appreciation     Growth      Quality Bond     Equities      Equities        Growth          Value
                                Portfolio      Portfolio      Portfolio      Portfolio     Portfolio      Portfolio      Portfolio
                               ----------------------------------------------------------------------------------------------------
<S>                            <C>            <C>           <C>            <C>            <C>            <C>            <C>
Assets:
  Investments in Anchor
    Series Trust,
    at market value            $32,782,763    $23,388,258    $40,744,826    $        0    $         0    $         0    $         0
  Investments in SunAmerica
    Series Trust,
    at market value                      0              0              0     5,595,095     13,414,867     17,189,618     18,715,030

Liabilities                              0              0              0             0              0              0              0
                               ----------------------------------------------------------------------------------------------------
Net Assets                     $32,782,763    $23,388,258    $40,744,826    $5,595,095    $13,414,867    $17,189,618    $18,715,030
                               ====================================================================================================
Accumulation units
  outstanding                      763,615        741,898      3,077,577       356,489        521,701        726,996        679,653
                               ====================================================================================================
Unit value of accumulation
  units                        $     42.93    $     31.52    $     13.24    $    15.69    $     25.71    $     23.64    $     27.54
                               ====================================================================================================
</TABLE>

                 See accompanying notes to financial statements.





                                       52

<PAGE>   88
                         VARIABLE ANNUITY ACCOUNT SEVEN
             (Portion Relating to the POLARIS PLUS Variable Annuity)
                                       OF
                     ANCHOR NATIONAL LIFE INSURANCE COMPANY

                             STATEMENT OF NET ASSETS
                                JANUARY 31, 2000
                                   (Continued)

<TABLE>
<CAPTION>
                               Federated       Putnam        Alliance         Growth-        Asset        SunAmerica
                                 Value         Growth         Growth          Income       Allocation       Balanced      Utility
                               Portfolio      Portfolio      Portfolio       Portfolio      Portfolio      Portfolio     Portfolio
                               ----------------------------------------------------------------------------------------------------
<S>                            <C>           <C>            <C>             <C>            <C>            <C>            <C>
 Assets:
  Investments in Anchor
    Series Trust,
    at market value            $        0    $         0    $          0    $         0    $         0    $         0    $        0
  Investments in SunAmerica
    Series Trust,
    at market value             6,199,688     55,131,568     123,998,073     78,599,671     10,529,035     90,341,188     6,667,170

Liabilities                             0              0               0              0              0              0             0
                               ----------------------------------------------------------------------------------------------------
Net Assets                     $6,199,688    $55,131,568    $123,998,073    $78,599,671    $10,529,035    $90,341,188    $6,667,170
                               ====================================================================================================
Accumulation units
  outstanding                     383,123      1,851,304       2,675,855      2,279,838        548,020      4,720,725       439,535
                               ====================================================================================================
Unit value of accumulation
  units                        $    16.18    $     29.78    $      46.34    $     34.48    $     19.21    $     19.14    $    15.17
                               ====================================================================================================
</TABLE>

                 See accompanying notes to financial statements.




                                       53
<PAGE>   89

                         VARIABLE ANNUITY ACCOUNT SEVEN
            (Portion Relating to the POLARIS PLUS Variable Annuity)
                                       OF
                     ANCHOR NATIONAL LIFE INSURANCE COMPANY

                            STATEMENT OF NET ASSETS
                                JANUARY 31, 2000
                                  (Continued)

<TABLE>
<CAPTION>
                                                                                         International
                                 Worldwide     High-Yield      Global        Corporate      Growth &       Emerging         Real
                                High Income       Bond          Bond           Bond          Income         Markets        Estate
                                 Portfolio     Portfolio      Portfolio      Portfolio      Portfolio      Portfolio      Portfolio
                                ----------------------------------------------------------------------------------------------------
<S>                             <C>            <C>            <C>            <C>         <C>               <C>            <C>
Assets:
  Investments in Anchor
    Series Trust,
    at market value             $        0     $        0     $        0     $        0     $        0     $        0     $        0
  Investments in SunAmerica
    Series Trust,
    at market value              1,589,288      5,342,408      7,008,887      7,209,781      7,167,492      5,748,607      1,449,849
Liabilities                              0              0              0              0              0              0              0
                                ----------------------------------------------------------------------------------------------------
Net Assets                      $1,589,288     $5,342,408     $7,008,887     $7,209,781     $7,167,492     $5,748,607     $1,449,849
                                ====================================================================================================
Accumulation units
  outstanding                      101,516        356,846        496,165        564,545        534,044        537,155        168,102
                                ====================================================================================================
Unit value of accumulation
   units                        $    15.66     $    14.97     $    14.13     $    12.77     $    13.42     $    10.70     $     8.62
                                ====================================================================================================
</TABLE>

                 See accompanying notes to financial statements.





                                       54

<PAGE>   90
                         VARIABLE ANNUITY ACCOUNT SEVEN
             (Portion Relating to the POLARIS PLUS Variable Annuity)
                                       OF
                     ANCHOR NATIONAL LIFE INSURANCE COMPANY

                             STATEMENT OF NET ASSETS
                                JANUARY 31, 2000
                                   (Continued)

<TABLE>
<CAPTION>
                                                                                   Small
                                  "Dogs" of        Equity          Equity          Company           Cash
                                 Wall Street       Income           Index           Value         Management
                                  Portfolio       Portfolio       Portfolio       Portfolio        Portfolio           TOTAL
                                 ----------------------------------------------------------------------------------------------
<S>                              <C>             <C>             <C>              <C>             <C>              <C>
Assets:
  Investments in Anchor
    Series Trust,
    at market value              $        0      $        0      $         0      $        0      $         0      $ 96,915,847
  Investments in SunAmerica
    Series Trust,
    at market value               5,617,162       6,669,644       63,484,901       2,813,315       30,077,151       570,559,488

Liabilities                               0               0                0               0                0                 0
                                 ----------------------------------------------------------------------------------------------
Net Assets                       $5,617,162      $6,669,644      $63,484,901      $2,813,315      $30,077,151      $667,475,335
                                 ==============================================================================================
Accumulation units
  outstanding                       667,120         674,580        6,093,374         239,114        2,440,650
                                 ============================================================================
Unit value of
  accumulation units             $     8.42      $     9.89      $     10.42      $    11.77      $     12.32
                                 ============================================================================
</TABLE>

                See accompanying notes to financial statements.




                                       55
<PAGE>   91
                         VARIABLE ANNUITY ACCOUNT SEVEN
             (Portion Relating to the POLARIS PLUS Variable Annuity)
                                       OF
                     ANCHOR NATIONAL LIFE INSURANCE COMPANY

                        SCHEDULE OF PORTFOLIO INVESTMENTS
                                JANUARY 31, 2000

<TABLE>
<CAPTION>
                                                                     Market Value      Market
Portfolio Investment                                    Shares        Per Share         Value              Cost
- --------------------------------------------------------------------------------------------------------------------
<S>                                                   <C>            <C>            <C>                <C>
 ANCHOR SERIES TRUST:
  Capital Appreciation Portfolio                        578,711         $56.65       $ 32,782,763       $ 25,779,884
  Growth Portfolio                                      628,827          37.19         23,388,258         22,024,611
  Government and Quality Bond Portfolio               2,989,187          13.63         40,744,826         42,184,208
                                                                                     ------------       ------------
                                                                                       96,915,847         89,988,703
                                                                                     ------------       ------------
SUNAMERICA SERIES TRUST:
  International Diversified Equities Portfolio          377,487          14.82          5,595,095          5,319,711
  Global Equities Portfolio                             636,978          21.06         13,414,867         12,041,922
  Aggressive Growth Porfolio                            756,929          22.71         17,189,618         13,348,892
  Venture Value Portfolio                               707,974          26.43         18,715,030         18,218,908
  Federated Value Portfolio                             390,656          15.87          6,199,688          6,534,119
  Putnam Growth Portfolio                             2,082,478          26.47         55,131,568         49,943,659
  Alliance Growth Portfolio                           3,389,581          36.58        123,998,073        115,311,665
  Growth-Income Portfolio                             2,516,015          31.24         78,599,671         73,709,674
  Asset Allocation Portfolio                            724,965          14.52         10,529,035         10,628,478
  SunAmerica Balanced Portfolio                       4,738,704          19.06         90,341,188         83,892,624
  Utility Portfolio                                     462,340          14.42          6,667,170          6,762,719
  Worldwide High Income Portfolio                       150,023          10.59          1,589,288          1,544,267
  High-Yield Bond Portfolio                             506,888          10.54          5,342,408          5,432,636
  Global Bond Portfolio                                 647,227          10.83          7,008,887          7,217,627
  Corporate Bond Portfolio                              648,518          11.12          7,209,781          7,314,056
  International Growth & Income Portfolio               583,499          12.28          7,167,492          7,753,913
  Emerging Markets Portfolio                            522,627          11.00          5,748,607          4,778,965
  Real Estate Portfolio                                 170,068           8.53          1,449,849          1,548,276
  "Dogs" of Wall Street Portfolio                       669,915           8.38          5,617,162          6,549,999
  Equity Income Portfolio                               650,958          10.25          6,669,644          6,979,041
  Equity Index Portfolio                              5,344,706          11.88         63,484,901         61,698,136
  Small Company Value Portfolio                         267,498          10.52          2,813,315          2,753,445
  Cash Management Portfolio                           2,750,189          10.94         30,077,151         29,718,422
                                                                                     ------------       ------------
                                                                                      570,559,488        539,001,154
                                                                                     ------------       ------------
                                                                                     $667,475,335       $628,989,857
                                                                                     ============       ============
</TABLE>

                See accompanying notes to financial statements.




                                       56
<PAGE>   92
                         VARIABLE ANNUITY ACCOUNT SEVEN
             (Portion Relating to the POLARIS PLUS Variable Annuity)
                                       OF
                     ANCHOR NATIONAL LIFE INSURANCE COMPANY

                         INTERIM STATEMENT OF OPERATIONS
                  FOR THE NINE MONTH PERIOD FROM MAY 1, 1999 TO
                                JANUARY 31, 2000

<TABLE>
<CAPTION>
                                                                  Government   International
                                      Capital                        and        Diversified     Global      Aggressive    Venture
                                    Appreciation    Growth       Quality Bond     Equities     Equities       Growth       Value
                                     Portfolio     Portfolio       Portfolio     Portfolio     Portfolio     Portfolio    Portfolio
                                    -----------------------------------------------------------------------------------------------
<S>                                 <C>           <C>             <C>            <C>          <C>           <C>           <C>
Investment income:
  Dividends and capital gains
    distributions                   $   596,332   $   841,147     $ 1,371,824    $  33,105    $   275,450   $   235,001   $ 278,500
                                    -----------------------------------------------------------------------------------------------
         Total investment income        596,332       841,147       1,371,824       33,105        275,450       235,001     278,500
                                    -----------------------------------------------------------------------------------------------
Expenses:
     Mortality risk charge              (90,129)      (76,356)       (157,368)     (16,799)       (37,621)      (39,700)    (60,546)
     Expense risk charge                (33,798)      (28,633)        (59,013)      (6,300)       (14,108)      (14,888)    (22,705)
     Distribution expense charge        (16,900)      (14,317)        (29,506)      (3,150)        (7,054)       (7,444)    (11,352)
                                    -----------------------------------------------------------------------------------------------
         Total expenses                (140,827)     (119,306)       (245,887)     (26,249)       (58,783)      (62,032)    (94,603)
                                    -----------------------------------------------------------------------------------------------
Net investment income (loss)            455,505       721,841       1,125,937        6,856        216,667       172,969     183,897
                                    -----------------------------------------------------------------------------------------------
Net realized gains (losses)
  from securities transactions:
    Proceeds from shares sold           435,240         9,389       1,397,346      590,304         76,077       602,845     117,336
    Cost of shares sold                (336,327)       (9,710)     (1,444,273)    (542,056)       (76,277)     (456,494)   (114,056)
                                    -----------------------------------------------------------------------------------------------
Net realized gains (losses) from
    securities transactions              98,913          (321)        (46,927)      48,248           (200)      146,351       3,280
                                    -----------------------------------------------------------------------------------------------
Net unrealized appreciation
  (depreciation) of investments:
     Beginning of period                 (1,096)          357          (5,797)       6,618           (196)         (683)     29,940
     End of period                    7,002,879     1,363,647      (1,439,382)     275,384      1,372,945     3,840,726     496,122
                                    -----------------------------------------------------------------------------------------------
Change in net unrealized
  appreciation/ depreciation of
  investments                         7,003,975     1,363,290      (1,433,585)     268,766      1,373,141     3,841,409     466,182
                                    -----------------------------------------------------------------------------------------------
Increase (decrease) in net
  assets from operations            $ 7,558,393   $ 2,084,810     $  (354,575)   $ 323,870    $ 1,589,608   $ 4,160,729   $ 653,359
                                    ===============================================================================================
</TABLE>

                 See accompanying notes to financial statements.



