<PAGE> 1
File Nos. 33-47473
811-3859
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OF 1933 [X]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 18 [X]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940 [X]
Amendment No. 35
(Check appropriate box or boxes)
VARIABLE SEPARATE ACCOUNT
(Exact Name of Registrant)
Anchor National Life Insurance Company
(Name of Depositor)
1 SunAmerica Center
Los Angeles, California 90067-6022
(Address of Depositor's Principal Offices) (Zip Code)
Depositor's Telephone Number, including Area Code
(310) 772-6000
Susan L. Harris, Esq.
Anchor National Life Insurance Company
1 SunAmerica Center
Los Angeles, California 90067-6022
(Name and Address of Agent for Service)
Title and Amount
of Securities
- ----------------
Flexible Payment
Deferred Annuity
Contracts
It is proposed that this filing will become effective:
[ ] immediately upon filing pursuant to paragraph (b) of Rule 485
[X] on March 31, 2000 pursuant to paragraph (b) of Rule 485
[ ] 60 days after filing pursuant to paragraph (a) of Rule 485
[ ] on [ ] pursuant to paragraph (a) of Rule 485
<PAGE> 2
VARIABLE SEPARATE ACCOUNT
Cross Reference Sheet
PART A - PROSPECTUS
Incorporated herein by reference to Post-Effective Amendment No. 17 under
Securities Act of 1933 (the 33 Act) and No. 34 under the Investment Company Act
of 1940 (the 40 Act) to Registration Statement file No. 33-47473 and 811-3859
filed on Form N-4 on December 15, 1999.
<PAGE> 3
PART B - STATEMENT OF ADDITIONAL INFORMATION
Incorporated herein by reference to Post-Effective Amendment No. 17 under
Securities Act of 1933 (the 33 Act) and No. 34 under the Investment Company Act
of 1940 (the 40 Act) to Registration Statement file No. 33-47473 and 811-3859
filed on Form N-4 on December 15, 1999.
PART C
Information required to be included in Part C is set forth under the
appropriate item, so numbered, in Part C of this Registration Statement.
<PAGE> 4
[POLARIS LOGO]
PROFILE
December 29, 1999
Incorporated herein by reference to Post-Effective Amendment No. 17 under
Securities Act of 1933 (the 33 Act) and No. 34 under the Investment Company Act
of 1940 (the 40 Act) to Registration Statement file No. 33-47473 and 811-3859
filed on Form N-4 on December 15, 1999.
<PAGE> 5
[POLARIS LOGO]
PROSPECTUS
December 29, 1999
Incorporated herein by reference to Post-Effective Amendment No. 17 under
Securities Act of 1933 (the 33 Act) and No. 34 under the Investment Company Act
of 1940 (the 40 Act) to Registration Statement file No. 33-47473 and 811-3859
filed on Form N-4 on December 15, 1999.
<PAGE> 6
STATEMENT OF ADDITIONAL INFORMATION
Fixed and Variable Group Deferred Contracts
issued by
VARIABLE SEPARATE ACCOUNT
DEPOSITOR: ANCHOR NATIONAL LIFE INSURANCE COMPANY
This Statement of Additional Information is not a prospectus; it should be read
with the prospectus, dated March 31, 2000, relating to the annuity contracts
described above, a copy of which may be obtained without charge by written
request addressed to:
Anchor National Life Insurance Company
Annuity Service Center
P.O. Box 54299
Los Angeles, California 90054-0299
THE DATE OF THIS STATEMENT OF ADDITIONAL INFORMATION IS
MARCH 31, 2000
<PAGE> 7
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Separate Account ....................................................... 3
General Account ........................................................ 3
Performance Data ....................................................... 4
Income Payments ........................................................ 9
Annuity Unit Values .................................................... 10
Taxes .................................................................. 12
Distribution of Contracts .............................................. 16
Financial Statements ................................................... 17
</TABLE>
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SEPARATE ACCOUNT
Variable Separate Account was originally established by the Anchor
National Life Insurance Company (the "Company") on June 25, 1981, pursuant to
the provisions of California law, as a segregated asset account of the Company.
The separate account meets the definition of a "separate account" under the
federal securities laws and is registered with the Securities and Exchange
Commission (the "SEC") as a unit investment trust under the Investment Company
Act of 1940. This registration does not involve supervision of the management of
the separate account or the Company by the SEC.
The assets of the separate account are the property of the Company.
However, the assets of the separate account, equal to its reserves and other
contract liabilities, are not chargeable with liabilities arising out of any
other business the Company may conduct. Income, gains, and losses, whether or
not realized, from assets allocated to the separate account are credited to or
charged against the separate account without regard to other income, gains, or
losses of the Company.
The separate account is divided into Variable Portfolios, with the
assets of each Variable Portfolio invested in the shares of one of the
underlying funds. The Company does not guarantee the investment performance of
the separate account, its Variable Portfolios or the underlying funds. Values
allocated to the separate account and the amount of variable Income Payments
will vary with the values of shares of the underlying funds, and are also
reduced by contract charges.
The basic objective of a variable annuity contract is to provide
variable Income Payments which will be to some degree responsive to changes in
the economic environment, including inflationary forces and changes in rates of
return available from various types of investments. The contract is designed to
seek to accomplish this objective by providing that variable Income Payments
will reflect the investment performance of the separate account with respect to
amounts allocated to it both before and after the Annuity Date. Since the
separate account is always fully invested in shares of the underlying funds, its
investment performance reflects the investment performance of those entities.
The values of such shares held by the separate account fluctuate and are subject
to the risks of changing economic conditions as well as the risk inherent in the
ability of the underlying funds' managements to make necessary changes in their
Variable Portfolios to anticipate changes in economic conditions. Therefore, the
owner bears the entire investment risk that the basic objectives of the contract
may not be realized, and that the adverse effects of inflation may not be
lessened. There can be no assurance that the aggregate amount of variable Income
Payments will equal or exceed the Purchase Payments made with respect to a
particular account for the reasons described above, or because of the premature
death of an Annuitant.
Another important feature of the contract related to its basic
objective is the Company's promise that the dollar amount of variable Income
Payments made during the lifetime of the Annuitant will not be adversely
affected by the actual mortality experience of the Company or by the actual
expenses incurred by the Company in excess of expense deductions provided for in
the contract (although the Company does not guarantee the amounts of the
variable Income Payments).
GENERAL ACCOUNT
The general account is made up of all of the general assets of the
Company other than those allocated to the separate account or any other
segregated asset account of the Company. A Purchase Payment may be allocated to
the one-year fixed investment option available in connection with the general
account, as elected by the owner at the time of purchasing a contract. Assets
supporting amounts allocated to fixed investment option become part of the
Company's general account assets and are available to fund the claims of all
classes of customers of the Company, as well as of its creditors.
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<PAGE> 9
Accordingly, all of the Company's assets held in the general account will be
available to fund the Company's obligations under the contracts as well as such
other claims.
The Company will invest the assets of the general account in the manner
chosen by the Company and allowed by applicable state laws regarding the nature
and quality of investments that may be made by life insurance companies and the
percentage of their assets that may be committed to any particular type of
investment. In general, these laws permit investments, within specified limits
and subject to certain qualifications, in federal, state and municipal
obligations, corporate bonds, preferred and common stocks, real estate
mortgages, real estate and certain other investments.
PERFORMANCE DATA
From time to time the separate account may advertise the Cash
Management Portfolio's "yield" and "effective yield." Both yield figures are
based on historical earnings and are not intended to indicate future
performance. The "yield" of the Cash Management Portfolio refers to the net
income generated for a contract funded by an investment in the Cash Management
Portfolio (which invests in shares of the Cash Management Portfolio of
SunAmerica Trust) over a seven-day period (which period will be stated in the
advertisement). This income is then "annualized." That is, the amount of income
generated by the investment during that week is assumed to be generated each
week over a 52-week period and is shown as a percentage of the investment. The
"effective yield" is calculated similarly but, when annualized, the income
earned by an investment in the Cash Management Portfolio is assumed to be
reinvested at the end of each seven day period. The "effective yield" will be
slightly higher than the "yield" because of the compounding effect of this
assumed reinvestment. Neither the yield nor the effective yield takes into
consideration the effect of any capital changes that might have occurred during
the seven day period, nor do they reflect the impact of premium taxes or any
withdrawal charges. The impact of other recurring charges on both yield figures
is, however, reflected in them to the same extent it would affect the yield (or
effective yield) for a contract of average size.
In addition, the separate account may advertise "total return" data for
its other Variable Portfolios. Like the yield figures described above, total
return figures are based on historical data and are not intended to indicate
future performance. The "total return" is a computed rate of return that, when
compounded annually over a stated period of time and applied to a hypothetical
initial investment in a Variable Portfolio made at the beginning of the period,
will produce the same contract value at the end of the period that the
hypothetical investment would have produced over the same period (assuming a
complete redemption of the contract at the end of the period). Recurring
contract charges are reflected in the total return figures in the same manner as
they are reflected in the yield data for contracts funded through the Cash
Management Portfolio. The effect of applicable withdrawal charges due to the
assumed redemption will be reflected in the return figures, but may be omitted
in additional return figures given for comparison.
For periods starting prior to the date the Variable Portfolios first
became available through the separate account the total return data for the
Capital Appreciation, Growth, Natural Resources and the Government and Quality
Bond Portfolios of the separate account will be derived from the performance of
the corresponding underlying funds of Anchor Series Trust, modified to reflect
the charges and expenses as if the separate account Variable Portfolio had been
in existence since the inception date of each respective Anchor Series Trust
underlying fund. Thus, such performance figures should not be construed to be
actual historic performance of the relevant separate account Variable Portfolio.
Rather, they are intended to indicate the historic performance of the
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<PAGE> 10
four corresponding underlying funds of Anchor Series Trust, adjusted to provide
direct comparability to the performance of the Variable Portfolios after the
date the Variable Portfolio became available within the separate account. The
Capital Appreciation, Growth, Natural Resources and Government and Quality Bond
underlying funds of Anchor Series Trust have served since their inception as
underlying investment media for separate accounts of other insurance companies
in connection with variable contracts not having the same fee and charge
schedules as those imposed under the contracts.
Performance data for the various Variable Portfolios are computed in
the manner described below.
CASH MANAGEMENT PORTFOLIO
- -------------------------
The annualized current yield and the effective yield for the Cash
Management Portfolio for the 7 day period ending December 31, 1999 were 4.56%
and 4.66%, respectively.
Current yield is computed by first determining the Base Period Return
attributable to a hypothetical contract having a balance of one Accumulation
Unit at the beginning of a 7 day period using the formula:
Base Period Return = (EV-SV-CMF)/(SV)
where:
SV = value of one Accumulation Unit at the start of a 7 day
period
EV = value of one Accumulation Unit at the end of the 7 day
period
CMF = an allocated portion of the $35 annual
Contract Maintenance Fee, prorated for 7 days
The change in the value of an Accumulation Unit during the 7 day period
reflects the income received minus any expenses accrued, during such 7 day
period. The Contract Maintenance Fee (CMF) is first allocated among the Variable
Portfolios and the general account so that each Variable Portfolio's allocated
portion of the fee is proportional to the percentage of the number of accounts
that have money allocated to that Variable Portfolio. The charge is further
reduced, for purposes of the yield computation, by multiplying it by the ratio
that the value of the hypothetical contract bears to the value of an account of
average size for contracts funded by the Cash Management Portfolio. Finally, as
is done with the other charges discussed above, the result is multiplied by the
fraction 7/365 to arrive at the portion attributable to the 7 day period.
The current yield is then obtained by annualizing the Base Period
Return:
Current Yield = (Base Period Return) x (365/7)
The Cash Management Portfolio also quotes an "effective yield" that
differs from the current yield given above in that it takes into account the
effect of dividend reinvestment in the underlying fund. The effective yield,
like the current yield, is derived from the Base Period Return over a 7 day
period.
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However, the effective yield accounts for dividend reinvestment by compounding
the current yield according to the formula:
365/7
Effective Yield = [(Base Period Return + 1) - 1].
Net investment income for yield quotation purposes will not include
either realized capital gains and losses or unrealized appreciation and
depreciation, whether reinvested or not. The yield quotations also do not
reflect any impact of premium taxes, transfer fees, or withdrawal charges.
The yield quoted should not be considered a representation of the yield
of the Cash Management Portfolio in the future since the yield is not fixed.
Actual yields will depend not only on the type, quality and maturities of the
investments held by the underlying fund and changes in interest rates on such
investments, but also on factors such as an owner's account size (since the
impact of fixed dollar charges will be greater for small accounts than for
larger accounts).
Yield information may be useful in reviewing the performance of the
Cash Management Portfolio and for providing a basis for comparison with other
investment alternatives. However, the Cash Management Portfolio's yield
fluctuates, unlike bank deposits or other investments that typically pay a fixed
yield for a stated period of time.
OTHER VARIABLE PORTFOLIOS
- -------------------------
The Variable Portfolios of the separate account other than the Cash
Management Portfolio compute their performance data as "total return".
The total returns of the various Variable Portfolios for 1 year period,
5-year period and since each Variable Portfolio's inception date are shown on
the next page, both with and without an assumed complete redemption at the end
of the period.
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TOTAL ANNUAL RETURN (IN PERCENT) FOR
PERIOD ENDING DECEMBER 31, 1999
(RETURN WITH/WITHOUT REDEMPTION)
<TABLE>
<CAPTION>
INCEPTION SINCE
VARIABLE PORTFOLIO DATE 1 YEAR 5 YEAR INCEPTION
------------------ ---- ------ ------ ---------
<S> <C> <C> <C> <C>
Anchor Series Trust
- -------------------
Capital Appreciation 2/12/93 58.32/65.32 31.81/32.01 23.58/23.62
Growth 2/19/93 17.98/24.98 25.29/25.54 18.68/18.73
Natural Resources 10/31/94 32.26/39.26 5.20/5.68 3.92/4.24
Government and Quality Bond 2/22/93 -10.16/-3.16 5.47/5.95 4.05/4.16
SunAmerica Series Trust
- -----------------------
Aggressive Growth 6/3/96 74.81/81.81 N/A 27.51/28.10
International Diversified Equities 10/31/94 15.16/22.61 11.44/11.83 10.36/10.62
Global Equities 2/9/93 21.90/28.90 18.11/18.42 15.11/15.17
Putnam Growth 2/9/93 20.71/27.71 26.09/26.32 18.08/18.14
MFS Growth and Income* 2/9/93 -2.70/4.30 18.76/19.06 13.18/13.25
Alliance Growth 2/9/93 24.05/31.05 35.37/35.56 25.68/25.72
"Dogs" of Wall Street 4/1/98 -15.55/-8.55 N/A -9.59/-5.95
Venture Value 10/31/94 7.34/14.34 22.75/23.01 21.74/21.91
Federated Value 6/3/96 -2.46/4.54 N/A 14.94/15.72
Growth-Income 2/9/93 21.05/28.05 28.29/28.51 20.29/20.34
Utility 6/3/96 -6.83/0.17 N/A 11.32/12.16
Asset Allocation 7/1/93 0.78/7.78 13.51/13.87 10.96/11.04
MFS Total Return** 10/31/94 -5.74/1.26 12.89/13.26 12.44/12.68
SunAmerica Balanced 6/3/96 12.51/19.51 N/A 20.12/20.81
Worldwide High Income 10/31/94 10.37/17.37 9.45/9.87 8.75/9.02
High-Yield Bond 2/9/93 -2.15/4.85 6.97/7.42 5.77/5.87
Corporate Bond 7/1/93 -10.39/-3.39 5.08/5.57 3.61/3.74
Global Bond 7/1/93 -9.57/-2.57 7.04/7.49 5.21/5.33
Emerging Markets 6/2/97 67.58/74.58 N/A 0.92/2.80
International Growth and Income 6/2/97 15.31/22.31 N/A 12.52/14.11
Real Estate 6/2/97 -15.94/-8.94 N/A -6.59/-4.47
MFS Mid Cap Growth 4/1/99 N/A N/A 56.04/63.04
</TABLE>
- -------------
* Formerly named Growth/Phoenix and managed by Phoenix Investment Counsel, Inc.
** Formerly named Balanced/Phoenix and managed by Phoenix Investment Counsel,
Inc.
Total return figures are based on historical data and are not intended to
indicate future performance.
HYPOTHETICAL ADJUSTED HISTORICAL PERFORMANCE
TOTAL ANNUAL RETURNS (IN PERCENT) FOR
PERIOD ENDING DECEMBER 31, 1999
<TABLE>
<CAPTION>
INCEPTION SINCE
VARIABLE PORTFOLIO DATE 1 YEAR 5 YEAR 10 YEAR INCEPTION
------------------ ---- ------ ------ -------- ----------
<S> <C> <C> <C> <C> <C>
Anchor Series Trust
- -------------------
Capital Appreciation 2/12/93 58.32/65.32 31.81/32.01 21.71 23.58/23.62
Growth 2/19/93 17.98/24.98 25.29/25.54 15.69 18.68/18.73
Natural Resources 10/31/94 32.26/39.26 5.20/5.68 4.26 3.92/4.24
Government and Quality Bond 2/22/93 -10.16/-3.16 5.47/5.95 5.84 4.05/4.16
</TABLE>
Total return figures are based on historical data and are not intended to
indicate future performance.
Total return for a Variable Portfolio represents a single computed
annual rate of return that, when compounded annually over the time period shown
and applied to a hypothetical initial investment in a contract funded by that
Variable Portfolio made at the beginning of the period, will produce the same
contract value at the end of the period that the hypothetical investment would
have produced over the same period. The total rate of return (T) is computed so
that it satisfies the formula:
n
P(1+T) = ERV
where: P = a hypothetical initial payment of $1,000
T = average annual total return
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n = number of years
ERV = ending redeemable value of a hypothetical $1,000
payment made at the beginning of the 1, 5, or 10 year
period as of the end of the period (or fractional
portion thereof).
