<PAGE>
Registration No. 333-08877
-------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------
POST-EFFECTIVE AMENDMENT NO. 9 ON FORM S-3 TO
FORM S-1 ON FORM S-3
UNDER
THE SECURITIES ACT OF 1933
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ANCHOR NATIONAL LIFE INSURANCE COMPANY
(Exact name of registrant as specified in its charter)
California 6311 86-0198983
(State or other (Primary Standard (I.R.S. Employer
jurisdiction of Industrial Classification Identification Number)
incorporation or Number) organization)
1 SunAmerica Center
Los Angeles, California 90067-6022
(310) 772-6000
(Address, including zip code, and telephone number,
including area code, or registrant's
principal executive offices)
Christine A. Nixon, Esquire
Anchor National Life Insurance Company
1 SunAmerica Center
Los Angeles, California 90067-6022
(310) 772-6000
(Name, address, including zip code, and telephone number,
including area code of agent for service)
-------------
Approximate date of commencement of proposed sale to the public: As soon
after the effective date of this Registration Statement as is practicable.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. / /
If any of the securities being registered on this form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities
Act of 1933, other than securities offered only in connection with dividend
or interest reinvestment plans, check the following box. /X/
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / / _____________
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / / _____________
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<PAGE>
[LOGO]
PROFILE
October 16, 2000
THIS PROFILE IS A SUMMARY OF SOME OF THE MORE IMPORTANT POINTS YOU SHOULD KNOW
AND CONSIDER BEFORE PURCHASING THE SEASONS SELECT II VARIABLE ANNUITY. THIS
VARIABLE ANNUITY PROVIDES AN OPTIONAL BONUS FEATURE CALLED "SELECT REWARDS." IF
YOU ELECT THIS FEATURE, IN EXCHANGE FOR ANY BONUS CREDITED TO YOUR CONTRACT,
YOUR SURRENDER CHARGE SCHEDULE WILL BE LONGER AND GREATER THAN IF YOU CHOSE NOT
TO ELECT THIS FEATURE. THESE WITHDRAWAL CHARGES MAY OFFSET THE VALUE OF THE
BONUS, IF YOU MAKE AN EARLY WITHDRAWAL. THE ANNUITY IS MORE FULLY DESCRIBED IN
THE PROSPECTUS. PLEASE READ THE PROSPECTUS CAREFULLY.
1. THE SEASONS SELECT II VARIABLE ANNUITY
The Seasons Select II Variable Annuity contract is a contract between you and
Anchor National Life Insurance Company. We designed Seasons Select II to help
you save on a tax-deferred basis. Seasons Select II provides a means to
diversify your investments among asset classes and managers as well as a variety
of investment styles to meet long-term financial goals, such as retirement
funding. Tax deferral means all your money, including the amount you would
otherwise pay in current income taxes, remains in your contract to generate more
earnings. Your money could grow faster than it would in a comparable taxable
investment. Of course, certain Qualified contracts automatically provide tax
deferral regardless of whether they are funded with an annuity.
The Seasons Select II Variable Annuity is designed as a long term retirement
investment and helps you meet these goals by offering variable investment
options. There are nine multimanaged portfolios called SELECT PORTFOLIOS and one
multi-managed FOCUSED PORTFOLIO representing a spectrum of investment styles. In
addition, there are four STRATEGIES which are managed by five different
professional investment managers. The value of any portion of your contract
allocated to the SELECT PORTFOLIO(S), FOCUSED PORTFOLIO(S) and/or STRATEGY(IES)
will fluctuate up or down based on the performance of the PORTFOLIOS and
STRATEGIES you select. You may experience a loss of both principal and earnings.
Five fixed investment options, each for a different length of time and offering
different interest rates guaranteed by Anchor National, are also available. In
addition, if you do not elect to participate in the Select Rewards Program, the
two DCA fixed accounts are available. They offer fixed interest rates guaranteed
by Anchor National and are available under the contract strictly as source
accounts for the Dollar Cost Averaging program.
The SELECT PORTFOLIOS, FOCUSED PORTFOLIOS, STRATEGIES and fixed investment
options are designed to be used in order to achieve your desired investment
goals. You may put money into any of the SELECT PORTFOLIOS, FOCUSED PORTFOLIOS,
STRATEGIES and/or fixed investment options. You may make transfers between the
SELECT PORTFOLIOS, FOCUSED PORTFOLIOS, STRATEGIES and/or the fixed investment
options without incurring a transfer charge.
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 SELECT PORTFOLIO(S), FOCUSED
PORTFOLIO(S) or STRATEGY(IES) to which your money is allocated and/or the
interest rate earned on the fixed investment options. You may withdraw money
from your contract during the Accumulation Phase. However, as with other
tax-deferred investments, you will pay taxes on earnings and untaxed
contributions when you withdraw them. An IRS tax penalty may apply if you make
withdrawals before age 59 1/2. During the Income Phase, you will receive
payments from your annuity. Your payments may be fixed in dollar amount, vary
with investment performance or be a combination of both, depending on where your
money is allocated. Among other factors, the amount of money you are able to
accumulate in your contract during the Accumulation Phase will determine the
amount of your payments during the Income Phase.
The Seasons Select II Variable Annuity may not be available in all states.
<PAGE>
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 or 20 years; and
(5) payments for a specified period of 5 to 30 years.
Other options may be available.
You will also need to decide if you want your payments to fluctuate with
investment performance or remain constant, and the date on which your payments
will begin. Once you begin receiving payments, you cannot change your income
option. If your contract is Non-qualified, payments during the Income Phase are
considered partly a return of your original investment. The "original
investment" part of each payment is not taxable but any gain to your original
investment is currently taxable as ordinary income upon distribution. For
Qualified contracts, the entire payment is currently taxable as ordinary income.
In addition to the above income options, if elected by you, you may also take
income payments under the Income Protector program subject to the provisions
thereof.
3. PURCHASING A SEASONS SELECT II VARIABLE ANNUITY
You can buy a contract through your financial representative, who can also help
you complete the proper forms. For Non-qualified contracts the minimum initial
investment is $5000. For Qualified contracts the minimum initial investment is
$2000. You can add $500 or more to your contract at any time during the
Accumulation Phase.
You may elect to participate in the Select Rewards Program when you apply for
your contract. Under this program, we add an amount to your contract (an
"upfront Payment Enhancement") each time you invest a Purchase Payment.
Additionally, we may also pay an amount to your contract at a future date (a
"deferred Payment Enhancement"). Payment Enhancements are calculated as a
percentage of each Purchase Payment. The Select Rewards Program may not be
available to you. Please check with your financial representative regarding
availability of this program.
4. INVESTMENT OPTIONS
You can put your money into any one or more of the nine distinct SELECT
PORTFOLIOS, one FOCUSED PORTFOLIO, four multi-manager variable investment
STRATEGIES and/or the seven fixed investment options; however, the 6-month and
1-year DCA fixed accounts are not available if you elect to participate in the
Select Rewards Program. The fixed investment options offer fixed rates of
interest for specified lengths of time.
Each SELECT PORTFOLIO and each FOCUSED PORTFOLIO has a distinct investment
objective utilizing a disciplined investing style to achieve its objective. Each
SELECT PORTFOLIO and each FOCUSED PORTFOLIO invests in an underlying investment
portfolio. Except for the Cash Management portfolio[s], each underlying
portfolio is multi-managed by a team of three money managers specializing in the
distinct investment style.
The nine SELECT PORTFOLIOS and the respective managers are:
<TABLE>
<S> <C>
LARGE CAP GROWTH LARGE CAP COMPOSITE
BANKERS TRUST COMPANY BANKERS TRUST
("BANKERS TRUST") SUNAMERICA ASSET
GOLDMAN SACHS ASSET MANAGEMENT CORPORATION
MANAGEMENT ("GOLDMAN ("SAAMCO")
SACHS") T. ROWE PRICE ASSOCIATES, INC.
JANUS CAPITAL CORPORATION("JANUS") ("T. ROWE PRICE")
LARGE CAP VALUE MID CAP GROWTH
BANKERS TRUST BANKERS TRUST
T. ROWE PRICE T. ROWE PRICE
WELLINGTON MANAGEMENT WELLINGTON
COMPANY LLP ("WELLINGTON")
MID CAP VALUE SMALL CAP
BANKERS TRUST BANKERS TRUST
GOLDMAN SACHS LORD ABBETT
LORD ABBETT & CO. ("LORD ABBETT") SAAMCO
INTERNATIONAL EQUITY DIVERSIFIED FIXED INCOME
BANKERS TRUST BANKERS TRUST
GOLDMAN SACHS ASSET MANAGEMENT SAAMCO
INTERNATIONAL ("GOLDMAN WELLINGTON
SACHS INT'L")
LORD ABBETT
CASH MANAGEMENT
SAAMCO
</TABLE>
The FOCUSED PORTFOLIO and its managers are:
FOCUS GROWTH
FRED ALGER MANAGEMENT ("FRED ALGER")
JENNISON ASSOCIATES ("JENNISON")
MARSICO CAPITAL MANAGEMENT ("MARSICO CAPITAL")
Each STRATEGY has a different investment objective. The STRATEGIES use an asset
allocation investment approach. Each STRATEGY invests in a combination of
underlying investment portfolios which in turn invest in a combination of
<PAGE>
stocks, bonds and cash, to achieve its investment objective. The four investment
STRATEGIES and their underlying investment portfolios are:
GROWTH STRATEGY
- ASSET ALLOCATION: DIVERSIFIED GROWTH PORTFOLIO
PUTNAM INVESTMENT MANAGEMENT, INC. ("PUTNAM")
- STOCK PORTFOLIO
T. ROWE PRICE
- MULTI-MANAGED GROWTH PORTFOLIO
JANUS
SAAMCO
WELLINGTON
MODERATE GROWTH STRATEGY
- ASSET ALLOCATION: DIVERSIFIED GROWTH PORTFOLIO
PUTNAM INVESTMENT MANAGEMENT, INC.
- STOCK PORTFOLIO
T. ROWE PRICE
- MULTI-MANAGED MODERATE GROWTH PORTFOLIO
JANUS
SAAMCO
WELLINGTON
BALANCED GROWTH STRATEGY
- ASSET ALLOCATION: DIVERSIFIED GROWTH PORTFOLIO
PUTNAM
- STOCK PORTFOLIO
T. ROWE PRICE
- MULTI-MANAGED INCOME/EQUITY PORTFOLIO
JANUS
SAAMCO
WELLINGTON
CONSERVATIVE GROWTH STRATEGY
- ASSET ALLOCATION: DIVERSIFIED GROWTH PORTFOLIO
PUTNAM
- STOCK PORTFOLIO
T. ROWE PRICE
- MULTI-MANAGED INCOME PORTFOLIO
JANUS
SAAMCO
WELLINGTON
The percentage allocation which each STRATEGY invests in each underlying
portfolio is depicted on pages 15-16 of the prospectus.
5. EXPENSES
Each year we deduct a $35 ($30 in North Dakota) contract administration fee on
your contract anniversary. We currently waive this fee if your contract value is
at least $50,000 on your contract anniversary.
We also deduct insurance charges. The insurance charge amounts to 1.40% annually
of the average daily value of your contract allocated to the SELECT
PORTFOLIO(S), FOCUSED PORTFOLIO(S) and/or STRATEGY(IES). There are also
investment charges and other expenses if you put money into the SELECT
PORTFOLIO(S), FOCUSED PORTFOLIO(S) or STRATEGY(IES), which are estimated to
range from 0.85% to 1.30% and 12b-1 fees of 0.15% annually. Investment charges
may be more or less than the percentages reflected here.
If you take your money out in excess of the "free withdrawal" amount allowed for
in your contract, we may assess a withdrawal charge that is a percentage of the
money you withdraw. The withdrawal charge schedule also varies depending on
whether you elect to participate in the Select Rewards Program when you purchase
your contract. The percentage declines with each year the purchase payment is in
the contract as follows:
WITHDRAWAL CHARGE WITHOUT THE SELECT REWARDS PROGRAM (SCHEDULE A)
<TABLE>
<S> <C> <C> <C>
Year 1........ 7% Year 5........ 4%
Year 2........ 6% Year 6........ 3%
Year 3........ 6% Year 7........ 2%
Year 4........ 5% Year 8........ 0%
</TABLE>
WITHDRAWAL CHARGE WITH THE SELECT REWARDS PROGRAM (SCHEDULE B)
<TABLE>
<S> <C> <C> <C>
Year 1........ 9% Year 6........ 5%
Year 2........ 8% Year 7........ 4%
Year 3........ 7% Year 8........ 3%
Year 4........ 6% Year 9........ 2%
Year 5........ 6% Year 10........ 0%
</TABLE>
The higher potential withdrawal charges may compensate us for the expenses
associated with the Select Rewards Program.
Additionally, if you take money out of a multi-year fixed investment option
before the end of the selected period, we may assess a market value adjustment
which could increase or decrease the value of your money.
In some states you may also be assessed a state premium tax of up to 3.5%,
depending upon the state in which you reside.
You may make transfers among the SELECT PORTFOLIO(S), FOCUSED PORTFOLIO(S),
STRATEGY(IES) and/or fixed investment options without incurring a transfer
charge. However, we reserve the right to charge a fee for such transfers in the
future.
If you elect to enroll in the Income Protector program, we charge 0.10% of your
Income Benefit Base (as described in the prospectus) from your contract value on
each contract anniversary depending on the option you select. If you elect the
optional enhanced death benefit, we charge 0.25% of your daily net asset value.
The following charts are designed to help you understand the charges in your
contract. THE COLUMN "TOTAL ANNUAL CHARGES" SHOWS THE TOTAL OF THE $35 CONTRACT
ADMINISTRATION CHARGE, THE 1.40% INSURANCE CHARGE, THE 0.15% 12B-1 FEE, AND THE
INVESTMENT CHARGES FOR EACH SELECT PORTFOLIO, FOCUSED PORTFOLIO AND STRATEGY. WE
CONVERTED THE CONTRACT ADMINISTRATION CHARGE TO A PERCENTAGE (0.09%) USING AN
ASSUMED CONTRACT SIZE OF $40,000. The actual impact of this charge on your
contract may differ from this percentage and actually may be waived for contract
values over $50,000.
<PAGE>
[TO BE UPDATED BY AMENDMENT]
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------------
EXAMPLES
Total Total
Expenses Expenses
at end of at end of
1 YEAR 10 YEARS
Total Without/ Without/
Annual Total Annual With With
Insurance Investment Total Select Select
Related Related Annual Rewards Rewards
Charges Charges Charges Program Program
SELECT
PORTFOLIOS
<S> <C> <C> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------------------------------------
Large Cap Growth 1.49% (1.40% + .09%) 1.25% (1.10% + .15%) 2.74% $ $
Large Cap Composite 1.49% (1.40% + .09%) 1.25% (1.10% + .15%) 2.74% $ $
Large Cap Value 1.49% (1.40% + .09%) 1.25% (1.10% + .15%) 2.74% $ $
Mid Cap Growth 1.49% (1.40% + .09%) 1.30% (1.15% + .15%) 2.79% $ $
Mid Cap Value 1.49% (1.40% + .09%) 1.30% (1.15% + .15%) 2.79% $ $
Small Cap 1.49% (1.40% + .09%) 1.30% (1.15% + .15%) 2.79% $ $
International Equity 1.49% (1.40% + .09%) 1.45% (1.30% + .15%) 2.94% $ $
Diversified Fixed
Income 1.49% (1.40% + .09%) 1.15% (1.00% + .15%) 2.64% $ $
Cash Management 1.49% (1.40% + .09%) 1.00% (0.85% + .15%) 2.49% $ $
---------------------------------------------------------------------------------------------------------------------------
FOCUSED PORTFOLIOS
---------------------------------------------------------------------------------------------------------------------------
Focus Growth(2) 1.49% (1.40% + .09%) 1.45% (1.30% + .15%) 2.79% $118 $308
---------------------------------------------------------------------------------------------------------------------------
<CAPTION>
EXAMPLES
Total Total
Expenses Expenses
at end of at end of
1 YEAR 10 YEARS
Total Without/ Without/
Annual Total Annual With With
Insurance Investment Total Select Select
Related Related Annual Rewards Rewards
Charges Charges(1) Charges Program Program
STRATEGIES
<S> <C> <C> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------------------------------------
Growth 1.49% (1.40% + .09%) 1.29% (1.14% + .15%) 2.78% $ $
Moderate Growth 1.49% (1.40% + .09%) 1.27% (1.12% + .15%) 2.76% $ $
Balanced Growth 1.49% (1.40% + .09%) 1.27% (1.12% + .15%) 2.76% $ $
Conservative Growth 1.49% (1.40% + .09%) 1.25% (1.10% + .15%) 2.74% $ $
---------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Investment related charges for each STRATEGY are based upon the allocation
to the underlying investment portfolio after the quarterly rebalancing
described in the prospectus.
(2) This portfolio was not available for sale during fiscal year 2000. The Total
Annual Investment Related Charges are based on estimated amounts for the
current fiscal year.