                                       57
<PAGE>   93
                         VARIABLE ANNUITY ACCOUNT SEVEN
             (Portion Relating to the POLARIS PLUS Variable Annuity)
                                       OF
                     ANCHOR NATIONAL LIFE INSURANCE COMPANY

                         INTERIM STATEMENT OF OPERATIONS
                  FOR THE NINE MONTH PERIOD FROM MAY 1, 1999 TO
                                JANUARY 31, 2000
                                   (Continued)


<TABLE>
<CAPTION>
                                   Federated      Putnam        Alliance         Growth-        Asset      SunAmerica
                                     Value        Growth         Growth          Income      Allocation      Balanced      Utility
                                   Portfolio     Portfolio      Portfolio       Portfolio     Portfolio     Portfolio     Portfolio
                                   ------------------------------------------------------------------------------------------------
<S>                                <C>          <C>            <C>             <C>            <C>          <C>            <C>
Investment income:
  Dividends and capital
  gains distributions              $  96,195    $   665,388    $  3,245,699    $ 1,302,192    $ 310,778    $   593,187    $ 139,526
                                   ------------------------------------------------------------------------------------------------
      Total investment income         96,195        665,388       3,245,699      1,302,192      310,778        593,187      139,526
                                   ------------------------------------------------------------------------------------------------
Expenses:
  Mortality risk charge              (20,396)      (179,737)       (378,204)      (243,322)     (34,383)      (291,355)     (22,303)
  Expense risk charge                 (7,648)       (67,401)       (141,826)       (91,246)     (12,894)      (109,258)      (8,364)
  Distribution expense charge         (3,824)       (33,701)        (70,913)       (45,622)      (6,447)       (54,629)      (4,181)
                                   ------------------------------------------------------------------------------------------------
      Total expenses                 (31,868)      (280,839)       (590,943)      (380,190)     (53,724)      (455,242)     (34,848)
                                   ------------------------------------------------------------------------------------------------
Net investment income (loss)          64,327        384,549       2,654,756        922,002      257,054        137,945      104,678
                                   ------------------------------------------------------------------------------------------------
Net realized gains (losses)
  from securities transactions:
    Proceeds from shares sold        101,072          1,522             695         15,729      103,424        332,435      151,101
    Cost of shares sold             (104,398)        (1,530)           (693)       (15,902)    (102,580)      (314,513)    (154,927)
                                   ------------------------------------------------------------------------------------------------
Net realized gains (losses) from
  securities transactions             (3,326)            (8)              2           (173)         844         17,922       (3,826)
                                   ------------------------------------------------------------------------------------------------
Net unrealized appreciation
  (depreciation) of investments:
     Beginning of period               5,440        (80,946)       (198,962)        20,532        1,731        (17,466)       4,115
     End of period                  (334,431)     5,187,909       8,686,408      4,889,997      (99,443)     6,448,564      (95,549)
                                   ------------------------------------------------------------------------------------------------
Change in net unrealized
  appreciation/depreciation
  of investments                    (339,871)     5,268,855       8,885,370      4,869,465     (101,174)     6,466,030      (99,664)
                                   ------------------------------------------------------------------------------------------------
Increase (decrease) in net
   assets from operations          $(278,870)   $ 5,653,396    $ 11,540,128    $ 5,791,294    $ 156,724    $ 6,621,897    $   1,188
                                   ================================================================================================
</TABLE>

                See accompanying notes to financial statements.


                                       58
<PAGE>   94
                         VARIABLE ANNUITY ACCOUNT SEVEN
             (Portion Relating to the POLARIS PLUS Variable Annuity)
                                       OF
                     ANCHOR NATIONAL LIFE INSURANCE COMPANY

                         INTERIM STATEMENT OF OPERATIONS
                  FOR THE NINE MONTH PERIOD FROM MAY 1, 1999 TO
                                JANUARY 31, 2000
                                   (Continued)

<TABLE>
<CAPTION>
                                    Worldwide      High-                                 International
                                      High         Yield        Global       Corporate     Growth &       Emerging        Real
                                     Income        Bond          Bond          Bond         Income         Markets       Estate
                                    Portfolio    Portfolio     Portfolio     Portfolio     Portfolio      Portfolio     Portfolio
                                    ---------------------------------------------------------------------------------------------
<S>                                 <C>          <C>           <C>           <C>         <C>             <C>            <C>
Investment income:
  Dividends and capital
    gains distributions             $ 50,858     $ 196,650     $ 224,717     $ 104,204     $ 637,136     $        73     $ 14,160
                                    ---------------------------------------------------------------------------------------------
      Total investment income         50,858       196,650       224,717       104,204       637,136              73       14,160
                                    ---------------------------------------------------------------------------------------------
Expenses:
  Mortality risk charge               (4,551)      (17,580)      (25,270)      (23,789)      (20,941)        (13,354)      (4,362)
  Expense risk charge                 (1,707)       (6,593)       (9,476)       (8,921)       (7,853)         (5,008)      (1,636)
  Distribution expense charge           (853)       (3,296)       (4,738)       (4,461)       (3,927)         (2,504)        (818)
                                    ---------------------------------------------------------------------------------------------
      Total expenses                  (7,111)      (27,469)      (39,484)      (37,171)      (32,721)        (20,866)      (6,816)
                                    ---------------------------------------------------------------------------------------------
Net investment income (loss)          43,747       169,181       185,233        67,033       604,415         (20,793)       7,344
                                    ---------------------------------------------------------------------------------------------
Net realized gains (losses) from
  securities transactions:
    Proceeds from shares sold         73,567        78,363       158,140        64,249        30,348         914,148       56,581
    Cost of shares sold              (72,600)      (79,761)     (163,518)      (65,605)      (30,946)       (804,097)     (61,918)
                                    ---------------------------------------------------------------------------------------------
Net realized gains (losses) from
    securities transactions              967        (1,398)       (5,378)       (1,356)         (598)        110,051       (5,337)
                                    ---------------------------------------------------------------------------------------------
Net unrealized appreciation
  (depreciation) of investments:
    Beginning of period                1,862         6,766         1,497           (77)        7,161           6,981          948
    End of period                     45,021       (90,228)     (208,740)     (104,275)     (586,421)        969,642      (98,427)
                                    ---------------------------------------------------------------------------------------------
Change in net unrealized
  appreciation/depreciation
  of investments                      43,159       (96,994)     (210,237)     (104,198)     (593,582)        962,661      (99,375)
                                    ---------------------------------------------------------------------------------------------
Increase (decrease) in net
  assets from operations            $ 87,873     $  70,789     $ (30,382)    $ (38,521)    $  10,235     $ 1,051,919     $(97,368)
                                    =============================================================================================
</TABLE>

                See accompanying notes to financial statements.



                                       59
<PAGE>   95
                         VARIABLE ANNUITY ACCOUNT SEVEN
             (Portion Relating to the POLARIS PLUS Variable Annuity)
                                       OF
                     ANCHOR NATIONAL LIFE INSURANCE COMPANY

                         INTERIM STATEMENT OF OPERATIONS
                  FOR THE NINE MONTH PERIOD FROM MAY 1, 1999 TO
                                JANUARY 31, 2000
                                   (Continued)

<TABLE>
<CAPTION>
                                                                                      Small
                                      "Dogs" of        Equity           Equity       Company           Cash
                                     Wall Street        Income           Index         Value         Management
                                      Portfolio       Portfolio        Portfolio     Portfolio        Portfolio            TOTAL
                                     ----------------------------------------------------------------------------------------------
<S>                                  <C>             <C>             <C>             <C>            <C>               <C>
Investment income:
  Dividends and capital
    gains distributions               $  71,148       $ 165,304       $   303,000     $  3,094       $   339,461       $ 12,094,129
                                      ---------------------------------------------------------------------------------------------
      Total investment income            71,148         165,304           303,000        3,094           339,461         12,094,129
                                      ---------------------------------------------------------------------------------------------
Expenses:
  Mortality risk charge                 (20,648)        (23,215)         (222,944)      (7,550)         (117,260)        (2,149,683)
  Expense risk charge                    (7,743)         (8,706)          (83,604)      (2,831)          (43,973)          (806,133)
  Distribution expense charge            (3,872)         (4,353)          (41,802)      (1,416)          (21,986)          (403,066)
                                      ---------------------------------------------------------------------------------------------
    Total expenses                      (32,263)        (36,274)         (348,350)     (11,797)         (183,219)        (3,358,882)
                                      ---------------------------------------------------------------------------------------------
Net investment income (loss)             38,885         129,030           (45,350)      (8,703)          156,242          8,735,247
                                      ---------------------------------------------------------------------------------------------
Net realized gains (losses)
  from securities transactions:
    Proceeds from shares sold           162,597         123,349           660,117       63,768         8,664,410         14,984,152
    Cost of shares sold                (179,960)       (126,087)         (627,587)     (60,717)       (8,622,242)       (14,568,774)
                                      ---------------------------------------------------------------------------------------------
Net realized gains (losses) from
  securities transactions               (17,363)         (2,738)           32,530        3,051            42,168            415,378
                                      ---------------------------------------------------------------------------------------------
Net unrealized appreciation
  (depreciation) of investments:
     Beginning of period                 13,862           7,177            19,938        2,623             5,374           (162,301)
     End of period                     (932,837)       (309,397)        1,786,765       59,870           358,729         38,485,478
                                      ---------------------------------------------------------------------------------------------
Change in net unrealized
  appreciation/depreciation
  of investments                       (946,699)       (316,574)        1,766,827       57,247           353,355         38,647,779
                                      ---------------------------------------------------------------------------------------------
Increase (decrease) in net
  assets from operations              $(925,177)      $(190,282)      $ 1,754,007     $ 51,595       $   551,765       $ 47,798,404
                                      =============================================================================================
</TABLE>

                See accompanying notes to financial statements.


                                       60
<PAGE>   96
                         VARIABLE ANNUITY ACCOUNT SEVEN
             (Portion Relating to the POLARIS PLUS Variable Annuity)
                                       OF
                     ANCHOR NATIONAL LIFE INSURANCE COMPANY

                   INTERIM STATEMENT OF CHANGES IN NET ASSETS
                  FOR THE NINE MONTH PERIOD FROM MAY 1, 1999 TO
                                JANUARY 31, 2000
<TABLE>
<CAPTION>
                                                                                       Government       International
                                                   Capital                                and            Diversified
                                                 Appreciation          Growth         Quality Bond         Equities
                                                  Portfolio           Portfolio         Portfolio          Portfolio
                                                 --------------------------------------------------------------------
<S>                                              <C>                <C>               <C>               <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations:
     Net investment income (loss)                $    455,505       $    721,841       $  1,125,937       $     6,856
     Net realized gains (losses) from
         securities transactions                       98,913               (321)           (46,927)           48,248
     Change in net unrealized appreciation/
         depreciation of investments                7,003,975          1,363,290         (1,433,585)          268,766
                                                 --------------------------------------------------------------------
         Increase (decrease) in net assets
           from operations                          7,558,393          2,084,810           (354,575)          323,870
                                                 --------------------------------------------------------------------
From capital transactions:
     Net proceeds from units sold                  16,108,850         15,488,575         33,116,939         3,477,231
     Cost of units redeemed                          (114,972)          (152,094)          (767,470)          (25,853)
     Net transfers                                  7,717,406          4,557,912          6,296,594         1,496,376
                                                 --------------------------------------------------------------------
         Increase (decrease) in net assets
             from capital transactions             23,711,284         19,894,393         38,646,063         4,947,754
                                                 --------------------------------------------------------------------
Increase (decrease) in net assets                  31,269,677         21,979,203         38,291,488         5,271,624
Net assets at beginning of period                   1,513,086          1,409,055          2,453,338           323,471
                                                 --------------------------------------------------------------------
Net assets at end of period                      $ 32,782,763       $ 23,388,258       $ 40,744,826       $ 5,595,095
                                                 ====================================================================
ANALYSIS OF INCREASE (DECREASE)
     IN UNITS OUTSTANDING:
     Units sold                                       492,458            542,104          2,483,242           236,015
     Units redeemed                                    (3,274)            (5,195)           (57,533)           (1,712)
     Units transferred                                221,695            155,097            471,434            99,658
                                                 --------------------------------------------------------------------
Increase (decrease) in units outstanding              710,879            692,006          2,897,143           333,961
Beginning units                                        52,736             49,892            180,434            22,528
                                                 --------------------------------------------------------------------
Ending units                                          763,615            741,898          3,077,577           356,489
                                                 ====================================================================
</TABLE>