The total return figures reflect the effect of both nonrecurring and
recurring charges, as discussed herein. Recurring charges are taken into account
in a manner similar to that used for the yield computations for the Cash
Management Portfolio, described above. The applicable withdrawal charge (if any)
is deducted as of the end of the period, to reflect the effect of the assumed
complete redemption. Because the impact of Contract Maintenance Fees on a
particular account will generally differ from that assumed in the computation,
due to differences between most actual allocations and the assumed one, as well
as differences due to varying account sizes, the total return experienced by an
actual Variable Portfolio over the same time periods would generally have been
different from those produced by the computation. As with the Cash Management
Portfolio yield figures, total return figures are derived from historical data
and are not intended to be a projection of future performance.
INCOME PAYMENTS
INITIAL MONTHLY INCOME PAYMENTS
- -------------------------------
The initial Income Payment is determined by applying separately that
portion of the contract value allocated to the fixed investment option and the
Variable Portfolio(s), less any premium tax, and then applying it to the annuity
table specified in the contract for fixed and variable Income Payments. Those
tables are based on a set amount per $1,000 of proceeds applied. The appropriate
rate must be determined by the sex (except where, as in the case of certain
Qualified contracts and other employer-sponsored retirement plans, such
classification is not permitted) and age of the Annuitant and designated second
person, if any.
The dollars applied are then divided by 1,000 and the result multiplied
by the appropriate annuity factor appearing in the table to compute the amount
of the first monthly Income Payment. In the case of a variable annuity, that
amount is divided by the value of an Annuity Unit as of the Annuity Date to
establish the number of Annuity Units representing each variable Income Payment.
The number of Annuity Units determined for the first variable Income Payment
remains constant for the second and subsequent monthly variable Income Payments,
assuming that no reallocation of contract values is made.
SUBSEQUENT MONTHLY PAYMENTS
- ---------------------------
For fixed Income Payments, the amount of the second and each subsequent
monthly Income Payment is the same as that determined above for the first
monthly payment.
For variable Income Payments, the amount of the second and each
subsequent monthly Income Payment is determined by multiplying the number of
Annuity Units, as determined in connection with the determination of the initial
monthly payment, above, by the Annuity Unit value as of the day preceding the
date on which each Income Payment is due.
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<PAGE> 14
ANNUITY UNIT VALUES
The value of an Annuity Unit is determined independently for each
Variable Portfolio.
The annuity tables contained in the contract are based on a 3.5% per
annum assumed investment rate. If the actual net investment rate experienced by
a Variable Portfolio exceed 3.5%, variable Income Payments derived from
allocations to that Variable Portfolio will increase over time. Conversely, if
the actual rate is less than 3.5%, variable Income Payments will decrease over
time. If the net investment rate equals 3.5%, the variable Income Payments will
remain constant. If a higher assumed investment rate had been used, the initial
monthly payment would be higher, but the actual net investment rate would also
have to be higher in order for Income Payments to increase (or not to decrease).
The payee receives the value of a fixed number of Annuity Units each
month. The value of a fixed number of Annuity Units will reflect the investment
performance of the Variable Portfolios elected, and the amount of each Income
Payment will vary accordingly.
For each Variable Portfolio, the value of an Annuity Unit is determined
by multiplying the Annuity Unit value for the preceding month by the Net
Investment Factor for the month for which the Annuity Unit value is being
calculated. The result is then multiplied by a second factor which offsets the
effect of the assumed net investment rate of 3.5% per annum which is assumed in
the annuity tables contained in the contract.
NET INVESTMENT FACTOR
- ---------------------
The Net Investment Factor ("NIF") is an index applied to measure the
net investment performance of a Variable Portfolio from one day to the next. The
NIF may be greater or less than or equal to one; therefore, the value of an
Annuity Unit may increase, decrease or remain the same.
The NIF for any Variable Portfolio for a certain month is determined by
dividing (a) by (b) where:
(a) is the Accumulation Unit value of the Variable Portfolio
determined as of the end of that month, and
(b) is the Accumulation Unit value of the Variable Portfolio
determined as of the end of the preceding month.
The NIF for a Variable Portfolio for a given month is a measure of the
net investment performance of the Variable Portfolio from the end of the prior
month to the end of the given month. A NIF of 1.000 results from no change in
the value of the Variable Portfolio; a NIF greater than 1.000 results from an
increase in the value of the Variable Portfolio; and a NIF less than 1.000
results from a decrease in the value of the Variable Portfolio. The NIF is
increased (or decreased) in accordance with the increases (or decreases,
respectively) in the value of a share of the underlying fund in which the
Variable Portfolio invests; it is also reduced by separate account asset
charges.
Illustrative Example
--------------------
Assume that one share of a given Variable Portfolio had an Accumulation
Unit value of $11.46 as of the close of the New York Stock Exchange ("NYSE") on
the last business day in September; that its Accumulation Unit value had been
$11.44 at the close of the NYSE on the last business day at the end of
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<PAGE> 15
the previous month. The NIF for the month of September is:
NIF = ($11.46/$11.44)
= 1.00174825
Illustrative Example
--------------------
The change in Annuity Unit value for a Variable Portfolio from one
month to the next is determined in part by multiplying the Annuity Unit value at
the prior month end by the NIF for that Variable Portfolio for the new month. In
addition, however, the result of that computation must also be multiplied by an
additional factor that takes into account, and neutralizes, the assumed
investment rate of 3.5 percent per annum upon which the Income Payment tables
are based. For example, if the net investment rate for a Variable Portfolio
(reflected in the NIF) were equal to the assumed investment rate, the variable
Income Payments should remain constant (i.e., the Annuity Unit value should not
change). The monthly factor that neutralizes the assumed investment rate of 3.5
percent per annum is:
(1/12)
1/[(1.035) ] = 0.99713732
In the example given above, if the Annuity Unit value for the Variable
Portfolio was $10.103523 on the last business day in August, the Annuity Unit
value on the last business day in September would have been:
$10.103523 x 1.00174825 x 0.99713732 = $10.092213
To determine the initial payment, the initial annuity payment for
variable annuitization is calculated based on our mortality expectations and an
assumed interest rate (AIR) of 3.5%. Thus the initial variable annuity payment
is the same as the initial payment for a fixed interest payout annuity
calculated at an effective rate of 3.5%.
The NIF measures the performance of the funds that are basis for the
amount of future annuity payments. This performance is compared to the AIR, and
if the growth in the NIF is the same as the AIR rate the payment remains the
same as the prior month. If the rate of growth of the NIF is different than the
AIR, then the payment is changed proportionately to the ratio (1+NIF) / (1+AIR),
calculated on a monthly basis. If the NIF is greater than the AIR, then this
proportion is less that one and payments are decreased.
VARIABLE INCOME PAYMENTS
- ------------------------
Illustrative Example
--------------------
Assume that a male owner, P, owns a contract in connection with which P
has allocated all of his contract value to a single Variable Portfolio. P is
also the sole Annuitant and, at age 60, has elected to annuitize his contract
under Option 4, a Life Annuity With 120 Monthly Payments Guaranteed. As of the
last valuation preceding the Annuity Date, P's Account was credited with
7543.2456 Accumulation Units each having a value of $15.432655, (i.e., P's
account value is equal to 7543.2456 x $15.432655 = $116,412.31). Assume also
that the Annuity Unit value for the Variable Portfolio on that same date is
$13.256932, and that the Annuity Unit value on the day immediately prior to the
second Income Payment date is $13.327695.
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<PAGE> 16
P's first variable Income Payment is determined from the annuity rate
tables in P's contract, using the information assumed above. From the tables,
which supply monthly Income Payments for each $1,000 of applied contract value,
P's first variable Income Payment is determined by multiplying the monthly
installment of $5.42 (Option 4 tables, male Annuitant age 60 at the Annuity
Date) by the result of dividing P's account value by $1,000:
First Payment = $5.42 x ($116,412.31/$1,000) = $630.95
The number of P's Annuity Units (which will be fixed; i.e., it will not
change unless he transfers his Account to another Account) is also determined at
this time and is equal to the amount of the first variable Income Payment
divided by the value of an Annuity Unit on the day immediately prior to
annuitization:
Annuity Units = $630.95/$13.256932 = 47.593968
P's second variable Income Payment is determined by multiplying the
number of Annuity Units by the Annuity Unit value as of the day immediately
prior to the second payment due date:
Second Payment = 47.593968 x $13.327695 = $634.32
The third and subsequent variable Income Payments are computed in a
manner similar to the second variable Income Payment.
Note that the amount of the first variable Income Payment depends on
the contract value in the relevant Variable Portfolio on the Annuity Date and
thus reflects the investment performance of the Variable Portfolio net of fees
and charges during the Accumulation Phase. The amount of that payment determines
the number of Annuity Units, which will remain constant during the Income Phase
(assuming no transfers from the Variable Portfolio). The net investment
performance of the Variable Portfolio during the Income Phase is reflected in
continuing changes during this phase in the Annuity Unit value, which determines
the amounts of the second and subsequent variable Income Payments.
TAXES
GENERAL
- -------
Section 72 of the Internal Revenue Code of 1986, as amended (the
"Code") governs taxation of annuities in general. An owner is not taxed on
increases in the value of a contract until distribution occurs, either in the
form of a non-annuity distribution or as income payments under the annuity
option elected. For a lump sum payment received as a total surrender (total
redemption), the recipient is taxed on the portion of the payment that exceeds
the cost basis of the contract. For a payment received as a withdrawal (partial
redemption), federal tax liability is determined on a last-in, first-out basis,
meaning taxable income is withdrawn before the cost basis of the contract is
withdrawn. For contracts issued in connection with Non-qualified plans, the cost
basis is generally the Purchase Payments, while for contracts issued in
connection with Qualified plans there may be no cost basis. The taxable portion
of the lump sum payment is taxed at ordinary income tax rates. Tax penalties may
also apply.
For income payments, the taxable portion is determined by a formula
which establishes the ratio that the cost basis of the contract bears to the
total value of income payments for the term of the annuity contract. The taxable
portion is taxed at ordinary income tax rates. Owners, Annuitants and
Beneficiaries under the contracts should seek competent financial advice about
the tax consequences of distributions
-11-
<PAGE> 17
under the retirement plan under which the contracts are purchased.
The Company is taxed as a life insurance company under the Code. For
federal income tax purposes, the separate account is not a separate entity from
the Company and its operations form a part of the Company.
WITHHOLDING TAX ON DISTRIBUTIONS
- --------------------------------
The Code generally requires the Company (or, in some cases, a plan
administrator) to withhold tax on the taxable portion of any distribution or
withdrawal from a contract. For "eligible rollover distributions" from contracts
issued under certain types of Qualified plans, 20% of the distribution must be
withheld, unless the payee elects to have the distribution "rolled over" to
another eligible plan in a direct "trustee to trustee" transfer. This
requirement is mandatory and cannot be waived by the owner.
Withholding on other types of distributions can be waived.
An "eligible rollover distribution" is the estimated taxable portion of
any amount received by a covered employee from a plan qualified under Section
401(a) or 403(a) of the Code, or from a tax-sheltered annuity qualified under
Section 403(b) of the Code (other than (1) income payments for the life (or life
expectancy) of the employee, or joint lives (or joint life expectancies) of the
employee and his or her designated Beneficiary, or for a specified period of ten
years or more; and (2) distributions required to be made under the Code).
Failure to "roll over" the entire amount of an eligible rollover distribution
(including an amount equal to the 20% portion of the distribution that was
withheld) could have adverse tax consequences, including the imposition of a
penalty tax on premature withdrawals, described later in this section.
Withdrawals or distributions from a contract other than eligible
rollover distributions are also subject to withholding on the estimated taxable
portion of the distribution, but the owner may elect in such cases to waive the
withholding requirement. If not waived, withholding is imposed (1) for periodic
payments, at the rate that would be imposed if the payments were wages, or (2)
for other distributions, at the rate of 10%. If no withholding exemption
certificate is in effect for the payee, the rate under (1) above is computed by
treating the payee as a married individual claiming 3 withholding exemptions.
DIVERSIFICATION - SEPARATE ACCOUNT INVESTMENTS
- ----------------------------------------------
Section 817(h) of the Code imposes certain diversification standards on
the underlying assets of variable annuity contracts. The Code provides that a
variable annuity contract will not be treated as an annuity contract for any
period (and any subsequent period) for which the investments are not adequately
diversified, in accordance with regulations prescribed by the United States
Treasury Department ("Treasury Department"). Disqualification of the contract as
an annuity contract would result in imposition of federal income tax to the
owner with respect to earnings allocable to the contract prior to the receipt of
payments under the contract. The Code contains a safe harbor provision which
provides that annuity contracts such as the contracts meet the diversification
requirements if, as of the close of each calendar quarter, the underlying assets
meet the diversification standards for a regulated investment company, and no
more than 55% of the total assets consist of cash, cash items, U.S. government
securities and securities of other regulated investment companies.
The Treasury Department has issued regulations which establish
diversification requirements for the investment portfolios underlying variable
contracts such as the contracts. The regulations amplify the diversification
requirements for variable contracts set forth in the Code and provide an
alternative to the safe harbor provision described above. Under the regulations
an investment portfolio will be deemed adequately diversified if (1) no more
than 55% of the value of the total assets of the portfolio is represented
-12-
<PAGE> 18
by any one investment; (2) no more than 70% of the value of the total assets of
the portfolio is represented by any two investments; (3) no more than 80% of the
value of the total assets of the portfolio is represented by any three
investments; and (4) no more than 90% of the value of the total assets of the
portfolio is represented by any four investments. For purposes of determining
whether or not the diversification standards imposed on the underlying assets of
variable contracts by Section 817(h) of the Code have been met, "each United
States government agency or instrumentality shall be treated as a separate
issuer."
MULTIPLE CONTRACTS
- ------------------
Multiple annuity contracts which are issued within a calendar year to
the same contract owner by one company or its affiliates are treated as one
annuity contract for purposes of determining the tax consequences of any
distribution. Such treatment may result in adverse tax consequences including
more rapid taxation of the distributed amounts from such multiple contracts. The
Company believes that Congress intended to affect the purchase of multiple
deferred annuity contracts which may have been purchased to avoid withdrawal
income tax treatment. Owners should consult a tax adviser prior to purchasing
more than one annuity contract in any calendar year.
TAX TREATMENT OF ASSIGNMENTS
- ----------------------------
An assignment of a contract may have tax consequences, and may also be
prohibited by ERISA in some circumstances. Owners should therefore consult
competent legal advisers should they wish to assign their contracts.
QUALIFIED PLANS
- ---------------
The contracts offered by this prospectus are designed to be suitable
for use under various types of Qualified plans. Taxation of owners in each
Qualified plan varies with the type of plan and terms and conditions of each
specific plan. Owners, Annuitants and Beneficiaries are cautioned that benefits
under a Qualified plan may be subject to the terms and conditions of the plan,
regardless of the terms and conditions of the contracts issued pursuant to the
plan.
Following are general descriptions of the types of Qualified plans with
which the contracts may be used. Such descriptions are not exhaustive and are
for general information purposes only. The tax rules regarding Qualified plans
are very complex and will have differing applications depending on individual
facts and circumstances. Each purchaser should obtain competent tax advice prior
to purchasing a contract issued under a Qualified plan.
Contracts issued pursuant to Qualified plans include special provisions
restricting contract provisions that may otherwise be available and described in
this prospectus. Generally, contracts issued pursuant to Qualified plans are not
transferable except upon surrender or annuitization. Various penalty and excise
taxes may apply to contributions or distributions made in violation of
applicable limitations. Furthermore, certain withdrawal penalties and
restrictions may apply to surrenders from Qualified contracts.
(A) H.R. 10 Plans
Section 401 of the Code permits self-employed individuals to
establish Qualified plans for themselves and their employees, commonly referred
to as "H.R. 10" or "Keogh" Plans. Contributions
-13-
<PAGE> 19
made to the plan for the benefit of the employees will not be included in the
gross income of the employees until distributed from the plan. The tax
consequences to owners may vary depending upon the particular plan design.
However, the Code places limitations and restrictions on all plans and such
items as: amounts of allowable contributions; form, manner and timing of
distributions; vesting and nonforfeitability of interests; nondiscrimination in
eligibility and participation; and the tax treatment of distributions,
withdrawals and surrenders.
(B) Tax-Sheltered Annuities
Section 403(b) of the Code permits the purchase of
"tax-sheltered annuities" by public schools and certain charitable, educational
and scientific organizations described in Section 501(c)(3) of the Code. These
qualifying employers may make contributions to the contracts for the benefit of
their employees. Such contributions are not includible in the gross income of
the employee until the employee receives distributions from the contract. The
amount of contributions to the tax-sheltered annuity is limited to certain
maximums imposed by the Code. Furthermore, the Code sets forth additional
restrictions governing such items as transferability, distributions,
nondiscrimination and withdrawals.
(C) Individual Retirement Annuities
Section 408(b) of the Code permits eligible individuals to
contribute to an individual retirement program known as an "Individual
Retirement Annuity" ("IRA"). Under applicable limitations, certain amounts may
be contributed to an IRA which will be deductible from the individual's gross
income. These IRAs are subject to limitations on eligibility, contributions,
transferability and distributions. Sales of contracts for use with IRAs are
subject to special requirements imposed by the Code, including the requirement
that certain informational disclosure be given to persons desiring to establish
an IRA.