<PAGE>
If you elect the optional Income Protector (0.10%) and Enhanced Death Benefit(3)
(0.25%):
TO BE UPDATED BY AMENDMENT
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------
EXAMPLES
Total Total
Expenses Expenses
at end of at end of
1 YEAR 10 YEARS
Total Without/ Without/
Annual Total Annual With With
Insurance Investment Total Select Select
Related Related Annual Rewards Rewards
Charges Charges Charges Program Program
SELECT
PORTFOLIO(S)
<S> <C> <C> <C> <C> <C> <C> <C>
------------------------------------------------------------------------------------------------------------
Large Cap
Growth 1.84% (1.40% + .09% + .10% + .25%) 1.25% (1.10% + .15%) 3.09% $ $
Large Cap
Composite 1.84% (1.40% + .09% + .10% + .25%) 1.25% (1.10% + .15%) 3.09% $ $
Large Cap
Value 1.84% (1.40% + .09% + .10% + .25%) 1.25% (1.10% + .15%) 3.09% $ $
Mid Cap
Growth 1.84% (1.40% + .09% + .10% + .25%) 1.30% (1.15% + .15%) 3.14% $ $
Mid Cap Value 1.84% (1.40% + .09% + .10% + .25%) 1.30% (1.15% + .15%) 3.14% $ $
Small Cap
Portfolio 1.84% (1.40% + .09% + .10% + .25%) 1.30% (1.15% + .15%) 3.14% $ $
International
Equity 1.84% (1.40% + .09% + .10% + .25%) 1.45% (1.30% + .15%) 3.29% $ $
Diversified
Fixed Income 1.84% (1.40% + .09% + .10% + .25%) 1.15% (1.00% + .15%) 2.99% $ $
Cash
Management 1.84% (1.40% + .09% + .10% + .25%) 1.00% (0.85% + .15%) 2.84% $ $
------------------------------------------------------------------------------------------------------------
FOCUSED
PORTFOLIOS
------------------------------------------------------------------------------------------------------------
Focus
Growth(2) 1.84% (1.40% + .09% + .10% + .25%) 1.45% (1.30% + .15%) 3.29% $119 $320
------------------------------------------------------------------------------------------------------------
<CAPTION>
EXAMPLES
Total Total
Expenses Expenses
at end of at end of
1 YEAR 10 YEARS
Total Without/ Without/
Annual Total Annual With With
Insurance Investment Total Select Select
Related Related Annual Rewards Rewards
Charges Charges(1) Charges Program Program
STRATEGY(IES)
<S> <C> <C> <C> <C> <C> <C> <C>
------------------------------------------------------------------------------------------------------------
Growth 1.84% (1.40% + .09% + .10% + .25%) 1.29% (1.14% + .15%) 3.13% $ $
Moderate
Growth 1.84% (1.40% + .09% + .10% + .25%) 1.27% (1.12% + .15%) 3.11% $ $
Balanced
Growth 1.84% (1.40% + .09% + .10% + .25%) 1.27% (1.12% + .15%) 3.11% $ $
Conservative
Growth 1.84% (1.40% + .09% + .10% + .25%) 1.25% (1.10% + .15%) 3.09% $ $
------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Investment related charges for each STRATEGY are based upon the allocation
to the underlying investment portfolio after the quarterly rebalancing
described in the prospectus.
(2) This portfolio was not available for sale during fiscal year 2000. The Total
Annual Investment Related Charges are based on estimated amounts for the
current fiscal year.
(3) Once elected at the time of contract application, the enhanced death benefit
cannot be terminated.
The examples assume that you invested $1,000 in a SELECT PORTFOLIO, FOCUSED
PORTFOLIO or STRATEGY which earns 5% annually and that you withdrew your money
at the end of a 1 year period and at the end of a 10 year period. For year 1,
the total annual charges are assessed as well as the withdrawal charge. For year
10, the example reflects the total annual charges but there is no withdrawal
charge applicable. The annual investment-related expenses may vary. The amounts
shown here are estimates and reflect the waiver or reimbursement of expenses by
the investment adviser. No premium taxes are reflected. Please see the Fee
Tables in the prospectus for more detailed information regarding the fees and
expenses incurred under the contract.
<PAGE>
6. TAXES
Unlike taxable investments where earnings are taxed in the year they are earned,
taxes on amounts earned in a Non-qualified contract (one that is established
with after tax dollars) are deferred until they are withdrawn. In a Qualified
contract (one that is established with before tax dollars) all amounts are
taxable when they are withdrawn.
When you begin taking distributions or withdrawals from your contract, earnings
are considered to be taken out first and will be taxed at your ordinary income
tax rate. You may be subject to a 10% IRS tax penalty for distributions or
withdrawals before age 59 1/2.
7. ACCESS TO YOUR MONEY
Withdrawals may be made from your contract in the amount of $1,000 or more.
Your contract provides for a free withdrawal amount each year. A free withdrawal
amount is the portion of your account that we allow you to take out each year
without being charged a surrender penalty. However, upon a future full surrender
of your contract we will recoup any surrender charges which would have been due
at the time the free withdrawals were taken if your free withdrawal had not been
free.
If you withdraw your entire contract value and you have purchase payments still
subject to a surrender penalty, you will not receive the benefit of any free
withdrawal amount. A separate withdrawal charge schedule applies to each
purchase payment. After a purchase payment has been in the contract for seven
full years, or nine years if you participate in the Select Rewards Program,
withdrawal charges no longer apply to that portion of the money. Of course, upon
withdrawal you may also have to pay income taxes and a 10% IRS tax penalty may
apply. Neither withdrawal charges nor the 10% IRS tax penalty are assessed when
a death benefit is paid.
8. PERFORMANCE
The value of your annuity will fluctuate depending upon the investment
performance of the SELECT PORTFOLIO(S), FOCUSED PORTFOLIO(S) and/or
STRATEGY(IES) you select. From time to time we may advertise a SELECT
PORTFOLIO'S, FOCUSED PORTFOLIO'S or STRATEGY'S total return. The total return
figures are based on historical data and are not intended to indicate future
performance.
<TABLE>
<CAPTION>
<S> <C>
-----------------------------------------------
Strategy 1999
-----------------------------------------------
Growth............................ 35.32%
Moderate Growth................... 29.61%
Balanced Growth................... 16.90%
Conservative Growth............... 10.57%
-----------------------------------------------
</TABLE>
The total returns here do not take into account the effect of a Payment
Enhancement made under the Select Rewards Program.
9. DEATH BENEFIT
If you, or the joint annuitant, if one exists, should die during the
Accumulation Phase, your Beneficiary will receive a death benefit.
The standard death benefit is an automatic feature of your contract. We also
offer an optional enhanced death benefit which you may elect as an alternative
to the standard death benefit if you are not over the age of 80 at time of
contract issue.
10. OTHER INFORMATION
OWNERSHIP: The contract is an allocated fixed and variable group annuity
contract. A group contract is issued to a contractholder, for the benefit of the
participants in the group. You, as an owner of a Seasons Select II Variable
Annuity, are a participant in the group and will receive a certificate
evidencing your ownership. You, as the owner of a certificate, are entitled to
all the rights and privileges of ownership. As used in this Profile and the
prospectus, the term contract refers to your certificate. In some states an
individual fixed and variable annuity contract may be available instead, which
is identical to the group contract described in this Profile and the prospectus
except that it is issued directly to the individual owner.
FREE LOOK: You may cancel your contract within 10 days of receiving it (or
whatever period is 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 the money in the SELECT
PORTFOLIO(S), FOCUSED PORTFOLIO(S) and/or STRATEGY(IES) plus any money you put
into the fixed investment options. Its value may be more or less than the money
you initially invested. Thus, the investment risk is borne by you during the
free look period.
SELECT REWARDS PROGRAM: if elected by you, we add an amount to your contract (an
"Upfront Payment Enhancement") each time you make a Purchase Payment.
Additionally, we may also add an amount to your contract at a future date (a
"Deferred Payment Enhancement"). Payment Enhancements are
<PAGE>
calculated as a percentage of your Purchase Payment amount and are treated as
earnings under your contract. The program may not be available to you. Please
check with your Financial representative regarding the availability of this
program.
SYSTEMATIC WITHDRAWAL PROGRAM: If selected by you, this program allows you to
receive either monthly, quarterly, semi-annual or annual checks during the
Accumulation Phase. Systematic withdrawals may also be electronically
transferred to your
<PAGE>
bank account. Of course, withdrawals during the Accumulation Phase may be
taxable and a 10% IRS tax penalty may apply if you are under age 59 1/2.
DOLLAR COST AVERAGING: If selected by you, this program allows you to invest
gradually into one or more of the SELECT PORTFOLIO(S), FOCUSED PORTFOLIO(S) or
STRATEGY(IES) from a SELECT PORTFOLIO, FOCUSED PORTFOLIO, STRATEGY OR or 1-year
fixed account option. If you do not participate in the Select Rewards Program
you may also invest in the SELECT PORTFOLIO(S), FOCUSED PORTFOLIO(S) or
STRATEGY(IES) from the 6-month DCA fixed account option the 1-year DCA fixed
account option.
PRINCIPAL ADVANTAGE PROGRAM: If selected by you, this program allows you to put
money in a fixed investment option and one or more SELECT PORTFOLIO(S), FOCUSED
PORTFOLIO(S) or STRATEGY(IES) and we will guarantee that the portion allocated
to the fixed investment option assuming that it remains invested in that option,
will grow to equal your principal investment.
AUTOMATIC PAYMENT PLAN: You can add to your contract directly from your bank
account with as little as $50 per month.
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
800/445-SUN2
If money accompanies your correspondence, you should direct it to:
Anchor National Life Insurance Company
P.O. Box 100330
Pasadena, California 91189-0001
<PAGE>
[LOGO]
PROSPECTUS
October 16, 2000
ALLOCATED FIXED AND VARIABLE GROUP ANNUITY
issued by
VARIABLE ANNUITY ACCOUNT FIVE
and
ANCHOR NATIONAL LIFE INSURANCE COMPANY
The annuity contract has 21 investment choices - 7 fixed investment options (5
fixed investment options if the Select Rewards Program is elected) which offer
interest rates guaranteed by Anchor National for different periods of time, 9
variable investment SELECT PORTFOLIOS, 1 variable investment FOCUSED PORTFOLIO
and 4 variable investment STRATEGIES:
<TABLE>
<CAPTION>
SELECT PORTFOLIOS FOCUSED PORTFOLIOS STRATEGIES
<S> <C> <C>
LARGE CAP GROWTH FOCUS GROWTH GROWTH
LARGE CAP COMPOSITE MODERATE GROWTH
LARGE CAP VALUE BALANCED GROWTH
MID CAP GROWTH CONSERVATIVE GROWTH
MID CAP VALUE
SMALL CAP
INTERNATIONAL EQUITY
DIVERSIFIED FIXED INCOME
CASH MANAGEMENT
</TABLE>
all of which invest in the underlying portfolios of
SEASONS SERIES TRUST
which is managed by:
<TABLE>
<CAPTION>
SELECT PORTFOLIOS FOCUSED PORTFOLIOS STRATEGIES
<S> <C> <C>
BANKERS TRUST COMPANY FRED ALGER MANAGEMENT PUTNAM INVESTMENT MANAGEMENT, INC.
GOLDMAN SACHS ASSET MANAGEMENT JENNISON ASSOCIATES T. ROWE PRICE ASSOCIATES, INC.
JANUS CAPITAL CORPORATION MARSICO CAPITAL MANAGEMENT JANUS CAPITAL CORPORATION
LORD, ABBETT & COMPANY SUNAMERICA ASSET MANAGEMENT CORPORATION
SUNAMERICA ASSET MANAGEMENT CORPORATION WELLINGTON MANAGEMENT COMPANY, LLP
T. ROWE PRICE ASSOCIATES, INC.
GOLDMAN SACHS ASSET MANAGEMENT
INTERNATIONAL
WELLINGTON MANAGEMENT COMPANY, LLP
</TABLE>
You can put your money into any one or all of the SELECT PORTFOLIO(S), FOCUSED
PORTFOLIO(S), STRATEGY(IES) and/or fixed investment options.
Please read this prospectus carefully before investing and keep it for your
future reference. It contains important information you should know about the
Seasons Select II Variable Annuity. This variable annuity provides an optional
bonus feature called "Select Rewards." If you elect this feature, in exchange
for bonuses credited to your contract, your surrender charge schedule will be
longer and greater than if you chose not to elect this feature. These withdrawal
charges may offset the value of any bonus, if you make an early withdrawal.
To learn more about the annuity offered by this prospectus, you can obtain a
copy of the Statement of Additional Information ("SAI") dated October 16,
2000. The SAI has been filed with the Securities and Exchange Commission
("SEC") and can be considered part of this prospectus.
The table of contents of the SAI appears on page 42 of this prospectus. For a
free copy of the SAI, call us at 800/445-SUN2 or write our Annuity Service
Center at, P.O. Box 54299, Los Angeles, California 90054-0299.
A registration statement has been filed with the SEC under the Securities Act of
1933 relating to the contract. This prospectus does not contain all the
information in the registration statement as permitted by SEC regulations. The
omitted information can be obtained from the SEC's principal office in
Washington, D.C., upon payment of a prescribed fee.
In addition, the SEC maintains a website (http://www.sec.gov) that contains the
SAI, materials incorporated by reference and other information filed
electronically with the SEC.
ANNUITIES INVOLVE RISK, INCLUDING POSSIBLE LOSS OF PRINCIPAL, AND ARE NOT A
DEPOSIT OR OBLIGATION OF, OR GUARANTEED OR ENDORSED BY, ANY BANK. THEY ARE NOT
FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD OR ANY OTHER AGENCY.
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>
INCORPORATION OF CERTAIN
DOCUMENTS BY REFERENCE
Anchor National's Annual Report on Form 10-K for the year ended
December 31, 1999 is incorporated herein by reference.
All documents or reports filed by Anchor National under Section 13(a), 13(c),
14, or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act") after the effective date of this prospectus are also incorporated by
reference. Statements contained in this prospectus and subsequently filed
documents which are incorporated by reference or deemed to be incorporated by
reference are deemed to modify or supersede documents incorporated herein by
reference.
Anchor National files its Exchange Act documents and reports, including its
annual and quarterly reports on Form 10-K and Form 10-Q, electronically pursuant
to EDGAR under CIK No. 0000006342.
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 required
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
statements and exhibits. For further information regarding the separate account,
Anchor National and its general account, the Variable Portfolios and the
contract, please refer to the registration statements and 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.
Anchor National will provide without charge to each person to whom this
prospectus is delivered, upon written or oral request, a copy of the documents
incorporated by reference. Requests for these documents should be directed to
Anchor National's Annuity Service Center, as follows:
Anchor National Life Insurance Company
Annuity Service Center
P.O. Box 54299
Los Angeles, California 90054-0299
Telephone Number: (800) 445-SUN2
SECURITIES AND EXCHANGE COMMISSION POSITION ON INDEMNIFICATION
Indemnification for liabilities arising under the Securities Act of 1933 (the
"Act") is provided to Anchor National's officers, directors and controlling
persons. The SEC has advised that it believes such indemnification is against
public policy under the Act and unenforceable. If a claim for indemnification
against such liabilities (other than for Anchor National's payment of expenses
incurred or paid by its directors, officers or controlling persons in the
successful defense of any legal action) is asserted by a director, officer or
controlling person of Anchor National in connection with the securities
registered under this prospectus, Anchor National will submit to a court with
jurisdiction to determine whether the indemnification is against public policy
under the Act. Anchor National will be governed by final judgment of the issue.
However, if in the opinion of Anchor National's counsel this issue has been
determined by controlling precedent, Anchor National will not submit the issue
to a court for determination.
2
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
GLOSSARY.................................................... 4
FEE TABLES.................................................. 5
Owner Transaction Expenses.............................. 5
Annual Separate Account Expenses........................ 5
The Optional Income Protector Fee....................... 5
Investment Portfolio Expenses of Portfolios............. 6
Investment Portfolio Expenses by Strategy............... 6
Investment Portfolio Expenses for Strategy Underlying
Portfolios............................................. 6
EXAMPLES.................................................... 7
THE SEASONS SELECT II VARIABLE ANNUITY...................... 10
PURCHASING A SEASONS SELECT VARIABLE ANNUITY................ 11
Select Rewards Program.................................. 11
Allocation of Purchase Payments......................... 11
Accumulation Units...................................... 14
Free Look............................................... 14
INVESTMENT OPTIONS.......................................... 15
Variable Investment Options............................. 15
THE PORTFOLIOS........................................ 15
THE STRATEGIES........................................ 16
Market Value Adjustment................................. 20
Transfers During the Accumulation Phase................. 21
Dollar Cost Averaging................................... 22
Principal Advantage Program............................. 23
Voting Rights........................................... 24
Substitution............................................ 24
ACCESS TO YOUR MONEY........................................ 24
Free Withdrawal Provision............................... 24
Systematic Withdrawal Program........................... 26
Minimum Contract Value.................................. 26
Qualified Contract Owners............................... 26
DEATH BENEFIT............................................... 27
Standard Death Benefit.................................. 27
Optional Enhanced Death Benefit......................... 28
Spousal Continuation.................................... 29
EXPENSES.................................................... 29
Insurance Charges....................................... 30
Withdrawal Charges...................................... 30
Investment Charges...................................... 31
Contract Maintenance Fee................................ 31
Transfer Fee............................................ 31
Premium Tax............................................. 31
Income Taxes............................................ 32
Reduction or Elimination of Charges and Expenses, and
Additional Amounts Credited............................ 32
INCOME OPTIONS.............................................. 32
Annuity Date............................................ 32
Income Options.......................................... 33
Allocation of Annuity Payments.......................... 34
Transfers During the Income Phase....................... 34
Deferment of Payments................................... 34
The Income Protector.................................... 34
TAXES....................................................... 37
Annuity Contracts in General............................ 37
Tax Treatment of Distributions--Non-qualified
Contracts.............................................. 38
Tax Treatment of Distributions--Qualified Contracts..... 38
Minimum Distributions................................... 38
Diversification......................................... 38
PERFORMANCE................................................. 39
OTHER INFORMATION........................................... 39
Anchor National......................................... 39
The Separate Account.................................... 40
Custodian............................................... 40
The General Account..................................... 40
Distribution of the Contract............................ 40
Administration.......................................... 40
Legal Proceedings....................................... 41
INDEPENDENT ACCOUNTANTS..................................... 41
TABLE OF CONTENTS OF STATEMENT OF ADDITIONAL INFORMATION.... 42
APPENDIX A--CONDENSED FINANCIAL INFORMATION................. A-1
APPENDIX B--SELECT REWARDS PROGRAM EXAMPLES................. B-1
APPENDIX C--MARKET VALUE ADJUSTMENT......................... C-1
APPENDIX D--PREMIUM TAXES................................... D-1
</TABLE>
3
<PAGE>
GLOSSARY
We have capitalized some of the technical terms used in this prospectus. To help
you understand these terms, we define 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.