<TABLE>
<CAPTION>
                                                   Global           Aggressive           Venture
                                                   Equities           Growth              Value
                                                  Portfolio          Portfolio          Portfolio
                                                 --------------------------------------------------
<S>                                              <C>                <C>                <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations:
     Net investment income (loss)                $    216,667       $    172,969       $    183,897
     Net realized gains (losses) from
         securities transactions                         (200)           146,351              3,280
     Change in net unrealized appreciation/
         depreciation of investments                1,373,141          3,841,409            466,182
                                                 --------------------------------------------------
         Increase (decrease) in net assets
           from operations                          1,589,608          4,160,729            653,359
                                                 --------------------------------------------------
From capital transactions:
     Net proceeds from units sold                   7,858,086          9,686,787         11,652,408
     Cost of units redeemed                           (68,826)           (47,654)          (128,408)
     Net transfers                                  3,723,519          2,928,818          5,535,504
                                                 --------------------------------------------------
         Increase (decrease) in net assets
             from capital transactions             11,512,779         12,567,951         17,059,504
                                                 --------------------------------------------------
Increase (decrease) in net assets                  13,102,387         16,728,680         17,712,863
Net assets at beginning of period                     312,480            460,938          1,002,167
                                                 --------------------------------------------------
Net assets at end of period                      $ 13,414,867       $ 17,189,618       $ 18,715,030
                                                 ==================================================
ANALYSIS OF INCREASE (DECREASE)
     IN UNITS OUTSTANDING:
     Units sold                                       351,162            550,015            439,507
     Units redeemed                                    (2,974)            (2,789)            (4,798)
     Units transferred                                158,926            151,283            207,492
                                                 --------------------------------------------------
Increase (decrease) in units outstanding              507,114            698,509            642,201
Beginning units                                        14,587             28,487             37,452
                                                 --------------------------------------------------
Ending units                                          521,701            726,996            679,653
                                                 ==================================================
</TABLE>


See accompanying notes to financial statements.


                                       61
<PAGE>   97
                         VARIABLE ANNUITY ACCOUNT SEVEN
             (Portion Relating to the POLARIS PLUS Variable Annuity)
                                       OF
                     ANCHOR NATIONAL LIFE INSURANCE COMPANY

                   INTERIM STATEMENT OF CHANGES IN NET ASSETS
                  FOR THE NINE MONTH PERIOD FROM MAY 1, 1999 TO
                                JANUARY 31, 2000
                                   (Continued)

<TABLE>
<CAPTION>
                                                  Federated           Putnam            Alliance            Growth-
                                                    Value             Growth             Growth             Income
                                                  Portfolio          Portfolio          Portfolio          Portfolio
                                                 ---------------------------------------------------------------------
<S>                                              <C>               <C>                <C>                 <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations:
     Net investment income (loss)                $    64,327       $    384,549       $   2,654,756       $    922,002
     Net realized gains (losses) from
         securities transactions                      (3,326)                (8)                  2               (173)
     Change in net unrealized appreciation/
         depreciation of investments                (339,871)         5,268,855           8,885,370          4,869,465
                                                 ---------------------------------------------------------------------
         Increase (decrease) in net assets
            from operations                         (278,870)         5,653,396          11,540,128          5,791,294
                                                 ---------------------------------------------------------------------
From capital transactions:
     Net proceeds from units sold                  4,239,692         34,435,681          82,887,956         52,962,762
     Cost of units redeemed                          (63,388)          (428,762)           (745,099)          (875,590)
     Net transfers                                 1,858,086         11,585,904          24,375,833         16,879,128
                                                 ---------------------------------------------------------------------
         Increase (decrease) in net assets
             from capital transactions             6,034,390         45,592,823         106,518,690         68,966,300
                                                 ---------------------------------------------------------------------
Increase (decrease) in net assets                  5,755,520         51,246,219         118,058,818         74,757,594
Net assets at beginning of period                    444,168          3,885,349           5,939,255          3,842,077
                                                 ---------------------------------------------------------------------
Net assets at end of period                      $ 6,199,688       $ 55,131,568       $ 123,998,073       $ 78,599,671
                                                 =====================================================================
ANALYSIS OF INCREASE (DECREASE)
     IN UNITS OUTSTANDING:
     Units sold                                      250,094          1,297,140           1,978,135          1,665,092
     Units redeemed                                   (3,853)           (15,694)            (17,101)           (26,738)
     Units transferred                               111,617            420,643             567,062            516,812
                                                 ---------------------------------------------------------------------
Increase (decrease) in units outstanding             357,858          1,702,089           2,528,096          2,155,166
Beginning units                                       25,265            149,215             147,759            124,672
                                                 ---------------------------------------------------------------------
Ending units                                         383,123          1,851,304           2,675,855          2,279,838
                                                 =====================================================================
</TABLE>

<TABLE>
<CAPTION>
                                                   Asset           SunAmerica
                                                 Allocation         Balanced           Utility
                                                 Portfolio          Portfolio          Portfolio
                                                -------------------------------------------------
<S>                                             <C>                <C>                <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations:
     Net investment income (loss)               $    257,054       $    137,945       $   104,678
     Net realized gains (losses) from
         securities transactions                         844             17,922            (3,826)
     Change in net unrealized appreciation/
         depreciation of investments                (101,174)         6,466,030           (99,664)
                                                -------------------------------------------------
         Increase (decrease) in net assets
            from operations                          156,724          6,621,897             1,188
                                                -------------------------------------------------
From capital transactions:
     Net proceeds from units sold                  6,651,098         63,769,378         4,932,776
     Cost of units redeemed                          (95,015)        (1,154,511)          (89,550)
     Net transfers                                 3,298,464         16,651,136         1,580,807
                                                -------------------------------------------------
         Increase (decrease) in net assets
             from capital transactions             9,854,547         79,266,003         6,424,033
                                                -------------------------------------------------
Increase (decrease) in net assets                 10,011,271         85,887,900         6,425,221
Net assets at beginning of period                    517,764          4,453,288           241,949
                                                -------------------------------------------------
Net assets at end of period                     $ 10,529,035       $ 90,341,188       $ 6,667,170
                                                =================================================
ANALYSIS OF INCREASE (DECREASE)
     IN UNITS OUTSTANDING:
     Units sold                                      352,161          3,606,861           324,993
     Units redeemed                                   (4,993)           (63,690)           (5,939)
     Units transferred                               173,825            922,781           104,327
                                                -------------------------------------------------
Increase (decrease) in units outstanding             520,993          4,465,952           423,381
Beginning units                                       27,027            254,773            16,154
                                                -------------------------------------------------
Ending units                                         548,020          4,720,725           439,535
                                                =================================================
</TABLE>

                See accompanying notes to financial statements.

                                       62
<PAGE>   98
                         VARIABLE ANNUITY ACCOUNT SEVEN
             (Portion Relating to the POLARIS PLUS Variable Annuity)
                                       OF
                     ANCHOR NATIONAL LIFE INSURANCE COMPANY

                   INTERIM STATEMENT OF CHANGES IN NET ASSETS
                  FOR THE NINE MONTH PERIOD FROM MAY 1, 1999 TO
                                JANUARY 31, 2000
                                   (Continued)

<TABLE>
<CAPTION>
                                                  Worldwide        High-Yield          Global           Corporate
                                                 High Income          Bond              Bond              Bond
                                                  Portfolio         Portfolio         Portfolio         Portfolio
                                                 -----------------------------------------------------------------
<S>                                              <C>               <C>               <C>               <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations:
     Net investment income (loss)                $    43,747       $   169,181       $   185,233       $    67,033
     Net realized gains (losses) from
         securities transactions                         967            (1,398)           (5,378)           (1,356)
     Change in net unrealized appreciation/
         depreciation of investments                  43,159           (96,994)         (210,237)         (104,198)
                                                 ------------------------------------------------------------------
         Increase (decrease) in net assets
           from operations                            87,873            70,789           (30,382)          (38,521)
                                                 -----------------------------------------------------------------
From capital transactions:
     Net proceeds from units sold                  1,161,365         4,109,801         4,946,363         5,399,290
     Cost of units redeemed                          (10,935)         (106,090)         (111,647)          (92,385)
     Net transfers                                   279,666           908,701         1,616,165         1,520,266
                                                 -----------------------------------------------------------------
         Increase (decrease) in net assets
             from capital transactions             1,430,096         4,912,412         6,450,881         6,827,171
                                                 -----------------------------------------------------------------
Increase (decrease) in net assets                  1,517,969         4,983,201         6,420,499         6,788,650
Net assets at beginning of period                     71,319           359,207           588,388           421,131
                                                 -----------------------------------------------------------------
Net assets at end of period                      $ 1,589,288       $ 5,342,408       $ 7,008,887       $ 7,209,781
                                                 =================================================================
ANALYSIS OF INCREASE (DECREASE)
     IN UNITS OUTSTANDING:
     Units sold                                       78,805           278,642           349,139           420,990
     Units redeemed                                     (747)           (7,190)           (7,913)           (7,212)
     Units transferred                                18,630            61,687           114,485           118,730
                                                 -----------------------------------------------------------------
Increase (decrease) in units outstanding              96,688           333,139           455,711           532,508
Beginning units                                        4,828            23,707            40,454            32,037
                                                 -----------------------------------------------------------------
Ending units                                         101,516           356,846           496,165           564,545
                                                 =================================================================
</TABLE>

<TABLE>
<CAPTION>
                                                   International       Emerging            Real
                                                 Growth & Income        Markets           Estate
                                                     Portfolio         Portfolio         Portfolio
                                                 --------------------------------------------------
<S>                                              <C>                  <C>               <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations:
     Net investment income (loss)                   $   604,415       $   (20,793)      $     7,344
     Net realized gains (losses) from
         securities transactions                           (598)          110,051            (5,337)
     Change in net unrealized appreciation/
         depreciation of investments                   (593,582)          962,661           (99,375)
                                                    -----------------------------------------------
         Increase (decrease) in net assets
           from operations                               10,235         1,051,919           (97,368)
                                                    -----------------------------------------------
From capital transactions:
     Net proceeds from units sold                     5,332,958         3,273,997         1,290,252
     Cost of units redeemed                             (43,967)          (28,612)           (3,036)
     Net transfers                                    1,678,687         1,307,478           207,710
                                                    -----------------------------------------------
         Increase (decrease) in net assets
             from capital transactions                6,967,678         4,552,863         1,494,926
                                                    -----------------------------------------------
Increase (decrease) in net assets                     6,977,913         5,604,782         1,397,558
Net assets at beginning of period                       189,579           143,825            52,291
                                                    -----------------------------------------------
Net assets at end of period                         $ 7,167,492       $ 5,748,607       $ 1,449,849
                                                    ===============================================
ANALYSIS OF INCREASE (DECREASE)
     IN UNITS OUTSTANDING:
     Units sold                                         398,539           382,704           140,091
     Units redeemed                                      (3,254)           (3,361)             (321)
     Units transferred                                  124,034           138,974            23,090
                                                    -----------------------------------------------
Increase (decrease) in units outstanding                519,319           518,317           162,860
Beginning units                                          14,725            18,838             5,242
                                                    -----------------------------------------------
Ending units                                            534,044           537,155           168,102
                                                    ===============================================
</TABLE>

                See accompanying notes to financial statements.