(D) Roth IRAs
Section 408(a) of the Code permits an individual to contribute
to an individual retirement program called a Roth IRA. Unlike contributions to a
regular IRA under Section 408(b) of the Code, contributions to a Roth IRA are
not made on a tax-deferred basis, but distributions are tax-free if certain
requirements are satisfied. Like regular IRAs, Roth IRAs are subject to
limitations on the amount that may be contributed, those who may be eligible and
the time when distributions may commence without tax penalty. Certain persons
may be eligible to convert a regular IRA into a Roth IRA, and the taxes on the
resulting income may be spread over four years if the conversion occurs before
January 1, 1999. If and when contracts are made available for use with Roth
IRAs, they may be subject to special requirements imposed by the Internal
Revenue Service ("IRS"). Purchasers of the contracts for this purpose will be
provided with such supplementary information as may be required by the IRS or
other appropriate agency.
(E) Corporate Pension and Profit-Sharing Plans
Section 401(a) and 401(k) of the Code permit corporate
employers to establish various types of retirement plans for employees. These
retirement plans may permit the purchase of the contracts to provide benefits
under the plan. Contributions to the plan for the benefit of employees will not
be includible in the gross income of the employee until distributed from the
plan. The tax consequences to
-14-
<PAGE> 20
owners may vary depending upon the particular plan design. However, the Code
places limitations on all plans on such items as amount of allowable
contributions; form, manner and timing of distributions; vesting and
nonforfeitability of interest; nondiscrimination in eligibility and
participation; and the tax treatment of distributions, withdrawals and
surrenders.
(F) Deferred Compensation Plans - Section 457
Under Section 457 of the Code, governmental and certain other
tax-exempt employers may establish, for the benefit of their employees, deferred
compensation plans which may invest in annuity contracts. The Code, as in the
case of Qualified plans, establishes limitations and restrictions on
eligibility, contributions and distributions. Under these plans, contributions
made for the benefit of the employees will not be includible in the employees'
gross income until distributed from the plan. However, under a 457 plan all the
plan assets shall remain solely the property of the employer, subject only to
the claims of the employer's general creditors until such time as made available
to an owner or a Beneficiary. As of January 1, 1999, all 457 plans of state and
local governments must hold assets and income in trust (or custodial accounts
or an annuity contract) for the exclusive benefit of participants and their
Beneficiaries.
DISTRIBUTION OF CONTRACTS
The contracts are offered on a continuous basis through SunAmerica
Capital Services, Inc., located at 733 Third Avenue, 4th Floor, New York, New
York 10017. SunAmerica Capital Services, Inc. is registered as a broker-dealer
under the Securities Exchange Act of 1934, as amended, and is a member of the
National Association of Securities Dealers, Inc. The Company and SunAmerica
Capital Services, Inc. are each an indirect wholly owned subsidiary of
SunAmerica Inc. No underwriting fees are paid in connection with the
distribution of the contracts.
-15-
<PAGE> 21
FINANCIAL STATEMENTS
The audited financial statements of the Company as of September 30,
1998 and 1997 and for each of the three years in the period ended September 30,
1998 are incorporated herein by reference to Post-Effective Amendment No. 17
under the Securities Act of 1933 (the 33 Act) and No. 34 under the Investment
Company Act of 1940 (the 40 Act) to this Registration Statement file No.
33-47473 and 811-3859 filed on form N-4 on December 15, 1999. Effective
December 31, 1999, the Company changed its fiscal year end from September 30 to
December 31. Reflecting this change, also incorporated herein by reference to
the above stated Registration Statement is the audited Transition Report of the
Company as of and for the three month period ended December 31, 1998. The
financial statements of the Company should be considered only as bearing on the
ability of the Company to meet its obligation under the contracts for amounts
allocated to the 1, 3, 5, 7 or 10 year fixed account options.
Effective December 31, 1999, Variable Separate Account changed its
fiscal year end from November 30, to December 31. Reflecting this change,
included in this Statement of Additional Information are the Variable Separate
Account (Portion Relating to the POLARIS Variable Annuity) audited financial
statements as of and for the one month period ended December 31, 1999 and as of
November 30, 1999 and for each of the two fiscal years in the period ended
November 30, 1999.
Documents incorporated by reference for filing purposes will still
appear at the end of this document when it is distributed upon request.
PricewaterhouseCoopers LLP, 400 South Hope Street, Los Angeles,
California 90071, serves as the independent accountants for the separate account
and the Company. The financial statements referred to above 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.
-16-
<PAGE> 22
VARIABLE SEPARATE ACCOUNT
(PORTION RELATING TO THE POLARIS VARIABLE ANNUITY)
OF
ANCHOR NATIONAL LIFE INSURANCE COMPANY
FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND NOVEMBER 30, 1999
<PAGE> 23
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of Anchor National Life Insurance Company
and the Contractholders of its separate account,
Variable Separate Account (Portion Relating to the POLARIS Variable Annuity)
In our opinion, the accompanying statement of net assets, including the schedule
of portfolio investments, and the related statements of operations and of
changes in net assets present fairly, in all material respects, the financial
position of the Variable Account constituting Variable Separate Account (Portion
Relating to the POLARIS Variable Annuity), a separate account of Anchor National
Life Insurance Company (the "Separate Account") at December 31, 1999 and
November 30, 1999, the results of their operations for the one month ended
December 31, 1999 and for the fiscal year ended November 30, 1999, and the
changes in their net assets for the one month ended December 31, 1999 and for
the two fiscal years ended November 30, 1999 and 1998, in conformity with
accounting principles generally accepted in the United States. These financial
statements are the responsibility of the Separate Account's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with auditing standards generally accepted in the United States which require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits, which included confirmation
of securities owned at December 31, 1999 and November 30, 1999 by correspondence
with the custodian, provide a reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
Los Angeles, California
March 3, 2000
<PAGE> 24
VARIABLE SEPARATE ACCOUNT
(Portion Relating to the POLARIS Variable Annuity)
OF
ANCHOR NATIONAL LIFE INSURANCE COMPANY
STATEMENT OF NET ASSETS
DECEMBER 31, 1999
<TABLE>
<CAPTION>
Government
Capital Natural and
Appreciation Growth Resources Quality Bond
Portfolio Portfolio Portfolio Portfolio
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Assets:
Investments in Anchor Series Trust,
at market value $939,590,430 $289,540,416 $ 27,730,315 $163,481,183
Investments in SunAmerica Series Trust,
at market value 0 0 0 0
Liabilities 0 0 0 0
------------ ------------ ------------ ------------
Net Assets $939,590,430 $289,540,416 $ 27,730,315 $163,481,183
============ ============ ============ ============
Accumulation units outstanding 21,764,629 8,878,474 2,218,703 12,309,470
============ ============ ============ ============
Unit value of accumulation units $ 43.17 $ 32.61 $ 12.50 $ 13.28
============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
International
Diversified Global Aggressive
Equities Equities Growth
Portfolio Portfolio Portfolio
------------ ------------ ------------
<S> <C> <C> <C>
Assets:
Investments in Anchor Series Trust,
at market value $ 0 $ 0 $ 0
Investments in SunAmerica Series Trust,
at market value 269,180,174 408,293,601 181,683,643
Liabilities 0 0 0
------------ ------------ ------------
Net Assets $269,180,174 $408,293,601 $181,683,643
============ ============ ============
Accumulation units outstanding 15,905,912 15,364,906 7,476,506
============ ============ ============
Unit value of accumulation units $ 16.92 $ 26.57 $ 24.30
============ ============ ============
</TABLE>
See accompanying notes to financial statements.
<PAGE> 25
VARIABLE SEPARATE ACCOUNT
(Portion Relating to the POLARIS Variable Annuity)
OF
ANCHOR NATIONAL LIFE INSURANCE COMPANY
STATEMENT OF NET ASSETS
DECEMBER 31, 1999
(Continued)
<TABLE>
<CAPTION>
Venture Federated Putnam MFS
Value Value Growth Growth-Income
Portfolio Portfolio Portfolio Portfolio
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Assets:
Investments in Anchor Series Trust,
at market value $ 0 $ 0 $ 0 $ 0
Investments in SunAmerica Series Trust,
at market value 1,166,149,860 67,563,849 357,411,334 227,210,948
Liabilities 0 0 0 0
-------------- -------------- -------------- --------------
Net Assets $1,166,149,860 $ 67,563,849 $ 357,411,334 $ 227,210,948
============== ============== ============== ==============
Accumulation units outstanding 41,825,421 4,001,010 11,286,031 9,598,954
============== ============== ============== ==============
Unit value of accumulation units $ 27.88 $ 16.89 $ 31.67 $ 23.67
============== ============== ============== ==============
</TABLE>
<TABLE>
<CAPTION>
Alliance Growth- Asset
Growth Income Allocation
Portfolio Portfolio Portfolio
-------------- -------------- --------------
<S> <C> <C> <C>
Assets:
Investments in Anchor Series Trust,
at market value $ 0 $ 0 $ 0
Investments in SunAmerica Series Trust,
at market value 1,253,718,798 865,712,375 411,441,160
Liabilities 0 0 0
-------------- -------------- --------------
Net Assets $1,253,718,798 $ 865,712,375 $ 411,441,160
============== ============== ==============
Accumulation units outstanding 25,819,661 24,109,131 20,767,631
============== ============== ==============
Unit value of accumulation units $ 48.56 $ 35.91 $ 19.81
============== ============== ==============
</TABLE>
See accompanying notes to financial statements.
<PAGE> 26
VARIABLE SEPARATE ACCOUNT
(Portion Relating to the POLARIS Variable Annuity)
OF
ANCHOR NATIONAL LIFE INSURANCE COMPANY
STATEMENT OF NET ASSETS
DECEMBER 31, 1999
(Continued)
<TABLE>
<CAPTION>
SunAmerica MFS Worldwide
Balanced Total Return Utility High Income
Portfolio Portfolio Portfolio Portfolio
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Assets:
Investments in Anchor Series Trust,
at market value $ 0 $ 0 $ 0 $ 0
Investments in SunAmerica Series Trust,
at market value 105,638,458 106,204,795 30,579,449 64,517,890
Liabilities 0 0 0 0
------------ ------------ ------------ ------------
Net Assets $105,638,458 $106,204,795 $ 30,579,449 $ 64,517,890
============ ============ ============ ============
Accumulation units outstanding 5,364,585 5,709,183 2,024,299 4,110,589
============ ============ ============ ============
Unit value of accumulation units $ 19.69 $ 18.60 $ 15.11 $ 15.70
============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
High-Yield Global Corporate
Bond Bond Bond
Portfolio Portfolio Portfolio
------------ ------------ ------------
<S> <C> <C> <C>
Assets:
Investments in Anchor Series Trust,
at market value $ 0 $ 0 $ 0
Investments in SunAmerica Series Trust,
at market value 152,411,177 70,049,853 66,697,539
Liabilities 0 0 0
------------ ------------ ------------
Net Assets $152,411,177 $ 70,049,853 $ 66,697,539
============ ============ ============
Accumulation units outstanding 10,247,398 4,972,504 5,225,508
============ ============ ============
Unit value of accumulation units $ 14.87 $ 14.09 $ 12.76
============ ============ ============
</TABLE>
See accompanying notes to financial statements.
<PAGE> 27
VARIABLE SEPARATE ACCOUNT
(Portion Relating to the POLARIS Variable Annuity)
OF
ANCHOR NATIONAL LIFE INSURANCE COMPANY
STATEMENT OF NET ASSETS
DECEMBER 31, 1999
(Continued)
<TABLE>
<CAPTION>
International Emerging Real "Dogs" of
Growth & Income Markets Estate Wall Street
Portfolio Portfolio Portfolio Portfolio
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Assets:
Investments in Anchor Series Trust,
at market value $ 0 $ 0 $ 0 $ 0
Investments in SunAmerica Series Trust,
at market value 60,797,998 25,225,514 17,234,823 12,307,606
Liabilities 0 0 0 0
-------------- -------------- -------------- --------------
Net Assets $ 60,797,998 $ 25,225,514 $ 17,234,823 $ 12,307,606
============== ============== ============== ==============
Accumulation units outstanding 4,319,856 2,341,461 1,934,426 1,368,990
============== ============== ============== ==============
Unit value of accumulation units $ 14.07 $ 10.77 $ 8.91 $ 8.99
============== ============== ============== ==============
</TABLE>
<TABLE>
<CAPTION>
MFS Cash
Mid-Cap Growth Management
Portfolio Portfolio TOTAL
-------------- -------------- --------------
<S> <C> <C> <C>
Assets:
Investments in Anchor Series Trust,
at market value $ 0 $ 0 $1,420,342,344
Investments in SunAmerica Series Trust,
at market value 17,429,464 203,308,966 6,140,769,274
Liabilities 0 0 0
-------------- -------------- --------------
Net Assets $ 17,429,464 $ 203,308,966 $7,561,111,618
============== ============== ==============
Accumulation units outstanding 1,068,886 16,598,506
============== ==============
Unit value of accumulation units $ 16.31 $ 12.25
============== ==============
</TABLE>
See accompanying notes to financial statements.
<PAGE> 28
VARIABLE SEPARATE ACCOUNT
(Portion Relating to the POLARIS Variable Annuity)
OF
ANCHOR NATIONAL LIFE INSURANCE COMPANY
STATEMENT OF NET ASSETS
NOVEMBER 30, 1999
<TABLE>
<CAPTION>
Government
Capital Natural and
Appreciation Growth Resources Quality Bond
Portfolio Portfolio Portfolio Portfolio
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Assets:
Investments in Anchor Series Trust,
at market value $796,823,703 $265,904,443 $ 26,017,310 $168,698,496
Investments in SunAmerica Series Trust,
at market value 0 0 0 0
Liabilities 0 0 0 0
------------ ------------ ------------ ------------
Net Assets $796,823,703 $265,904,443 $ 26,017,310 $168,698,496
============ ============ ============ ============
Accumulation units outstanding 21,898,142 8,941,621 2,283,074 12,612,572
============ ============ ============ ============
Unit value of accumulation units $ 36.39 $ 29.74 $ 11.40 $ 13.37
============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
International
Diversified Global Aggressive
Equities Equities Growth
Portfolio Portfolio Portfolio
------------ ------------ ------------
<S> <C> <C> <C>
Assets:
Investments in Anchor Series Trust,
at market value $ 0 $ 0 $ 0
Investments in SunAmerica Series Trust,
at market value 248,953,254 368,258,540 139,879,173
Liabilities 0 0 0
------------ ------------ ------------
Net Assets $248,953,254 $368,258,540 $139,879,173
============ ============ ============
Accumulation units outstanding 16,071,377 15,218,999 7,354,489
============ ============ ============
Unit value of accumulation units $ 15.49 $ 24.20 $ 19.02
============ ============ ============
</TABLE>
See accompanying notes to financial statements.
<PAGE> 29
VARIABLE SEPARATE ACCOUNT
(Portion Relating to the POLARIS Variable Annuity)
OF
ANCHOR NATIONAL LIFE INSURANCE COMPANY
STATEMENT OF NET ASSETS
NOVEMBER 30, 1999
(Continued)
<TABLE>
<CAPTION>
MFS
Venture Federated Putnam Growth-
Value Value Growth Income
Portfolio Portfolio Portfolio Portfolio
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Assets:
Investments in Anchor Series Trust,
at market value $ 0 $ 0 $ 0 $ 0
Investments in SunAmerica Series Trust,
at market value 1,120,389,245 68,422,827 323,309,383 219,305,264
Liabilities 0 0 0 0
-------------- -------------- -------------- --------------
Net Assets $1,120,389,245 $ 68,422,827 $ 323,309,383 $ 219,305,264
============== ============== ============== ==============
Accumulation units outstanding 42,175,145 4,164,599 11,402,199 9,723,097
============== ============== ============== ==============
Unit value of accumulation units $ 26.57 $ 16.43 $ 28.36 $ 22.55
============== ============== ============== ==============
</TABLE>
<TABLE>
<CAPTION>
Alliance Growth- Asset
Growth Income Allocation
Portfolio Portfolio Portfolio
-------------- -------------- --------------
<S> <C> <C> <C>
Assets:
Investments in Anchor Series Trust,
at market value $ 0 $ 0 $ 0
Investments in SunAmerica Series Trust,
at market value 1,158,835,058 810,926,844 402,591,694
Liabilities 0 0 0
-------------- -------------- --------------
Net Assets $1,158,835,058 $ 810,926,844 $ 402,591,694
============== ============== ==============
Accumulation units outstanding 26,154,552 24,491,425 21,080,060
============== ============== ==============
Unit value of accumulation units $ 44.31 $ 33.11 $ 19.10
============== ============== ==============
</TABLE>
See accompanying notes to financial statements.
<PAGE> 30
VARIABLE SEPARATE ACCOUNT
(Portion Relating to the POLARIS Variable Annuity)
OF
ANCHOR NATIONAL LIFE INSURANCE COMPANY
STATEMENT OF NET ASSETS
NOVEMBER 30, 1999
(Continued)
<TABLE>
<CAPTION>
SunAmerica MFS Worldwide
Balanced Total Return Utility High Income
Portfolio Portfolio Portfolio Portfolio
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Assets:
Investments in Anchor Series Trust,
at market value $ 0 $ 0 $ 0 $ 0
Investments in SunAmerica Series Trust,
at market value 97,578,312 105,781,567 31,029,076 64,487,527
Liabilities 0 0 0 0
------------ ------------ ------------ ------------
Net Assets $ 97,578,312 $105,781,567 $ 31,029,076 $ 64,487,527
============ ============ ============ ============
Accumulation units outstanding 5,352,344 5,719,070 2,046,427 4,234,687
============ ============ ============ ============
Unit value of accumulation units $ 18.23 $ 18.50 $ 15.16 $ 15.23
============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
High-Yield Global Corporate
Bond Bond Bond
Portfolio Portfolio Portfolio
------------ ------------ ------------
<S> <C> <C> <C>
Assets:
Investments in Anchor Series Trust,
at market value $ 0 $ 0 $ 0
Investments in SunAmerica Series Trust,
at market value 154,901,570 73,384,217 68,299,158
Liabilities 0 0 0
------------ ------------ ------------
Net Assets $154,901,570 $ 73,384,217 $ 68,299,158
============ ============ ============
Accumulation units outstanding 10,532,444 5,199,731 5,339,302
============ ============ ============
Unit value of accumulation units $ 14.71 $ 14.11 $ 12.78
============ ============ ============
</TABLE>
See accompanying notes to financial statements.