ANNUITY DATE--The date on which annuity payments are to begin, as selected by
you.
ANNUITY UNITS--A measurement we use to calculate the amount 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
issuer of this annuity contract.
INCOME PHASE--The period during which we make annuity payments to you.
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").
PAYMENT ENHANCEMENT(S)--The amount(s) allocated to your contract by Us under the
Select Rewards Program. Payment enhancements are calculated as a percentage of
your Purchase Payments and are considered earnings.
PORTFOLIO(S)--A sub-account of Variable Annuity Account Five which provides for
the variable investment options available under the contract. Each SELECT and
FOCUSED PORTFOLIO has a distinct investment objective and is invested in the
underlying investment portfolios of the Seasons Series Trust. This investment
option allocates assets to an underlying fund in which a portion of the assets
is managed by three different advisors.
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
individual retirement account ("IRA").
STRATEGY(IES)--A sub-account of Variable Annuity Account Five which provides for
the variable investment options available under the contract. Each STRATEGY has
its own investment objective and is invested in the underlying investment
portfolios of the Seasons Series Trust. This investment option allocates assets
to three out of six available portfolios, each of which is managed by a
different investment advisor.
4
<PAGE>
SEASONS SELECT II VARIABLE ANNUITY FEE TABLES
------------------------------------------------------------
OWNER TRANSACTION EXPENSES
Withdrawal Charge as a percentage of Purchase Payments:
<TABLE>
<CAPTION>
YEARS: 1 2 3 4 5 6 7 8 9 10
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Schedule A*.......... 7% 6% 6% 5% 4% 3% 2% 0% 0% 0%
Schedule B**......... 9% 8% 7% 6% 6% 5% 4% 3% 2% 0%
</TABLE>
* This schedule applies to each Purchase Payment if you are NOT participating
in the Select Rewards Program.
** This schedule applies to each Purchase Payment if you are participating in
the Select Rewards Program.
<TABLE>
<S> <C>
Contract Maintenance Charge........ $35 each year ($30 in North Dakota)
</TABLE>
ANNUAL SEPARATE ACCOUNT EXPENSES
(as a percentage of daily net asset value)
<TABLE>
<S> <C>
Mortality Risk Charge........................ 0.90%
Expense Risk Charge.......................... 0.35%
Distribution Expense Charge.................. 0.15%
----
Total Separate Account Expenses........ 1.40%
</TABLE>
THE OPTIONAL INCOME PROTECTOR FEE
(The Income Protector Program is optional and
if elected the fee is deducted annually from your contract value.)
<TABLE>
<S> <C>
Fee as a percentage of
your Income Benefit
Base*.................. 0.10%
</TABLE>
* The Income Benefit Base is calculated by using your contract value on the date
of your effective enrollment in the program and then each subsequent contract
anniversary, adding purchase payments made since the prior contract anniversary,
less proportional withdrawals since the prior contract anniversary and fees and
charges applicable to those withdrawals.
THE OPTIONAL ENHANCED DEATH BENEFIT FEE
(The enhanced death benefit is optional and
if elected the fee is deducted daily from your contract value.)
<TABLE>
<S> <C>
Fee as a percentage of
your daily net asset
value.................. 0.25%
</TABLE>
5
<PAGE>
INVESTMENT PORTFOLIO EXPENSES OF PORTFOLIOS
(based on the total annual expenses of the underlying investment portfolios
reflected below as of the fiscal year end of the
Trust ending March 31, 2000) (TO BE UPDATED BY AMENDMENT)
<TABLE>
<CAPTION>
MANAGEMENT OTHER TOTAL ANNUAL
FEE 12b-1 FEES EXPENSES EXPENSES
<S> <C> <C> <C> <C>
-----------------------------------------------------------------------------------------------------
SELECT PORTFOLIOS
-------------------------------------------------
Large Cap Growth 0.80% 0.15% 0.30% 1.25%
Large Cap Composite 0.80% 0.15% 0.30% 1.25%
Large Cap Value 0.80% 0.15% 0.30% 1.25%
Mid Cap Growth 0.85% 0.15% 0.30% 1.30%
Mid Cap Value 0.85% 0.15% 0.30% 1.30%
Small Company 0.85% 0.15% 0.30% 1.30%
International Equity 1.00% 0.15% 0.30% 1.45%
Diversified Fixed Income 0.70% 0.15% 0.30% 1.15%
Cash Management 0.55% 0.15% 0.30% 1.00%
-----------------------------------------------------------------------------------------------------
FOCUSED PORTFOLIOS
-------------------------------------------------
Focus Growth* 1.00% 0.15% 0.30% 1.45%
-----------------------------------------------------------------------------------------------------
</TABLE>
* This portfolio was not available for sale during fiscal year 2000. The
percentages are based on estimated amounts for the current fiscal year.
INVESTMENT PORTFOLIO EXPENSES BY STRATEGY
(based on the total annual expenses of the underlying investment portfolios
reflected below as of the fiscal year end of the
Trust ending March 31, 2000) (TO BE UPDATED BY AMENDMENT)
<TABLE>
<CAPTION>
MANAGEMENT OTHER TOTAL ANNUAL
FEE 12b-1 FEES EXPENSES EXPENSES
<S> <C> <C> <C> <C>
-----------------------------------------------------------------------------------------------------
Growth 0.87% 0.15% 0.27% 1.29%
Moderate Growth 0.85% 0.15% 0.27% 1.27%
Balanced Growth 0.83% 0.15% 0.29% 1.27%
Conservative Growth 0.80% 0.15% 0.30% 1.25%
-----------------------------------------------------------------------------------------------------
</TABLE>
IMPORTANT INFORMATION ABOUT PORTFOLIO EXPENSES IF INVESTED IN STRATEGIES:
The Investment Portfolio Expenses table set forth below identifies the total
investment expenses charged by the underlying investment portfolios of Seasons
Series Trust. Each contractholder invested in a STRATEGY will incur only a
portion of the investment expense of those portfolios in which the STRATEGY
invests. The table above entitled "Investment Portfolio Expenses by STRATEGY"
shows an approximation of the total investment expenses a contractholder may
incur if invested in each respective STRATEGY, after the automatic quarterly
rebalancing of such STRATEGY as described on page 17. The actual investment
expenses incurred by contractholders within a STRATEGY will vary depending upon
the daily net asset value of each investment portfolio in which such STRATEGY is
invested.
INVESTMENT PORTFOLIO EXPENSES
FOR STRATEGY UNDERLYING PORTFOLIOS
(as a percentage of daily net asset value of each investment portfolio as of the
fiscal year end of the
Trust ending March 31, 2000) (TO BE UPDATED BY AMENDMENT)
<TABLE>
<CAPTION>
MANAGEMENT OTHER TOTAL ANNUAL
FEE 12b-1 FEES EXPENSES EXPENSES
<S> <C> <C> <C> <C>
-----------------------------------------------------------------------------------------------------
Stock 0.85% 0.15% 0.21% 1.21%
Asset Allocation: Diversified Growth 0.85% 0.15% 0.36% 1.36%
Multi-Managed Growth 0.89% 0.15% 0.26% 1.30%
Multi-Managed Moderate Growth 0.85% 0.15% 0.25% 1.25%
Multi-Managed Income/Equity 0.81% 0.15% 0.29% 1.25%
Multi-Managed Income 0.77% 0.15% 0.29% 1.21%
-----------------------------------------------------------------------------------------------------
</TABLE>
THE ABOVE INVESTMENT PORTFOLIO EXPENSES WERE PROVIDED BY SEASONS SERIES TRUST.
WE HAVE NOT INDEPENDENTLY VERIFIED THE ACCURACY OF THE INFORMATION.
6
<PAGE>
EXAMPLES
(TO BE UPDATED BY AMENDMENT)
You will pay the following expenses on a $1,000 investment, assuming a 5% annual
return on assets, Investment Portfolio Expenses after any waiver, reimbursement
or recoupment, if applicable, and you did NOT participate in the Select Rewards
Program:
(a) If the contract is surrendered at the end of the stated time period.
(b) If the contract is not surrendered or is annuitized.*
(c) If the contract is surrendered and you elect one of the optional Enhanced
Death Benefits and the Income Protector Program.
<TABLE>
<CAPTION>
TIME PERIODS
----------------------------------------------------------------------------------------------
SELECT PORTFOLIO 1 YEAR 3 YEARS 5 YEARS 10 YEARS
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Large Cap Growth (a) $116 (a) $150 (a) $196 (a) $289
(b) $117 (b) $153 (b) $202 (b) $300
(c) $26 (c) $ 80 (c) $136 (c) $289
Large Cap Composite (a) $116 (a) $150 (a) $196 (a) $289
(b) $117 (b) $153 (b) $202 (b) $300
(c) $26 (c) $ 80 (c) $136 (c) $289
Large Cap Value (a) $116 (a) $150 (a) $196 (a) $289
(b) $117 (b) $153 (b) $202 (b) $300
(c) $26 (c) $ 80 (c) $136 (c) $289
Mid Cap Growth (a) $116 (a) $151 (a) $198 (a) $294
(b) $118 (b) $155 (b) $204 (b) $305
(c) $26 (c) $ 81 (c) $138 (c) $294
Mid Cap Value (a) $116 (a) $151 (a) $198 (a) $294
(b) $118 (b) $155 (b) $204 (b) $305
(c) $26 (c) $ 81 (c) $138 (c) $294
Small Company (a) $116 (a) $151 (a) $198 (a) $294
(b) $118 (b) $155 (b) $204 (b) $305
(c) $26 (c) $ 81 (c) $138 (c) $294
International Equity (a) $118 (a) $155 (a) $206 (a) $308
(b) $119 (b) $159 (b) $212 (b) $320
(c) $28 (c) $ 85 (c) $146 (c) $308
Diversified Fixed Income (a) $115 (a) $147 (a) $191 (a) $279
(b) $116 (b) $150 (b) $197 (b) $291
(c) $25 (c) $ 77 (c) $131 (c) $279
Cash Management (a) $113 (a) $142 (a) $183 (a) $264
(b) $115 (b) $146 (b) $189 (b) $276
(c) $23 (c) $ 72 (c) $123 (c) $264
----------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------
<CAPTION>
FOCUSED PORTFOLIOS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Focus Growth** (a) $118 (a) $155 (a) $206 (a) $308
(b) $119 (b) $159 (b) $212 (b) $320
(c) $28 (c) $ 85 (c) $146 (c) $308
----------------------------------------------------------------------------------------------
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
TIME PERIODS
------------------------------------------------------------------------------------------
STRATEGY 1 YEAR 3 YEARS 5 YEARS 10 YEARS
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Growth (a) $116 (a) $151 (a) $198 (a) $293
(b) $117 (b) $154 (b) $204 (b) $304
(c) $26 (c) $ 81 (c) $138 (c) $293
Moderate Growth (a) $116 (a) $150 (a) $197 (a) $291
(b) $117 (b) $154 (b) $203 (b) $302
(c) $26 (c) $ 80 (c) $137 (c) $291
Balanced Growth (a) $116 (a) $150 (a) $197 (a) $291
(b) $117 (b) $154 (b) $203 (b) $302
(c) $26 (c) $ 80 (c) $137 (c) $291
Conservative Growth (a) $116 (a) $150 (a) $196 (a) $289
(b) $117 (b) $153 (b) $202 (b) $300
(c) $26 (c) $ 80 (c) $136 (c) $289
------------------------------------------------------------------------------------------
</TABLE>
* 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.
** This portfolio was not available for sale during fiscal year 2000. The
figures are based on estimated amounts for the current fiscal year.
You will pay the following expenses on a $1,000 investment, assuming a 5% annual
return on assets, Investment Portfolio Expenses after any waiver, reimbursement
or recoupment, if applicable, and you participated in the Select Rewards
Program:
(a) If the contract is surrendered at the end of the stated time period.
(b) If the contract is not surrendered or is annuitized at the end of the
stated time period.
(c)If the contract is surrendered at the end of the stated time period and you
elect one of the optional Enhanced Death Benefits and the Income Protector
Program.
<TABLE>
<CAPTION>
TIME PERIODS
----------------------------------------------------------------------------------------------
SELECT PORTFOLIO 1 YEAR 3 YEARS 5 YEARS 10 YEARS
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Large Cap Growth (a) $117 (a) $153 (a) $201 (a) $300
(b) $118 (b) $156 (b) $207 (b) $312
(c) $ (c) $ (c) $ (c) $
Large Cap Composite (a) $117 (a) $153 (a) $201 (a) $300
(b) $118 (b) $156 (b) $207 (b) $312
(c) $ (c) $ (c) $ (c) $
Large Cap Value (a) $117 (a) $153 (a) $201 (a) $300
(b) $118 (b) $156 (b) $207 (b) $312
(c) $ (c) $ (c) $ (c) $
Mid Cap Growth (a) $117 (a) $154 (a) $203 (a) $305
(b) $119 (b) $158 (b) $209 (b) $316
(c) $ (c) $ (c) $ (c) $
Mid Cap Value (a) $117 (a) $154 (a) $203 (a) $305
(b) $119 (b) $158 (b) $209 (b) $316
(c) $ (c) $ (c) $ (c) $
Small Company (a) $117 (a) $154 (a) $203 (a) $305
(b) $119 (b) $158 (b) $209 (b) $316
(c) $ (c) $ (c) $ (c) $
International Equity (a) $119 (a) $159 (a) $211 (a) $319
(b) $120 (b) $162 (b) $217 (b) $331
(c) $ (c) $ (c) $ (c) $
Diversified Fixed Income (a) $116 (a) $150 (a) $196 (a) $290
(b) $117 (b) $153 (b) $202 (b) $302
(c) $ (c) $ (c) $ (c) $
Cash Management (a) $114 (a) $145 (a) $189 (a) $275
(b) $116 (b) $149 (b) $195 (b) $287
(c) $ (c) $ (c) $ (c) $
----------------------------------------------------------------------------------------------
<CAPTION>
----------------------------------------------------------------------------------------------
FOCUSED PORTFOLIOS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Focus Growth** (a) $119 (a) $159 (a) $211 (a) $319
(b) $120 (b) $162 (b) $217 (b) $331
(c) $ (c) $ (c) $ (c) $
----------------------------------------------------------------------------------------------
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
TIME PERIODS
------------------------------------------------------------------------------------------
STRATEGY 1 YEAR 3 YEARS 5 YEARS 10 YEARS
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Growth (a) $117 (a) $154 (a) $203 (a) $304
(b) $118 (b) $157 (b) $209 (b) $315
(c) $ (c) $ (c) $ (c) $
Moderate Growth (a) $117 (a) $153 (a) $202 (a) $302
(b) $118 (b) $157 (b) $208 (b) $313
(c) $ (c) $ (c) $ (c) $
Balanced Growth (a) $117 (a) $153 (a) $202 (a) $302
(b) $118 (b) $157 (b) $208 (b) $313
(c) $ (c) $ (c) $ (c) $
Conservative Growth (a) $117 (a) $153 (a) $201 (a) $300
(b) $118 (b) $156 (b) $207 (b) $312
(c) $ (c) $ (c) $ (c) $
------------------------------------------------------------------------------------------
</TABLE>
** This portfolio was not available for sale during fiscal year 2000. The
figures are based on estimated amounts for the current fiscal year.
EXPLANATION OF FEE TABLES AND EXAMPLES
1. The purpose of the Fee Tables is to show you the various expenses you will
incur directly and indirectly by investing in the contract. The example
reflects owner transaction expenses, separate account expenses including
optional benefit fees in some examples and investment portfolio expenses
by SELECT PORTFOLIO, FOCUSED PORTFOLIO and STRATEGY.
2. The Examples assume that no transfer fees were imposed. Premium taxes are
not reflected but may be applicable. Although premium taxes may apply in
certain states, they are not reflected in the Examples.
3. For certain investment portfolios in which the SELECT PORTFOLIOS, FOCUSED
PORTFOLIOS and STRATEGIES invest, SAAMCo has voluntarily agreed to waive
fees or reimburse expenses, if necessary, to keep annual operating
expenses at or below the following percentages of each of the following
Portfolios' average net assets: Multi-Managed Growth Portfolio 1.29%,
Multi-Managed Moderate Growth Portfolio 1.21%, Multi-Managed Income/Equity
Portfolio 1.14%, Multi-Managed Income Portfolio 1.06%, Asset Allocation:
Diversified Growth Portfolio 1.21%, Stock Portfolio 1.21%, Large Cap
Growth Portfolio 1.10%, Large Cap Composite Portfolio 1.10%, Large Cap
Value Portfolio 1.10%, Mid Cap Growth Portfolio 1.15%, Mid Cap Value
Portfolio 1.15%, Small Cap Portfolio 1.15%, International Equity Portfolio
1.30%, Diversified Fixed Income Portfolio 1.00%, Focus Growth 1.30% and
Cash Management Portfolio 0.85%. SAAMCo also may voluntarily waive or
reimburse additional amounts to increase the investment return to a
Portfolio's investors. SAAMCo may terminate all such waivers and/or
reimbursements at any time. Further, any waivers or reimbursements made by
SAAMCo with respect to a Portfolio are subject to recoupment from that
Portfolio within the following two years, provided that the Portfolio is
able to effect such payment to SAAMCo and remain in compliance with the
foregoing expense limitations. During the time period reflected in this
Fee Table, the adviser did not rely on any of these waiver and/or
reimbursement agreements.