                                       63
<PAGE>   99
                         VARIABLE ANNUITY ACCOUNT SEVEN
             (Portion Relating to the POLARIS PLUS Variable Annuity)
                                       OF
                     ANCHOR NATIONAL LIFE INSURANCE COMPANY

                   INTERIM STATEMENT OF CHANGES IN NET ASSETS
                  FOR THE NINE MONTH PERIOD FROM MAY 1, 1999 TO
                                JANUARY 31, 2000
                                   (Continued)

<TABLE>
<CAPTION>
                                                                                                           Small
                                                  "Dogs" of          Equity             Equity            Company
                                                 Wall Street         Income             Index              Value
                                                  Portfolio         Portfolio         Portfolio          Portfolio
                                                 ------------------------------------------------------------------
<S>                                              <C>               <C>               <C>                <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations:
     Net investment income (loss)                $    38,885       $   129,030       $    (45,350)      $    (8,703)
     Net realized gains (losses) from
         securities transactions                     (17,363)           (2,738)            32,530             3,051
     Change in net unrealized appreciation/
         depreciation of investments                (946,699)         (316,574)         1,766,827            57,247
                                                 ------------------------------------------------------------------
         Increase (decrease) in net assets
            from operations                         (925,177)         (190,282)         1,754,007            51,595
                                                 ------------------------------------------------------------------
From capital transactions:
     Net proceeds from units sold                  5,034,889         5,333,434         45,918,519         2,114,575
     Cost of units redeemed                          (38,509)         (124,020)          (592,814)           (6,563)
     Net transfers                                 1,233,089         1,268,914         12,299,480           602,900
                                                 ------------------------------------------------------------------
         Increase (decrease) in net assets
             from capital transactions             6,229,469         6,478,328         57,625,185         2,710,912
                                                 ------------------------------------------------------------------
Increase (decrease) in net assets                  5,304,292         6,288,046         59,379,192         2,762,507
Net assets at beginning of period                    312,870           381,598          4,105,709            50,808
                                                 ------------------------------------------------------------------
Net assets at end of period                      $ 5,617,162       $ 6,669,644       $ 63,484,901       $ 2,813,315
                                                 ====================================================================
ANALYSIS OF INCREASE (DECREASE)
     IN UNITS OUTSTANDING:
     Units sold                                      512,444           525,183          4,538,954           183,476
     Units redeemed                                   (4,124)          (12,285)           (57,265)             (564)
     Units transferred                               128,185           125,619          1,211,592            51,568
                                                 ------------------------------------------------------------------
Increase (decrease) in units outstanding             636,505           638,517          5,693,281           234,480
Beginning units                                       30,615            36,063            400,093             4,634
                                                 ------------------------------------------------------------------
Ending units                                         667,120           674,580          6,093,374           239,114
                                                 ==================================================================
</TABLE>

<TABLE>
<CAPTION>
                                                    Cash
                                                 Management
                                                  Portfolio             TOTAL
                                                 --------------------------------
<S>                                              <C>                <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations:
     Net investment income (loss)                $    156,242       $   8,735,247
     Net realized gains (losses) from
         securities transactions                       42,168             415,378
     Change in net unrealized appreciation/
         depreciation of investments                  353,355          38,647,779
                                                 --------------------------------
         Increase (decrease) in net assets
            from operations                           551,765          47,798,404
                                                 --------------------------------
From capital transactions:
     Net proceeds from units sold                  34,308,848         465,492,510
     Cost of units redeemed                          (855,436)         (6,771,206)
     Net transfers                                 (7,970,392)        123,438,151
                                                 --------------------------------
         Increase (decrease) in net assets
             from capital transactions             25,483,020         582,159,455
                                                 --------------------------------
Increase (decrease) in net assets                  26,034,785         629,957,859
Net assets at beginning of period                   4,042,366          37,517,476
                                                 --------------------------------
Net assets at end of period                      $ 30,077,151       $ 667,475,335
                                                 ================================
ANALYSIS OF INCREASE (DECREASE)
     IN UNITS OUTSTANDING:
     Units sold                                     2,829,666          25,207,612
     Units redeemed                                   (70,285)           (390,804)
     Units transferred                               (656,002)          5,743,244
                                                 --------------------------------
Increase (decrease) in units outstanding            2,103,379          30,560,052
Beginning units                                       337,271           2,079,488
                                                 --------------------------------
Ending units                                        2,440,650          32,639,540
                                                 ================================
</TABLE>

                See accompanying notes to financial statements.

                                       64
<PAGE>   100
                         VARIABLE ANNUITY ACCOUNT SEVEN
             (Portion Relating to the POLARIS PLUS Variable Annuity)
                                       OF
                     ANCHOR NATIONAL LIFE INSURANCE COMPANY

                       STATEMENT OF CHANGES IN NET ASSETS
                          FOR THE PERIOD FROM INCEPTION
                                TO APRIL 30, 1999

<TABLE>
<CAPTION>
                                                                                     Government      International
                                                   Capital                               and          Diversified
                                                 Appreciation         Growth         Quality Bond       Equities
                                                   Portfolio        Portfolio         Portfolio         Portfolio
                                                 -----------------------------------------------------------------
<S>                                              <C>               <C>               <C>              <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations:
     Net investment loss                         $      (771)      $      (740)      $    (1,400)      $    (250)
     Net realized gains (losses) from
         securities transactions                           2                 0                (1)              1
     Change in net unrealized appreciation/
         depreciation of investments                  (1,096)              357            (5,797)          6,618
                                                 ---------------------------------------------------------------
         Increase (decrease) in net assets
            from operations                           (1,865)             (383)           (7,198)          6,369
                                                 ---------------------------------------------------------------
From capital transactions:
     Net proceeds from units sold                  1,482,144         1,407,498         2,582,141         316,608
     Cost of units redeemed                             (326)             (593)           (5,718)              0
     Net transfers                                    33,133             2,533          (115,887)            494
                                                 ---------------------------------------------------------------
         Increase (decrease) in net assets
             from capital transactions             1,514,951         1,409,438         2,460,536         317,102
                                                 ---------------------------------------------------------------
Increase (decrease) in net assets                  1,513,086         1,409,055         2,453,338         323,471
Net assets at beginning of period                          0                 0                 0               0
                                                 ---------------------------------------------------------------
Net assets at end of period                      $ 1,513,086       $ 1,409,055       $ 2,453,338       $ 323,471
                                                 ===============================================================
ANALYSIS OF INCREASE (DECREASE)
     IN UNITS OUTSTANDING:
     Units sold                                       51,615            49,826           189,356          22,494
     Units redeemed                                      (12)              (22)             (419)              0
     Units transferred                                 1,133                88            (8,503)             34
                                                 ---------------------------------------------------------------
Increase (decrease) in units outstanding              52,736            49,892           180,434          22,528
Beginning units                                            0                 0                 0               0
                                                 ---------------------------------------------------------------
Ending units                                          52,736            49,892           180,434          22,528
                                                 ===============================================================
</TABLE>

<TABLE>
<CAPTION>
                                                  Global        Aggressive         Venture
                                                  Equities        Growth            Value
                                                 Portfolio       Portfolio        Portfolio
                                                 -------------------------------------------
<S>                                              <C>            <C>              <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations:
     Net investment loss                         $    (146)      $    (218)      $      (621)
     Net realized gains (losses) from
         securities transactions                         0               0                 1
     Change in net unrealized appreciation/
         depreciation of investments                  (196)           (683)           29,940
                                                 -------------------------------------------
         Increase (decrease) in net assets
            from operations                           (342)           (901)           29,320
                                                 -------------------------------------------
From capital transactions:
     Net proceeds from units sold                  309,878         462,895           951,070
     Cost of units redeemed                            (25)              0              (210)
     Net transfers                                   2,969          (1,056)           21,987
                                                 -------------------------------------------
         Increase (decrease) in net assets
             from capital transactions             312,822         461,839           972,847
                                                 -------------------------------------------
Increase (decrease) in net assets                  312,480         460,938         1,002,167
Net assets at beginning of period                        0               0                 0
                                                 -------------------------------------------
Net assets at end of period                      $ 312,480       $ 460,938       $ 1,002,167
                                                 ===========================================
ANALYSIS OF INCREASE (DECREASE)
     IN UNITS OUTSTANDING:
     Units sold                                     14,448          28,552            36,627
     Units redeemed                                     (1)              0                (8)
     Units transferred                                 140             (65)              833
                                                 -------------------------------------------
Increase (decrease) in units outstanding            14,587          28,487            37,452
Beginning units                                          0               0                 0
                                                 -------------------------------------------
Ending units                                        14,587          28,487            37,452
                                                 ===========================================
</TABLE>

                See accompanying notes to financial statements.

                                       65
<PAGE>   101
                         VARIABLE ANNUITY ACCOUNT SEVEN
             (Portion Relating to the POLARIS PLUS Variable Annuity)
                                       OF
                     ANCHOR NATIONAL LIFE INSURANCE COMPANY

                       STATEMENT OF CHANGES IN NET ASSETS
                          FOR THE PERIOD FROM INCEPTION
                                TO APRIL 30, 1999
                                   (Continued)

<TABLE>
<CAPTION>
                                                 Federated         Putnam           Alliance            Growth-
                                                   Value           Growth            Growth             Income
                                                 Portfolio        Portfolio         Portfolio          Portfolio
                                                 ---------------------------------------------------------------
<S>                                              <C>             <C>               <C>               <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations:
     Net investment loss                         $    (142)      $    (1,644)      $    (3,110)      $    (2,223)
     Net realized gains (losses) from
         securities transactions                         2                90                89                52
     Change in net unrealized appreciation/
         depreciation of investments                 5,440           (80,946)         (198,962)           20,532
                                                 ---------------------------------------------------------------
         Increase (decrease) in net assets
            from operations                          5,300           (82,500)         (201,983)           18,361
                                                 ---------------------------------------------------------------
From capital transactions:
     Net proceeds from units sold                  439,371         3,958,840         6,110,435         3,828,749
     Cost of units redeemed                           (503)           (9,477)           (9,509)           (5,912)
     Net transfers                                       0            18,486            40,312               879
                                                 ---------------------------------------------------------------
         Increase (decrease) in net assets
             from capital transactions             438,868         3,967,849         6,141,238         3,823,716
                                                 ---------------------------------------------------------------
Increase (decrease) in net assets                  444,168         3,885,349         5,939,255         3,842,077
Net assets at beginning of period                        0                 0                 0                 0
                                                 ---------------------------------------------------------------
Net assets at end of period                      $ 444,168       $ 3,885,349       $ 5,939,255       $ 3,842,077
                                                 ===============================================================
ANALYSIS OF INCREASE (DECREASE)
     IN UNITS OUTSTANDING:
     Units sold                                     25,294           148,918           147,006           124,852
     Units redeemed                                    (29)             (382)             (242)             (200)
     Units transferred                                   0               679               995                20
                                                 ---------------------------------------------------------------
Increase (decrease) in units outstanding            25,265           149,215           147,759           124,672
Beginning units                                          0                 0                 0                 0
                                                 ---------------------------------------------------------------
Ending units                                        25,265           149,215           147,759           124,672
                                                 ===============================================================
</TABLE>

<TABLE>
<CAPTION>
                                                    Asset        SunAmerica
                                                 Allocation       Balanced          Utility
                                                  Portfolio       Portfolio        Portfolio
                                                 -------------------------------------------
<S>                                              <C>             <C>               <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations:
     Net investment loss                         $    (126)      $    (2,085)      $     (82)
     Net realized gains (losses) from
         securities transactions                         0                13               0
     Change in net unrealized appreciation/
         depreciation of investments                 1,731           (17,466)          4,115
                                                 -------------------------------------------
         Increase (decrease) in net assets
            from operations                          1,605           (19,538)          4,033
                                                 -------------------------------------------
From capital transactions:
     Net proceeds from units sold                  488,277         4,406,305         237,916
     Cost of units redeemed                           (340)           (6,921)              0
     Net transfers                                  28,222            73,442               0
                                                 -------------------------------------------
         Increase (decrease) in net assets
             from capital transactions             516,159         4,472,826         237,916
                                                 -------------------------------------------
Increase (decrease) in net assets                  517,764         4,453,288         241,949
Net assets at beginning of period                        0                 0               0
                                                 -------------------------------------------
Net assets at end of period                      $ 517,764       $ 4,453,288       $ 241,949
                                                 ===========================================
ANALYSIS OF INCREASE (DECREASE)
     IN UNITS OUTSTANDING:
     Units sold                                     25,572           250,997          16,154
     Units redeemed                                    (18)             (405)              0
     Units transferred                               1,473             4,181               0
                                                 -------------------------------------------
Increase (decrease) in units outstanding            27,027           254,773          16,154
Beginning units                                          0                 0               0
                                                 -------------------------------------------
Ending units                                        27,027           254,773          16,154
                                                 ===========================================
</TABLE>

                See accompanying notes to financial statements.