<PAGE> 31
VARIABLE SEPARATE ACCOUNT
(Portion Relating to the POLARIS Variable Annuity)
OF
ANCHOR NATIONAL LIFE INSURANCE COMPANY
STATEMENT OF NET ASSETS
NOVEMBER 30, 1999
(Continued)
<TABLE>
<CAPTION>
International Emerging Real "Dogs" of
Growth & Income Markets Estate Wall Street
Portfolio Portfolio Portfolio Portfolio
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Assets:
Investments in Anchor Series Trust,
at market value $ 0 $ 0 $ 0 $ 0
Investments in SunAmerica Series Trust,
at market value 57,725,484 17,590,018 18,358,838 13,772,935
Liabilities 0 0 0 0
-------------- -------------- -------------- --------------
Net Assets $ 57,725,484 $ 17,590,018 $ 18,358,838 $ 13,772,935
============== ============== ============== ==============
Accumulation units outstanding 4,307,535 1,956,342 2,159,442 1,509,434
============== ============== ============== ==============
Unit value of accumulation units $ 13.40 $ 8.99 $ 8.50 $ 9.12
============== ============== ============== ==============
</TABLE>
<TABLE>
<CAPTION>
MFS Cash
Mid-Cap Growth Management
Portfolio Portfolio TOTAL
-------------- -------------- --------------
<S> <C> <C> <C>
Assets:
Investments in Anchor Series Trust,
at market value $ 0 $ 0 $1,257,443,952
Investments in SunAmerica Series Trust,
at market value 12,378,010 190,553,990 5,766,711,984
Liabilities 0 0 0
-------------- -------------- --------------
Net Assets $ 12,378,010 $ 190,553,990 $7,024,155,936
============== ============== ==============
Accumulation units outstanding 869,761 15,616,078
============== ==============
Unit value of accumulation units $ 14.23 $ 12.20
============== ==============
</TABLE>
See accompanying notes to financial statements.
<PAGE> 32
VARIABLE SEPARATE ACCOUNT
(Portion Relating to the POLARIS Variable Annuity)
OF
ANCHOR NATIONAL LIFE INSURANCE COMPANY
SCHEDULE OF PORTFOLIO INVESTMENTS
DECEMBER 31, 1999
<TABLE>
<CAPTION>
Market Value Market
Variable Accounts Shares Per Share Value Cost
---------- ------------------- -------------- --------------
<S> <C> <C> <C> <C>
ANCHOR SERIES TRUST:
Capital Appreciation Portfolio 16,477,008 $ 57.02 $ 939,590,430 $ 572,399,237
Growth Portfolio 7,516,806 38.52 289,540,416 203,285,742
Natural Resources Portfolio 1,709,116 16.22 27,730,315 26,185,255
Government and Quality Bond Portfolio 11,947,233 13.68 163,481,183 169,427,260
-------------- --------------
1,420,342,344 971,297,494
-------------- --------------
SUNAMERICA SERIES TRUST:
International Diversified Equities Portfolio 16,826,170 16.00 269,180,174 195,199,098
Global Equities Portfolio 18,739,442 21.79 408,293,601 274,721,091
Aggressive Growth Porfolio 7,778,071 23.36 181,683,643 102,643,891
Venture Value Portfolio 43,524,559 26.79 1,166,149,860 754,631,807
Federated Value Portfolio 4,077,244 16.57 67,563,849 58,217,057
Putnam Growth Portfolio 12,680,345 28.19 357,411,334 197,832,743
MFS Growth-Income Portfolio 16,270,350 13.96 227,210,948 203,014,888
Alliance Growth Portfolio 32,674,004 38.37 1,253,718,798 743,742,737
Growth-Income Portfolio 26,577,541 32.57 865,712,375 460,998,450
Asset Allocation Portfolio 27,446,131 14.99 411,441,160 360,373,858
SunAmerica Balanced Portfolio 5,378,007 19.64 105,638,458 77,168,236
MFS Total Return Portfolio 7,421,921 14.31 106,204,795 97,584,162
Utility Portfolio 2,126,613 14.38 30,579,449 27,746,269
Worldwide High Income Portfolio 6,063,880 10.64 64,517,890 71,473,710
High-Yield Bond Portfolio 14,536,246 10.48 152,411,177 160,248,099
Global Bond Portfolio 6,478,314 10.81 70,049,853 69,793,516
Corporate Bond Portfolio 5,996,040 11.12 66,697,539 66,115,905
International Growth & Income Portfolio 4,715,048 12.89 60,797,998 57,068,816
Emerging Markets Portfolio 2,275,487 11.09 25,225,514 19,444,023
Real Estate Portfolio 1,955,792 8.81 17,234,823 20,871,921
"Dogs" of Wall Street Portfolio 1,374,165 8.96 12,307,606 13,239,890
MFS Mid-Cap Growth Portfolio 1,072,223 16.26 17,429,464 14,008,429
Cash Management Portfolio 18,675,785 10.89 203,308,966 201,687,934
-------------- --------------
6,140,769,274 4,247,826,530
-------------- --------------
$7,561,111,618 $5,219,124,024
============== ==============
</TABLE>
See accompanying notes to financial statements.
<PAGE> 33
VARIABLE SEPARATE ACCOUNT
(Portion Relating to the POLARIS Variable Annuity)
OF
ANCHOR NATIONAL LIFE INSURANCE COMPANY
SCHEDULE OF PORTFOLIO INVESTMENTS
NOVEMBER 30, 1999
<TABLE>
<CAPTION>
Market Value Market
Variable Accounts Shares Per Share Value Cost
- ----------------- ------ ------------ ------ ----
<S> <C> <C> <C> <C>
ANCHOR SERIES TRUST:
Capital Appreciation Portfolio 16,599,498 $ 48.00 $ 796,823,703 $ 567,518,255
Growth Portfolio 7,580,057 35.08 265,904,443 203,486,733
Natural Resources Portfolio 1,760,984 14.77 26,017,310 26,973,348
Government and Quality Bond Portfolio 12,257,208 13.76 168,698,496 173,862,365
-------------- --------------
1,257,443,952 971,840,701
-------------- --------------
SUNAMERICA SERIES TRUST:
International Diversified Equities Portfolio 17,023,130 14.62 248,953,254 197,345,328
Global Equities Portfolio 18,585,519 19.81 368,258,540 270,611,261
Aggressive Growth Porfolio 7,661,022 18.26 139,879,173 98,811,069
Venture Value Portfolio 43,945,207 25.50 1,120,389,245 760,443,667
Federated Value Portfolio 4,249,437 16.10 68,422,827 60,671,873
Putnam Growth Portfolio 12,827,405 25.20 323,309,383 200,057,861
MFS Growth & Income Portfolio 16,502,051 13.29 219,305,264 205,851,715
Alliance Growth Portfolio 33,140,548 34.97 1,158,835,058 753,169,125
Growth-Income Portfolio 27,033,855 30.00 810,926,844 468,778,519
Asset Allocation Portfolio 27,895,035 14.43 402,591,694 366,122,522
SunAmerica Balanced Portfolio 5,372,665 18.16 97,578,312 76,842,456
MFS Total Return Portfolio 7,444,382 14.21 105,781,567 97,809,472
Utility Portfolio 2,152,639 14.41 31,029,076 28,051,562
Worldwide High Income Portfolio 6,255,061 10.31 64,487,527 73,795,893
High-Yield Bond Portfolio 14,959,731 10.35 154,901,570 165,042,815
Global Bond Portfolio 6,783,146 10.82 73,384,217 73,076,556
Corporate Bond Portfolio 6,134,471 11.13 68,299,158 67,641,702
International Growth & Income Portfolio 4,286,018 13.47 57,725,484 51,233,141
Emerging Markets Portfolio 1,903,670 9.24 17,590,018 15,563,400
Real Estate Portfolio 2,186,156 8.40 18,358,838 23,430,954
"Dogs" of Wall Street Portfolio 1,517,073 9.08 13,772,935 14,626,564
MFS Mid-Cap Growth Portfolio 861,111 14.37 12,378,010 10,559,479
Cash Management Portfolio 17,594,199 10.83 190,553,990 189,705,496
-------------- --------------
5,766,711,984 4,269,242,430
-------------- --------------
$7,024,155,936 $5,241,083,131
============== ==============
</TABLE>
See accompanying notes to financial statements.
<PAGE> 34
VARIABLE SEPARATE ACCOUNT
(Portion Relating to the POLARIS Variable Annuity)
OF
ANCHOR NATIONAL LIFE INSURANCE COMPANY
STATEMENT OF OPERATIONS
FOR THE ONE MONTH ENDED
DECEMBER 31, 1999
<TABLE>
<CAPTION>
Government
Capital Natural and
Appreciation Growth Resources Quality Bond
Portfolio Portfolio Portfolio Portfolio
------------- ------------ ----------- -----------
<S> <C> <C> <C> <C>
Investment income:
Dividends and capital gains distributions $ 0 $ 0 $ 0 $ 0
------------- ------------ ----------- -----------
Total investment income 0 0 0 0
------------- ------------ ----------- -----------
Expenses:
Mortality risk charge (661,977) (213,309) (20,168) (127,590)
Guarantee death benefit charge (88,264) (28,441) (2,689) (17,012)
Expense risk charge (257,435) (82,954) (7,843) (49,618)
Distribution expense charge (110,329) (35,552) (3,362) (21,265)
------------- ------------ ----------- -----------
Total expenses (1,118,005) (360,256) (34,062) (215,485)
------------- ------------ ----------- -----------
Net investment income (loss) (1,118,005) (360,256) (34,062) (215,485)
------------- ------------ ----------- -----------
Net realized gains (losses) from securities transactions:
Proceeds from shares sold 32,719,784 7,629,463 942,624 5,435,850
Cost of shares sold (21,727,055) (5,567,935) (957,863) (5,612,575)
------------- ------------ ----------- -----------
Net realized gains (losses) from
securities transactions 10,992,729 2,061,528 (15,239) (176,725)
------------- ------------ ----------- -----------
Net unrealized appreciation (depreciation) of investments:
Beginning of period 229,305,448 62,417,710 (956,038) (5,163,869)
End of period 367,191,193 86,254,674 1,545,060 (5,946,077)
------------- ------------ ----------- -----------
Change in net unrealized appreciation/depreciation
of investments 137,885,745 23,836,964 2,501,098 (782,208)
------------- ------------ ----------- -----------
Increase (decrease) in net assets from operations $ 147,760,469 $ 25,538,236 $ 2,451,797 $(1,174,418)
============= ============ =========== ===========
</TABLE>
<TABLE>
<CAPTION>
International
Diversified Global Aggressive
Equities Equities Growth
Portfolio Portfolio Portfolio
------------ ------------- ------------
<S> <C> <C> <C>
Investment income:
Dividends and capital gains distributions $ 0 $ 0 $ 0
------------ ------------- ------------
Total investment income 0 0 0
------------ ------------- ------------
Expenses:
Mortality risk charge (195,377) (295,908) (125,900)
Guarantee death benefit charge (26,050) (39,454) (16,787)
Expense risk charge (75,980) (115,075) (48,961)
Distribution expense charge (32,563) (49,318) (20,983)
------------ ------------- ------------
Total expenses (329,970) (499,755) (212,631)
------------ ------------- ------------
Net investment income (loss) (329,970) (499,755) (212,631)
------------ ------------- ------------
Net realized gains (losses) from securities transactions:
Proceeds from shares sold 3,435,699 4,232,905 3,841,548
Cost of shares sold (2,655,169) (3,009,386) (2,273,810)
------------ ------------- ------------
Net realized gains (losses) from
securities transactions 780,530 1,223,519 1,567,738
------------ ------------- ------------
Net unrealized appreciation (depreciation) of investments:
Beginning of period 51,607,926 97,647,279 41,068,104
End of period 73,981,076 133,572,510 79,039,752
------------ ------------- ------------
Change in net unrealized appreciation/depreciation
of investments 22,373,150 35,925,231 37,971,648
------------ ------------- ------------
Increase (decrease) in net assets from operations $ 22,823,710 $ 36,648,995 $ 39,326,755
============ ============= ============
</TABLE>
See accompanying notes to financial statements.
<PAGE> 35
VARIABLE SEPARATE ACCOUNT
(Portion Relating to the POLARIS Variable Annuity)
OF
ANCHOR NATIONAL LIFE INSURANCE COMPANY
STATEMENT OF OPERATIONS
FOR THE ONE MONTH ENDED
DECEMBER 31, 1999
(Continued)
<TABLE>
<CAPTION>
Venture Federated Putnam MFS
Value Value Growth Growth-Income
Portfolio Portfolio Portfolio Portfolio
------------- ----------- ------------- ------------
<S> <C> <C> <C> <C>
Investment income:
Dividends and capital gains distributions $ 0 $ 0 $ 0 $ 0
------------- ----------- ------------- ------------
Total investment income 0 0 0 0
------------- ----------- ------------- ------------
Expenses:
Mortality risk charge (866,855) (51,959) (259,941) (169,823)
Guarantee death benefit charge (115,581) (6,928) (34,659) (22,643)
Expense risk charge (337,110) (20,206) (101,088) (66,042)
Distribution expense charge (144,475) (8,660) (43,323) (28,305)
------------- ----------- ------------- ------------
Total expenses (1,464,021) (87,753) (439,011) (286,813)
------------- ----------- ------------- ------------
Net investment income (loss) (1,464,021) (87,753) (439,011) (286,813)
------------- ----------- ------------- ------------
Net realized gains (losses) from securities transactions:
Proceeds from shares sold 15,028,791 2,846,788 4,071,433 3,607,520
Cost of shares sold (10,028,050) (2,490,202) (2,389,660) (3,328,586)
------------- ----------- ------------- ------------
Net realized gains (losses) from
securities transactions 5,000,741 356,586 1,681,773 278,934
------------- ----------- ------------- ------------
Net unrealized appreciation (depreciation) of investments:
Beginning of period 359,945,578 7,750,954 123,251,522 13,453,549
End of period 411,518,053 9,346,792 159,578,591 24,196,060
------------- ----------- ------------- ------------
Change in net unrealized appreciation/depreciation
of investments 51,572,475 1,595,838 36,327,069 10,742,511
------------- ----------- ------------- ------------
Increase (decrease) in net assets from operations $ 55,109,195 $ 1,864,671 $ 37,569,831 $ 10,734,632
============= =========== ============= ============
</TABLE>
<TABLE>
<CAPTION>
Alliance Growth- Asset
Growth Income Allocation
Portfolio Portfolio Portfolio
------------- ------------- ------------
<S> <C> <C> <C>
Investment income:
Dividends and capital gains distributions $ 0 $ 0 $ 0
------------- ------------- ------------
Total investment income 0 0 0
------------- ------------- ------------
Expenses:
Mortality risk charge (917,311) (636,029) (311,298)
Guarantee death benefit charge (122,308) (84,804) (41,506)
Expense risk charge (356,732) (247,345) (121,060)
Distribution expense charge (152,886) (106,005) (51,883)
------------- ------------- ------------
Total expenses (1,549,237) (1,074,183) (525,747)
------------- ------------- ------------
Net investment income (loss) (1,549,237) (1,074,183) (525,747)
------------- ------------- ------------
Net realized gains (losses) from securities transactions:
Proceeds from shares sold 19,871,142 14,264,914 7,726,352
Cost of shares sold (12,467,577) (8,066,958) (6,900,248)
------------- ------------- ------------
Net realized gains (losses) from
securities transactions 7,403,565 6,197,956 826,104
------------- ------------- ------------
Net unrealized appreciation (depreciation) of investments:
Beginning of period 405,665,933 342,148,325 36,469,172
End of period 509,976,061 404,713,925 51,067,302
------------- ------------- ------------
Change in net unrealized appreciation/depreciation
of investments 104,310,128 62,565,600 14,598,130
------------- ------------- ------------
Increase (decrease) in net assets from operations $ 110,164,456 $ 67,689,373 $ 14,898,487
============= ============= ============
</TABLE>
See accompanying notes to financial statements.