4. Examples reflecting participation in the Select Rewards program reflect
surrender charge Schedule B, and a [2%] upfront payment enhancement.
5. 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 for the SELECT PORTFOLIOS, FOCUSED
PORTFOLIOS and STRATEGY(IES) are contained in Appendix A--Condensed Financial
Information.
9
<PAGE>
THE SEASONS SELECT II VARIABLE ANNUITY
--------------------------------------------------------------------------------
An annuity is a contract between you and an insurance company. You are the owner
of the contract. The contract provides three main benefits:
- Tax Deferral: You do not pay taxes on your earnings from the annuity until
you withdraw them.
- Death Benefit: If you die during the Accumulation Phase, the insurance
company pays a death benefit to your Beneficiary.
- Guaranteed Income: If elected, you receive a stream of income for your
lifetime, or another available period you select.
Tax-qualified retirement plans (e.g., IRAs, 401(k) or 403(b) plans) defer
payment of taxes on earnings until withdrawal. If you are considering funding a
tax-qualified retirement plan with an annuity, you should know that an annuity
does not provide any additional tax deferral treatment of earnings beyond the
treatment provided by the tax-qualified retirement plan itself. However,
annuities do provide other features and benefits which may be valuable to you.
You should fully discuss this decision with your financial advisor.
This annuity was developed to help you contribute to your retirement savings.
This annuity works in two stages, the Accumulation Phase and the Income Phase.
Your contract is in the Accumulation Phase during the period when you make
payments into the contract. The Income Phase begins when you request us to start
making 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 investment portfolios which we call SELECT PORTFOLIOS, FOCUSED
PORTFOLIOS and/or STRATEGIES. The SELECT PORTFOLIOS, FOCUSED PORTFOLIOS and
STRATEGIES, are similar to mutual funds, in that they have specific investment
objectives and their performance varies. You can gain or lose money if you
invest in these SELECT PORTFOLIOS, FOCUSED PORTFOLIOS or STRATEGIES. The amount
of money you accumulate in your contract depends on the performance of the
SELECT PORTFOLIO(S), FOCUSED PORTFOLIO(S) or STRATEG(IES) in which you invest.
The Contract also offers several fixed account options for varying time periods.
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 your Contract depends on the total interest credited
to the particular fixed account option(s) in which you are invested.
For more information on SELECT PORTFOLIO(S), FOCUSED PORTFOLIO(S), STRATEGY(IES)
and fixed account options available under this contract, SEE INVESTMENT OPTIONS
PAGE 15.
Anchor National Life Insurance Company (Anchor National, The Company, Us, We)
issues the Seasons Select II Variable Annuity. When you purchase a Seasons
Select II Variable Annuity, a contract exists between you and Anchor National.
The Company 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. Seasons Select II may not currently be
available in all states. Please check with your financial adviser regarding
availability in your state.
This annuity is designed for investors whose personal circumstances allow for a
long-term investment time horizon, to assist in contributing to retirement
savings. As a function of the federal tax code you may be assessed a 10% federal
tax penalty on any withdrawal made prior to your reaching age 59 1/2.
Additionally, this contract provides
10
<PAGE>
that you will be charged a withdrawal charge on each Purchase Payment withdrawn
if that Purchase Payment has not been invested in this contract for at least 7
years, or 9 years if you elect to participate in the Select Rewards Program.
Because of these potential penalties, you should fully discuss all of the
benefits and risks of this contract with your financial adviser prior to
purchase.
PURCHASING A SEASONS SELECT II VARIABLE ANNUITY
--------------------------------------------------------------------------------
An initial Purchase Payment is the money you give us to buy a contract. Any
additional money you give us to invest in the contract after purchase is a
subsequent Purchase Payment.
This chart shows the minimum initial and subsequent Purchase Payments permitted
under your contract. These amounts depend upon whether a contract is Qualified
or Non-qualified for tax purposes.
<TABLE>
<CAPTION>
MINIMUM
MINIMUM INITIAL SUBSEQUENT
PURCHASE PAYMENT PURCHASE PAYMENT
---------------- ----------------
<S> <C> <C>
Qualified $2,000 $500
Non-qualified $5,000 $500
</TABLE>
Prior Company approval is required to accept Purchase Payments greater than
$1,500,000. The Company reserves the right to refuse any Purchase Payment
including one which would cause the contact value or Purchase Payments to exceed
$1,500,000 at the time of the Purchase Payment. Also, the optional Automatic
Payment Plan allows you to make subsequent payments as small as $50.00. We may
refuse any Purchase Payment.
In general, we will not issue a Qualified contract to anyone who is age 70 1/2
or older, unless they certify to us that the minimum distribution required by
the federal tax code is being made. In addition, we may not issue a contract to
anyone over age 90. You may not elect the optional enhanced death benefit or
participate in the Select Rewards Program if you are over age 80 at the time of
contract issue.
ALLOCATION OF PURCHASE PAYMENTS
We invest your Purchase Payments in the fixed accounts, SELECT PORTFOLIO(S),
FOCUSED PORTFOLIO(S) and/or STRATEGY(IES) according to your instructions. If we
receive a Purchase Payment without allocation instructions, we will invest the
money according to your last allocation instructions. Purchase Payments are
applied to your contract based upon the value of the variable investment option
next determined after receipt of your money. SEE INVESTMENT OPTIONS PAGE 15.
In order to issue your contract, we must receive your completed application,
Purchase Payment allocation instructions and any other required paper work at
our Annuity Service Center. We allocate your initial purchase payment within two
days of receiving it. If we do not have 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.
SELECT REWARDS PROGRAM
If you elect to participate in the Select Rewards Program at contract issue, we
contribute an Upfront Payment Enhancement and, if applicable, a Deferred Payment
Enhancement to your contract in conjunction with each Purchase Payment you
invest during the life of your contract. If you elect to participate in this
program, all
11
<PAGE>
Purchase Payments are subject to a nine year withdrawal charge schedule. SEE
WITHDRAWAL CHARGES ON PAGE 30. If you make an early withdrawal of Purchase
Payments, we may effectively recoup the amount of any bonuses applicable to any
payment withdrawn. SEE EXPENSES, PAGE 29. You may not elect to participate in
this program if you are over age 80 at the time of contract issue. Amounts we
contribute to your contract under this program are considered earnings and are
allocated to your contract as described below.
Purchase Payments may not be invested in the 6-month or the 1-year Dollar Cost
Averaging fixed accounts if you participate in the Select Rewards Program.
However, you may use the 1-year fixed account option as a Dollar Cost Averaging
source account.
ENHANCEMENT LEVELS
The Upfront Payment Enhancement Rate, Deferred Payment Enhancement Rate and
Deferred Payment Enhancement Date may be determined based on stated Enhancement
Levels. Each Enhancement Level is a range of dollar amounts which may correspond
to different enhancement rates and dates. Enhancement Levels may change from
time to time, at our sole discretion. The Enhancement Level applicable to your
initial Purchase Payment is determined by the amount of that initial Purchase
Payment. With respect to any subsequent Purchase Payments we determine your
Enhancement Level by adding to your contract value on the date we receive each
subsequent Purchase Payment plus the amount of the subsequent Purchase Payment.
UPFRONT PAYMENT ENHANCEMENT
An Upfront Payment Enhancement is an amount we add to your contract on the day
we receive a Purchase Payment. We calculate an Upfront Payment Enhancement
amount as a percentage (the "Upfront Payment Enhancement Rate") of each Purchase
Payment. We periodically review and establish the Upfront Payment Enhancement
Rate, which may increase or decrease at any time, but will never be less than
2%. The applicable Upfront Payment Enhancement Rate is that which is in effect
for any applicable Enhancement Level, when we receive each Purchase Payment
under your contract. The Upfront Payment Enhancement amounts are allocated among
the fixed and variable investment options according to the current allocation
instructions in effect when we receive each Purchase Payment.
DEFERRED PAYMENT ENHANCEMENT
A Deferred Payment Enhancement is an amount we may add to your contract on a
future date (the "Deferred Payment Enhancement Date"). We calculate the Deferred
Payment Enhancement amount, if any, as a percentage of each Purchase Payment
(the "Deferred Payment Enhancement Rate"). We periodically review and establish
the Deferred Payment Enhancement Rates and Deferred Payment Enhancement Dates.
The Deferred Payment Enhancement Rate being offered may increase, decrease or be
eliminated by us, at any time. The Deferred Payment Enhancement Date, if
applicable, may change at any time. The applicable Deferred Payment Enhancement
Date and Deferred Payment Enhancement Rate are those which may be in effect for
any applicable Enhancement Level, when we receive each Purchase Payment under
your contract. Any applicable Deferred Payment Enhancement, when credited, is
allocated to the Cash Management Variable Portfolio.
If you withdraw any portion of a Purchase Payment, to which a Deferred Payment
Enhancement applies, prior to the Deferred Payment Enhancement Date, we reduce
the amount of the corresponding Deferred Payment Enhancement in the same
proportion that your withdrawal (and any fees and charges associated with such
withdrawals) reduces that Purchase Payment. For purposes of the Deferred Payment
Enhancement, withdrawals are assumed to be taken from earnings first, then from
Purchase Payments, on a first-in-first-out basis.
APPENDIX B shows how we calculate any applicable Deferred Payment Enhancement
amount.
12
<PAGE>
CURRENT ENHANCEMENT LEVELS
The Enhancement Levels, Upfront Payment Enhancement Rate, Deferred Payment
Enhancement Rate and Deferred Payment Enhancement Date are as follows:
<TABLE>
<CAPTION>
ENHANCEMENT UPFRONT PAYMENT DEFERRED PAYMENT DEFERRED PAYMENT
LEVEL ENHANCEMENT RATE ENHANCEMENT RATE ENHANCEMENT DATE
<S> <C> <C> <C>
--------------------------------------------------------------------------------------------------
Under $500,000 4% 0% N/A
--------------------------------------------------------------------------------------------------
$500,000 -- more 5% 0% N/A
--------------------------------------------------------------------------------------------------
</TABLE>
We will not allocate any applicable Deferred Payment Enhancement to your
contract if any of the following circumstances occurs prior to the Deferred
Payment Enhancement Date:
- You surrender your contract;
- A death benefit it paid on your contract;
- You switch to the Income Phase of your contract; or
- You fully withdraw the corresponding Purchase Payment.
90 DAY WINDOW
Contracts issued with the Select Rewards feature may be eligible for a
"Look-Back Adjustment." As of the 90th day after your contract was issued, we
will total your Purchase Payments made over those 90 days, without considering
any investment gain or loss in contract value on those Purchase Payments. If
your total Purchase Payments bring you to an Enhancement Level which, as of the
date we issued your contract, would have provided for a higher Upfront and/or
any applicable Deferred Payment Enhancement Rate on each Purchase Payment, you
will get the benefit of the Enhancement Rate(s) that were applicable to that
higher Enhancement Level at the time your contract was issued. We will add any
applicable Upfront Look Back Adjustment to your contract on the 90th day
following the date of contract issue. We will send you a confirmation indicating
any applicable Upfront and/or Deferred Look Back Adjustment, on or about the
90th day following the date of contract issuance. We will allocate any
applicable Upfront Look Back Adjustment according to your then-current
allocation instructions on file for subsequent Purchase Payments at the time we
make the contribution and if applicable, to the Cash Management Portfolio, for a
Deferred Look Back Adjustment.
APPENDIX B provides an example of the 90 Day Window Provision.
The Select Rewards Program may not be available to you. Please check with your
financial adviser or representative regarding the availability of this program.
WE RESERVE THE RIGHT TO MODIFY, SUSPEND OR TERMINATE THE SELECT REWARDS PROGRAM
(IN ITS ENTIRETY OR ANY COMPONENT) AT ANY TIME.
Check with your representative for information on the Upfront Payment
Enhancement Rate, Deferred Payment Enhancement Rate and Deferred Payment
Enhancement Date.
ACCUMULATION UNITS
The value of the variable portion of your contract will go up or down depending
upon the investment performance of the SELECT PORTFOLIO(S), FOCUSED PORTFOLIO(S)
or STRATEGY(IES) you select. In order to keep track of the value of your
contract, we use a unit of measure called an Accumulation Unit which works like
a share of a mutual fund. During the Income Phase, we call them Annuity Units.
13
<PAGE>
An Accumulation Unit value is determined each day that the New York Stock
Exchange ("NYSE") is open. We calculate an Accumulation Unit for each STRATEGY,
SELECT PORTFOLIO or FOCUSED PORTFOLIO after the NYSE closes each day. We do this
by:
1. determining the total value of money invested in a particular STRATEGY,
SELECT PORTFOLIO or FOCUSED PORTFOLIO;
2. subtracting from that amount any asset-based charges and any other
charges such as taxes we have deducted; and
3. dividing this amount by the number of outstanding Accumulation Units.
EXAMPLE (CONTRACTS WITHOUT SELECT REWARDS):
We receive a $25,000 Purchase Payment from you on Wednesday. You allocate
the money to the Focus Growth Portfolio. We determine that the value of an
Accumulation Unit for the Focus Growth 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 2,252.2523 Accumulation Units for the Focus
Growth Portfolio.
EXAMPLE (CONTRACTS WITH SELECT REWARDS):
We receive a $25,000 Purchase Payment from you on Wednesday. You allocate
the money to the Focus Growth Portfolio. If the Upfront Payment Enhancement
is 2.00% of your Purchase Payment, we would add an Upfront Payment
Enhancement of $500 to your contract. We determine that the value of an
Accumulation Unit for the Focus Growth Portfolio is $11.10 when the NYSE
closes on Wednesday. We then divide $25,500 by $11.10 and credit your
contract on Wednesday with 2,297.2973 Accumulation Units for the Focus
Growth Portfolio.
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.
If you decide to cancel your contract during the free look period, we will
refund to you the value of your contract on the day we receive your request
MINUS the Free Look Payment Enhancement Deduction, if applicable. The Free Look
Payment Enhancement Deduction is equal of the lesser of (1) the value of any
Payment Enhancement(s) on the day we receive your free look request; or (2) the
Payment Enhancement amount(s), if any, which we allocated to your contract.
Thus, you receive any gain and we bear any loss on any Payment Enhancement(s) if
you decide to cancel your contract during the free look period.
Certain states require us to return your Purchase Payments upon a free look
request. Additionally, all contracts issued as an IRA require the full return of
Purchase Payments upon a free look. With respect to those contracts, we reserve
the right to put your money in the Cash Management investment option during the
free look period and will allocate your money according to your instructions at
the end of the applicable free look period. Currently, we do not put your money
in the Cash Management investment option during the free look period unless you
allocate your money to it. If your contract was issued in a state requiring
return of Purchase Payments or as an IRA and you cancel your contract during the
free look period, we return the greater of (1) your Purchase Payments; or
(2) the value of your contract MINUS the Free Look Payment Enhancement
Deduction, if applicable. At the end of the free look period, we allocate your
money according to your instructions.
INVESTMENT OPTIONS
--------------------------------------------------------------------------------
The contract offers variable investment options which we call SELECT PORTFOLIOS,
FOCUSED PORTFOLIOS and STRATEGIES, and fixed investment options. We designed the
contract to meet your varying investment needs over time. You can achieve this
by using the SELECT PORTFOLIOS, FOCUSED
14
<PAGE>
PORTFOLIOS and/or STRATEGIES alone or in concert with the fixed investment
options. The SELECT PORTFOLIOS, FOCUSED PORTFOLIOS and STRATEGIES operate
similar to a mutual fund but are only available through the purchase of certain
variable annuities. A mixture of your investment in the SELECT PORTFOLIOS,
FOCUSED PORTFOLIOS and/or STRATEGIES and fixed account options may lower the
risk associated with investing only in a variable investment option.
VARIABLE INVESTMENT OPTIONS
Each of the variable investment options of the contract invests in underlying
portfolios of Seasons Series Trust. SAAMCo, an affiliate of Anchor National,
manages Seasons Series Trust. SAAMCo has engaged sub-advisers to provide
investment advice for certain of the underlying investment portfolios.
YOU SHOULD READ THE PROSPECTUS FOR THE SEASONS SERIES TRUST CAREFULLY BEFORE
INVESTING. THE TRUST PROSPECTUS WHICH IS ATTACHED HERETO CONTAINS DETAILED
INFORMATION ABOUT THE UNDERLYING INVESTMENT PORTFOLIOS INCLUDING INVESTMENT
OBJECTIVE AND RISK FACTORS.
THE PORTFOLIOS
The contract offers nine SELECT PORTFOLIOS, each with a distinct investment
objective, utilizing a disciplined investing style to achieve its objective.
Each SELECT PORTFOLIO invests in an underlying investment portfolio of the
Seasons Series Trust. Except for the Cash Management portfolio, each underlying
portfolio is multi-managed by a team of three money managers, one component of
the underlying portfolios is an unmanaged component that tracks a particular
target index or subset of an index. The other two components are actively
managed. The unmanaged component of each underlying portfolio is intended to
balance some of the risks associated with an actively traded portfolio.