                                       66
<PAGE>   102
                         VARIABLE ANNUITY ACCOUNT SEVEN
             (Portion Relating to the POLARIS PLUS Variable Annuity)
                                       OF
                     ANCHOR NATIONAL LIFE INSURANCE COMPANY

                       STATEMENT OF CHANGES IN NET ASSETS
                          FOR THE PERIOD FROM INCEPTION
                                TO APRIL 30, 1999
                                   (Continued)

<TABLE>
<CAPTION>
                                                 Worldwide      High-Yield       Global          Corporate
                                                High Income        Bond           Bond             Bond
                                                 Portfolio      Portfolio       Portfolio        Portfolio
                                                -----------------------------------------------------------
<S>                                             <C>             <C>             <C>             <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations:
     Net investment loss                         $    (36)      $    (307)      $    (308)      $    (276)
     Net realized gains (losses) from
         securities transactions                        1              12               0               1
     Change in net unrealized appreciation/
         depreciation of investments                1,862           6,766           1,497             (77)
                                                 --------------------------------------------------------
         Increase (decrease) in net assets
           from operations                          1,827           6,471           1,189            (352)
                                                 --------------------------------------------------------
From capital transactions:
     Net proceeds from units sold                  69,492         352,908         587,687         421,483
     Cost of units redeemed                             0            (172)           (527)              0
     Net transfers                                      0               0              39               0
                                                 --------------------------------------------------------
         Increase (decrease) in net assets
             from capital transactions             69,492         352,736         587,199         421,483
                                                 --------------------------------------------------------
Increase (decrease) in net assets                  71,319         359,207         588,388         421,131
Net assets at beginning of period                       0               0               0               0
                                                 --------------------------------------------------------
Net assets at end of period                      $ 71,319       $ 359,207       $ 588,388       $ 421,131
                                                 ========================================================
ANALYSIS OF INCREASE (DECREASE)
     IN UNITS OUTSTANDING:
     Units sold                                     4,828          23,718          40,487          32,037
     Units redeemed                                     0             (11)            (36)              0
     Units transferred                                  0               0               3               0
                                                 --------------------------------------------------------
Increase (decrease) in units outstanding            4,828          23,707          40,454          32,037
Beginning units                                         0               0               0               0
                                                 --------------------------------------------------------
Ending units                                        4,828          23,707          40,454          32,037
                                                 ========================================================
</TABLE>

<TABLE>
<CAPTION>
                                                 International     Emerging          Real
                                                Growth & Income     Markets         Estate
                                                   Portfolio       Portfolio       Portfolio
                                                --------------------------------------------
<S>                                             <C>                <C>             <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations:
     Net investment loss                           $     (96)      $     (62)      $    (12)
     Net realized gains (losses) from
         securities transactions                           2               1              0
     Change in net unrealized appreciation/
         depreciation of investments                   7,161           6,981            948
                                                   ----------------------------------------
         Increase (decrease) in net assets
           from operations                             7,067           6,920            936
                                                   ----------------------------------------
From capital transactions:
     Net proceeds from units sold                    171,201         136,905         51,355
     Cost of units redeemed                             (363)              0              0
     Net transfers                                    11,674               0              0
                                                   ----------------------------------------
         Increase (decrease) in net assets
             from capital transactions               182,512         136,905         51,355
                                                   ----------------------------------------
Increase (decrease) in net assets                    189,579         143,825         52,291
Net assets at beginning of period                          0               0              0
                                                   ----------------------------------------
Net assets at end of period                        $ 189,579       $ 143,825       $ 52,291
                                                   ========================================
ANALYSIS OF INCREASE (DECREASE)
     IN UNITS OUTSTANDING:
     Units sold                                       13,835          18,838          5,242
     Units redeemed                                      (29)              0              0
     Units transferred                                   919               0              0
                                                   ----------------------------------------
Increase (decrease) in units outstanding              14,725          18,838          5,242
Beginning units                                            0               0              0
                                                   ----------------------------------------
Ending units                                          14,725          18,838          5,242
                                                   ========================================
</TABLE>

                See accompanying notes to financial statements.

                                       67
<PAGE>   103
                         VARIABLE ANNUITY ACCOUNT SEVEN
             (Portion Relating to the POLARIS PLUS Variable Annuity)
                                       OF
                     ANCHOR NATIONAL LIFE INSURANCE COMPANY

                       STATEMENT OF CHANGES IN NET ASSETS
                          FOR THE PERIOD FROM INCEPTION
                                TO APRIL 30, 1999
                                   (Continued)

<TABLE>
<CAPTION>
                                                                                                             Small
                                                   "Dogs" of          Equity             Equity             Company
                                                  Wall Street         Income             Index               Value
                                                   Portfolio         Portfolio          Portfolio          Portfolio
                                                  ------------------------------------------------------------------
<S>                                               <C>                <C>               <C>                 <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations:
     Net investment loss                           $    (168)        $    (172)        $    (1,878)        $    (26)
     Net realized gains (losses) from
         securities transactions                         (39)                0                   8                0
     Change in net unrealized appreciation/
         depreciation of investments                  13,862             7,177              19,938            2,623
                                                   ----------------------------------------------------------------
         Increase (decrease) in net
           assets from operations                     13,655             7,005              18,068            2,597
                                                   ----------------------------------------------------------------
From capital transactions:
     Net proceeds from units sold                    301,308           370,857           4,068,548           48,211
     Cost of units redeemed                             (262)                0              (4,403)               0
     Net transfers                                    (1,831)            3,736              23,496                0
                                                   ----------------------------------------------------------------
         Increase (decrease) in net assets
             from capital transactions               299,215           374,593           4,087,641           48,211
                                                   ----------------------------------------------------------------
Increase (decrease) in net assets                    312,870           381,598           4,105,709           50,808
Net assets at beginning of period                          0                 0                   0                0
                                                   ----------------------------------------------------------------
Net assets at end of period                        $ 312,870         $ 381,598         $ 4,105,709         $ 50,808
                                                   ================================================================
ANALYSIS OF INCREASE (DECREASE)
     IN UNITS OUTSTANDING:
     Units sold                                       30,856            35,710             398,231            4,634
     Units redeemed                                      (26)                0                (425)               0
     Units transferred                                  (215)              353               2,287                0
                                                   ----------------------------------------------------------------
Increase (decrease) in units outstanding              30,615            36,063             400,093            4,634
Beginning units                                            0                 0                   0                0
                                                   ----------------------------------------------------------------
Ending units                                          30,615            36,063             400,093            4,634
                                                   ================================================================
</TABLE>

<TABLE>
<CAPTION>
                                                   Cash
                                                 Management
                                                  Portfolio             TOTAL
                                                 --------------------------------
<S>                                              <C>                 <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations:
     Net investment loss                         $    (2,010)        $    (18,909)
     Net realized gains (losses) from
         securities transactions                           1                  236
     Change in net unrealized appreciation/
         depreciation of investments                   5,374             (162,301)
                                                 --------------------------------
         Increase (decrease) in net
           assets from operations                      3,365             (180,974)
                                                 --------------------------------
From capital transactions:
     Net proceeds from units sold                  4,375,057           37,937,139
     Cost of units redeemed                             (279)             (45,540)
     Net transfers                                  (335,777)            (193,149)
                                                 --------------------------------
         Increase (decrease) in net assets
             from capital transactions             4,039,001           37,698,450
                                                 --------------------------------
Increase (decrease) in net assets                  4,042,366           37,517,476
Net assets at beginning of period                          0                    0
                                                 --------------------------------
Net assets at end of period                      $ 4,042,366         $ 37,517,476
                                                 ================================
ANALYSIS OF INCREASE (DECREASE)
     IN UNITS OUTSTANDING:
     Units sold                                      365,310            2,105,437
     Units redeemed                                      (23)              (2,288)
     Units transferred                               (28,016)             (23,661)
                                                 --------------------------------
Increase (decrease) in units outstanding             337,271            2,079,488
Beginning units                                            0                    0
                                                 --------------------------------
Ending units                                         337,271            2,079,488
                                                 ================================
</TABLE>

                See accompanying notes to financial statements.

                                       68
<PAGE>   104
                         VARIABLE ANNUITY ACCOUNT SEVEN
             (PORTION RELATING TO THE POLARIS PLUS VARIABLE ANNUITY)
                                       OF
                     ANCHOR NATIONAL LIFE INSURANCE COMPANY

                          NOTES TO FINANCIAL STATEMENTS

1.      ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

        Variable Separate Account (Portion Relating to the POLARIS PLUS Variable
        Annuity) of Anchor National Life Insurance Company (the "Separate
        Account") is a segregated investment account of Anchor National Life
        Insurance Company (the "Company"). The Company is an indirect, wholly
        owned subsidiary of American International Group Inc. ("AIG"), an
        international insurance and financial services company. At December 31,
        1998, the Company was a wholly owned indirect subsidiary of SunAmerica
        Inc., a Maryland corporation. On January 1, 1999, SunAmerica Inc. merged
        with and into AIG in a tax-free reorganization that has been treated as
        a pooling of interests for accounting purposes. Thus, SunAmerica Inc.
        ceased to exist on that date. However, immediately prior to the
        effectiveness of the merger, substantially all of the net assets of
        SunAmerica Inc. were contributed to a newly formed subsidiary of AIG
        named SunAmerica Holdings, Inc., a Delaware corporation. SunAmerica
        Holdings, Inc. subsequently changed its name to SunAmerica Inc. The
        Separate Account is registered as a segregated unit investment trust
        pursuant to the provisions of the Investment Company Act of 1940, as
        amended.

        The Separate Account is composed of twenty-six variable portfolios (the
        "Variable Accounts"). Each of the Variable Accounts is invested solely
        in the shares of either (1) one of the three currently available
        investment portfolios of Anchor Series Trust ("Anchor Trust") or (2) one
        of the twenty-three currently available investment portfolios of
        SunAmerica Series Trust ("SunAmerica Trust"). The Anchor Trust and the
        SunAmerica Trust (the "Trusts") are each diversified, open-end,
        affiliated investment companies, which retain investment advisers to
        assist in the investment activities of the Trusts. The participant may
        elect to have investments allocated to any of five guaranteed-interest
        funds of the Company (the "General Account"), which are not a part of
        the Separate Account. The financial statements include balances
        allocated by the participant to the twenty-six Variable Accounts and do
        not include balances allocated to the General Account.

        The inception date of the Worldwide High Income and Real Estate
        Portfolios was March 31, 1999. The inception date of the International
        Growth & Income Portfolio was March 24, 1999. The inception date of the
        Cash Management, Corporate Bond, Asset Allocation, Equity Income,
        Emerging Markets, and Small Company Value Portfolios was March 23, 1999.
        The inception date of the remaining portfolios was March 19, 1999.


        The fiscal year-end of the Separate Account is April 30. Accordingly,
        the accompanying interim statement of operations and of changes in net
        assets for the nine month period from May 1, 1999 to January 31, 2000,
        and the statement of changes in net assets for the period from inception
        to April 30, 1999 do not represent a full year's activity for the
        Separate Account.





                                       69
<PAGE>   105
                         VARIABLE ANNUITY ACCOUNT SEVEN
             (PORTION RELATING TO THE POLARIS PLUS VARIABLE ANNUITY)
                                       OF
                     ANCHOR NATIONAL LIFE INSURANCE COMPANY

                          NOTES TO FINANCIAL STATEMENTS

        ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
        (continued)

        The investment objectives and policies of the three portfolios of the
        Anchor Trust are summarized below:

        The CAPITAL APPRECIATION PORTFOLIO seeks long-term capital appreciation.
        This portfolio invests in growth equity securities which are widely
        diversified by industry and company using a wide-ranging and flexible
        stock picking approach; may be concentrated and will generally have less
        investments in large company securities than the Growth Portfolio.

        The GROWTH PORTFOLIO seeks capital appreciation. This portfolio invests
        in core equity securities that are widely diversified by industry and
        company.

        The GOVERNMENT AND QUALITY BOND PORTFOLIO seeks relatively high current
        income, liquidity and security of principal. This portfolio invests in
        obligations issued, guaranteed or insured by the U.S. Government, its
        agencies or instrumentalities and in high quality corporate fixed income
        securities.