<PAGE> 36
VARIABLE SEPARATE ACCOUNT
(Portion Relating to the POLARIS Variable Annuity)
OF
ANCHOR NATIONAL LIFE INSURANCE COMPANY
STATEMENT OF OPERATIONS
FOR THE ONE MONTH ENDED
DECEMBER 31, 1999
(Continued)
<TABLE>
<CAPTION>
SunAmerica MFS Worldwide
Balanced Total Return Utility High Income
Portfolio Portfolio Portfolio Portfolio
------------ ----------- ----------- -----------
<S> <C> <C> <C> <C>
Investment income:
Dividends and capital gains distributions $ 0 $ 0 $ 0 $ 0
------------ ----------- ----------- -----------
Total investment income 0 0 0 0
------------ ----------- ----------- -----------
Expenses:
Mortality risk charge (77,911) (80,375) (23,285) (49,911)
Guarantee death benefit charge (10,388) (10,717) (3,105) (6,655)
Expense risk charge (30,299) (31,257) (9,055) (19,410)
Distribution expense charge (12,985) (13,395) (3,881) (8,318)
------------ ----------- ----------- -----------
Total expenses (131,583) (135,744) (39,326) (84,294)
------------ ----------- ----------- -----------
Net investment income (loss) (131,583) (135,744) (39,326) (84,294)
------------ ----------- ----------- -----------
Net realized gains (losses) from securities transactions:
Proceeds from shares sold 913,619 1,169,873 733,272 2,617,194
Cost of shares sold (699,309) (1,082,360) (670,933) (2,918,634)
------------ ----------- ----------- -----------
Net realized gains (losses) from
securities transactions 214,310 87,513 62,339 (301,440)
------------ ----------- ----------- -----------
Net unrealized appreciation (depreciation) of investments:
Beginning of period 20,735,856 7,972,095 2,977,514 (9,308,366)
End of period 28,470,222 8,620,633 2,833,180 (6,955,820)
------------ ----------- ----------- -----------
Change in net unrealized appreciation/depreciation
of investments 7,734,366 648,538 (144,334) 2,352,546
------------ ----------- ----------- -----------
Increase (decrease) in net assets from operations $ 7,817,093 $ 600,307 $ (121,321) $ 1,966,812
============ =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
High-Yield Global Corporate
Bond Bond Bond
Portfolio Portfolio Portfolio
------------ ----------- -----------
<S> <C> <C> <C>
Investment income:
Dividends and capital gains distributions $ 0 $ 0 $ 0
------------ ----------- -----------
Total investment income 0 0 0
------------ ----------- -----------
Expenses:
Mortality risk charge (118,159) (55,498) (51,891)
Guarantee death benefit charge (15,755) (7,400) (6,919)
Expense risk charge (45,951) (21,583) (20,180)
Distribution expense charge (19,692) (9,249) (8,648)
------------ ----------- -----------
Total expenses (199,557) (93,730) (87,638)
------------ ----------- -----------
Net investment income (loss) (199,557) (93,730) (87,638)
------------ ----------- -----------
Net realized gains (losses) from securities transactions:
Proceeds from shares sold 6,599,696 3,300,221 1,654,498
Cost of shares sold (6,959,450) (3,283,040) (1,639,504)
------------ ----------- -----------
Net realized gains (losses) from
securities transactions (359,754) 17,181 14,994
------------ ----------- -----------
Net unrealized appreciation (depreciation) of investments:
Beginning of period (10,141,245) 307,661 657,456
End of period (7,836,922) 256,337 581,634
------------ ----------- -----------
Change in net unrealized appreciation/depreciation
of investments 2,304,323 (51,324) (75,822)
------------ ----------- -----------
Increase (decrease) in net assets from operations $ 1,745,012 $ (127,873) $ (148,466)
============ =========== ===========
</TABLE>
See accompanying notes to financial statements.
<PAGE> 37
VARIABLE SEPARATE ACCOUNT
(Portion Relating to the POLARIS Variable Annuity)
OF
ANCHOR NATIONAL LIFE INSURANCE COMPANY
STATEMENT OF OPERATIONS
FOR THE ONE MONTH ENDED
DECEMBER 31, 1999
(Continued)
<TABLE>
<CAPTION>
International Emerging Real "Dogs" of
Growth & Income Markets Estate Wall Street
Portfolio Portfolio Portfolio Portfolio
--------------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Investment income:
Dividends and capital gains distributions $ 5,414,666 $ 0 $ 0 $ 0
----------- ----------- ----------- -----------
Total investment income 5,414,666 0 0 0
----------- ----------- ----------- -----------
Expenses:
Mortality risk charge (45,651) (16,113) (13,884) (9,878)
Guarantee death benefit charge (6,087) (2,148) (1,851) (1,317)
Expense risk charge (17,753) (6,266) (5,399) (3,841)
Distribution expense charge (7,609) (2,686) (2,314) (1,647)
----------- ----------- ----------- -----------
Total expenses (77,100) (27,213) (23,448) (16,683)
----------- ----------- ----------- -----------
Net investment income (loss) 5,337,566 (27,213) (23,448) (16,683)
----------- ----------- ----------- -----------
Net realized gains (losses) from securities transactions:
Proceeds from shares sold 2,293,774 478,085 2,341,517 1,388,328
Cost of shares sold (1,965,680) (383,577) (2,915,873) (1,504,052)
----------- ----------- ----------- -----------
Net realized gains (losses) from
securities transactions 328,094 94,508 (574,356) (115,724)
----------- ----------- ----------- -----------
Net unrealized appreciation (depreciation) of investments:
Beginning of period 6,492,343 2,026,618 (5,072,116) (853,629)
End of period 3,729,182 5,781,491 (3,637,098) (932,284)
----------- ----------- ----------- -----------
Change in net unrealized appreciation/depreciation
of investments (2,763,161) 3,754,873 1,435,018 (78,655)
----------- ----------- ----------- -----------
Increase (decrease) in net assets from operations $ 2,902,499 $ 3,822,168 $ 837,214 $ (211,062)
=========== =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
MFS Cash
Mid-Cap Growth Management
Portfolio Portfolio TOTAL
----------- ------------ ---------------
<S> <C> <C> <C>
Investment income:
Dividends and capital gains distributions $ 243,178 $ 0 $ 5,657,844
----------- ------------ ---------------
Total investment income 243,178 0 $ 5,657,844
----------- ------------ ---------------
Expenses:
Mortality risk charge (10,887) (155,421) $ (5,562,309)
Guarantee death benefit charge (1,452) (20,723) $ (741,643)
Expense risk charge (4,234) (60,442) $ (2,163,119)
Distribution expense charge (1,814) (25,903) $ (927,050)
----------- ------------ ---------------
Total expenses (18,387) (262,489) $ (9,394,121)
----------- ------------ ---------------
Net investment income (loss) 224,791 (262,489) $ (3,736,277)
----------- ------------ ---------------
Net realized gains (losses) from securities transactions:
Proceeds from shares sold 711,716 40,469,283 $ 190,325,889
Cost of shares sold (600,641) (40,211,359) $ (152,309,486)
----------- ------------ ---------------
Net realized gains (losses) from
securities transactions 111,075 257,924 $ 38,016,403
----------- ------------ ---------------
Net unrealized appreciation (depreciation) of investments:
Beginning of period 1,818,531 848,494 $ 1,783,072,805
End of period 3,421,035 1,621,032 $ 2,341,987,594
----------- ------------ ---------------
Change in net unrealized appreciation/depreciation
of investments 1,602,504 772,538 $ 558,914,789
----------- ------------ ---------------
Increase (decrease) in net assets from operations $ 1,938,370 $ 767,973 $ 593,194,915
=========== ============ ===============
</TABLE>
See accompanying notes to financial statements.
<PAGE> 38
VARIABLE SEPARATE ACCOUNT
(Portion Relating to the POLARIS Variable Annuity)
OF
ANCHOR NATIONAL LIFE INSURANCE COMPANY
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED
NOVEMBER 30, 1999
<TABLE>
<CAPTION>
Government
Capital Natural and
Appreciation Growth Resources Quality Bond
Portfolio Portfolio Portfolio Portfolio
------------- ------------ ------------ -------------
<S> <C> <C> <C> <C>
Investment income:
Dividends and capital gains distributions $ 30,895,332 $ 16,818,525 $ 350,468 $ 8,710,684
------------- ------------ ------------ ------------
Total investment income 30,895,332 16,818,525 350,468 8,710,684
------------- ------------ ------------ ------------
Expenses:
Mortality risk charge (5,864,165) (2,295,494) (242,507) (1,672,361)
Guarantee death benefit charge (781,889) (306,066) (32,334) (222,982)
Expense risk charge (2,280,509) (892,692) (94,308) (650,363)
Distribution expense charge (977,360) (382,583) (40,418) (278,726)
------------- ------------ ------------ ------------
Total expenses (9,903,923) (3,876,835) (409,567) (2,824,432)
------------- ------------ ------------ ------------
Net investment income (loss) 20,991,409 12,941,690 (59,099) 5,886,252
------------- ------------ ------------ ------------
Net realized gains (losses) from securities transactions:
Proceeds from shares sold 416,000,167 93,043,456 13,384,222 82,033,697
Cost of shares sold (322,224,584) (69,019,381) (14,878,686) (81,795,065)
------------- ------------ ------------ ------------
Net realized gains (losses) from
securities transactions 93,775,583 24,024,075 (1,494,464) 238,632
------------- ------------ ------------ ------------
Net unrealized appreciation (depreciation) of investments:
Beginning of period 64,370,940 49,943,366 (7,380,859) 5,122,431
End of period 229,305,448 62,417,710 (956,038) (5,163,869)
------------- ------------ ------------ ------------
Change in net unrealized appreciation/depreciation
of investments 164,934,508 12,474,344 6,424,821 (10,286,300)
------------- ------------ ------------ ------------
Increase (decrease) in net assets from operations $ 279,701,500 $ 49,440,109 $ 4,871,258 $ (4,161,416)
============= ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
International
Diversified Global Aggressive
Equities Equities Growth
Portfolio Portfolio Portfolio
------------- ------------ ------------
<S> <C> <C> <C>
Investment income:
Dividends and capital gains distributions $ 4,871,466 $ 27,653,769 $ 8,704,886
------------ ------------ ------------
Total investment income 4,871,466 27,653,769 8,704,886
------------ ------------ ------------
Expenses:
Mortality risk charge (2,156,349) (3,141,788) (942,788)
Guarantee death benefit charge (287,513) (418,905) (125,705)
Expense risk charge (838,580) (1,221,806) (366,640)
Distribution expense charge (359,392) (523,631) (157,131)
------------ ------------ ------------
Total expenses (3,641,834) (5,306,130) (1,592,264)
------------ ------------ ------------
Net investment income (loss) 1,229,632 22,347,639 7,112,622
------------ ------------ ------------
Net realized gains (losses) from securities transactions:
Proceeds from shares sold 76,454,601 82,231,522 41,325,768
Cost of shares sold (64,825,634) (63,558,378) (31,176,448)
------------ ------------ ------------
Net realized gains (losses) from
securities transactions 11,628,967 18,673,144 10,149,320
------------ ------------ ------------
Net unrealized appreciation (depreciation) of investments:
Beginning of period 32,593,624 58,184,659 10,837,901
End of period 51,607,926 97,647,279 41,068,104
------------ ------------ ------------
Change in net unrealized appreciation/depreciation
of investments 19,014,302 39,462,620 30,230,203
------------ ------------ ------------
Increase (decrease) in net assets from operations $ 31,872,901 $ 80,483,403 $ 47,492,145
============ ============ ============
</TABLE>
See accompanying notes to financial statements.
<PAGE> 39
VARIABLE SEPARATE ACCOUNT
(Portion Relating to the POLARIS Variable Annuity)
OF
ANCHOR NATIONAL LIFE INSURANCE COMPANY
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED
NOVEMBER 30, 1999
(Continued)
<TABLE>
<CAPTION>
MFS
Venture Federated Putnam Growth-
Value Value Growth Income
Portfolio Portfolio Portfolio Portfolio
------------- ------------ ------------- ------------
<S> <C> <C> <C> <C>
Investment income:
Dividends and capital gains distributions $ 48,202,197 $ 3,287,079 $ 10,199,913 $ 50,546,053
------------- ------------ ------------- ------------
Total investment income 48,202,197 3,287,079 10,199,913 50,546,053
------------- ------------ ------------- ------------
Expenses:
Mortality risk charge (10,161,162) (649,273) (2,779,137) (2,059,281)
Guarantee death benefit charge (1,354,822) (86,570) (370,551) (274,570)
Expense risk charge (3,951,563) (252,495) (1,080,775) (800,831)
Distribution expense charge (1,693,527) (108,212) (463,190) (343,214)
------------- ------------ ------------- ------------
Total expenses (17,161,074) (1,096,550) (4,693,653) (3,477,896)
------------- ------------ ------------- ------------
Net investment income (loss) 31,041,123 2,190,529 5,506,260 47,068,157
------------- ------------ ------------- ------------
Net realized gains (losses) from securities transactions:
Proceeds from shares sold 166,418,185 25,260,758 50,159,371 27,405,771
Cost of shares sold (110,903,240) (20,491,173) (32,767,842) (21,450,750)
------------- ------------ ------------- ------------
Net realized gains (losses) from
securities transactions 55,514,945 4,769,585 17,391,529 5,955,021
------------- ------------ ------------- ------------
Net unrealized appreciation (depreciation) of investments:
Beginning of period 304,053,517 12,631,782 74,627,124 44,832,654
End of period 359,945,578 7,750,954 123,251,522 13,453,549
------------- ------------ ------------- ------------
Change in net unrealized appreciation/depreciation
of investments 55,892,061 (4,880,828) 48,624,398 (31,379,105)
------------- ------------ ------------- ------------
Increase (decrease) in net assets from operations $ 142,448,129 $ 2,079,286 $ 71,522,187 $ 21,644,073
============= ============ ============= ============
</TABLE>
<TABLE>
<CAPTION>
Alliance Growth- Asset
Growth Income Allocation
Portfolio Portfolio Portfolio
------------- ------------- -------------
<S> <C> <C> <C>
Investment income:
Dividends and capital gains distributions $ 92,381,887 $ 40,335,122 $ 34,616,957
------------- ------------- -------------
Total investment income 92,381,887 40,335,122 34,616,957
------------- ------------- -------------
Expenses:
Mortality risk charge (9,567,339) (6,855,566) (3,934,089)
Guarantee death benefit charge (1,275,646) (914,076) (524,546)
Expense risk charge (3,720,632) (2,666,054) (1,529,924)
Distribution expense charge (1,594,556) (1,142,594) (655,681)
------------- ------------- -------------
Total expenses (16,158,173) (11,578,290) (6,644,240)
------------- ------------- -------------
Net investment income (loss) 76,223,714 28,756,832 27,972,717
------------- ------------- -------------
Net realized gains (losses) from securities transactions:
Proceeds from shares sold 212,407,437 108,943,434 101,175,283
Cost of shares sold (133,095,002) (63,588,625) (88,471,004)
------------- ------------- -------------
Net realized gains (losses) from
securities transactions 79,312,435 45,354,809 12,704,279
------------- ------------- -------------
Net unrealized appreciation (depreciation) of investments:
Beginning of period 265,639,874 229,663,206 56,280,516
End of period 405,665,933 342,148,325 36,469,172
------------- ------------- -------------
Change in net unrealized appreciation/depreciation
of investments 140,026,059 112,485,119 (19,811,344)
------------- ------------- -------------
Increase (decrease) in net assets from operations $ 295,562,208 $ 186,596,760 $ 20,865,652
============= ============= =============
</TABLE>
See accompanying notes to financial statements.
<PAGE> 40
VARIABLE SEPARATE ACCOUNT
(Portion Relating to the POLARIS Variable Annuity)
OF
ANCHOR NATIONAL LIFE INSURANCE COMPANY
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED
NOVEMBER 30, 1999
(Continued)
<TABLE>
<CAPTION>
SunAmerica MFS Worldwide
Balanced Total Return Utility High Income
Portfolio Portfolio Portfolio Portfolio
----------- ------------ ----------- ------------
<S> <C> <C> <C> <C>
Investment income:
Dividends and capital gains distributions $ 1,781,703 $13,630,383 $ 1,816,448 $ 7,360,805
----------- ----------- ----------- ------------
Total investment income 1,781,703 13,630,383 1,816,448 7,360,805
----------- ----------- ----------- ------------
Expenses:
Mortality risk charge (787,026) (953,112) (286,089) (588,620)
Guarantee death benefit charge (104,937) (127,082) (38,146) (78,483)
Expense risk charge (306,066) (370,655) (111,257) (228,908)
Distribution expense charge (131,171) (158,852) (47,681) (98,103)
----------- ----------- ----------- ------------
Total expenses (1,329,200) (1,609,701) (483,173) (994,114)
----------- ----------- ----------- ------------
Net investment income (loss) 452,503 12,020,682 1,333,275 6,366,691
----------- ----------- ----------- ------------
Net realized gains (losses) from securities transactions:
Proceeds from shares sold 9,268,989 8,581,556 5,656,988 27,396,061
Cost of shares sold (7,487,889) (7,258,349) (4,446,450) (32,192,984)
----------- ----------- ----------- ------------
Net realized gains (losses) from
securities transactions 1,781,100 1,323,207 1,210,538 (4,796,923)
----------- ----------- ----------- ------------
Net unrealized appreciation (depreciation) of investments:
Beginning of period 10,542,332 14,640,479 4,233,766 (14,945,783)
End of period 20,735,856 7,972,095 2,977,514 (9,308,366)
----------- ----------- ----------- ------------
Change in net unrealized appreciation/depreciation
of investments 10,193,524 (6,668,384) (1,256,252) 5,637,417
----------- ----------- ----------- ------------
Increase (decrease) in net assets from operations $12,427,127 $ 6,675,505 $ 1,287,561 $ 7,207,185
=========== =========== =========== ============
</TABLE>
<TABLE>
<CAPTION>
High-Yield Global Corporate
Bond Bond Bond
Portfolio Portfolio Portfolio
------------ ------------ ------------
<S> <C> <C> <C>
Investment income:
Dividends and capital gains distributions $ 16,311,519 $ 5,893,681 $ 3,324,052
------------ ------------ ------------
Total investment income 16,311,519 5,893,681 3,324,052
------------ ------------ ------------
Expenses:
Mortality risk charge (1,540,492) (726,944) (671,089)
Guarantee death benefit charge (205,398) (96,925) (89,479)
Expense risk charge (599,080) (282,700) (260,979)
Distribution expense charge (256,749) (121,158) (111,848)
------------ ------------ ------------
Total expenses (2,601,719) (1,227,727) (1,133,395)
------------ ------------ ------------
Net investment income (loss) 13,709,800 4,665,954 2,190,657
------------ ------------ ------------
Net realized gains (losses) from securities transactions:
Proceeds from shares sold 74,420,448 16,048,945 16,550,881
Cost of shares sold (74,749,763) (15,139,092) (15,823,499)
------------ ------------ ------------
Net realized gains (losses) from
securities transactions (329,315) 909,853 727,382
------------ ------------ ------------
Net unrealized appreciation (depreciation) of investments:
Beginning of period (2,564,692) 7,530,038 5,687,470
End of period (10,141,245) 307,661 657,456
------------ ------------ ------------
Change in net unrealized appreciation/depreciation
of investments (7,576,553) (7,222,377) (5,030,014)
------------ ------------ ------------
Increase (decrease) in net assets from operations $ 5,803,932 $ (1,646,570) $ (2,111,975)
============ ============ ============
</TABLE>
See accompanying notes to financial statements.