The contract also currently offers one FOCUSED PORTFOLIO. Each multi-managed
FOCUSED PORTFOLIO offers you at least two different professional managers, one
of which may be SAAMCo, and each of which advises a separate portion of the
FOCUSED PORTFOLIO. Each manager actively selects a limited number of stocks that
represent their best stock selections. This approach to investing results in a
more concentrated portfolio, which will be less diversified than the SELECT
PORTFOLIOS, and may be subject to greater market risks.
15
<PAGE>
Each underlying PORTFOLIO and the respective managers are:
<TABLE>
<S> <C>
SELECT PORTFOLIOS LARGE CAP COMPOSITE
LARGE CAP GROWTH Bankers Trust
Bankers Trust SAAMCo
Goldman Sachs T. Rowe Price
Janus
LARGE CAP VALUE MID CAP GROWTH
Bankers Trust Bankers Trust
T. Rowe Price T. Rowe Price
Wellington Wellington
MID CAP VALUE SMALL CAP
Bankers Trust Bankers Trust
Goldman Sachs Lord Abbett
Lord Abbett SAAMCo
INTERNATIONAL EQUITY DIVERSIFIED FIXED INCOME
Bankers Trust Bankers Trust
Goldman Sachs Int'l SAAMCo
Lord Abbett Wellington
CASH MANAGEMENT
SAAMCo
FOCUSED PORTFOLIO
FOCUS GROWTH
Fred Alger
Jennison
Marisco Capital
</TABLE>
PORTFOLIO OPERATION
Each PORTFOLIO is designed to meet a distinct investment objective facilitated
by the management philosophy of three different money managers. Generally, an
equal portion of the Purchase Payments received for allocation to each PORTFOLIO
will be allocated among the three managers for that PORTFOLIO. Each quarter
SAAMCo will evaluate the asset allocation between the three managers of each
PORTFOLIO. If SAAMCo determines that the assets have become significantly
unequal in allocation among the managers, then the in-coming cash flows may be
redirected in an attempt to stabilize the allocations. Generally, existing
PORTFOLIO assets will not be rebalanced. However, we reserve the right to do so
in the event that it is deemed necessary and not adverse to the interests of
contract owners invested in the PORTFOLIO. Transfers made as a result of
rebalancing a PORTFOLIO are not considered a transfer under your contract.
THE STRATEGIES
The contract offers four multi-manager variable investment STRATEGIES, each with
a different investment objective. We designed the STRATEGIES utilizing an asset
allocation approach to meet your investment needs over time, considering factors
such as your age, goals and risk tolerance. However, each STRATEGY is designed
to achieve different levels of growth over time.
Each STRATEGY invests in three underlying investment portfolios of the Seasons
Series Trust. The allocation of money among these investment portfolios varies
depending on the objective of the STRATEGY.
The underlying investment portfolios of Seasons Series Trust in which the
STRATEGIES invest include the Asset Allocation--Diversified Growth Portfolio,
the Stock Portfolio and the Multi-Managed Growth, Multi-Managed Moderate Growth,
Multi-Managed Income/Equity and Multi-Managed Income Portfolios (the
"Multi-Managed Portfolios").
The Asset Allocation: Diversified Growth Portfolio is managed by Putnam. The
Stock Portfolio is managed by T. Rowe Price. All of the Multi-Managed Portfolios
include the same three basic investment components: a growth
16
<PAGE>
component managed by Janus, a balanced component managed by SAAMCo and a fixed
income component managed by Wellington, LLP. The Growth STRATEGY and the
Moderate Growth STRATEGY also have an aggressive growth component which SAAMCo
manages. The percentage that any one of these components represents in each
Multi-Managed Portfolio varies in accordance with the investment objective.
Each STRATEGY uses an investment approach based on asset allocation. This
approach is achieved by each STRATEGY investing in distinct percentages in three
specific underlying funds of the Seasons Series Trust. In turn, the underlying
funds invest in a combination of domestic and international stocks, bonds and
cash. Based on the percentage allocation to each specific underlying fund and
each underlying fund's investment approach, each STRATEGY initially has a
neutral asset allocation mix of stocks, bonds and cash. At the beginning of each
quarter a rebalancing occurs among the underlying funds to realign each STRATEGY
with its distinct percentage investment in the three underlying funds. This
rebalancing is designed to help maintain the neutral asset allocation mix for
each STRATEGY. The pie charts on the following pages demonstrate:
- the neutral asset allocation mix for each STRATEGY; and
- the percentage allocation in which each STRATEGY invests.
STRATEGY REBALANCING
Each STRATEGY is designed to meet its investment objective by allocating a
portion of your money to three different investment portfolios. In order to
maintain the mix of investment portfolios consistent with each STRATEGY's
objective, each STRATEGY within your contract is rebalanced each quarter. On the
first business day of each quarter (or as close to such date as is
administratively practicable) your money will be allocated among the various
investment portfolios according to the percentages set forth on the prior pages.
Additionally, within each Multi-Managed Portfolio, your money will be rebalanced
among the various components. We also reserve the right to rebalance any
STRATEGY more frequently if rebalancing is, deemed necessary and not adverse to
the interests of contract owners invested in such STRATEGY. Rebalancing a
STRATEGY may involve shifting a portion of assets out of underlying investment
portfolios with higher returns into underlying investment portfolios with
relatively lower returns. Transfers made as a result of rebalancing a STRATEGY
are not counted against your fifteen free transfers per year.
17
<PAGE>
GROWTH
GOAL: Long-term growth of capital, allocating its assets primarily to
stocks. This STRATEGY may be best suited for those with longer periods to
invest.
<TABLE>
<S> <C>
Stocks.............................. 80%
Bonds............................... 15%
Cash................................ 5%
</TABLE>
UNDERLYING INVESTMENT
PORTFOLIOS & MANAGERS
<TABLE>
<S> <C>
MULTI-MANAGED GROWTH PORTFOLIO 50%
Managed by:
Janus Capital Corporation
SunAmerica Asset Management Corp.
Wellington Management Company, LLP
STOCK PORTFOLIO 25%
Managed by T. Rowe Price Associates,
Inc.
ASSET ALLOCATION: DIVERSIFIED GROWTH
PORTFOLIO 25%
Managed by Putnam Investment
Management, Inc.
</TABLE>
MODERATE GROWTH
GOAL: Growth of capital through investments in equities, with a secondary
objective of conservation of principal by allocating more of its assets to bonds
than the Growth STRATEGY. This STRATEGY may be best suited for those nearing
retirement years but still earning income.
<TABLE>
<S> <C>
Stocks.............................. 70%
Bonds............................... 25%
Cash................................ 5%
</TABLE>
UNDERLYING INVESTMENT
PORTFOLIOS & MANAGERS
<TABLE>
<S> <C>
MULTI-MANAGED MODERATE GROWTH PORTFOLIO 55%
Managed by:
Janus Capital Corporation
SunAmerica Asset Management Corp.
Wellington Management Company, LLP
STOCK PORTFOLIO 20%
Managed by T. Rowe Price Associates,
Inc.
ASSET ALLOCATION: DIVERSIFIED GROWTH
PORTFOLIO 25%
Managed by Putnam Investment
Management, Inc.
</TABLE>
18
<PAGE>
BALANCED GROWTH
GOAL: Focuses on conservation of principal by investing in a more balanced
weighting of stocks and bonds, with a secondary objective of seeking a high
total return. This STRATEGY may be best suited for those approaching retirement
and with less tolerance for investment risk.
<TABLE>
<S> <C>
Stocks.............................. 55%
Bonds............................... 40%
Cash................................ 5%
</TABLE>
UNDERLYING INVESTMENT
PORTFOLIOS & MANAGERS
<TABLE>
<S> <C>
MULTI-MANAGED INCOME/EQUITY PORTFOLIO 55%
Managed by:
Janus Capital Corporation
SunAmerica Asset Management Corp.
Wellington Management Company, LLP
STOCK PORTFOLIO 20%
Managed by T. Rowe Price Associates,
Inc.
ASSET ALLOCATION: DIVERSIFIED GROWTH
PORTFOLIO 25%
Managed by Putnam Investment
Management, Inc.
</TABLE>
CONSERVATIVE GROWTH
GOAL: Capital preservation while maintaining some potential for growth over
the long term. This STRATEGY may be best suited for those with lower investment
risk tolerance.
<TABLE>
<S> <C>
Stocks.............................. 42%
Bonds............................... 53%
Cash................................ 5%
</TABLE>
UNDERLYING INVESTMENT
PORTFOLIOS & MANAGERS
<TABLE>
<S> <C>
MULTI-MANAGED INCOME PORTFOLIO 60%
Managed by:
Janus Capital Corporation
SunAmerica Asset Management Corp.
Wellington Management Company, LLP
STOCK PORTFOLIO 15%
Managed by T. Rowe Price Associates,
Inc.
ASSET ALLOCATION: DIVERSIFIED GROWTH
PORTFOLIO 25%
Managed by Putnam Investment
Management, Inc.
</TABLE>
19
<PAGE>
FIXED INVESTMENT OPTIONS
The contract also offers seven fixed investment options. Anchor National will
guarantee the interest rate earned on money you allocate to any of these fixed
investment options. We currently offer fixed investment options for periods of
one, three, five, seven and ten years, which we call guarantee periods. In
Maryland and Washington only the one year fixed account option is available.
Additionally, if you do not elect to enroll in the Select Rewards Program, you
have the option of allocating your money to the 6-month and/or 1-year DCA fixed
account. We guarantee the interest rate for money allocated to the six-month DCA
fixed account and/or the one year DCA fixed account (the "DCA fixed accounts")
which are available only in conjunction with the Dollar Cost Averaging Program.
The 6-month and 1-year DCA fixed account options are not available if you
participate in the Select Rewards Program. Please see the section on the Dollar
Cost Averaging Program on page 22 for additional information about, including
limitations on, the availability and operation of the DCA fixed accounts. The
DCA fixed accounts are only available for new Purchase Payments.
All of these fixed account options pay interest at rates set and guaranteed by
Anchor National. Interest rates may differ from time to time and are set at our
sole discretion. We will never credit less than a 3% annual effective rate to
any of the fixed account options. The interest rate offered for new Purchase
Payments may differ from that offered for subsequent Purchase Payments and money
already in the fixed account options. In addition, different guarantee periods
offer different interest rates. Rates for specified payments are declared at the
beginning of the guarantee period and do not change during the specified period.
There are three scenarios in which you may put money into the 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 from a fixed account or
one of the STRATEGIES, SELECT PORTFOLIOS or FOCUSED PORTFOLIOS into a
fixed account and to money remaining in a fixed account after expiration
of a guarantee period.
Each of these rates may differ from one and other. Although once declared the
applicable rate is guaranteed until the guarantee period expires.
The DCA fixed accounts also credit a fixed rate of interest. Interest is
credited to amounts allocated to the 1-year or 6-month DCA fixed account 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 but will never be less than an effective rate of 3%.
SEE DOLLAR COST AVERAGING ON PAGE 22 for more information.
When a guarantee period ends, you may leave your money in the same guarantee
period. You may also reallocate money to another fixed investment option (other
than the DCA fixed accounts) or to any of the SELECT PORTFOLIO(S), FOCUSED
PORTFOLIO(S) or STRATEGY(IES). If you want to reallocate your money, you must
contact us within 30 days after the end of the current guarantee period and
instruct us how to reallocate your money. If we do not hear from you, we will
keep your money in the same guarantee period where it will earn the renewal
interest rate applicable at that time.
MARKET VALUE ADJUSTMENT
NOTE: THE FOLLOWING DISCUSSION APPLIES TO THE 3, 5, 7 OR 10 YEAR FIXED
INVESTMENT OPTIONS ONLY. THESE OPTIONS ARE NOT AVAILABLE IN MARYLAND, OREGON AND
WASHINGTON AND MAY NOT BE AVAILABLE IN OTHER STATES. PLEASE CONTACT YOUR
FINANCIAL REPRESENTATIVE FOR MORE INFORMATION. THIS DISCUSSION DOES NOT APPLY TO
WITHDRAWALS TO PAY A DEATH BENEFIT OR CONTRACT FEES AND CHARGES.
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<PAGE>
If you take money out of the 3, 5, 7 or 10 year fixed investment options before
the end of the guarantee period, we make an adjustment to your contract (the
"market value adjustment" or "MVA"). This market value adjustment reflects any
difference in the interest rate environment between the time you place your
money in the fixed investment option and the time when you withdraw that money.
This adjustment can increase or decrease your contract value. You have 30 days
after the end of each guarantee period to reallocate your funds without
incurring a market value adjustment.
We will not assess a market value adjustment against withdrawals made (1) to pay
a death benefit; (2) to pay contract fees and charges; or (3) to begin the
income phase of your contract on the latest annuity date.
We calculate the market value adjustment by doing a comparison between current
rates and the rate being credited to you in the fixed investment option. For the
current rate we use a rate being offered by us for a guarantee period that is
equal to the time remaining in the guarantee period from which you seek
withdrawal. If we are not currently offering a guarantee period for that period
of time, we determine an applicable rate by using a formula to arrive at a
number between the interest rates currently offered for the two closest periods
available.
Generally, if interest rates drop 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. On the other hand, 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 adjustments is
positive, we add the adjustment to your withdrawal amount. For withdrawals under
the systematic withdrawal program that result in a negative market value
adjustment, the MVA amount will be deducted from your withdrawal.
The one year fixed investment option and the DCA fixed accounts do not impose a
market value adjustment. These fixed investment options are not registered under
the Securities Act of 1933 and are not subject to the provisions of the
Investment Company Act of 1940.
Please see Appendix C for more information on how we calculate the market value
adjustment.
TRANSFERS DURING THE ACCUMULATION PHASE
Except as provided in the next sentence with respect to the DCA fixed accounts,
you can transfer money among the SELECT PORTFOLIO(S), FOCUSED PORTFOLIO(S),
STRATEGY(IES) and the fixed investment options by written request or by
telephone. Although you may transfer money out of the DCA fixed accounts, you
may not transfer money into the DCA fixed account from any SELECT PORTFOLIO,
FOCUSED PORTFOLIO, STRATEGY or fixed investment option. You can make transfers
every year without incurring a transfer charge. Transfers out of a 3, 5, 7 or 10
year fixed investment option may be subject to a market value adjustment.
The minimum amount you can transfer is $500, or a lesser amount if you transfer
the entire balance from a SELECT PORTFOLIO, FOCUSED PORTFOLIO, STRATEGY or a
fixed investment option. Any money remaining in a SELECT PORTFOLIO, FOCUSED
PORTFOLIO, STRATEGY or fixed investment option after making a transfer must
equal at least $500. Your request for transfer must clearly state which
investment option(s) are involved and the amount you want to transfer. Please
see the section below on Dollar Cost Averaging for specific rules regarding the
DCA fixed accounts.
We will accept transfers by telephone unless you specify otherwise on your
contract application. When receiving instructions over the telephone, 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.
21
<PAGE>
We will accept transfers over the internet unless you specify otherwise on your
contract application. When receiving internet account transfers, 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 internet.
If we fail to follow our procedures we may be liable for any losses due to
unauthorized or fraudulent transactions.
For information regarding transfers during the Income Phase, SEE INCOME OPTIONS,
PAGE 32.
We may 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 group 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 appointed, by you or for you, to
act on your behalf for all your financial affairs.
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.
We reserve the right to modify, suspend or terminate the transfer privileges at
any time.
DOLLAR COST AVERAGING
The Dollar Cost Averaging ("DCA") program allows you to invest gradually in the
variable investment options. Under the program you systematically transfer a set
dollar amount or percentage of any SELECT PORTFOLIO, FOCUSED PORTFOLIO and/or
STRATEGY or from the 1-year fixed account option (source accounts) to any other
SELECT PORTFOLIO, FOCUSED PORTFOLIO or STRATEGY. Transfers may be monthly or
quarterly. You may change the frequency at any time by notifying us in writing.
We also offer the 6-month and a 1-year DCA fixed accounts exclusively to
facilitate this program. If you elect to participate in the Select Rewards
Program, the 6-month and 1-year DCA fixed accounts are not available under your
contract. The DCA fixed accounts only accept new Purchase Payments. You can not
transfer money already in your contract into these options. If you allocate a
Purchase Payment into a DCA fixed account, we transfer all your money allocated
to that account into the SELECT PORTFOLIO(S), FOCUSED PORTFOLIO(S) or
STRATEGY(IES) you select over the selected 6-month or 1-year period. You cannot
change the option or the frequency of transfers once selected. The minimum
transfer amount if you use the 1-year or 6-month DCA fixed accounts to provide
dollar cost averaging is $100.
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<PAGE>
If allocated to the 6-month DCA fixed account, we transfer your money over a
maximum of 6 monthly transfers. We base the actual number of transfers on the
total amount allocated to the account. For example, if you allocate $500 to the
6-month DCA fixed account, we transfer your money over a period of five months,
so that each payment complies with the $100 per transfer minimum.
We determine the amount of the transfers from the 1-year DCA fixed account based
on
- the total amount of money allocated to the account, and
- the frequency of transfers selected.
For example, let's say you allocate $1,000 to the 1-year DCA account. You select
monthly transfers. We completely transfer all of your money to the selected
investment options over a period of ten months.
You may terminate your DCA program at any time. If money remains in the DCA
fixed account, we transfer the remaining money to the 1-year fixed investment
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
elect 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 Mid-Cap Value SELECT PORTFOLIO over six
quarters. You set up dollar cost averaging and purchase Accumulation Units
at the following values:
<TABLE>
<CAPTION>
QUARTER ACCUMULATION UNIT UNITS 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.