        Anchor Trust has portfolios in addition to those identified above;
        however, none of these other portfolios is currently available for
        investment under the Separate Account.

        The investment objectives and policies of the twenty-three portfolios of
        the SunAmerica Trust are summarized below:

        The INTERNATIONAL DIVERSIFIED EQUITIES PORTFOLIO seeks long-term capital
        appreciation. This portfolio invests (in accordance with country
        weightings as determined by the Subadviser) in common stocks of foreign
        issuers which, in the aggregate, replicate broad country and sector
        indices.

        The GLOBAL EQUITIES PORTFOLIO seeks long-term growth of capital. This
        portfolio invests primarily in common stocks or securities of U.S. and
        foreign issuers with common stock characteristics which demonstrate the
        potential for appreciation and engages in transactions in foreign
        currencies.

        The AGGRESSIVE GROWTH PORTFOLIO seeks capital appreciation. This
        portfolio invests primarily in equity securities of high growth
        companies including small companies with market capitalizations under $1
        billion.


                                       70
<PAGE>   106
                         VARIABLE ANNUITY ACCOUNT SEVEN
             (PORTION RELATING TO THE POLARIS PLUS VARIABLE ANNUITY)
                                       OF
                     ANCHOR NATIONAL LIFE INSURANCE COMPANY

                          NOTES TO FINANCIAL STATEMENTS

        ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
        (continued)

        The VENTURE VALUE PORTFOLIO seeks growth of capital. This portfolio
        invests primarily in common stocks of companies with market
        capitalizations of at least $5 billion.

        The FEDERATED VALUE PORTFOLIO seeks growth of capital and income. This
        portfolio invests primarily in the securities of high quality companies.

        The PUTNAM GROWTH PORTFOLIO seeks long-term growth of capital. This
        portfolio invests primarily in common stocks or securities with common
        stock characteristics that its Subadviser believes have above-average
        growth prospects.

        The ALLIANCE GROWTH PORTFOLIO seeks long-term growth of capital. This
        portfolio invests primarily in equity securities of a limited number of
        large, carefully selected, high quality U.S. companies that are judged
        likely to achieve superior earnings.

        The GROWTH-INCOME PORTFOLIO seeks growth of capital and income. This
        portfolio invests primarily in common stocks or securities which
        demonstrate the potential for appreciation and/or dividends.

        The ASSET ALLOCATION PORTFOLIO seeks high total return (including income
        and capital gains) consistent with preservation of capital over the long
        term. This portfolio invests in a diversified selection of common stocks
        and other securities having common stock characteristics, bonds and
        other intermediate and long-term fixed-income securities and money
        market instruments (debt securities maturing in one year or less) in any
        combination.

        The SUNAMERICA BALANCED PORTFOLIO seeks to conserve principal. This
        portfolio maintains at all times a balanced portfolio of stocks and
        bonds, with at least 25% invested in fixed income securities.

        The UTILITY PORTFOLIO seeks high current income and moderate capital
        appreciation. This portfolio invests primarily in the equity and debt
        securities of utility companies.

        The WORLDWIDE HIGH INCOME PORTFOLIO seeks high current income and,
        secondarily, capital appreciation. This portfolio invests primarily in a
        selection of high-yielding fixed-income securities of issuers located
        throughout the world.


                                       71
<PAGE>   107
                         VARIABLE ANNUITY ACCOUNT SEVEN
             (PORTION RELATING TO THE POLARIS PLUS VARIABLE ANNUITY)
                                       OF
                     ANCHOR NATIONAL LIFE INSURANCE COMPANY

                          NOTES TO FINANCIAL STATEMENTS

        ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
        (continued)

        The HIGH-YIELD BOND PORTFOLIO seeks a high level of current income and,
        secondarily, seeks capital appreciation. This portfolio invests
        primarily in intermediate and long-term corporate obligations, with
        emphasis on higher-yielding, higher-risk, lower-rated or unrated
        securities with a primary focus on "B" rated high-yield bonds.

        The GLOBAL BOND PORTFOLIO seeks a high total return, emphasizing current
        income and, to a lesser extent, providing opportunities for capital
        appreciation. This portfolio invests in high quality fixed-income
        securities of U.S. and foreign issuers and engages in transactions in
        foreign currencies.

        The CORPORATE BOND PORTFOLIO seeks a high total return with only
        moderate price risk. This portfolio invests primarily in investment
        grade fixed-income securities.

        The INTERNATIONAL GROWTH AND INCOME PORTFOLIO seeks growth of capital
        with current income as a secondary objective. This portfolio invests
        primarily in common stocks traded on markets outside the United States.

        The EMERGING MARKETS PORTFOLIO seeks long-term capital appreciation.
        This portfolio invests mainly in the common stocks and other equity
        securities of companies that its Subadviser believes have above-average
        growth prospects primarily in emerging markets outside the United
        States.

        The REAL ESTATE PORTFOLIO seeks to achieve total return through a
        combination of growth and income. This portfolio invests primarily in
        securities of companies principally engaged in or related to the real
        estate industry or which own significant real estate assets or which
        primarily invest in real estate financial instruments.

        The "DOGS" OF WALL STREET PORTFOLIO seeks total return (including
        capital appreciation and current income) primarily through the annual
        selection of thirty high dividend yielding common stocks from the Dow
        Jones Industrial Average and the broader market.

        The EQUITY INCOME PORTFOLIO seeks long-term capital appreciation and
        income. This portfolio invests primarily in equity securities that are
        expected to pay above-average dividends.


                                       72
<PAGE>   108
                         VARIABLE ANNUITY ACCOUNT SEVEN
             (PORTION RELATING TO THE POLARIS PLUS VARIABLE ANNUITY)
                                       OF
                     ANCHOR NATIONAL LIFE INSURANCE COMPANY

                          NOTES TO FINANCIAL STATEMENTS

        ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
        (continued)

        The EQUITY INDEX PORTFOLIO seeks investment results that correspond with
        the performance of the Standard and Poor's 500 Composite Stock Price
        Index ("S&P 500"). This portfolio invests primarily in common stocks
        included in the S&P 500.

        The SMALL COMPANY VALUE PORTFOLIO seeks capital appreciation. This
        portfolio invests in a broadly diversified portfolio of equity
        securities of small companies generally with market capitalizations of
        less than $1 billion.

        The CASH MANAGEMENT PORTFOLIO seeks high current yield while preserving
        capital. This portfolio invests in a diversified selection of money
        market instruments.

        The SunAmerica Trust has portfolios in addition to those identified
        above; however, none of these other portfolios is currently available
        for investment under the Separate Account.

        Purchases and sales of shares of the portfolios of the Trusts are valued
        at the net asset values of the shares on the date the shares are
        purchased or sold. Dividends and capital gains distributions are
        recorded when received. Realized gains and losses on the sale of
        investments in the Trusts are recognized at the date of sale and are
        determined on an average cost basis.

        Accumulation unit values are computed daily based on the total net
        assets of the Variable Accounts.

2.      CHARGES AND DEDUCTIONS

        WITHDRAWAL CHARGE: The contract value may be withdrawn at any time
        during the accumulation period subject to the limitations under Section
        403 (b) (11) of the Internal Revenue Code (IRC) and any applicable Plan
        document. A withdrawal charge applies against each purchase payment put
        into the contract with a few exceptions. A withdrawal charge is not
        applicable to withdrawals due to annuitization or death benefits.
        Additionally, withdrawal charges do not apply after the participant's
        tenth contract anniversary or after separation from service occurring
        after contract issue. Withdrawal charges are not deducted when
        withdrawals are requested due to disability or hardship. Finally,
        fifteen percent of the purchase payments each contract year are exempt
        from withdrawal charges for participants who were separated from service
        at the time the contract was issued.


                                       73
<PAGE>   109
                         VARIABLE ANNUITY ACCOUNT SEVEN
             (PORTION RELATING TO THE POLARIS PLUS VARIABLE ANNUITY)
                                       OF
                     ANCHOR NATIONAL LIFE INSURANCE COMPANY

                          NOTES TO FINANCIAL STATEMENTS

        CHARGES AND DEDUCTIONS (continued)

        Withdrawal charges vary in amount depending upon the number of years
        since the purchase payment being withdrawn was made. The applicable
        withdrawal charge schedule varies depending upon employment status at
        the time of contract issue. The withdrawal charge is deducted from the
        remaining contract value so that the actual reduction in contract value
        as a result of the withdrawal will be greater than the withdrawal amount
        requested and paid. For purposes of determining the withdrawal charge,
        withdrawals will be allocated first to investment income, if any (which
        may generally be withdrawn free of a withdrawal charge), and then to the
        oldest purchase payments first so that all withdrawals are allocated to
        purchase payments to which the lowest (if any) withdrawal charge
        applies.

        Any amount withdrawn may be subject to a withdrawal charge in accordance
        with the withdrawal charge tables shown below:

                    SEPARATED FROM SERVICE AT CONTRACT ISSUE

<TABLE>
<CAPTION>
                Years Since                          Applicable Withdrawal
              Purchase Payment                         Charge Percentage
              ----------------                       ---------------------
<S>                                                  <C>
              First                                             6%
              Second                                            6%
              Third                                             5%
              Fourth                                            5%
              Fifth                                             4%
              Sixth and beyond                                  0%
</TABLE>

                           EMPLOYED AT CONTRACT ISSUE

<TABLE>
<CAPTION>
                Years Since                          Applicable Withdrawal
              Purchase Payment                         Charge Percentage
              ----------------                       ---------------------
<S>                                                  <C>
              First                                             6%
              Second                                            6%
              Third                                             5%
              Fourth                                            5%
              Fifth                                             4%
              Sixth                                             4%
              Seventh and beyond                                0%
</TABLE>



                                       74
<PAGE>   110
                         VARIABLE ANNUITY ACCOUNT SEVEN
             (PORTION RELATING TO THE POLARIS PLUS VARIABLE ANNUITY)
                                       OF
                     ANCHOR NATIONAL LIFE INSURANCE COMPANY

                          NOTES TO FINANCIAL STATEMENTS

       CHARGES AND DEDUCTIONS (continued)

       TRANSFER FEE: A transfer fee of $25 ($10 in Pennsylvania and Texas) is
       assessed on each transfer of funds in excess of fifteen transactions
       within a contract year.

       PREMIUM TAXES: Premium taxes or other taxes payable to a state or other
       governmental entity will be charged against the contract values. Some
       states assess premium taxes at the time purchase payments are made;
       others assess premium taxes at the time annuity payments begin. The
       Company currently intends to deduct premium taxes at the time of
       surrender or upon annuitization; however, it reserves the right to deduct
       any premium taxes when incurred or upon the payment of the death benefit.

       MORTALITY AND EXPENSE RISK CHARGE: The Company deducts mortality and
       expense risk charges, which total to an annual rate of 1.10% of the net
       asset value of each portfolio, computed on a daily basis. The mortality
       risk charge of 0.80% is compensation for the mortality risks assumed by
       the Company from its contractual obligations to make annuity payments
       after the contract has annuitized for the life of the annuitant and to
       provide death benefits. The expense risk charge of 0.30% is compensation
       for assuming the risk that the current charges will be insufficient in
       the future to cover the cost of administering the contract.

       DISTRIBUTION EXPENSE CHARGE: The Company deducts a distribution expense
       charge at an annual rate of 0.15% of the net asset value of each
       portfolio, computed on a daily basis. This charge is for all expenses
       associated with the distribution of the contract. These expenses include
       preparing the contract, confirmations and statements, providing sales
       support and maintaining contract records. If this charge is not enough to
       cover the costs of distributing the contract, the Company will bear the
       loss.

       SEPARATE ACCOUNT INCOME TAXES: The Company currently does not maintain a
       provision for taxes, but has reserved the right to establish such a
       provision for taxes in the future if it determines, in its sole
       discretion, that it will incur a tax as a result of the operation of the
       Separate Account.