<PAGE> 41
VARIABLE SEPARATE ACCOUNT
(Portion Relating to the POLARIS Variable Annuity)
OF
ANCHOR NATIONAL LIFE INSURANCE COMPANY
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED
NOVEMBER 30, 1999
(Continued)
<TABLE>
<CAPTION>
International Emerging Real "Dogs" of
Growth & Income Markets Estate Wall Street
Portfolio Portfolio Portfolio Portfolio
--------------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Investment income:
Dividends and capital gains distributions $ 1,014,919 $ 17,523 $ 732,207 $ 485,004
------------ ----------- ----------- -----------
Total investment income 1,014,919 17,523 732,207 485,004
------------ ----------- ----------- -----------
Expenses:
Mortality risk charge (414,503) (105,388) (197,836) (139,078)
Guarantee death benefit charge (55,267) (14,051) (26,378) (18,544)
Expense risk charge (161,195) (40,984) (76,936) (54,086)
Distribution expense charge (69,084) (17,565) (32,973) (23,180)
------------ ----------- ----------- -----------
Total expenses (700,049) (177,988) (334,123) (234,888)
------------ ----------- ----------- -----------
Net investment income (loss) 314,870 (160,465) 398,084 250,116
------------ ----------- ----------- -----------
Net realized gains (losses) from securities transactions:
Proceeds from shares sold 17,350,760 9,393,483 8,736,384 4,700,679
Cost of shares sold (15,607,265) (9,683,172) (9,925,459) (4,608,608)
------------ ----------- ----------- -----------
Net realized gains (losses) from
securities transactions 1,743,495 (289,689) (1,189,075) 92,071
------------ ----------- ----------- -----------
Net unrealized appreciation (depreciation) of investments:
Beginning of period 946,922 (2,543,275) (2,857,432) 332,861
End of period 6,492,343 2,026,618 (5,072,116) (853,629)
------------ ----------- ----------- -----------
Change in net unrealized appreciation/depreciation
of investments 5,545,421 4,569,893 (2,214,684) (1,186,490)
------------ ----------- ----------- -----------
Increase (decrease) in net assets from operations $ 7,603,786 $ 4,119,739 $(3,005,675) $ (844,303)
============ =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
MFS Cash
Mid-Cap Growth Management
Portfolio Portfolio TOTAL
-------------- ------------- ---------------
<S> <C> <C> <C>
Investment income:
Dividends and capital gains distributions $ 0 $ 6,360,082 $ 436,302,664
----------- ------------- ---------------
Total investment income 0 6,360,082 $ 436,302,664
----------- ------------- ---------------
Expenses:
Mortality risk charge (26,858) (1,851,392) (60,609,726)
Guarantee death benefit charge (3,582) (246,852) (8,081,299)
Expense risk charge (10,445) (719,986) (23,570,449)
Distribution expense charge (4,476) (308,565) (10,101,620)
----------- ------------- ---------------
Total expenses (45,361) (3,126,795) (102,363,094)
----------- ------------- ---------------
Net investment income (loss) (45,361) 3,233,287 333,939,570
----------- ------------- ---------------
Net realized gains (losses) from securities transactions:
Proceeds from shares sold 2,015,564 769,540,901 2,465,905,311
Cost of shares sold (1,852,668) (765,723,903) (2,082,744,913)
----------- ------------- ---------------
Net realized gains (losses) from
securities transactions 162,896 3,816,998 383,160,398
----------- ------------- ---------------
Net unrealized appreciation (depreciation) of investments:
Beginning of period 0 1,539,243 1,223,942,664
End of period 1,818,531 848,494 1,783,072,805
----------- ------------- ---------------
Change in net unrealized appreciation/depreciation
of investments 1,818,531 (690,749) 559,130,141
----------- ------------- ---------------
Increase (decrease) in net assets from operations $ 1,936,066 $ 6,359,536 $ 1,276,230,109
=========== ============= ===============
</TABLE>
See accompanying notes to financial statements.
<PAGE> 42
VARIABLE SEPARATE ACCOUNT
(Portion Relating to the POLARIS Variable Annuity)
OF
ANCHOR NATIONAL LIFE INSURANCE COMPANY
STATEMENT OF CHANGES IN NET ASSETS
FOR THE ONE MONTH ENDED
DECEMBER 31, 1999
<TABLE>
<CAPTION>
Government
Capital Natural and
Appreciation Growth Resources Quality Bond
Portfolio Portfolio Portfolio Portfolio
------------ ------------ ----------- ------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations:
Net investment income (loss) $ (1,118,005) $ (360,256) $ (34,062) $ (215,485)
Net realized gains (losses) from
securities transactions 10,992,729 2,061,528 (15,239) (176,725)
Change in net unrealized appreciation/
depreciation of investments 137,885,745 23,836,964 2,501,098 (782,208)
------------ ------------ ----------- ------------
Increase (decrease) in net assets from
operations 147,760,469 25,538,236 2,451,797 (1,174,418)
------------ ------------ ----------- ------------
From capital transactions:
Net proceeds from units sold 645,733 168,532 14,212 67,672
Cost of units redeemed (6,828,718) (2,334,906) (207,435) (1,413,578)
Net transfers 1,189,243 264,111 (545,569) (2,696,989)
------------ ------------ ----------- ------------
Increase (decrease) in net assets
from capital transactions (4,993,742) (1,902,263) (738,792) (4,042,895)
------------ ------------ ----------- ------------
Increase (decrease) in net assets 142,766,727 23,635,973 1,713,005 (5,217,313)
Net assets at beginning of period 796,823,703 265,904,443 $26,017,310 168,698,496
------------ ------------ ----------- ------------
Net assets at end of period $939,590,430 $289,540,416 $27,730,315 $163,481,183
============ ============ =========== ============
ANALYSIS OF INCREASE (DECREASE)
IN UNITS OUTSTANDING:
Units sold 16,470 5,496 1,203 5,091
Units redeemed (172,798) (74,650) (17,466) (105,935)
Units transferred 22,815 6,007 (48,108) (202,258)
---------- --------- --------- ----------
Increase (decrease) in units outstanding (133,513) (63,147) (64,371) (303,102)
Beginning units 21,898,142 8,941,621 2,283,074 12,612,572
------------ ------------ ----------- ------------
Ending units 21,764,629 8,878,474 2,218,703 12,309,470
============ ============ =========== ============
</TABLE>
<TABLE>
<CAPTION>
International
Diversified Global Aggressive
Equities Equities Growth
Portfolio Portfolio Portfolio
------------- ------------ ------------
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations:
Net investment income (loss) $ (329,970) $ (499,755) $ (212,631)
Net realized gains (losses) from
securities transactions 780,530 1,223,519 1,567,738
Change in net unrealized appreciation/
depreciation of investments 22,373,150 35,925,231 37,971,648
------------ ------------ ------------
Increase (decrease) in net assets from
operations 22,823,710 36,648,995 39,326,755
------------ ------------ ------------
From capital transactions:
Net proceeds from units sold 175,621 188,004 240,362
Cost of units redeemed (1,778,151) (2,909,963) (1,777,418)
Net transfers (994,260) 6,108,025 4,014,771
------------ ------------ ------------
Increase (decrease) in net assets
from capital transactions (2,596,790) 3,386,066 2,477,715
------------ ------------ ------------
Increase (decrease) in net assets 20,226,920 40,035,061 41,804,470
Net assets at beginning of period 248,953,254 368,258,540 139,879,173
------------ ------------ ------------
Net assets at end of period $269,180,174 $408,293,601 $181,683,643
============ ============ ============
ANALYSIS OF INCREASE (DECREASE)
IN UNITS OUTSTANDING:
Units sold 10,712 7,445 10,934
Units redeemed (110,959) (116,440) (82,429)
Units transferred (65,218) 254,902 193,512
---------- ---------- ---------
Increase (decrease) in units outstanding (165,465) 145,907 122,017
Beginning units 16,071,377 15,218,999 7,354,489
------------ ------------ ------------
Ending units 15,905,912 15,364,906 7,476,506
============ ============ ============
</TABLE>
See accompanying notes to financial statements.
<PAGE> 43
VARIABLE SEPARATE ACCOUNT
(Portion Relating to the POLARIS Variable Annuity)
OF
ANCHOR NATIONAL LIFE INSURANCE COMPANY
STATEMENT OF CHANGES IN NET ASSETS
FOR THE ONE MONTH ENDED
DECEMBER 31, 1999
(Continued)
<TABLE>
<CAPTION>
Venture Federated Putnam MFS
Value Value Growth Growth-Income
Portfolio Portfolio Portfolio Portfolio
-------------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations:
Net investment income (loss) $ (1,464,021) $ (87,753) $ (439,011) $ (286,813)
Net realized gains (losses) from
securities transactions 5,000,741 356,586 1,681,773 278,934
Change in net unrealized appreciation/
depreciation of investments 51,572,475 1,595,838 36,327,069 10,742,511
-------------- ----------- ------------ ------------
Increase (decrease) in net assets from
operations 55,109,195 1,864,671 37,569,831 10,734,632
-------------- ----------- ------------ ------------
From capital transactions:
Net proceeds from units sold 908,831 63,030 217,222 188,337
Cost of units redeemed (8,057,697) (229,038) (2,869,130) (1,826,934)
Net transfers (2,199,714) (2,557,641) (815,972) (1,190,351)
-------------- ----------- ------------ ------------
Increase (decrease) in net assets
from capital transactions (9,348,580) (2,723,649) (3,467,880) (2,828,948)
-------------- ----------- ------------ ------------
Increase (decrease) in net assets 45,760,615 (858,978) 34,101,951 7,905,684
Net assets at beginning of period 1,120,389,245 68,422,827 323,309,383 219,305,264
-------------- ----------- ------------ ------------
Net assets at end of period $1,166,149,860 $67,563,849 $357,411,334 $227,210,948
============== =========== ============ ============
ANALYSIS OF INCREASE (DECREASE)
IN UNITS OUTSTANDING:
Units sold 33,865 3,829 7,231 8,205
Units redeemed (298,552) (13,933) (95,903) (79,644)
Units transferred (85,037) (153,485) (27,496) (52,704)
-------------- ----------- ------------ ------------
Increase (decrease) in units outstanding (349,724) (163,589) (116,168) (124,143)
Beginning units 42,175,145 4,164,599 11,402,199 9,723,097
-------------- ----------- ------------ ------------
Ending units 41,825,421 4,001,010 11,286,031 9,598,954
============== =========== ============ ============
</TABLE>
<TABLE>
<CAPTION>
Alliance Growth- Asset
Growth Income Allocation
Portfolio Portfolio Portfolio
-------------- ------------ ------------
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations:
Net investment income (loss) $ (1,549,237) $ (1,074,183) $ (525,747)
Net realized gains (losses) from
securities transactions 7,403,565 6,197,956 826,104
Change in net unrealized appreciation/
depreciation of investments 104,310,128 62,565,600 14,598,130
-------------- ------------ ------------
Increase (decrease) in net assets from
operations 110,164,456 67,689,373 14,898,487
-------------- ------------ ------------
From capital transactions:
Net proceeds from units sold 1,196,859 625,321 257,791
Cost of units redeemed (10,529,451) (5,924,212) (3,050,623)
Net transfers (5,948,124) (7,604,951) (3,256,189)
-------------- ------------ ------------
Increase (decrease) in net assets
from capital transactions (15,280,716) (12,903,842) (6,049,021)
-------------- ------------ ------------
Increase (decrease) in net assets 94,883,740 54,785,531 8,849,466
Net assets at beginning of period 1,158,835,058 810,926,844 402,591,694
-------------- ------------ ------------
Net assets at end of period $1,253,718,798 $865,712,375 $411,441,160
============== ============ ============
ANALYSIS OF INCREASE (DECREASE)
IN UNITS OUTSTANDING:
Units sold 26,059 18,277 13,156
Units redeemed (228,779) (172,961) (157,011)
Units transferred (132,171) (227,610) (168,574)
-------------- ------------ ------------
Increase (decrease) in units outstanding (334,891) (382,294) (312,429)
Beginning units 26,154,552 24,491,425 21,080,060
-------------- ------------ ------------
Ending units 25,819,661 24,109,131 20,767,631
============== ============ ============
</TABLE>
See accompanying notes to financial statements.
<PAGE> 44
VARIABLE SEPARATE ACCOUNT
(Portion Relating to the POLARIS Variable Annuity)
OF
ANCHOR NATIONAL LIFE INSURANCE COMPANY
STATEMENT OF CHANGES IN NET ASSETS
FOR THE ONE MONTH ENDED
DECEMBER 31, 1999
(Continued)
<TABLE>
<CAPTION>
SunAmerica MFS Worldwide
Balanced Total Return Utility High Income
Portfolio Portfolio Portfolio Portfolio
------------ ------------ ----------- -----------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations:
Net investment income (loss) $ (131,583) $ (135,744) $ (39,326) $ (84,294)
Net realized gains (losses) from
securities transactions 214,310 87,513 62,339 (301,440)
Change in net unrealized appreciation/
depreciation of investments 7,734,366 648,538 (144,334) 2,352,546
------------ ------------ ----------- -----------
Increase (decrease) in net assets from
operations 7,817,093 600,307 (121,321) 1,966,812
------------ ------------ ----------- -----------
From capital transactions:
Net proceeds from units sold 61,284 53,562 14,220 84,021
Cost of units redeemed (666,756) (525,016) (216,605) (473,027)
Net transfers 848,525 294,375 (125,921) (1,547,443)
------------ ------------ ----------- -----------
Increase (decrease) in net assets
from capital transactions 243,053 (177,079) (328,306) (1,936,449)
------------ ------------ ----------- -----------
Increase (decrease) in net assets 8,060,146 423,228 (449,627) 30,363
Net assets at beginning of period 97,578,312 105,781,567 31,029,076 64,487,527
------------ ------------ ----------- -----------
Net assets at end of period $105,638,458 $106,204,795 $30,579,449 $64,517,890
============ ============ =========== ===========
ANALYSIS OF INCREASE (DECREASE)
IN UNITS OUTSTANDING:
Units sold 3,262 2,885 1,017 5,388
Units redeemed (35,312) (28,434) (14,462) (30,539)
Units transferred 44,291 15,662 (8,683) (98,947)
------------ ------------ ----------- -----------
Increase (decrease) in units outstanding 12,241 (9,887) (22,128) (124,098)
Beginning units 5,352,344 5,719,070 2,046,427 4,234,687
------------ ------------ ----------- -----------
Ending units 5,364,585 5,709,183 2,024,299 4,110,589
============ ============ =========== ===========
</TABLE>
<TABLE>
<CAPTION>
High-Yield Global Corporate
Bond Bond Bond
Portfolio Portfolio Portfolio
------------ ----------- -----------
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations:
Net investment income (loss) $ (199,557) $ (93,730) $ (87,638)
Net realized gains (losses) from
securities transactions (359,754) 17,181 14,994
Change in net unrealized appreciation/
depreciation of investments 2,304,323 (51,324) (75,822)
------------ ----------- -----------
Increase (decrease) in net assets from
operations 1,745,012 (127,873) (148,466)
------------ ----------- -----------
From capital transactions:
Net proceeds from units sold 49,932 49,237 25,995
Cost of units redeemed (2,238,184) (549,438) (816,017)
Net transfers (2,047,153) (2,706,290) (663,131)
------------ ----------- -----------
Increase (decrease) in net assets
from capital transactions (4,235,405) (3,206,491) (1,453,153)
------------ ----------- -----------
Increase (decrease) in net assets (2,490,393) (3,334,364) (1,601,619)
Net assets at beginning of period 154,901,570 73,384,217 68,299,158
------------ ----------- -----------
Net assets at end of period $152,411,177 $70,049,853 $66,697,539
============ =========== ===========
ANALYSIS OF INCREASE (DECREASE)
IN UNITS OUTSTANDING:
Units sold 3,367 3,492 2,022
Units redeemed (151,008) (38,915) (63,859)
Units transferred (137,405) (191,804) (51,957)
------------ ----------- -----------
Increase (decrease) in units outstanding (285,046) (227,227) (113,794)
Beginning units 10,532,444 5,199,731 5,339,302
------------ ----------- -----------
Ending units 10,247,398 4,972,504 5,225,508
============ =========== ===========
</TABLE>
See accompanying notes to financial statements.