PRINCIPAL ADVANTAGE PROGRAM
The Principal Advantage Program allows you to invest in one or more of the
SELECT PORTFOLIO(S), FOCUSED PORTFOLIO(S) or STRATEGY(IES) without putting your
principal at direct risk. The program accomplishes this by allocating your
investment strategically between the fixed investment options (other than the
DCA fixed accounts) and the SELECT PORTFOLIO, FOCUSED PORTFOLIO or STRATEGY you
select. You decide how much you want to invest and approximately when you want a
return of principal. We calculate how much of your Purchase Payment needs to be
allocated to the particular fixed investment option to ensure that it grows to
an amount equal to your total principal invested under this program.
We reserve the right to modify, suspend or terminate this program at any time.
23
<PAGE>
EXAMPLE:
Assume that you want to allocate a portion of your initial Purchase Payment
of $100,000 to the fixed investment option. You want the amount allocated to
the fixed investment option to grow to $100,000 in 7 years. If the 7-year
fixed investment option is offering a 5% interest rate, we will allocate
$71,069 to the 7-year fixed investment option to ensure that this amount
will grow to $100,000 at the end of the 7-year period. The remaining $28,931
may be allocated among the SELECT PORTFOLIO(S), FOCUSED PORTFOLIO(S) or
STRATEGY(IES), as determined by you, to provide opportunity for greater
growth.
VOTING RIGHTS
Anchor National is the legal owner of the Seasons Series Trust shares. However,
when an underlying 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 any of the underlying portfolios become unavailable for investment, we may be
required to substitute shares of another investment 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 two ways:
- by making a partial or total withdrawal, and/or;
- by receiving income payments during the Income Phase. SEE INCOME OPTIONS,
PAGE 32.
Generally, we deduct a withdrawal charge applicable to any total or partial
withdrawal and a market value adjustment if a withdrawal comes from the 3, 5, 7
or 10 year fixed investment options prior to the end of a guarantee period. If
you withdraw your entire contract value, we also deduct any applicable premium
taxes and a contract maintenance fee. SEE EXPENSES, PAGE 30. We calculate
charges due on a total withdrawal on the day after we receive your request and
other required paper work. We return your contract value less any applicable
fees and charges.
FREE WITHDRAWAL PROVISION
Your contract provides for a free withdrawal amount each year. A free withdrawal
amount is the portion of your account that we allow you to take out each year
without being charged a surrender penalty. However, upon a future full surrender
of your contract we will recoup any surrender charges which would have been due
at the time the free withdrawals were taken if your prior free withdrawal(s) had
not been free. Additionally, if you participate in the Select Rewards Program,
you will not receive any applicable Deferred Payment Enhancement, if you fully
withdraw a Purchase Payment or your contract value prior to the corresponding
Payment Enhancement Date. SEE SELECT REWARDS PROGRAM ON PAGE .
To determine your free withdrawal amount and your surrender charge, we refer to
two special terms. These are penalty free earnings and the Total Invested
Amount.
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<PAGE>
The penalty-free earnings portion of your contract is simply your account value
less your Total Invested Amount. The Total Invested Amount is the total of all
Purchase Payments you have made into the contract less portions of some prior
withdrawals you made. The portions of prior withdrawals that reduce your Total
Invested Amount are as follows:
1. Any free withdrawals in any year that were in excess of your penalty
free earnings and were based on the part of the Total Investment Amount
that was no longer subject to surrender charges at the time of the
withdrawal.
2. Any prior withdrawals of the Total Investment Amount on which you
already paid a surrender penalty, plus any surrender charge paid on such
a withdrawal.
When you make a withdrawal, we assume that it is taken from penalty-free
earnings first, then from the Total Invested Amount on a first-in, first-out
basis. This means that you can also access your Purchase Payments which are no
longer subject to a surrender charge before those Purchase Payments which are
still subject to the surrender charge.
During the first year after we issue your contract your free withdrawal amount
is the greater of:
1. Your penalty-free earnings, or;
2. If you are participating in the Systematic Withdrawal program, a total
of 10% of your Total Invested Amount less any withdrawals taken during
the contract year.
After the first contract year, you can take out the greater of the following
amounts each year:
1. Your penalty free earnings and any portion of your Total Invested Amount
no longer subject to surrender charges, or;
2. 10% of the portion of your Total Invested Amount that has been in your
contract for at least one year less any withdrawals taken during the
contract year.
Purchase Payments, above and beyond the amount of your free withdrawal amount,
that are invested for less than 7 years, or 9 years if you elect to participate
in the Select Rewards Program, and withdrawn will result in your paying a
penalty in the form of a surrender charge. The amount of the charge and how it
applies are discussed more fully below. You should consider, before purchasing
this contract, the effect this charge will have on your investment if you need
to withdraw more money than the free withdrawal amount. You should fully discuss
this decision with your financial advisor.
The withdrawal charge percentage is determined by the age of the Purchase
Payment remaining in the contract at the time of the withdrawal. For the purpose
of calculating the withdrawal charge, any prior Free Withdrawal is not
subtracted from the total Purchase Payments still subject to withdrawal charges.
For example, you make an initial Purchase Payment of $100,000. For purposes of
this example we will assume a 0% growth rate over the life of the contract, no
election of the Select Rewards Program, Income Protector Program or the enhanced
death benefit and no subsequent Purchase Payments. In contract year 2 and year
3, you take out your maximum free withdrawal of $10,000 for each year. After
those free withdrawals your contract value is $80,000. In contract year 5 you
request a full surrender of your contract. We will apply the following
calculation, A - (B X C) = D, where:
A = Your contract value at the time of your request for surrender ($80,000)
B = The amount of your Purchase Payments still subject to withdrawal charge
($100,000)
C = The withdrawal charge percentage applicable to the age of each Purchase
Payment (4%) [B X C = $4,000]
D = Your full surrender value ($76,000)
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<PAGE>
The minimum partial withdrawal amount is $1,000. We require that the value left
in any SELECT PORTFOLIO, FOCUSED PORTFOLIO, STRATEGY or fixed account be at
least $500 after the withdrawal. You must send a written withdrawal request.
Unless you provide us with different instructions, partial withdrawals will be
made in equal amounts from each SELECT PORTFOLIO, FOCUSED PORTFOLIO, STRATEGY
and the fixed investment option in which your contract is invested. Withdrawals
from fixed investment options prior to the end of the guarantee period may
result in a market value adjustment.
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 investment option. Such deferrals are limited to no longer than six
months.
SYSTEMATIC WITHDRAWAL PROGRAM
If you elect, we use money in your contract to pay you monthly, quarterly,
semi-annual or annual payments during the Accumulation Phase. Electronic
transfer of these funds to your bank account is also available. The minimum
amount of each withdrawal is $250. There must be at 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. Any withdrawals you make using this program
count against your free withdrawal amount as described above. Withdrawals in
excess of that amount may incur a withdrawal charge. 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.
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.
QUALIFIED CONTRACT OWNERS
Certain Qualified plans restrict and/or prohibit your ability to withdraw money
from your contract. SEE TAXES, PAGE 37 for a more detailed explanation.
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<PAGE>
DEATH BENEFIT
--------------------------------------------------------------------------------
If you, or the joint annuitant, if one exists, should die during the
Accumulation Phase, your Beneficiary will receive a death benefit. The death
benefit options are discussed in detail below.
The death benefit is not paid after you switch to the Income Phase. If you die
during the Income Phase, your Beneficiary will receive any remaining guaranteed
income payments in accordance with the income option you choose. SEE INCOME
OPTIONS, PAGE 32.
You select the Beneficiary to receive any amounts payable on death. You may
change the Beneficiary at any time, unless you previously made an irrevocable
Beneficiary designation. A new Beneficiary designation is not effective until we
record the change.
The death benefit will be paid out when we receive adequate proof of death:
(1) a certified copy of a death certificate; (2) a certified copy of a decree of
court of competent jurisdiction as to the finding of death; (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 also require additional
documentation or proof in order for the death benefit to be paid.
Generally, the death benefit payment must begin immediately upon receipt of all
necessary documents and, in any event, must be paid within 5 years of the date
of death. The Beneficiary may, in the alternative, elect to have the death
benefit payable in the form of an annuity. If the Beneficiary elects an income
option, it must be paid over the Beneficiary's lifetime or for a period not
extending beyond the Beneficiary's life expectancy. Income payments must begin
within one year of your death. If the Beneficiary is the spouse of the owner, he
or she can elect to continue the contract at the then current value, rather than
receive a death benefit.
If the Beneficiary does not make a specific election as to how they want the
death benefit distributed within sixty days of our receipt of adequate proof of
death, it will be paid in a lump sum.
If the Annuitant dies before annuity payments begin, you can name a new
Annuitant. If no Annuitant is named within 30 days, you will become the
Annuitant. However, if the owner is a non-natural person (for example, a
corporation), then the death of the Annuitant will be treated as the death of
the owner, no new Annuitant may be named and the death benefit will be paid.
This contract provides three death benefit options: the standard death benefit
which is automatically included in your contract for no additional fee, and a
choice between two optional enhanced death benefits, for an additional fee. If
you choose one of the two enhanced death benefits, you must do so at the time of
contract application and you never terminate the election thereafter.
The term, "Net Purchase Payment" is used frequently explaining the death benefit
options below. We define Net Purchase Payment as total Purchase Payments reduced
by any partial withdrawals (and any fees or charges applicable to such
withdrawals) in the same proportion that the contract value was reduced on the
date of such withdrawal.
STANDARD DEATH BENEFIT
The standard death benefit on your contract, if you (or in the case of joint
ownership, the younger owner) are age 74 or younger at the time of death, is the
greater of:
1. Net Purchase Payments compounded at a 3% annual growth rate from the
date of issue until the date of death, plus any subsequent Net Purchase
Payments; or
2. the value of your contract at the time we receive satisfactory proof of
death.
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<PAGE>
If you (or in the case of joint ownership, the younger owner) are age 75 or
older at the time of death, Net Purchase Payments are compounded at a 3% annual
growth rate from date of issue until your 75th birthday.
OPTIONAL ENHANCED DEATH BENEFIT
If you elect the optional enhanced death benefit at the time of contract
application, we will pay your Beneficiary the sum of A plus B, where:
A. is the amount payable under the selected enhanced death benefit (see
option 1 or 2 below); and
B. is the earnings enhancement amount (see description below).
A. Optional Enhanced Death Benefit Options:
1. Purchase Payment Accumulation Option -- the death benefit is the greater of:
a. the value of your contract at the time we receive satisfactory proof of
death; or
b. Net Purchase Payments compounded to the earlier of age 80 or the date of
death at a 5% annual growth rate, plus any subsequent Net Purchase
Payments recorded after the date of death. This benefit will not exceed
two times the Net Purchase Payments.
2. Maximum Anniversary Value Option -- the death benefit is the greater of:
a. Net Purchase Payments; or
b. the value of your contract at the time we receive satisfactory proof of
death; or
c. the maximum anniversary value on any contract anniversary prior to your
81st birthday. The anniversary value equals the value of your contract on
a contract anniversary plus any subsequent Net Purchase Payments made
since that anniversary.
B. Optional Earnings Enhancement Feature (included with Selected Optional Death
Benefit):
The earnings enhancement feature can increase the death benefit amount. The
earnings enhancement is only available if you elect one of the optional enhanced
death benefits at the time of contract application. The earnings enhancement
amount is added to the death benefits payable under the Purchase Payment
Accumulation option or the Maximum Anniversary Value option.
WHAT IS THE EARNINGS ENHANCEMENT AMOUNT?
For purposes of determining the amount of the earnings enhancement, the amount
of your earnings is first determined. Earnings equals the amount of your
contract value minus the Net Purchase Payments as of the date of death. (If the
earnings amount is negative, then no earnings enhancement can be added.) If you
have earnings in your contract at the time we received satisfactory proof of
death, we may add a stated percentage of those earnings, subject to the maximum
defined below, to your death benefit.
WHAT IS THE MAXIMUM EARNINGS ENHANCEMENT?
The earnings enhancement amount is subject to a maximum which is calculated
using the stated percentages in the table below. The maximum earnings
enhancement amount is equal to the percentage of your Net Purchase Payments. The
applicable percentage is determined by a schedule based on the number of years
you have owned your contract prior to the date of death.
28
<PAGE>
<TABLE>
<CAPTION>
EARNINGS ENHANCEMENT MAXIMUM
CONTRACT YEAR OF DEATH* PERCENTAGE** EARNINGS ENHANCEMENT***
<S> <C> <C>
----------------------------------------------------------------------------------------------------
Years 0-4 25% 25%
----------------------------------------------------------------------------------------------------
Years 5-9 40% 40%
----------------------------------------------------------------------------------------------------
Years 10+ 50% 50%
----------------------------------------------------------------------------------------------------
</TABLE>
* Contract Year of Death is the number of full years since you have owned your
contract to the date of death.
** Earnings Enhancement Percentage is a percentage applied to the earnings in
your contract since you have owned your contract to your date of death.
*** Maximum Earnings Enhancement Percentage is the percentage of Net Purchase
Payments that is used to calculate the maximum benefit of earnings
enhancement.
You must elect the enhanced death benefit at the time of contract application.
Once elected, you may not terminate or change the option you have selected.
We assess a daily charge for the enhanced death benefit. The charge is equal to
0.25% of your average daily ending value of the assets you have allocated to the
SELECT PORTFOLIO(S), FOCUSED PORTFOLIO(S) and/or STRATEGY(IES).
We reserve the right to change the number of years, the earnings enhancement
percentage and maximum earnings enhancement at any time.
SPOUSAL CONTINUATION
If the Beneficiary is your spouse ("spousal Beneficiary"), the spousal
Beneficiary may elect to become the new owner and continue the contract. If the
spousal Beneficiary elects to continue the contract, no death benefit is paid at
that time. However, we will contribute to the contract any amount by which the
death benefit that would have been payable, exceeds the contract value. This
continuation contribution is only available one time, upon the death of the
original owner. The amount we contribute is not considered a Purchase Payment.
This amount will be calculated using the contract value and any applicable death
benefit as of the original owner's date of death and after we receive the
spousal Beneficiary's written request to continue the contract and satisfactory
proof of death of the original owner. This amount, if any, will be added to the
contract value as of the date we receive these two documents. (If the enhanced
death benefit was elected by the original owner, any earnings enhancement due,
will be added to the death benefit as well.) The age of the spousal beneficiary
at the time of continuation ("Continuation Date") will be used in determining
any future death benefits on this Contract.
For purposes of determining any earnings enhancement payable upon the death of
the spousal Beneficiary who elects to continue the contract, the following items
in the earnings enhancement table above are modified as follows:
(a) Contract Year of Death is the number of full years since the contract
continuation date to the date of death of the spousal beneficiary.
(b) Earnings Enhancement Percentage is a percentage applied to the earnings of
your contract since the contract continuation date up to the date of death
of the spousal beneficiary.
(c) Maximum Earnings Enhancement Percentage is the percentage of the sum of any
amount contributed to the contract on the contract continuation date plus
the contract value on the continuation date reduced proportionately by any
withdrawals (and any fees or charges associated to such withdrawals) that is
used to calculate the maximum benefit of the earnings enhancement.
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<PAGE>
The spousal Beneficiary may elect to continue the contract only upon the death
of the original owner. The spousal Beneficiary cannot change any contract
provisions as the new owner. Upon the spousal Beneficiary's death, the entire
interest of the contract must be distributed immediately under the provisions of
the death benefit previously selected by the original owner.
We reserve the right to modify, suspend or terminate the continuation
contribution at any time.
EXPENSES
--------------------------------------------------------------------------------
There are charges and expenses associated with your contract. These charges and
expenses reduce your investment return. We will not increase the contract
maintenance fee or withdrawal charges under your contract. However the
investment charges under your contract may increase or decrease. Some states may
require that we charge less than the amounts described below.
INSURANCE CHARGES
The amount of this charge is 1.40% annually of the value of your contract
invested in the SELECT PORTFOLIO(S), FOCUSED PORTFOLIO(S) and/or STRATEGY(IES).
We deduct the charge daily, on a pro-rata basis, from the value of your contract
allocated to the SELECT PORTFOLIO(S), FOCUSED PORTFOLIO(S) and/or STRATEGY(IES).
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
During the Accumulation Phase you may make withdrawals from your contract.
However, a withdrawal charge may apply. We apply a withdrawal charge upon an
early withdrawal against each Purchase Payment you put into the contract. The
withdrawal charge equals a percentage of the Purchase Payment you take out of
the contract. The withdrawal charge percentage declines each year a Purchase
Payment is in the contract, as follows:
WITHDRAWAL CHARGE WITHOUT THE SELECT REWARDS PROGRAM (SCHEDULE A)
<TABLE>
<CAPTION>
YEAR 1 2 3 4 5 6 7 8
--------------------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Withdrawal Charge 7% 6% 6% 5% 4% 3% 2% 0%
</TABLE>
WITHDRAWAL CHARGE WITH THE SELECT REWARDS PROGRAM (SCHEDULE B)
<TABLE>
<CAPTION>
YEAR 1 2 3 4 5 6 7 8 9 10
--------------------- -------- -------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Withdrawal Charge 9% 8% 7% 6% 6% 5% 4% 3% 2% 0%
</TABLE>
After a Purchase Payment has been in the contract for seven complete years, or
nine complete years if you elect to participate in the Select Rewards Program,
the withdrawal charge no longer applies to that payment.
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.
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The Select Rewards feature of this contract is designed to reward long term
investing. We expect that if you remain committed to this investment over the
long term, we will profit as a result of fees charged over the life of your
contract.
Whenever possible, we deduct the withdrawal charge from the money remaining in
your contract from each of your investment options on a pro-rata basis. If you
withdraw all of your contract value, we deduct any applicable withdrawal charges
from the amount withdrawn.