                                       75
<PAGE>   111
                         VARIABLE ANNUITY ACCOUNT SEVEN
             (PORTION RELATING TO THE POLARIS PLUS VARIABLE ANNUITY)
                                       OF
                     ANCHOR NATIONAL LIFE INSURANCE COMPANY

                          NOTES TO FINANCIAL STATEMENTS

        CHARGES AND DEDUCTIONS (continued)

        INCOME PROTECTOR FEE: The Company offers two levels of income protection
        to participants. If elected, the Income Protector Plus and the Income
        Protector Max can provide increased levels of minimum guaranteed income.
        An annual fee is charged for the Plus and Max options, as a percentage
        of an "income benefit base" calculation, in the amount of 0.15% and
        0.30%, respectively. The "income benefit base" calculation is equal to
        the contract's value on the election date, plus all subsequent purchase
        payments, less all withdrawals and applicable fees and charges in an
        amount proportionate to the amount by which such withdrawals decrease
        the contract's value. The "income benefit base" also accumulates at an
        annual growth rate of 3.25% and 5.25% for the Plus and the Max options,
        respectively.


                                       76
<PAGE>   112
                         VARIABLE ANNUITY ACCOUNT SEVEN
             (PORTION RELATING TO THE POLARIS PLUS VARIABLE ANNUITY)
                                       OF
                     ANCHOR NATIONAL LIFE INSURANCE COMPANY

                          NOTES TO FINANCIAL STATEMENTS

3.     INVESTMENT IN ANCHOR TRUST AND SUNAMERICA TRUST

       The aggregate cost of the shares acquired and the aggregate proceeds from
       shares sold during the nine month period from May 1, 1999 to January 31,
       2000 consist of the following:

<TABLE>
<CAPTION>
                                                            Cost of Shares           Proceeds from
        Portfolio Investment                                  Acquired                Shares Sold
        --------------------                                --------------------------------------
<S>                                                         <C>                      <C>
        ANCHOR TRUST:
        Capital Appreciation Portfolio                      $ 24,602,029               $  435,240
        Growth Portfolio                                      20,625,623                    9,389
        Government and Quality Bond Portfolio                 41,169,346                1,397,346

        SUNAMERICA TRUST:
        International Diversified Equities Portfolio           5,544,914                  590,304
        Global Equities Portfolio                             11,805,523                   76,077
        Aggressive Growth Portfolio                           13,343,765                  602,845
        Venture Value Portfolio                               17,360,737                  117,336
        Federated Value Portfolio                              6,199,789                  101,072
        Putnam Growth Portfolio                               45,978,894                    1,522
        Alliance Growth Portfolio                            109,174,141                      695
        Growth-Income Portfolio                               69,904,031                   15,729
        Asset Allocation Portfolio                            10,215,025                  103,424
        SunAmerica Balanced Portfolio                         79,736,383                  332,435
        Utility Portfolio                                      6,679,812                  151,101
        Worldwide High Income Portfolio                        1,547,410                   73,567
        High-Yield Bond Portfolio                              5,159,956                   78,363
        Global Bond Portfolio                                  6,794,254                  158,140
        Corporate Bond Portfolio                               6,958,453                   64,249
        International Growth & Income Portfolio                7,602,441                   30,348
        Emerging Markets Portfolio                             5,446,218                  914,148
        Real Estate Portfolio                                  1,558,851                   56,581
        "Dogs" of Wall Street Portfolio                        6,430,951                  162,597
        Equity Income Portfolio                                6,730,707                  123,349
        Equity Index Portfolio                                58,239,952                  660,117
        Small Company Value Portfolio                          2,765,977                   63,768
        Cash Management Portfolio                             34,303,672                8,664,410
</TABLE>


                                       77
<PAGE>   113
                         VARIABLE ANNUITY ACCOUNT SEVEN
             (PORTION RELATING TO THE POLARIS PLUS VARIABLE ANNUITY)
                                       OF
                     ANCHOR NATIONAL LIFE INSURANCE COMPANY

                          NOTES TO FINANCIAL STATEMENTS

4.      FEDERAL INCOME TAXES

        The Company qualifies for federal income tax treatment granted to life
        insurance companies under subchapter L of the Internal Revenue Service
        Code (the "Code"). The operations of the Separate Account are part of
        the total operations of the Company and are not taxed separately. The
        Separate Account is not treated as a regulated investment company under
        the Code.





                                       78
<PAGE>   114
                          PART C -- OTHER INFORMATION

Item 24.      Financial Statements And Exhibits



(a)     Financial Statements

         The following financial statements are included in Part A of the
         Registration Statement:

                  None

          The following financial statements are included in Part B of the
          Registration Statement:


                  Audited consolidated financial statements of Anchor National
                  Life Insurance Company as of December 31, 1999, December 31,
                  1998 and September 30, 1998 and for the year ended December
                  31, 1999, for the three months ended December 31, 1998 and
                  for each of the two fiscal years in the period ended
                  September 30, 1998.






                  Financial Statements of Variable Annuity Account Seven
                  (portion related to the Polaris Plus Variable Annuity) as of
                  January 31, 2000 and for the nine month period from May 1,
                  1999, to January 31, 2000, and for the period from inception
                  to April 30, 1999.


(b)      Exhibits

(1)       Resolutions Establishing Separate Account.......... **
(2)       Custody Agreements................................. Not Applicable
(3)       (a) Form of Distribution Contract.................. ***
          (b) Form of Selling Agreement...................... ***
(4)       (a) Variable Annuity Contract...................... ***
          (b) Variable Annuity Certificate................... ***
          (c) Tax Sheltered Annuity (403(b)) Endorsement..... ***
(5)       Application for Contract........................... ***
(6)       Depositor -- Corporate Documents
          (a) Certificate of Incorporation................... **
          (b) By-Laws........................................ **
(7)       Reinsurance Contract............................... Not Applicable
(8)       Form of Fund Participation Agreement............... ***
          (a) Anchor Series Trust............................ ***
          (b) SunAmerica Series Trust........................ ***
(9)       Opinion of Counsel................................. ***
          Consent of Counsel................................. ***
(10)      Consent of Independent Accountants................. Filed Herewith
(11)      Financial Statements Omitted from Item 23.......... Not Applicable
(12)      Initial Capitalization Agreement................... Not Applicable
(13)      Performance Computations........................... Not Applicable

(14)      Diagram and Listing of All Persons Directly
          or Indirectly Controlled By or Under Common
          Control with Anchor National Life Insurance
          Company, the Depositor of Registrant............... Filed Herewith

(15)      Powers of Attorney................................. **

*         Previously filed in Form 10-K of American International
          Group, Inc. (File Nos. 001-08787), filed on
          March 30, 1999.

**        Previously Filed in initial Registration Statement
          of Anchor National and Variable Annuity Account
          Seven (333-63511 and 811-0903).

***       Previously Filed in Registration Statement
          of Anchor National and Variable Annuity Account
          Seven (333-63511 and 811-0903) Pre-Effective
          Amendment No. 2.

Item 25.   Directors and Officers of the Depositor

         The officers and directors of Anchor National Life Insurance Company
are listed below. Their principal business address is 1 SunAmerica Center, Los
Angeles, California 90067-6022, unless otherwise noted.

NAME                                      POSITION
- ----                                      --------
Eli Broad                                 Chairman, President and
                                          Chief Executive Officer
Jay S. Wintrob                            Director and Executive Vice
                                          President

Marc H. Gamsin                            Director and Senior Vice President

Jana W. Greer                             Director and Senior Vice President
Peter McMillan                            Director
James R. Belardi                          Director and Senior Vice President
Susan L. Harris                           Director, Senior Vice President
                                          and Secretary
Scott L. Robinson                         Director and Senior Vice President
N. Scott Gillis                           Senior Vice President and Controller


                                      II-1
<PAGE>   115

NAME                                      POSITION
- ----                                      --------
Edwin Raquel                              Senior Vice President and
                                          Chief Actuary
Marc H. Gamsin                            Director and Senior Vice President
P. Daniel Demko                           Vice President
Kevin J. Hart                             Vice President
Edward P. Nolan*                          Vice President
Gregory M. Outcalt                        Vice President
Scott H. Richland                         Vice President
David R. Bechtel                          Vice President and Treasurer

Stuart R. Polakov                         Vice President
Christine A. Nixon                        Assistant Secretary
Lawrence A. Goldman                       Assistant Secretary




- ------------------------
* 88 Bradley Road, P.O. Box 4005, Woodbridge, Connecticut 06525


Item 26.  Persons Controlled By or Under Common Control With Depositor or
Registrant


         The Registrant is a Separate Account of Anchor National Life Insurance
Company (Depositor). For a complete listing and diagram of all persons directly
or indirectly controlled by or under common control with the Depositor or
Registrant, see Exhibit 14 which is incorporated herein by reference. As of
January 4, 1999, Anchor National became an indirect, wholly-owned subsidiary of
American International Group, Inc. ("AIG"). An organizational chart for AIG can
be found in Form 10-K, SEC file no. 001-08787 filed March 30, 2000.


Item 27.  Number Of Contract Owners


        As of March 31, 2000, the number of contracts funded by Variable
Annuity Account Seven of Anchor National (portion relating to The Polaris Plus
Variable Annuity) was 26,429, all of which were Qualified Contracts.


Item 28.  Indemnification

        None.

Item 29.  Principal Underwriter

        SunAmerica Capital Services, Inc. serves as distributor to the
Registrant.

        Its principal business address is 733 Third Avenue, 4th Floor, New York,
New York 10017. The following are the directors and officers of SunAmerica
Capital Services, Inc.


Name                               Position with Distributor
- ----                               -------------------------
J. Steven Neamtz                   Director & President
Robert M. Zakem                    Director, Executive Vice President,
                                   General Counsel &
                                   Assistant Secretary
Peter A. Harbeck                   Director
Debbie Potash-Turner               Controller
James Nichols                      Vice President
Susan L. Harris                    Secretary



               Net Distribution   Compensation on
Name of        Discounts and      Redemption or     Brokerage
Distributor    Commissions        Annuitization     Commissions    Commissions*
- -----------    ----------------   ---------------   -----------    ------------
SunAmerica          None               None              None           None
Capital
Services, Inc.
- --------------------
*Distribution fee is paid by Anchor National Life Insurance Company.

SunAmerica Capital Services, Inc. also acts as the principal underwriter:

    - Variable Separate Account
    - Presidential Variable Account One
    - FS Variable Separate Account
    - Variable Annuity Account One
    - FS Variable Annuity Account One
    - Variable Annuity Account Five
    - Variable Annuity Account Six
    - SunAmerica Income Funds
    - SunAmerica Equity Funds
    - SunAmerica Money Market Funds, Inc.
    - Style Select Series, Inc.
    - SunAmerica Strategic Investment Series, Inc.


Item 30.  Location of Accounts and Records

         Anchor National Life Insurance Company, the Depositor for the
Registrant, is located at 1 SunAmerica Center, Los Angeles, California
90067-6022. SunAmerica Capital Services, Inc., the distributor of the Contracts,
is located at 733 Third Avenue, New York, New York 10017. Each maintains those
accounts and records required to be maintained by it pursuant to Section 31(a)
of the Investment Company Act and the rules promulgated thereunder.

         State Street Bank and Trust Company, 225 Franklin Street, Boston,
Massachusetts 02100, maintains certain accounts and records pursuant to the
instructions of the Registrant.


                                      II-2


<PAGE>   116
Item 31.  Management Services

        Not Applicable.


Item 32.  Undertakings

        Registrant undertakes to (1) file post-effective amendments to this
Registration Statement as frequently as is necessary to ensure that the audited
financial statements in the Registration Statement are never more than 16 months
old for so long as payments under the variable annuity Contracts may be
accepted; (2) include either (A) as part of any application to purchase a
Contract offered by the prospectus forming a part of the Registration Statement,
a space that an applicant can check to request a Statement of Additional
Information, or (B) a postcard or similar written communication affixed to or
included in the Prospectus that the Applicant can remove to send for a Statement
of Additional Information; and (3) deliver a Statement of Additional Information
and any financial statements required to be made available under this Form N-4
promptly upon written or oral request.

Item 33.  Representation

(a)      The Company hereby represents that it is relying upon a No-Action
Letter issued to the American Council of Life Insurance dated November 28, 1988
concerning the redeemability of Section 403(b) annuity Contracts (Commission
ref. IP-6-88) and that the following provisions have been complied with:

1.       Include appropriate disclosure regarding the redemption restrictions
         imposed by Section 403(b)(11) in each registration statement, including
         the prospectus, used in connection with the offer of the contract;

2.       Include appropriate disclosure regarding the redemption restrictions
         imposed by Section 403(b)(11) in any sales literature used in
         connection with the offer of the contract;

3.       Instruct sales representatives who solicit participants to purchase the
         contract specifically to bring the redemption restrictions imposed by
         Section 403(b)(11) to the attention of the potential participants;

4.       Obtain from each plan participant who purchases a Section 403(b)
         annuity contract, prior to or at the time of such purchase, a signed
         statement acknowledging the participant's understanding of (1) the
         restrictions on redemption imposed by Section 403(b)(11), and (2) other
         investment alternatives available under the employer's Section 403(b)
         arrangement to which the participant may elect to transfer his contract
         value.