<PAGE> 45
VARIABLE SEPARATE ACCOUNT
(Portion Relating to the POLARIS Variable Annuity)
OF
ANCHOR NATIONAL LIFE INSURANCE COMPANY
STATEMENT OF CHANGES IN NET ASSETS
FOR THE ONE MONTH ENDED
DECEMBER 31, 1999
(Continued)
<TABLE>
<CAPTION>
International Emerging Real "Dogs" of
Growth & Income Markets Estate Wall Street
Portfolio Portfolio Portfolio Portfolio
--------------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations:
Net investment income (loss) $ 5,337,566 $ (27,213) $ (23,448) $ (16,683)
Net realized gains (losses) from
securities transactions 328,094 94,508 (574,356) (115,724)
Change in net unrealized appreciation/
depreciation of investments (2,763,161) 3,754,873 1,435,018 (78,655)
----------- ----------- ----------- -----------
Increase (decrease) in net assets from
operations 2,902,499 3,822,168 837,214 (211,062)
----------- ----------- ----------- -----------
From capital transactions:
Net proceeds from units sold 125,189 76,789 13,467 5,059
Cost of units redeemed (492,542) (97,098) (93,683) (126,296)
Net transfers 537,368 3,833,637 (1,881,013) (1,133,030)
----------- ----------- ----------- -----------
Increase (decrease) in net assets
from capital transactions 170,015 3,813,328 (1,961,229) (1,254,267)
----------- ----------- ----------- -----------
Increase (decrease) in net assets 3,072,514 7,635,496 (1,124,015) (1,465,329)
Net assets at beginning of period 57,725,484 17,590,018 18,358,838 13,772,935
----------- ----------- ----------- -----------
Net assets at end of period $60,797,998 $25,225,514 $17,234,823 $12,307,606
=========== =========== =========== ===========
ANALYSIS OF INCREASE (DECREASE)
IN UNITS OUTSTANDING:
Units sold 9,089 8,054 1,615 565
Units redeemed (35,519) (10,012) (11,015) (14,061)
Units transferred 38,751 387,077 (215,616) (126,948)
----------- ----------- ----------- -----------
Increase (decrease) in units outstanding 12,321 385,119 (225,016) (140,444)
Beginning units 4,307,535 1,956,342 2,159,442 1,509,434
----------- ----------- ----------- -----------
Ending units 4,319,856 2,341,461 1,934,426 1,368,990
=========== =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
MFS Cash
Mid-Cap Growth Management
Portfolio Portfolio TOTAL
-------------- ------------ --------------
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations:
Net investment income (loss) $ 224,791 $ (262,489) $ (3,736,277)
Net realized gains (losses) from
securities transactions 111,075 257,924 $ 38,016,403
Change in net unrealized appreciation/
depreciation of investments 1,602,504 772,538 $ 558,914,789
----------- ------------ --------------
Increase (decrease) in net assets from
operations 1,938,370 767,973 $ 593,194,915
----------- ------------ --------------
From capital transactions:
Net proceeds from units sold 147,606 594,664 $ 6,258,552
Cost of units redeemed (63,808) (5,614,682) $ (61,710,406)
Net transfers 3,029,286 17,007,021 $ (787,379)
----------- ------------ --------------
Increase (decrease) in net assets
from capital transactions 3,113,084 11,987,003 $ (56,239,233)
----------- ------------ --------------
Increase (decrease) in net assets 5,051,454 12,754,976 $ 536,955,682
Net assets at beginning of period 12,378,010 190,553,990 $7,024,155,936
----------- ------------ --------------
Net assets at end of period $17,429,464 $203,308,966 $7,561,111,618
=========== ============ ==============
ANALYSIS OF INCREASE (DECREASE)
IN UNITS OUTSTANDING:
Units sold 9,616 48,726 $ 267,071
Units redeemed (4,207) (459,121) $ (2,623,924)
Units transferred 193,716 1,392,823 $ 555,535
----------- ------------ --------------
Increase (decrease) in units outstanding 199,125 982,428 $ (1,801,318)
Beginning units 869,761 15,616,078 $ 288,413,948
----------- ------------ --------------
Ending units 1,068,886 16,598,506 $ 286,612,630
=========== ============ ==============
</TABLE>
See accompanying notes to financial statements.
<PAGE> 46
VARIABLE SEPARATE ACCOUNT
(Portion Relating to the POLARIS Variable Annuity)
OF
ANCHOR NATIONAL LIFE INSURANCE COMPANY
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED
NOVEMBER 30, 1999
<TABLE>
<CAPTION>
Government
Capital Natural and
Appreciation Growth Resources Quality Bond
Portfolio Portfolio Portfolio Portfolio
------------ ------------ ---------- ------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations:
Net investment income (loss) $ 20,991,409 $ 12,941,690 $ (59,099) $ 5,886,252
Net realized gains (losses) from
securities transactions 93,775,583 24,024,075 (1,494,464) 238,632
Change in net unrealized appreciation/
depreciation of investments 164,934,508 12,474,344 6,424,821 (10,286,300)
------------ ------------ ---------- ------------
Increase (decrease) in net assets from
operations 279,701,500 49,440,109 4,871,258 (4,161,416)
------------ ------------ ---------- ------------
From capital transactions:
Net proceeds from units sold 10,114,146 3,573,955 369,266 2,759,677
Cost of units redeemed (49,855,703) (18,274,614) (2,127,032) (17,887,222)
Net transfers (14,109,346) (9,002,244) (1,332,153) (4,337,778)
------------ ------------ ---------- ------------
Increase (decrease) in net assets
from capital transactions (53,850,903) (23,702,903) (3,089,919) (19,465,323)
------------ ------------ ---------- ------------
Increase (decrease) in net assets 225,850,597 25,737,206 1,781,339 (23,626,739)
Net assets at beginning of period 570,973,106 240,167,237 $24,235,971 192,325,235
------------ ------------ ---------- ------------
Net assets at end of period $796,823,703 $265,904,443 26,017,310 $168,698,496
============ ============ ========== ============
ANALYSIS OF INCREASE (DECREASE)
IN UNITS OUTSTANDING:
Units sold 346,059 129,800 35,101 203,073
Units redeemed (1,685,878) (661,152) (202,601) (1,326,455)
Units transferred (830,596) (365,165) (154,700) (340,865)
------------ ------------ ---------- ------------
Increase (decrease) in units outstanding (2,170,415) (896,517) (322,200) (1,464,247)
Beginning units 24,068,557 9,838,138 2,605,274 14,076,819
------------ ------------ ---------- ------------
Ending units 21,898,142 8,941,621 2,283,074 12,612,572
============ ============ ========== ============
</TABLE>
<TABLE>
<CAPTION>
International
Diversified Global Aggressive
Equities Equities Growth
Portfolio Portfolio Portfolio
------------- ------------ ------------
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations:
Net investment income (loss) $ 1,229,632 $ 22,347,639 $ 7,112,622
Net realized gains (losses) from
securities transactions 11,628,967 18,673,144 10,149,320
Change in net unrealized appreciation/
depreciation of investments 19,014,302 39,462,620 30,230,203
------------ ------------ ------------
Increase (decrease) in net assets from
operations 31,872,901 80,483,403 47,492,145
------------ ------------ ------------
From capital transactions:
Net proceeds from units sold 3,494,198 4,215,919 1,925,204
Cost of units redeemed (15,014,651) (29,136,117) (7,549,939)
Net transfers (13,916,314) (25,222,229) 14,258,360
------------ ------------ ------------
Increase (decrease) in net assets
from capital transactions (25,436,767) (50,142,427) 8,633,625
------------ ------------ ------------
Increase (decrease) in net assets 6,436,134 30,340,976 56,125,770
Net assets at beginning of period 242,517,120 337,917,564 83,753,403
============
Net assets at end of period $248,953,254 $368,258,540 $139,879,173
============ ============ ============
ANALYSIS OF INCREASE (DECREASE)
IN UNITS OUTSTANDING:
Units sold 246,616 195,374 125,450
Units redeemed (1,060,437) (1,358,306) (484,606)
Units transferred (1,032,301) (1,212,133) 654,143
------------ ------------ ------------
Increase (decrease) in units outstanding (1,846,122) (2,375,065) 294,987
Beginning units 17,917,499 17,594,064 7,059,502
------------ ------------ ------------
Ending units 16,071,377 15,218,999 7,354,489
============ ============ ============
</TABLE>
See accompanying notes to financial statements.
<PAGE> 47
VARIABLE SEPARATE ACCOUNT
(Portion Relating to the POLARIS Variable Annuity)
OF
ANCHOR NATIONAL LIFE INSURANCE COMPANY
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED
NOVEMBER 30, 1999
(Continued)
<TABLE>
<CAPTION>
MFS
Venture Federated Putnam Growth-
Value Value Growth Income
Portfolio Portfolio Portfolio Portfolio
-------------- ----------- ------------ ------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations:
Net investment income (loss) $ 31,041,123 $ 2,190,529 $ 5,506,260 $ 47,068,157
Net realized gains (losses) from
securities transactions 55,514,945 4,769,585 17,391,529 5,955,021
Change in net unrealized appreciation/
depreciation of investments 55,892,061 (4,880,828) 48,624,398 (31,379,105)
-------------- ----------- ------------ ------------
Increase (decrease) in net assets from
operations 142,448,129 2,079,286 71,522,187 21,644,073
-------------- ----------- ------------ ------------
From capital transactions:
Net proceeds from units sold 16,260,872 973,482 5,140,874 3,001,560
Cost of units redeemed (71,731,152) (4,312,058) (24,690,199) (17,167,878)
Net transfers (42,855,774) 2,191,280 2,652,527 (1,696,574)
-------------- ----------- ------------ ------------
Increase (decrease) in net assets
from capital transactions (98,326,054) (1,147,296) (16,896,798) (15,862,892)
-------------- ----------- ------------ ------------
Increase (decrease) in net assets 44,122,075 931,990 54,625,389 5,781,181
Net assets at beginning of period 1,076,267,170 67,490,837 268,683,994 213,524,083
-------------- ----------- ------------ ------------
Net assets at end of period $1,120,389,245 $68,422,827 $323,309,383 $219,305,264
============== =========== ============ ============
ANALYSIS OF INCREASE (DECREASE)
IN UNITS OUTSTANDING:
Units sold 630,938 57,266 198,857 132,518
Units redeemed (2,774,324) (257,567) (956,117) (760,545)
Units transferred (1,750,898) 109,900 106,901 (83,510)
-------------- ----------- ------------ ------------
Increase (decrease) in units outstanding (3,894,284) (90,401) (650,359) (711,537)
Beginning units 46,069,429 4,255,000 12,052,558 10,434,634
-------------- ----------- ------------ ------------
Ending units 42,175,145 4,164,599 11,402,199 9,723,097
============== =========== ============ ============
</TABLE>
<TABLE>
<CAPTION>
Alliance Growth- Asset
Growth Income Allocation
Portfolio Portfolio Portfolio
-------------- ------------ ------------
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations:
Net investment income (loss) $ 76,223,714 $ 28,756,832 $ 27,972,717
Net realized gains (losses) from
securities transactions 79,312,435 45,354,809 12,704,279
Change in net unrealized appreciation/
depreciation of investments 140,026,059 112,485,119 (19,811,344)
-------------- ------------ ------------
Increase (decrease) in net assets from operations 295,562,208 186,596,760 20,865,652
-------------- ------------ ------------
From capital transactions:
Net proceeds from units sold 22,924,041 10,762,553 4,643,699
Cost of units redeemed (76,220,215) (58,161,418) (32,054,010)
Net transfers 58,738,353 8,395,674 (65,372,494)
-------------- ------------ ------------
Increase (decrease) in net assets
from capital transactions 5,442,179 (39,003,191) (92,782,805)
-------------- ------------ ------------
Increase (decrease) in net assets 301,004,387 147,593,569 (71,917,153)
Net assets at beginning of period 857,830,671 663,333,275 474,508,847
-------------- ------------ ------------
Net assets at end of period $1,158,835,058 $810,926,844 $402,591,694
============== ============ ============
ANALYSIS OF INCREASE (DECREASE)
IN UNITS OUTSTANDING:
Units sold 571,999 356,514 248,586
Units redeemed (1,877,222) (1,911,121) (1,714,012)
Units transferred 1,313,499 244,224 (3,498,510)
-------------- ------------ ------------
Increase (decrease) in units outstanding 8,276 (1,310,383) (4,963,936)
Beginning units 26,146,276 25,801,808 26,043,996
-------------- ------------ ------------
Ending units 26,154,552 24,491,425 21,080,060
============== ============ ============
</TABLE>
See accompanying notes to financial statements.
<PAGE> 48
VARIABLE SEPARATE ACCOUNT
(Portion Relating to the POLARIS Variable Annuity)
OF
ANCHOR NATIONAL LIFE INSURANCE COMPANY
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED
NOVEMBER 30, 1999
(Continued)
<TABLE>
<CAPTION>
SunAmerica MFS Worldwide
Balanced Total Return Utility High Income
Portfolio Portfolio Portfolio Portfolio
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations:
Net investment income (loss) $ 452,503 $ 12,020,682 $ 1,333,275 $ 6,366,691
Net realized gains (losses) from
securities transactions 1,781,100 1,323,207 1,210,538 (4,796,923)
Change in net unrealized appreciation/
depreciation of investments 10,193,524 (6,668,384) (1,256,252) 5,637,417
------------- ------------- ------------- -------------
Increase (decrease) in net assets from operations 12,427,127 6,675,505 1,287,561 7,207,185
------------- ------------- ------------- -------------
From capital transactions:
Net proceeds from units sold 1,806,943 1,555,219 620,467 828,999
Cost of units redeemed (7,381,305) (6,208,023) (2,392,332) (4,715,553)
Net transfers 25,516,418 9,336,208 644,701 (12,983,379)
------------- ------------- ------------- -------------
Increase (decrease) in net assets
from capital transactions 19,942,056 4,683,404 (1,127,164) (16,869,933)
------------- ------------- ------------- -------------
Increase (decrease) in net assets 32,369,183 11,358,909 160,397 (9,662,748)
Net assets at beginning of period 65,209,129 94,422,658 30,868,679 74,150,275
------------- ------------- ------------- -------------
Net assets at end of period $ 97,578,312 $ 105,781,567 $ 31,029,076 $ 64,487,527
============= ============= ============= =============
ANALYSIS OF INCREASE (DECREASE)
IN UNITS OUTSTANDING:
Units sold 105,012 83,583 42,141 59,012
Units redeemed (425,865) (334,588) (159,599) (334,490)
Units transferred 1,493,652 504,425 43,398 (953,424)
------------- ------------- ------------- -------------
Increase (decrease) in units outstanding 1,172,799 253,420 (74,060) (1,228,902)
Beginning units 4,179,545 5,465,650 2,120,487 5,463,589
------------- ------------- ------------- -------------
Ending units 5,352,344 5,719,070 2,046,427 4,234,687
============= ============= ============= =============
</TABLE>
<TABLE>
<CAPTION>
High-Yield Global Corporate
Bond Bond Bond
Portfolio Portfolio Portfolio
------------- ------------- -------------
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations:
Net investment income (loss) $ 13,709,800 $ 4,665,954 $ 2,190,657
Net realized gains (losses) from
securities transactions (329,315) 909,853 727,382
Change in net unrealized appreciation/
depreciation of investments (7,576,553) (7,222,377) (5,030,014)
------------- ------------- -------------
Increase (decrease) in net assets from operations 5,803,932 (1,646,570) (2,111,975)
------------- ------------- -------------
From capital transactions:
Net proceeds from units sold 2,470,743 1,193,631 1,460,618
Cost of units redeemed (17,522,452) (7,005,153) (6,784,418)
Net transfers (15,414,722) (4,227,245) (1,818,857)
------------- ------------- -------------
Increase (decrease) in net assets
from capital transactions (30,466,431) (10,038,767) (7,142,657)
------------- ------------- -------------
Increase (decrease) in net assets (24,662,499) (11,685,337) (9,254,632)
Net assets at beginning of period 179,564,069 85,069,554 77,553,790
------------- ------------- -------------
Net assets at end of period $ 154,901,570 $ 73,384,217 $ 68,299,158
============= ============= =============
ANALYSIS OF INCREASE (DECREASE)
IN UNITS OUTSTANDING:
Units sold 168,864 82,953 112,246
Units redeemed (1,197,293) (490,303) (524,059)
Units transferred (1,036,210) (299,675) (145,356)
------------- ------------- -------------
Increase (decrease) in units outstanding (2,064,639) (707,025) (557,169)
Beginning units 12,597,083 5,906,756 5,896,471
------------- ------------- -------------
Ending units 10,532,444 5,199,731 5,339,302
============= ============= =============
</TABLE>
See accompanying notes to financial statements.