The contract provides a free withdrawal amount every year. SEE ACCESS TO YOUR
MONEY PAGE 24.
We will not assess a withdrawal charge for money withdrawn to pay a death
benefit. We do not currently assess a withdrawal charge upon election to receive
income payments from your contract.
Withdrawals made prior to age 59 1/2 may result in tax penalties. SEE TAXES
PAGE 37.
INVESTMENT CHARGES
Charges are deducted from the assets of the investment portfolios underlying the
SELECT PORTFOLIO(S), FOCUSED PORTFOLIO(S) or STRATEGY(IES) for the advisory and
other expenses of the portfolios. THE FEE TABLE BEGINNING ON PAGE 5 ILLUSTRATES
THESE CHARGES AND EXPENSES.
12b-1 FEES
Portfolio shares are all subject to fees imposed under the distribution plan
adopted by the Seasons Series Trust pursuant to Rule 12b-1 under the
Investment Company Act of 1940. The 12b-1 fee (0.15%) will not increase for
the life of the contract.
FOR MORE DETAILED INFORMATION ON THESE INVESTMENT CHARGES, REFER TO THE
PROSPECTUS FOR THE SEASONS SERIES TRUST, ATTACHED.
CONTRACT MAINTENANCE FEE
During the Accumulation Phase, we subtract a contract maintenance fee from your
account once per year. This charge compensates us for the cost of contract
administration. We will deduct the $35 ($30 in North Dakota) contract
maintenance fee on a pro-rata basis from your account value on your contract
anniversary. In the states of Pennsylvania, Texas and Washington a contract
maintenance fee will be deducted pro-rata from the SELECT PORTFOLIO(S), FOCUSED
PORTFOLIO(S) and/or STRATEGY(IES) in which you are invested, only. If you
withdraw your entire contract value, we deduct the fee from that withdrawal.
If your contract value is $50,000 or more on your contract anniversary date, we
will waive the charge. This waiver is subject to change without notice.
TRANSFER FEE
You may make transfers between investment options, without incurring a transfer
charge. However, we reserve the right to charge a fee for such transfers in the
future.
OPTIONAL ENHANCED DEATH BENEFIT FEE
Please see page 28 of this prospectus for additional information regarding the
optional enhanced death benefit fee.
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<PAGE>
OPTIONAL INCOME PROTECTOR FEE
Please see page 35 of this prospectus for additional information regarding the
Income Protector Fee.
PREMIUM TAX
Certain states charge the Company a tax on the premiums you pay into the
contract. We deduct from your contract these premium tax charges. Currently we
deduct the charge for premium taxes when you take 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 C 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 such a determination regarding sales to its employees,
it 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 after your
second contract anniversary. 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 discussed under Option
5, once you begin receiving income payments, you cannot otherwise access your
money through a withdrawal or surrender.
If you participate in the Select Rewards Program and switch to the Income Phase
prior to a Deferred Payment Enhancement Date, we will not allocate any
corresponding Deferred Payment Enhancement to your contract. SEE SELECT REWARDS
PROGRAM ON PAGE 11.
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Income payments must begin on or before your 90th birthday or on your tenth
contract anniversary, whichever occurs later. If you do not choose an Annuity
Date, your income payments will automatically begin on this date. Certain states
may require your income payments to start earlier.
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. In addition, certain Qualified contracts require you to take
minimum distributions after you reach age 70 1/2. SEE TAXES, PAGE 37.
INCOME OPTIONS
Currently, this Contract offers five 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. As the contract owner, you may change
the Annuitant at any time prior to the Annuity Date. You must notify us if the
Annuitant dies before the Annuity Date and then designate a new Annuitant.
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 100% SURVIVOR LIFE ANNUITY WITH 10 OR 20 YEAR PERIOD
CERTAIN
This option is similar to Option 2 above, with an additional guarantee of
payments for at least 10 or 20 years. If the Annuitant and the Survivor die
before all of the payments have been made, the remaining payments are made to
the Beneficiary under your Contract.
OPTION 4 - LIFE ANNUITY WITH 10 OR 20 YEAR PERIOD CERTAIN
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 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 (in full or
in part) 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 Option 5 does not contain
an element of mortality risk, no benefit is derived from this charge.
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<PAGE>
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 direct 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 annuity payments of less than $50 per payment, we may decrease
the frequency of the payments, state law allowing.
ALLOCATION OF ANNUITY PAYMENTS
You can choose income payments that are fixed, variable or both. If payments are
fixed, Anchor National guarantees the amounts of each payment. If the payments
are variable, the amounts are not guaranteed. They will go up and/or down based
upon the performance of the SELECT PORTFOLIO(S), FOCUSED PORTFOLIO(S) or
STRATEGY(IES) in which you invest.
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 SELECT PORTFOLIO(S), FOCUSED
PORTFOLIO(S) and/or STRATEGY(IES) 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. If you are invested in both fixed and variable options at
the time you begin the Income Phase, a portion of your income payments will be
fixed and a portion will be variable.
INCOME PAYMENTS
Your income payments will vary if you are invested in the SELECT PORTFOLIO(S),
FOCUSED PORTFOLIO(S) and/or STRATEGY(IES) after the Annuity date depending on
four things:
- for life options, your age when payments begin, and;
- the value of your contract in the SELECT PORTFOLIO(S), FOCUSED
PORTFOLIO(S) and/or STRATEGY(IES) on the Annuity Date, and;
- the 3.5% assumed investment rate for variable income payments used in the
annuity table for the contract, and;
- the performance of the SELECT PORTFOLIO(S), FOCUSED PORTFOLIO(S) and/or
STRATEGY(IES) in which you are invested during the time you receive income
payments.
If you are invested in both the fixed account options and the SELECT
PORTFOLIO(S), FOCUSED PORTFOLIO(S) and/or STRATEGY(IES) after the Annuity Date,
the allocation of funds between the fixed accounts and SELECT PORTFOLIO(S),
FOCUSED PORTFOLIO(S) and/or STRATEGY(IES) also impacts the amount of your
annuity payments.
TRANSFERS DURING THE INCOME PHASE
During the Income Phase, one (1) transfer per month is permitted between the
SELECT PORTFOLIO(S), FOCUSED PORTFOLIO(S) and STRATEGY(IES). 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 for a more detailed
discussion of the income options.
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<PAGE>
THE INCOME PROTECTOR
You may elect to enroll in the Income Protector Program. The Income Protector
Program provides a future "safety net" which offers you the ability to receive a
guaranteed fixed minimum retirement income when you choose to begin receiving
income payments. With the Income Protector you can know the level of minimum
income that will be available to you upon annuitization, regardless of
fluctuating market conditions. In order to utilize the program, you must follow
the provisions discussed below.
You are not required to use the Income Protector to receive 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 INCOME PROTECTOR IF YOUR CONTRACT PERFORMS WITHIN A HISTORICALLY
ANTICIPATED RANGE. HOWEVER, PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
Certain federal tax code restrictions on the 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 DO WE DETERMINE THE AMOUNT OF YOUR MINIMUM GUARANTEED INCOME?
We base the amount of minimum retirement 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 Initial Income Benefit Base is equal to your contract
value. Your participation becomes effective on either the date of issue of the
contract (if the feature is 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 SELECT PORTFOLIOS, FOCUSED
PORTFOLIOS or STRATEGIES 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 equal to, for the first year of calculation, your contract value on
the date your participation became effective, and for each subsequent
year of calculation, the Income Benefit Base of your prior contract
anniversary, and;
(b) is equal to the sum of all subsequent Purchase Payments made into the
contract since the prior contract anniversary, and;
(c) is equal to all withdrawals and applicable fees, charges and any
negative MVA (but excluding administration fees, mortality and expense
charges and the fee for enrollment into the program) since the prior
contract anniversary, including premium taxes, in an amount proportionate
to the amount by which such withdrawals decreased your contract value.
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. You can not terminate your enrollment once elected.
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ELECTING TO RECEIVE INCOME
In order to exercise the Income Protector feature, you may not begin the income
phase for at least nine years following the date your enrollment in the program
became effective. Further, you may begin taking income payments using the Income
Protector feature only within 30 days after the ninth or later contract
anniversary following the effective date of your enrollment in the Income
Protector program.
The contract anniversary prior to your election to begin receiving income
payments is your Income Benefit Date. We calculate your Income Benefit Base as
of that date to use in determining your guaranteed minimum fixed retirement
income. To determine the minimum guaranteed retirement income available to you,
we apply your final Income Benefit Base to the annuity rates stated in your
Income Protector endorsement for the income option you select. You then choose
if you would like to receive the income annually, semi-annually, quarterly or
monthly for the time guaranteed under your selected income option. Your final
Income Benefit Base is equal to (a) minus (b) where:
(a) is your Income Benefit Base as of your Income Benefit Date, and;
(b) is any partial withdrawals of contract value and any charges applicable
to those withdrawals (including any negative MVA) and any withdrawal
charges otherwise applicable, calculated as if you fully surrender your
contract as of the Income Benefit Date, and any applicable premium taxes.
The income options available when using the Income Protector feature to receive
your retirement income are:
- Life Annuity with 10 years guaranteed, or
- Joint and 100% Survivor Life Annuity with 20 years guaranteed
At the time you elect to begin receiving income payments, we will calculate your
income payments using both your 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 feature will be
different. You will receive whichever provides a greater stream of income. If
you elect to receive income payments using the Income Protector feature your
income payments will be fixed in amount.
NOTE TO QUALIFIED CONTRACT HOLDERS
Qualified contracts generally require that you select an income option that does
not exceed your life expectancy. That restriction, if it applies to you, may
limit the benefit of the Income Protector program. To utilize the Income
Protector feature, you must take income payments under one of the two income
options described above. 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 years guaranteed, you must annuitize before
age 79, and;
- for the Joint and 100% Survivor Annuity with 20 years guaranteed, 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 may wish to consult your tax advisor for information concerning your
particular circumstances.
FEES ASSOCIATED WITH THE INCOME PROTECTOR PROGRAM
If you elect to participate in the Income Protector program we deduct a fee
equal to 0.10% of your Income Benefit Base from your contract value on each
contract anniversary beginning with the contract anniversary following the
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<PAGE>
anniversary on which your enrollment in the program becomes effective. We will
deduct this charge from your contract value on every contract anniversary up to
and including your Income Benefit Date. Additionally, if you fully surrender
your contract prior to your contract anniversary, we will deduct the fee at the
time of surrender based on your Income Benefit Base as of the surrender date.
Once elected, the Income Protector Program and its corresponding charges may not
be terminated until full surrender or annuitization of the contract occurs.
HYPOTHETICAL EXAMPLE OF THE OPERATION OF THE INCOME PROTECTOR PROGRAM:
This table assumes a $100,000 initial investment in a non-qualified contract
with no further premiums, no withdrawals, and no premium taxes, no election of
Select Rewards or the enhanced death benefit and the election of the Income
Protector program at contract issue.
<TABLE>
<CAPTION>
ANNUAL INCOME IF YOU ANNUITIZE ON THE FOLLOWING CONTRACT ANNIVERSARIES:
IF AT ISSUE YOU ARE... 1-8 9 10 15 20
<S> <C> <C> <C> <C> <C>
----------------------------------------------------------------------------------------------------
Male (M), Age 60* N/A 6,480 6,672 7,716 8,832
----------------------------------------------------------------------------------------------------
Female (F), Age 60* N/A 5,700 5,880 6,900 8,112
----------------------------------------------------------------------------------------------------
M and F, Age 60** N/A 4,920 5,028 5,544 5,928
----------------------------------------------------------------------------------------------------
</TABLE>
* Life Annuity with 10 Year Period Certain
** Joint and 100% Survivor Annuity with 20 Year Period Certain
The Income Protector program is not available in California and may not be
available in other states. Check with your financial adviser for availability in
your state.
We reserve the right to modify, suspend or terminate the program at any time.
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 CANNOT GUARANTEE THAT THE
INFORMATION CONTAINED HEREIN IS COMPLETE AND/OR ACCURATE.
ANNUITY CONTRACTS IN GENERAL
The Internal Revenue Code ("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. Qualified retirement
investments automatically provide tax deferral regardless of whether the
underlying contract is an annuity. Different rules apply depending on how you
take the money out and whether your contract is Qualified or Non-qualified.
If you do not purchase your contract under a pension plan, a specially sponsored
employer program or an individual retirement account, your contract is referred
to as a Non-qualified contract. A Non-qualified contract receives different tax
treatment than a Qualified contract. In general, your cost basis in a
Non-qualified contract is equal to the Purchase Payments you put into the
contract. You have already been taxed on the cost basis in your contract.
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: Individual
Retirement Accounts ("IRAs"), Roth IRAs, Tax-Sheltered Annuities (referred to as
403(b) contracts), H.R. 10
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Plans (referred to as Keogh Plans) and 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.
TAX TREATMENT OF DISTRIBUTIONS--NON-QUALIFIED CONTRACTS
If you make a withdrawal from a Non-qualified contract, the federal tax code
treats such a withdrawal as first coming from the earnings and then as coming
from your Purchase Payments. For annuity payments, any portion of each payment
that is considered a return of your Purchase Payment will not be taxed.
Withdrawn earnings are treated as income to you and are taxable. The federal tax
code provides for a 10% penalty tax on any earnings that are withdrawn 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 federal tax code); (4) in a series of substantially
equal installments made for your life or for the joint lives of you and you
Beneficiary; (5) under an immediate annuity; or (6) which come from Purchase
Payments made prior to August 14, 1982.
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 federal tax code 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 federal tax code); (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 federal tax code for amounts paid during the taxable year for medical care;
(6) to fund higher education expenses (as defined in federal tax code); (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.
The federal tax code limits the withdrawal of Purchase Payments from certain
Tax-Sheltered Annuities. Withdrawals can only be made when an owner:
(1) reaches age 59 1/2; (2) leaves his or her job; (3) dies; (4) becomes
disabled (as defined in the federal tax code); or (5) in the case of hardship.
In the case of hardship, the owner can only withdraw Purchase Payments.
MINIMUM DISTRIBUTIONS
If you have a Qualified contract, distributions must begin by April 1 of the
calendar year following the later of (1) the calendar year in which you attain
age 70 1/2 or (2) the calendar year in which you retire. Failure to satisfy the
minimum distribution requirements may result in a tax penalty. You should
contact your tax advisor for more information.
We currently waive surrender charges and MVA on withdrawals taken to meet
minimum distribution requirements. Current operational practice is to provide a
free withdrawal of the greater of the contract's maximum penalty free amount or
the required minimum distribution amount for a particular contract (but not
both).
DIVERSIFICATION
The federal tax code imposes certain diversification requirements on the
underlying investments for a variable annuity. We believe that the 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.
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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 the 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
--------------------------------------------------------------------------------
From time to time we will advertise the performance of the SELECT PORTFOLIOS,
FOCUSED PORTFOLIOS and/or STRATEGIES. Any such performance results are based on
historical earnings and are not intended to indicate future performance.
We advertise the Cash Management Portfolio's yield and effective yield. In
addition, the other SELECT PORTFOLIOS, FOCUSED PORTFOLIOS and STRATEGIES
advertise total return, gross yield and yield-to-maturity. These figures
represent past performance of the SELECT PORTFOLIOS, FOCUSED PORTFOLIOS and
STRATEGIES. These performance numbers do not indicate future results.
We may show performance of each SELECT PORTFOLIO, FOCUSED PORTFOLIO and/or
STRATEGY in comparison to various appropriate indexes and the performance of
other similar variable annuity products with similar objectives as reported by
such independent reporting services as Morningstar, Inc., Lipper Analytical
Services, Inc. and the Variable Annuity Research Data Service ("VARDS").
Please see the Statement of Additional Information for additional information
regarding the methods used to calculate performance data.
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
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 Asset Management, SunAmerica Trust
Company, and the SunAmerica Financial Network, Inc. (comprising six wholly owned
broker-dealers), specialize in retirement savings and investment products and
services. Business focuses include, fixed and variable annuities, mutual funds,
broker-dealer services and trust administration services.
39
<PAGE>
THE SEPARATE ACCOUNT
Anchor National originally established a separate account, Variable Annuity
Account Five (the "Separate Account"), under Arizona law on July 8, 1996. 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.
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.
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 7.5% of your Purchase Payments. Contracts
sold with the Select Rewards Program may result in our paying a lower
commission. 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, certain minimum amounts of 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, and is a registered as a broker-dealer under the
Exchange Act of 1934 and a member of the National Association of Securities
Dealers, Inc.
No underwriting fees are paid in connection with the distribution of the
contracts.
ADMINISTRATION
We are responsible for the administrative servicing of your contract. 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.
40
<PAGE>
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. Please
contact our Annuity Service Center at 1-800-445-SUN2, if you have any comment,
question or service request.
We send out transaction confirmations and quarterly statements. 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.
LEGAL PROCEEDINGS
There are no pending legal proceedings 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.
INDEPENDENT ACCOUNTANTS
[TO BE UPDATED BY AMENDMENT]
--------------------------------------------------------------------------------
The 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, are
incorporated by reference in this prospectus and 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. As of
the date of this Prospectus, sale of these contracts had not yet begun.
Therefore, financial statements for Variable Annuity Account Five (portion
related to the Seasons Select II Variable Annuity) are not contained herein.