(b)      REPRESENTATION PURSUANT TO SECTION 26(e) OF THE INVESTMENT COMPANY ACT
         OF 1940: The Company and Registrant represent that the fees and
         charges to be deducted under the variable annuity contract described
         in the prospectus contained in this registration statement are, in the
         aggregate, reasonable in relation to the services rendered, the
         expenses expected to be incurred, and the risks assumed in connection
         with the contract.



                                      II-3

<PAGE>   117
                                   SIGNATURES

         As required by the Securities Act of 1933 and the Investment Company
Act of 1940, the Registrant certifies it meets the requirements of Securities
Act Rule 485 for effectiveness of this Registration Statement and has caused
this Post-Effective Amendment to the Registration Statement to be signed on its
behalf, in the City of Los Angeles, and the State of California, on this
21st day of April, 2000.


                     VARIABLE ANNUITY ACCOUNT SEVEN
                                  (Registrant)


                     By: ANCHOR NATIONAL LIFE INSURANCE COMPANY
                                   (Depositor)


                     By:     /s/ JAY S. WINTROB
                         --------------------------
                                 Jay S. Wintrob
                            Executive Vice President


                     ANCHOR NATIONAL LIFE INSURANCE COMPANY
                                   (Depositor)


                     By:     /s/ JAY S. WINTROB
                         --------------------------
                                 Jay S. Wintrob
                            Executive Vice President

        As required by the Securities Act of 1933, this Post-Effective Amendment
to the Registration Statement has been signed by the following persons in the
capacity and on the dates indicated.


SIGNATURE              TITLE                           DATE
- ---------              -----                           ----

Eli Broad*             President, Chief
- --------------------   Executive Officer and
Eli Broad              Chairman of the Board
                       (Principal Executive
                           Officer)



N. Scott Gillis*       Senior Vice President and Director
- --------------------         (Principal Financial
N. Scott Gillis                     Officer)



Marc H. Gamsin*       Senior Vice President
- --------------------      and Director
Marc H. Gamsin



James R. Belardi*      Senior Vice President and
- --------------------           Director
James R. Belardi


Jana W. Greer*         Senior Vice President and
- --------------------           Director
Jana W. Greer



/s/ Susan L. Harris    Senior Vice President, Secretary      April 21, 2000
- --------------------            and Director
Susan L. Harris


**/s/ Gregory M. Outcalt     Senior Vice President
- ----------------------          and Controller
Gregory M. Outcalt        (Principal Accounting Officer)


Jay S. Wintrob*             Executive Vice President
- --------------------                Director
Jay S. Wintrob


/s/ Susan L. Harris    Attorney-in-Fact
- --------------------
Susan L. Harris


Date: April 21, 2000


 *Attorney in Fact

**KNOW ALL PERSONS BY THESE PRESENTS, that the person whose signature appears
below hereby constitutes and appoints SUSAN L. HARRIS AND CHRISTINE A. NIXON or
each of them, as his true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the
same, with all exhibits thereto, and other documents in connection therewith,
as fully to all intents as he might or could do in person, including
specifically, but without limiting the generality of foregoing, to (i) take any
action to comply with any rules, regulations or requirements of the Securities
and Exchange Commission under the federal securities laws; (ii) make
application for and secure any exemptions from the federal securities laws;
(iii) register additional annuity contracts under the federal securities laws,
if registration is deemed necessary. The undersigned hereby ratifies and
confirms all that said attorneys-in-fact and agents or any of them, or their
substitutes, shall do or cause to be done by virtue thereof.


** /s/ Gregory M. Outcalt
- --------------------------      Senior Vice President and     April 21, 2000
       Gregory M. Outcalt               Controller



<PAGE>   1

                                                                     EXHIBIT 10


                       CONSENT OF INDEPENDENT ACCOUNTANTS



         We hereby consent to the use in the Statement of Additional Information
         constituting part of this Registration Statement on Form N-4 for
         Variable Annuity Account Seven (Portion Relating to the POLARIS PLUS
         Variable Annuity) of Anchor National Life Insurance Company of our
         report dated January 31, 2000, relating to the financial statements of
         Anchor National Life Insurance Company, and of our report dated March
         31, 2000, relating to the financial statements of Variable Annuity
         Account Seven (Portion Relating to the POLARIS PLUS Variable Annuity),
         which appear in such Statement of Additional Information, and to the
         incorporation by reference of our report into the Prospectus which
         constitutes part of this Registration Statement. We also consent to the
         reference to us under the heading "Financial Statements" in such
         Statement of Additional Information.




         PricewaterhouseCoopers LLP
         Los Angeles, California
         April 21, 2000

<PAGE>   1
                                                                      EXHIBIT 14


American International Group, Inc. (a Delaware corporation) owns 100% of
SunAmerica Inc. (a Delaware corporation), which owns 100% of SunAmerica
Investments, Inc. (a Georgia corporation); Resources Trust Company (a Colorado
corporation), which owns 100% of Resources Consolidated Inc. (a Colorado
corporation); SunAmerica Life Insurance Company (an Arizona corporation); Anchor
Insurance Company (Hawaii), Ltd. (a Hawaii corporation; SA Investment Group,
Inc. (a California corporation); SunAmerica Affordable Housing Finance Corp. (a
Delaware corporation); Stanford Ranch, Inc. (a Delaware corporation), which owns
100% of Stanford Ranch, Inc. (a California corporation); Arrowhead SAHP Corp. (a
New Mexico corporation); Chelsea SAHP Corp. (a Florida corporation); Tierra
Vista SAHP Corp. (a Florida corporation); Westwood SAHP Corp. (a New Mexico
corporation); Westwood SAHP Corp. (a New Mexico corporation); Bryton SAHP Corp.
(a Delaware corporation); Churchill SAHP Corp. (a Delaware corporation);
Crossing SAHP Corp. (a Delaware corporation); Emerald SAHP Corp. (a Delaware
corporation); Forest SAHP Corp. (a Delaware corporation); Pleasant SAHP Corp. (a
Delaware corporation); Westlake SAHP Corp. (a Delaware corporation);
Williamsburg SAHP Corp. (a Delaware corporation); Willow SAHP Corp. (a Delaware
corporation); Prairie SAHP Corp. (a Delaware corporation); DIL/SAHP Corp. (a
Delaware corporation); Charleston Bay SAHP Corp. (a Delaware corporation);
SubGen NT Corp. (a Delaware corporation); Belvedere Ventures, Inc. (a Delaware
corporation); SunAmerica Capital Trust IV (a Delaware business trust); Sun
America Capital Trust V (a Delaware business trust); SunAmerica Capital Trust VI
(a Delaware business trust); AIG Investment Management Inc. (a Delaware
corporation). In addition, SunAmerica Inc. owns 33% of New California Life
Holdings, Inc. (a Delaware corporation), which owns a 100% of Aurora National
Life Assurance Company (a California corporation); 85% of AMSUN Realty Holdings
(a California general partnership); 40% of Falcon Financial, LLC (a Delaware
limited liability company); and 93.74% of West Capital Financial Services Corp.
(a California corporation), which owns 100% of West Capital Receivables
Corporation (a California corporation) and 100% of WCFSC Special Purpose
Corporation II (a California corporation), which owns 100% of WCFSC Special
Purpose Corporation (a California corporation), and JOPCO Management Services (a
California corporation).

SunAmerica Investments, Inc. owns 100% of SunAmerica Retirement Markets, Inc. (a
Maryland corporation); SunAmerica Advertising, Inc. (a Georgia corporation);
Accelerated Capital Corp. (a Florida corporation); SunAmerica Louisiana
Properties, Inc. (a California corporation); SunAmerica Real Estate and Office
Administration (a California corporation); SunAmerica Affordable Housing
Partners, Inc. (a California corporation); Hampden I & II Corp. (a California
corporation); Sunport Holdings, Inc. (a California corporation); Sunport
Property Holdings, Inc. (a Florida corporation); SunAmerica Mortgages, Inc. (a
Delaware corporation); Sun Princeton II, Inc. (a California corporation); which
owns Sun Princeton I, Inc. (a California corporation); Houston Warehouse Corp.
(a California corporation); SunAmerica (Cayman) Insurance Company, Ltd. (a
Cayman Islands company); SLP Housing I LLC (a Nevada limited liability company);
SLP Housing II LLC (a Nevada limited liability company); SLP Housing III LLC (a
Nevada limited liability company); SunAmerica Financial Network, Inc. (a
Maryland corporation); SunMexico Holdings, Inc. (a Delaware corporation); Sun
Hechs, Inc. (a California corporation); SAI Investment Adviser, Inc. (a
Delaware corporation); Sun GP Corp. (a California corporation); Sun CRC, Inc. (a
California corporation); Sun-Dollar, Inc. (a California corporation); Sun PLA,
Inc. (a California corporation); Metrocorp, Inc. (a California corporation). In
addition, SunAmerica Investments, Inc. owns 95% of Travel Services Holdings, LLC
(a Delaware limited liability company), which owns 100% of SA Travel Services,
Inc. (a California corporation); 70% of Homes Systems Partners (a California
limited partnership), which owns 100% of Extraneous Holdings Corp. (a Delaware
corporation).

SunAmerica Financial Network, Inc. owns 100% of SunAmerica Securities, Inc. (a
Delaware corporation), which owns 50% of Anchor Insurance Services, Inc., (a
Hawaii corporation); SunAmerica Investments Services corporation (a Georgia
corporation); Financial Service Corporation (a Georgia corporation), which owns
100% of FSC Corporation, which owns 100% FSC Securities Corporation (a Delaware
corporation), FSC Advisory Corporation (a Delaware corporation) and FSC Agency,
Inc. (a Georgia corporation). In addition, SunAmerica Financial Network, Inc.
owns 100% of The Financial Group, Inc. (a Georgia corporation), which owns 100%
of Keogler, Morgan & Co., Inc. (a Georgia corporation), Keogler Investment
Advisory, Inc. (a Georgia corporation); and Keogler Morgan Investments, Inc. (a
Georgia corporation); Advantage Capital Corporation (a New York corporation);
SunAmerica Advisory, Inc. (a Delaware corporation); Glencourt Investments, Inc.
(a California corporation), which owns 100% of Spelman & Co., Inc. (a California
corporation), which owns 100% of Century Investments Group Incorporation (an
Oklahoma corporation); SSC Holding Company, Inc. (a California corporation),
which owns 100% of Sentra Securities Corporation (a California corporation).

SunAmerica Life Insurance Company owns 100% of First SunAmerica Life Insurance
Company (a New York corporation); SunAmerica National Life Insurance Company (an
Arizona corporation); Anchor National Life Insurance Company (an Arizona
corporation); Export Leasing FSC, Inc. (a Virgin Islands company); SunAmerica
Virginia Properties, Inc. (a California corporation); and SAL Investment Group,
Inc. (a California corporation). In additional, SunAmerica Life Insurance
Company owns 85% of SunAmerica Realty Partners (a California corporation) and
88.75% of Sun Quorum LLC (a Delaware limited liability company).

Anchor National Life Insurance Company owns 100% of the following Massachusetts
business trusts: Anchor Pathway Fund, Anchor Series Trust, SunAmerica Series
Trust and Seasons Series Trust. In addition, Anchor National Life Insurance
Company owns 5% of Travel Services Holdings; 100% of Sam Holdings Corporation (a
California corporation), which owns 100% of Sun Royal Holdings Corporation (a
California corporation), which owns 100% of Royal Alliance Associates, Inc. (a
Delaware corporation), which owns 50% of Anchor Insurance Services, Inc. Sam
Holdings Corporation owns 100% of SunAmerica Asset Management Corp. (a Delaware
corporation), which owns 100% of SunAmerica Capital Services, Inc. (a Delaware
corporation); SunAmerica Capital Services (a Delaware corporation); SunAmerica
Fund Services, Inc. (a Delaware corporation); ANF Property Holdings, Inc. (a
California corporation); Capital Life Mortgage Corp. (a Delaware corporation);
and UG Corporation (a Georgia corporation).




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