41
<PAGE>
TABLE OF CONTENTS OF
STATEMENT OF ADDITIONAL INFORMATION
<TABLE>
<S> <C>
Separate Account............................................ 3
General Account............................................. 4
Performance Data............................................ 4
Annuity Payments............................................ 8
Annuity Unit Values......................................... 8
Taxes....................................................... 11
Distribution of Contracts................................... 16
Financial Statements........................................ 16
</TABLE>
42
<PAGE>
APPENDIX A - CONDENSED FINANCIAL INFORMATION [TO BE UPDATED BY AMENDMENT]
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FISCAL 3/31/00
YEAR TO
STRATEGIES INCEPTION TO 3/31/99 3/31/00 4/30/00
------------------------------------------------- ---------------------- ----------- -----------
<S> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------------------
Growth (Inception Date: (a) 3/4/99 (b) 4/6/99)
Beginning AUV.................................. (a) 15.05 15.89 21.30
(b) 0 16.27 21.27
End AUV........................................ (a) 15.89 21.30 20.24
(b) 0 21.27 20.22
Ending Number of AUs........................... (a) 31,169 1,653,495 1,871,300
(b) 0 126,216 132,445
---------------------------------------------------------------------------------------------------------
Moderate Growth (Inception Date: (a) 3/3/99 (b) 4/26/99)
Beginning AUV.................................. (a) 14.25 15.09 19.48
(b) 0 15.79 19.46
End AUV........................................ (a) 15.09 19.48 18.62
(b) 0 19.46 18.59
Ending Number of AUs........................... (a) 93,136 1,559,019 1,760,865
(b) 0 53,392 69,503
---------------------------------------------------------------------------------------------------------
Balanced Growth (Inception Date: (a) 3/5/99 (b) 4/5/99)
Beginning AUV.................................. (a) 13.80 14.05 16.68
(b) 0 14.26 16.66
End AUV........................................ (a) 14.05 16.68 16.11
(b) 0 16.66 16.09
Ending Number of AUs........................... (a) 85,553 991,695 1,061,795
(b) 0 113,160 109,857
---------------------------------------------------------------------------------------------------------
Conservative Growth (Inception Date: (a) 3/5/99 (b) 3/19/99)
Beginning AUV.................................. (a) 13.03 13.21 14.89
(b) 13.25 13.21 14.89
End AUV........................................ (a) 13.21 14.89 14.50
(b) 13.21 14.87 14.48
Ending Number of AUs........................... (a) 33,892 623,175 629,067
(b) 5,689 77,606 81,771
---------------------------------------------------------------------------------------------------------
</TABLE>
AUV-Accumulation Unit Value
AU-Accumulation Units
(a) Reflects age 80 or younger
(b) Reflects age 81 or older
A-1
<PAGE>
APPENDIX B - SELECT REWARDS PROGRAM EXAMPLES
--------------------------------------------------------------------------------
I. DEFERRED PAYMENT ENHANCEMENT
If you elect to participate in the Select Rewards Program at contract issue, we
contribute at least 2% of each Purchase Payment to your contract for each
Purchase Payment we receive as an Upfront Payment Enhancement. Any applicable
Deferred Payment Enhancement is allocated to your contract on the corresponding
Deferred Payment Enhancement Date and, if declared by the Company, is a
percentage of your remaining Purchase Payment on the Deferred Payment
Enhancement Date. Deferred Purchase Payment Enhancements are reduced
proportionately by partial withdrawals of that Purchase Payment prior to the
Deferred Payment Enhancement Date.
The examples that follow assume an initial Purchase Payment of $125,000 and that
the Deferred Payment Enhancement is 1%.
For purposes of the example, the Deferred Payment Enhancement Date is the 9th
anniversary of the Purchase Payment.
EXAMPLE 1 - NO WITHDRAWALS ARE MADE
The Upfront Payment Enhancement allocated to your contract is $2,500 (2% of
$125,000).
On your 9th contract anniversary, the Deferred Payment Enhancement Date, your
Deferred Payment Enhancement of $1,250 (1% of your remaining Purchase Payment or
$125,000) will be allocated to your contract.
EXAMPLE 2 - WITHDRAWAL MADE PRIOR TO DEFERRED PAYMENT ENHANCEMENT DATE
As in Example 1, your Upfront Payment Enhancement is $2,500.
This example also assumes the following:
(1) Your contract value on your 5th contract anniversary is $190,000.
(2) You request a withdrawal of $75,000 on your 5th contract anniversary.
(3) No subsequent Purchase Payments have been made.
(4) No prior withdrawals have been taken.
(5) Funds are not allocated to any of the MVA Fixed Accounts.
On your 5th contract anniversary, your penalty-free earnings in the contract are
$65,000 ($190,000 contract value less your $125,000 investment in the contract).
Therefore, you are withdrawing $10,000 of your initial Purchase Payment. Your
contract value will also be reduced by a $500 withdrawal charge on the $10,000
Purchase Payment (5% of $10,000). Your gross withdrawal is $75,500 of which
$10,500 constitutes part of your Purchase Payment.
The withdrawal of $10,500 of your $125,000 Purchase Payment is a withdrawal of
8.4% of your Purchase Payment. Therefore, only 91.6% or $114,500 of your initial
Purchase Payment remains in your contract.
On your 9th contract anniversary, the Deferred Payment Enhancement Date,
assuming no other transactions occur affecting the Purchase Payment, we allocate
your Deferred Payment Enhancement of $1,145 (1% of your remaining Purchase
Payment, $114,500) to your contract.
B-1
<PAGE>
II. 90 DAY WINDOW
Contracts issued with the Select Rewards feature are eligible for a "Look-Back
Adjustment." As of the 90th day after your contract was issued, we will total
your Purchase Payments remaining in your contract at that time, without
considering any investment gain or loss in contract value on those Purchase
Payments. If your total Purchase Payments bring you to an Enhancement Level
which, as of the date we issued your contract, would have provided for a higher
Upfront and/or Deferred Payment Enhancement Rate on each Purchase Payment, you
will get the benefit of the Enhancement Rate(s) that were applicable to that
higher Enhancement Level at the time your contract was issued.
This example assumes the following:
(1) Current Enhancement Levels, Rates and Dates (beginning , 2000)
throughout the first 90 days.
(2) No withdrawal in the first 90 days.
(3) Initial Purchase Payment of $35,000 on , 2000.
(4) Subsequent Purchase Payment of $40,000 on , 2000.
(5) Subsequent Purchase Payment of $25,000 on , 2000.
(6) Subsequent Purchase Payment of $7,500 on , 2000.
<TABLE>
<CAPTION>
DEFERRED
PURCHASE UPFRONT DEFERRED PAYMENT
PAYMENT PAYMENT PAYMENT ENHANCEMENT
DATE AMOUNT ENHANCEMENT ENHANCEMENT DATE
----------------------------------- -------- ----------- ----------- ------------------
<S> <C> <C> <C> <C>
----------------------------------------------------------------------------------------------
, 2000 $ 35,000 2% 0% N/A
, 2000 $ 40,000 4% 0% N/A
, 2000 $ 25,000 4% 1% , 2009
, 2000 $ 7,500 4% 1% , 2009
----------------------------------------------------------------------------------------------
</TABLE>
ENHANCEMENT ADJUSTMENTS ON THE 90TH DAY FOLLOWING CONTRACT ISSUE
The sum of all Purchase Payments made in the first 90 days of the contract
equals $107,500. According to the Enhancement Levels in effect at the time this
contract was issued, a $107,500 Purchase Payment would have received a 4%
Upfront Payment Enhancement and a 1% Deferred Payment Enhancement. Under the 90
Day Window provision all Purchase Payments made within those first 90 days would
receive the benefit of the parameters in place at the time the contract was
issued, as if all of the Purchase Payments were received on the date of issue.
Thus, the first two Purchase Payments would be adjusted as follows:
<TABLE>
<CAPTION>
DEFERRED
PURCHASE UPFRONT DEFERRED PAYMENT
PAYMENT PAYMENT PAYMENT ENHANCEMENT
DATE AMOUNT ENHANCEMENT ENHANCEMENT DATE
----------------------------------- -------- ----------- ----------- ------------------
<S> <C> <C> <C> <C>
----------------------------------------------------------------------------------------------
, 2000 $ 35,000 4% 1% , 2009
, 2000 $ 40,000 4% 1% , 2009
, 2000 $ 25,000 4% 1% , 2009
, 2000 $ 7,500 4% 1% , 2009
----------------------------------------------------------------------------------------------
</TABLE>
B-2
<PAGE>
APPENDIX C - MARKET VALUE ADJUSTMENT
--------------------------------------------------------------------------------
The market value adjustment reflects the impact that changing interest rates
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 factor:
[(1+I/(1+J+L)](to the power of N/12) - 1
THE MARKET VALUE ADJUSTMENT FORMULA
MAY DIFFER IN CERTAIN STATES
where:
I is the interest rate you are earning on the money invested in
the fixed investment option;
J is the interest rate then currently available for the period
of time equal to the number of years remaining in the term you initially agreed
to leave your money in the fixed investment option; and
L is equal to 0.005, except in Pennsylvania where it is equal to
zero and Florida where it is equal to .0025.
N is the number of full months remaining in the term you
initially agreed to leave your money in the fixed investment option.
EXAMPLES OF THE MARKET VALUE ADJUSTMENT
The examples below assume the following:
(1) You made an initial Purchase Payment of $10,000 and allocated it to the
10-year fixed investment option at a rate of 5%;
(2) You make a partial withdrawal of $4,000 when 1 year (12 months) remain
in the 10-year term you initially agreed to leave your money in the fixed
investment option (N=12); and
(3) You have not made any other transfers, additional Purchase Payments, or
withdrawals.
No withdrawal charges are reflected because your Purchase Payment has been in
the contract for nine full years. If a withdrawal charge applies, it is deducted
before the market value adjustment. The market value adjustment is assessed on
the amount withdrawn less any withdrawal charges.
NEGATIVE ADJUSTMENT
Assume that on the date of withdrawal, the interest rate in effect for new
Purchase Payments in the 1-year fixed investment option is 6%.
The market value adjustment factor is
= [(1+I)/(1+J+0.005)](to the power of N/12) - 1
= [(1.05)/(1.06+0.005)](to the power of 12/12) - 1
= (0.985915)(to the power of 1) - 1
= 0.985915 - 1
= -0.014085
The requested withdrawal amount is multiplied by the market value adjustment
factor to determine the market value adjustment:
$4,000 X (-0.014085) = -$56.34
C-1
<PAGE>
$56.34 represents the market value adjustment that will be deducted from the
money remaining in the 10-year fixed investment option.
POSITIVE ADJUSTMENT
Assume that on the date of withdrawal, the interest rate in effect for a new
Purchase Payments in the 1-year fixed investment option is 4%.
The market value adjustment factor is
= [(1+I/(1+J+0.005)](to the power of N/12) - 1
= [(1.05)/(1.04+0.005)](to the power of 12/12) - 1
= (1.004785)(to the power of 1) - 1
= 1.004785 - 1
= +0.004785
The requested withdrawal amount is multiplied by the market value adjustment
factor to determine the market value adjustment:
$4,000 X (+0.004785) = +$19.14
$19.14 represents the market value adjustment that would be added to your
withdrawal.
C-2
<PAGE>
APPENDIX D - 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.................................................. 0.50% 2.35%
Maine....................................................... 0% 2.00%
Nevada...................................................... 0% 3.50%
South Dakota................................................ 0% 1.25%
West Virginia............................................... 1.00% 1.00%
Wyoming..................................................... 0% 1.00%
</TABLE>
D-1
<PAGE>
Please forward a copy (without charge) of the Seasons Select 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>
Part II
-------
Information Not Required in Prospectus
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth the expenses in connection with the
issuance and distribution of the securities being registered, other than
underwriting discounts and commissions. All of the amounts shown are
estimates, except the SEC registration fee.
<TABLE>
<S> <C>
SEC registration fee . . . . . . . . . . . . . . $ 5,560
Printing and engraving . . . . . . . . . . . . . 50,000
Legal fees and expenses . . . . . . . . . . . . 10,000
Rating agency fees . . . . . . . . . . . . . . . 7,500
Miscellaneous . . . . . . . . . . . . . . . . . 10,000
---------
Total . . . . . . . . . . . . . . . . . . . . $ 83,060
---------
---------
</TABLE>
Item 15. Indemnification of Directors and Officers.
Section 10-851 of the Arizona Corporations and Associations law permits
the indemnification of directors, officers, employees and agents of Arizona
corporations. Article Eight of the Company's Restated Articles of
Incorporation, as amended and restated (the "Articles") and Article Five
of the Company's By-Laws ("By-Laws") authorize the indemnification of
directors and officers to the full extent required or permitted by the Laws
of the State of Arizona, now or hereafter in force, whether such persons are
serving the Company, or, at its request, any other entity, which
indemnification shall include the advance of expenses under the procedures
and to the full extent permitted by law. In addition, the Company's officers
and directors are covered by certain directors' and officers' liability
insurance policies maintained by the Company's parent. Reference is made to
section 10-851 of the Arizona Corporations and Associations Law, Article
Eight of the Articles, and Article Five of the By-Laws, which are
incorporated herein by reference.
Item 16. Exhibits and Financial Statements Schedules.
Seasons Select
Exhibit No. Description
----------- -----------
(1) Form of Underwriting Agreement ***
(2) Plan of Acquisition, Reorganization, Arrangement, Liquidation or
Succession **
(3) (a) Articles of Incorporation ***
(b) By-Laws ***
(4) (a) Seasons Select II Individual Fixed and Variable Annuity Contract*
(b) Individual Retirement Annuity Endorsement*
(c) Purchase Payment Accumulation Optional Death Benefit Endorsement*
(d) Maximum Anniversary Value Optional Death Benefit Endorsement*
(e) Spousal Continuation Death Benefit Endorsement*
(f) Optional Income Benefit Endorsement*
(g) Death Benefit Endorsement*
(h) Seasons Select II Deferred Annuity Application*
(5) Opinion of Counsel re: Legality **
(including on Exhibit (23)(b))
(6) Opinion re Discount on Capital Shares **
(7) Opinion re Liquidation Preference **
(8) Opinion re Tax Matters **
(9) Voting Trust Agreement **
(10) Material Contracts **
(11) Statement re Computation of Per Share Earnings **
(12) Statement re Computation of Ratios **
(14) Material Foreign Patents **
(15) Letter re Unaudited Financial Information **
(16) Letter re Change in Certifying Accountant **
(23) (a) Consent of Independent Accountants *
(b) Consent of Attorney **
(24) Powers of Attorney *
(25) Statement of Eligibility of Trustee **
(26) Invitation for Competitive Bids **
(27) Financial Data Schedule +
(28) Information Reports Furnished to State Insurance Regulatory
Authority **
(29) Other Exhibits **
* Herewith
** Not Applicable
*** Incorporated by Reference to
Pre-Effective Amendment No. 1
of this Registration Statement
on Form S-1 filed on March 11, 1997.
**** Incorporated by Reference to the
Initial Registration Statement to
Registration Statement No. 333-08877
filed on Form S-1 on November 20, 1998.
+ Incorporated by Reference to
Pre-Effective Amendment No. 2
to Registration Statement No. 333-08877
on Form S-1, filed on February 1, 1999.
++ Incorporated by Reference to the
Post-Effective Amendment No. 8 of this
Registration Statement filed on Form S-3
on July 19, 2000.
<PAGE>
Item 17. Undertakings.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement to include
any material information with respect to the plan of distribution not
previously disclosed in the registration statement or any material
change to such information in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(4) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the registrant's annual
report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 and, where applicable, each filing
of an employee benefit plan's annual report pursuant to Section
15(d) of the Securities Exchange Act of 1934) that is incorporated
by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
<PAGE>
SIGNATURES
Pursuant to the requirement of the Securities Act of 1933, the
Registrant Certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Los Angeles, State of California on this 25th
day of September, 2000.
By: ANCHOR NATIONAL LIFE INSURANCE COMPANY
By: /s/ JAY S. WINTROB
-----------------------------------
Jay S. Wintrob
President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
ELI BROAD* Chief Executive Officer, & September 25, 2000
------------------- Chairman of Board
Eli Broad (Principal Executive Officer)
N. SCOTT GILLIS* Director & Senior Vice President September 25, 2000
-------------------
N. Scott Gillis
JAMES R. BELARDI* Director & Senior Vice President September 25, 2000
-------------------
James R. Belardi
JANA W. GREER* Director & Senior Vice President September 25, 2000
-------------------
Jana W. Greer
JAY S. WINTROB* Director & President September 25, 2000
-------------------
Jay S. Wintrob
MAURICE HEBERT*
------------------- Controller & Vice President September 25, 2000
Maurice Hebert (Principal Accounting Officer)
MARC H. GAMSIN* Director & Senior Vice President September 25, 2000
-------------------
Marc H. Gamsin
*By: /s/ CHRISTINE A. NIXON Attorney-in-Fact
----------------------
Christine A. Nixon
</TABLE>
Dated: September 25, 2000
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- ----------------------------------------------------------------
<C> <S>
(4)(a) SEASONS SELECT II INDIVIDUAL FIXED AND VARIABLE ANNUITY CONTRACT
(4)(b) INDIVIDUAL RETIREMENT ANNUITY ENDORSEMENT
(4)(c) PURCHASE PAYMENT ACCUMULATION OPTIONAL DEATH BENEFIT
ENDORSEMENT
(4)(d) MAXIMUM ANNIVERSARY VALUE OPTIONAL DEATH BENEFIT
ENDORSEMENT
(4)(e) SPOUSAL CONTINUATION DEATH BENEFIT ENDORSEMENT
(4)(f) OPTIONAL INCOME BENEFIT ENDORSEMENT
(4)(g) DEATH BENEFIT ENDORSEMENT
(4)(h) SEASONS SELECT II INDIVIDUAL DEFERRED ANNUITY APPLICATION
(23)(a) Consent of Independent Accountants
</TABLE>