<PAGE> 49
VARIABLE SEPARATE ACCOUNT
(Portion Relating to the POLARIS Variable Annuity)
OF
ANCHOR NATIONAL LIFE INSURANCE COMPANY
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED
NOVEMBER 30, 1999
(Continued)
<TABLE>
<CAPTION>
International Emerging Real "Dogs" of
Growth & Income Markets Estate Wall Street
Portfolio Portfolio Portfolio Portfolio
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations:
Net investment income (loss) $ 314,870 $ (160,465) $ 398,084 $ 250,116
Net realized gains (losses) from
securities transactions 1,743,495 (289,689) (1,189,075) 92,071
Change in net unrealized appreciation/
depreciation of investments 5,545,421 4,569,893 (2,214,684) (1,186,490)
--------------- --------------- --------------- ---------------
Increase (decrease) in net assets from operations 7,603,786 4,119,739 (3,005,675) (844,303)
--------------- --------------- --------------- ---------------
From capital transactions:
Net proceeds from units sold 928,866 299,347 537,666 511,540
Cost of units redeemed (3,136,656) (1,095,467) (1,204,054) (876,411)
Net transfers 15,439,574 5,969,800 (2,670,042) 901,004
--------------- --------------- --------------- ---------------
Increase (decrease) in net assets
from capital transactions 13,231,784 5,173,680 (3,336,430) 536,133
--------------- --------------- --------------- ---------------
Increase (decrease) in net assets 20,835,570 9,293,419 (6,342,105) (308,170)
Net assets at beginning of period 36,889,914 8,296,599 24,700,943 14,081,105
--------------- --------------- --------------- ---------------
Net assets at end of period $ 57,725,484 $ 17,590,018 $ 18,358,838 $ 13,772,935
=============== =============== =============== ===============
ANALYSIS OF INCREASE (DECREASE)
IN UNITS OUTSTANDING:
Units sold 72,279 38,897 55,736 53,009
Units redeemed (247,472) (145,028) (127,288) (89,378)
Units transferred 1,176,063 709,989 (290,175) 95,589
--------------- --------------- --------------- ---------------
Increase (decrease) in units outstanding 1,000,870 603,858 (361,727) 59,220
Beginning units 3,306,665 1,352,484 2,521,169 1,450,214
--------------- --------------- --------------- ---------------
Ending units 4,307,535 1,956,342 2,159,442 1,509,434
=============== =============== =============== ===============
</TABLE>
<TABLE>
<CAPTION>
MFS Cash
Mid-Cap Growth Management
Portfolio Portfolio TOTAL
--------------- --------------- ---------------
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations:
Net investment income (loss) $ (45,361) $ 3,233,287 $ 333,939,570
Net realized gains (losses) from
securities transactions 162,896 3,816,998 383,160,398
Change in net unrealized appreciation/
depreciation of investments 1,818,531 (690,749) 559,130,141
--------------- --------------- ---------------
Increase (decrease) in net assets from operations 1,936,066 6,359,536 1,276,230,109
--------------- --------------- ---------------
From capital transactions:
Net proceeds from units sold 93,210 6,467,290 108,933,985
Cost of units redeemed (127,030) (65,231,554) (547,862,616)
Net transfers 10,475,764 110,869,556 50,430,068
--------------- --------------- ---------------
Increase (decrease) in net assets
from capital transactions 10,441,944 52,105,292 (388,498,563)
--------------- --------------- ---------------
Increase (decrease) in net assets 12,378,010 58,464,828 887,731,546
Net assets at beginning of period 0 132,089,162 6,136,424,390
--------------- --------------- ---------------
Net assets at end of period $ 12,378,010 $ 190,553,990 $ 7,024,155,936
=============== =============== ===============
ANALYSIS OF INCREASE (DECREASE)
IN UNITS OUTSTANDING:
Units sold 7,927 539,762 4,899,572
Units redeemed (10,466) (5,426,945) (26,543,117)
Units transferred 872,300 9,343,061 4,673,626
--------------- --------------- ---------------
Increase (decrease) in units outstanding 869,761 4,455,878 (16,969,919)
Beginning units 0 11,160,200 305,383,867
--------------- --------------- ---------------
Ending units 869,761 15,616,078 288,413,948
=============== =============== ===============
</TABLE>
See accompanying notes to financial statements.
<PAGE> 50
VARIABLE SEPARATE ACCOUNT
(Portion Relating to the POLARIS Variable Annuity)
OF
ANCHOR NATIONAL LIFE INSURANCE COMPANY
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED
NOVEMBER 30, 1998
<TABLE>
<CAPTION>
Government
Capital Natural and
Appreciation Growth Resources Quality Bond
Portfolio Portfolio Portfolio Portfolio
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations:
Net investment income (loss) $ 36,124,250 $ 9,835,043 $ 191,807 $ 5,469,291
Net realized gains (losses) from
securities transactions 31,645,944 8,331,348 (1,982,437) 1,083,093
Change in net unrealized appreciation/
depreciation of investments (5,091,941) 21,325,642 (3,440,379) 5,726,957
------------- ------------- ------------- -------------
Increase (decrease) in net assets from operations 62,678,253 39,492,033 (5,231,009) 12,279,341
------------- ------------- ------------- -------------
From capital transactions:
Net proceeds from units sold 17,162,536 7,123,914 948,816 5,536,298
Cost of units redeemed (35,954,314) (13,523,791) (1,609,838) (10,993,988)
Net transfers (1,941,763) 9,080,349 (2,585,769) 58,359,031
------------- ------------- ------------- -------------
Increase (decrease) in net assets
from capital transactions (20,733,541) 2,680,472 (3,246,791) 52,901,341
------------- ------------- ------------- -------------
Increase (decrease) in net assets 41,944,712 42,172,505 (8,477,800) 65,180,682
Net assets at beginning of period 529,028,394 197,994,732 32,713,772 127,144,553
------------- ------------- ------------- -------------
Net assets at end of period $ 570,973,106 $ 240,167,237 $ 24,235,972 $ 192,325,235
============= ============= ============= =============
ANALYSIS OF INCREASE (DECREASE)
IN UNITS OUTSTANDING:
Units sold 740,144 319,148 88,720 421,397
Units redeemed (1,562,125) (599,961) (153,365) (837,252)
Units transferred 1,405 371,523 (267,279) 4,445,632
------------- ------------- ------------- -------------
Increase (decrease) in units outstanding (820,576) 90,710 (331,924) 4,029,777
Beginning units 24,889,133 9,747,428 2,937,198 10,047,042
------------- ------------- ------------- -------------
Ending units 24,068,557 9,838,138 2,605,274 14,076,819
============= ============= ============= =============
</TABLE>
<TABLE>
<CAPTION>
International
Diversified Global Aggressive
Equities Equities Growth
Portfolio Portfolio Portfolio
------------- ------------- -------------
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations:
Net investment income (loss) $ 6,784,520 $ 25,170,030 $ (1,201,292)
Net realized gains (losses) from
securities transactions 6,426,264 9,198,472 1,891,538
Change in net unrealized appreciation/
depreciation of investments 22,391,920 5,625,420 2,182,270
------------- ------------- -------------
Increase (decrease) in net assets from operations 35,602,704 39,993,922 2,872,516
------------- ------------- -------------
From capital transactions:
Net proceeds from units sold 6,840,445 7,444,968 3,413,653
Cost of units redeemed (11,017,277) (21,348,644) (4,639,272)
Net transfers 1,872,969 1,244,805 (926,390)
------------- ------------- -------------
Increase (decrease) in net assets
from capital transactions (2,303,863) (12,658,871) (2,152,009)
------------- ------------- -------------
Increase (decrease) in net assets 33,298,841 27,335,051 720,507
Net assets at beginning of period 209,218,279 310,582,513 83,032,896
------------- ------------- -------------
Net assets at end of period $ 242,517,120 $ 337,917,564 $ 83,753,403
============= ============= =============
ANALYSIS OF INCREASE (DECREASE)
IN UNITS OUTSTANDING:
Units sold 522,155 401,379 294,237
Units redeemed (835,386) (1,151,597) (402,100)
Units transferred 220,173 (31,903) (47,659)
------------- ------------- -------------
Increase (decrease) in units outstanding (93,058) (782,121) (155,522)
Beginning units 18,010,557 18,376,185 7,215,024
------------- ------------- -------------
Ending units 17,917,499 17,594,064 7,059,502
============= ============= =============
</TABLE>
See accompanying notes to financial statements.
<PAGE> 51
VARIABLE SEPARATE ACCOUNT
(Portion Relating to the POLARIS Variable Annuity)
OF
ANCHOR NATIONAL LIFE INSURANCE COMPANY
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED
NOVEMBER 30, 1998
(Continued)
<TABLE>
<CAPTION>
MFS
Venture Federated Putnam Growth-
Value Value Growth Income
Portfolio Portfolio Portfolio Portfolio
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations:
Net investment income (loss) $ 21,875,320 $ 458,964 $ 32,797,490 $ 32,870,808
Net realized gains (losses) from
securities transactions 25,907,088 1,465,941 11,084,715 7,567,654
Change in net unrealized appreciation/
depreciation of investments 43,540,196 6,277,307 224,207 (9,187,736)
--------------- --------------- --------------- ---------------
Increase in net assets from operations 91,322,604 8,202,212 44,106,412 31,250,726
--------------- --------------- --------------- ---------------
From capital transactions:
Net proceeds from units sold 47,383,154 3,628,680 8,778,289 3,826,919
Cost of units redeemed (54,932,014) (3,128,650) (14,581,779) (13,929,554)
Net transfers 36,304,819 16,633,897 20,979,462 (14,171,074)
--------------- --------------- --------------- ---------------
Increase (decrease) in net assets
from capital transactions 28,755,959 17,133,927 15,175,972 (24,273,709)
--------------- --------------- --------------- ---------------
Increase (decrease) in net assets 120,078,563 25,336,139 59,282,384 6,977,017
Net assets at beginning of period 956,188,606 42,154,698 209,401,610 206,547,066
--------------- --------------- --------------- ---------------
Net assets at end of period $ 1,076,267,170 $ 67,490,837 $ 268,683,994 $ 213,524,083
=============== =============== =============== ===============
ANALYSIS OF INCREASE (DECREASE)
IN UNITS OUTSTANDING:
Units sold 2,090,520 245,735 427,414 200,022
Units redeemed (2,448,129) (207,095) (697,501) (718,168)
Units transferred 1,534,592 1,120,847 985,913 (761,670)
--------------- --------------- --------------- ---------------
Increase (decrease) in units outstanding 1,176,983 1,159,487 715,826 (1,279,816)
Beginning units 44,892,446 3,095,513 11,336,732 11,714,450
--------------- --------------- --------------- ---------------
Ending units 46,069,429 4,255,000 12,052,558 10,434,634
=============== =============== =============== ===============
</TABLE>
<TABLE>
<CAPTION>
Alliance Growth- Asset
Growth Income Allocation
Portfolio Portfolio Portfolio
--------------- --------------- ---------------
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations:
Net investment income (loss) $ 54,090,029 $ 19,629,840 $ 50,186,064
Net realized gains (losses) from
securities transactions 36,329,237 22,075,308 2,771,086
Change in net unrealized appreciation/
depreciation of investments 117,425,221 65,621,025 (48,751,217)
--------------- --------------- ---------------
Increase in net assets from operations 207,844,487 107,326,173 4,205,933
--------------- --------------- ---------------
From capital transactions:
Net proceeds from units sold 31,279,981 20,277,490 17,563,319
Cost of units redeemed (44,862,048) (36,455,560) (27,943,876)
Net transfers 74,176,211 41,423,730 26,174,022
--------------- --------------- ---------------
Increase (decrease) in net assets
from capital transactions 60,594,144 25,245,660 15,793,465
--------------- --------------- ---------------
Increase (decrease) in net assets 268,438,631 132,571,833 19,999,398
Net assets at beginning of period 589,392,040 530,761,442 454,509,449
--------------- --------------- ---------------
Net assets at end of period $ 857,830,671 $ 663,333,275 $ 474,508,847
=============== =============== ===============
ANALYSIS OF INCREASE (DECREASE)
IN UNITS OUTSTANDING:
Units sold 1,091,748 851,324 943,086
Units redeemed (1,526,082) (1,516,106) (1,519,582)
Units transferred 2,529,913 1,670,766 1,347,716
--------------- --------------- ---------------
Increase (decrease) in units outstanding 2,095,579 1,005,984 771,220
Beginning units 24,050,697 24,795,824 25,272,776
--------------- --------------- ---------------
Ending units 26,146,276 25,801,808 26,043,996
=============== =============== ===============
</TABLE>
See accompanying notes to financial statements.
<PAGE> 52
VARIABLE SEPARATE ACCOUNT
(Portion Relating to the POLARIS Variable Annuity)
OF
ANCHOR NATIONAL LIFE INSURANCE COMPANY
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED
NOVEMBER 30, 1998
(Continued)
<TABLE>
<CAPTION>
SunAmerica MFS Worldwide
Balanced Total Return Utility High Income
Portfolio Portfolio Portfolio Portfolio
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations:
Net investment income (loss) $ 617,113 $ 8,450,859 $ 488,294 $ 9,294,592
Net realized gains (losses) from
securities transactions 665,050 723,970 1,160,039 (2,809,178)
Change in net unrealized appreciation/
depreciation of investments 5,964,937 813,986 1,617,655 (21,835,461)
------------- ------------- ------------- -------------
Increase (decrease) in net assets from operations 7,247,100 9,988,815 3,265,988 (15,350,047)
------------- ------------- ------------- -------------
From capital transactions:
Net proceeds from units sold 2,884,371 2,564,367 1,317,505 3,809,808
Cost of units redeemed (2,620,645) (4,518,026) (1,909,553) (5,647,503)
Net transfers 25,338,978 2,737,718 8,550,433 (10,396,335)
------------- ------------- ------------- -------------
Increase (decrease) in net assets
from capital transactions 25,602,704 784,059 7,958,385 (12,234,030)
------------- ------------- ------------- -------------
Increase (decrease) in net assets 32,849,804 10,772,874 11,224,373 (27,584,077)
Net assets at beginning of period 32,359,325 83,649,784 19,644,306 101,734,353
------------- ------------- ------------- -------------
Net assets at end of period $ 65,209,129 $ 94,422,658 $ 30,868,679 $ 74,150,275
============= ============= ============= =============
ANALYSIS OF INCREASE (DECREASE)
IN UNITS OUTSTANDING:
Units sold 201,667 157,118 97,062 236,387
Units redeemed (180,430) (274,374) (135,939) (363,538)
Units transferred 1,710,360 167,594 618,018 (777,507)
------------- ------------- ------------- -------------
Increase (decrease) in units outstanding 1,731,597 50,338 579,141 (904,658)
Beginning units 2,447,948 5,415,312 1,541,346 6,368,247
------------- ------------- ------------- -------------
Ending units 4,179,545 5,465,650 2,120,487 5,463,589
============= ============= ============= =============
</TABLE>
<TABLE>
<CAPTION>
High-Yield Global Corporate
Bond Bond Bond
Portfolio Portfolio Portfolio
------------- ------------- -------------
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations:
Net investment income (loss) $ 9,373,549 $ 5,588,309 $ 1,419,463
Net realized gains (losses) from
securities transactions 3,390,193 2,058,350 398,015
Change in net unrealized appreciation/
depreciation of investments (17,499,203) 622,089 1,256,821
------------- ------------- -------------
Increase (decrease) in net assets from operations (4,735,461) 8,268,748 3,074,299
------------- ------------- -------------
From capital transactions:
Net proceeds from units sold 8,423,042 2,141,820 2,747,025
Cost of units redeemed (13,481,311) (6,321,971) (4,188,628)
Net transfers 21,612,238 326,809 22,821,525
------------- ------------- -------------
Increase (decrease) in net assets
from capital transactions 16,553,969 (3,853,342) 21,379,922
------------- ------------- -------------
Increase (decrease) in net assets 11,818,508 4,415,406 24,454,221
Net assets at beginning of period 167,745,561 80,654,148 53,099,569
------------- ------------- -------------
Net assets at end of period $ 179,564,069 $ 85,069,554 $ 77,553,790
============= ============= =============
ANALYSIS OF INCREASE (DECREASE)
IN UNITS OUTSTANDING:
Units sold 557,130 157,390 214,332
Units redeemed (896,725) (459,677) (324,357)
Units transferred 1,493,428 44,588 1,770,506
------------- ------------- -------------
Increase (decrease) in units outstanding 1,153,833 (257,699) 1,660,481
Beginning units 11,443,250 6,164,455 4,235,990
------------- ------------- -------------
Ending units 12,597,083 5,906,756 5,896,471
============= ============= =============
</TABLE>
See accompanying notes to financial statements.
<PAGE> 53
VARIABLE SEPARATE ACCOUNT
(Portion Relating to the POLARIS Variable Annuity)
OF
ANCHOR NATIONAL LIFE INSURANCE COMPANY
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED
NOVEMBER 30, 1998
(Continued)
<TABLE>
<CAPTION>
International Emerging Real "Dogs" of
Growth & Income Markets Estate Wall Street
Portfolio Portfolio Portfolio Portfolio
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations:
Net investment income (loss) $ (315,298) $ (60,070) $ (150,040) $ (82,934)
Net realized gains (losses) from
securities transactions 338,693 (2,884,938) (382,889) (61,976)
Change in net unrealized appreciation/
depreciation of investments 734,460 705,149 (4,040,365) 332,861
--------------- --------------- --------------- ---------------
Increase (decrease) in net assets from operations 757,855 (2,239,859) (4,573,294) 187,951
--------------- --------------- --------------- ---------------
From capital transactions:
Net proceeds from units sold 3,322,536 636,384 3,138,981 2,053,916
Cost of units redeemed (11,639,505) (8,208,163) (3,653,464) (204,903)
Net transfers 16,333,647 4,144,100 11,107,587 12,044,140
--------------- --------------- --------------- ---------------
Increase (decrease) in net assets
from capital transactions 8,016,678 (3,427,679) 10,593,104 13,893,153
--------------- --------------- --------------- ---------------
Increase (decrease) in net assets 8,774,533 (5,667,538) 6,019,810 14,081,104
Net assets at beginning of period 28,115,381 13,964,137 18,681,133 0
--------------- --------------- --------------- ---------------
Net assets at end of period $ 36,889,914 $ 8,296,599 $ 24,700,943 $ 14,081,104
=============== =============== =============== ===============
ANALYSIS OF INCREASE (DECREASE)
IN UNITS OUTSTANDING:
Units sold 287,438 82,499 280,536 214,973
Units redeemed (1,122,021) (1,046,506) (326,783) (21,845)
Units transferred 1,420,020 564,569 934,612 1,257,086
--------------- --------------- --------------- ---------------
Increase (decrease) in units outstanding 585,437 (399,438) 888,365 1,450,214
Beginning units 2,721,228 1,751,922 1,632,804 0
--------------- --------------- --------------- ---------------
Ending units 3,306,665 1,352,484 2,521,169 1,450,214
=============== =============== =============== ===============
</TABLE>
<TABLE>
<CAPTION>
Cash
Management
Portfolio TOTAL
--------------- ---------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations:
Net investment income (loss) $ 2,615,787 $ 331,521,788
Net realized gains (losses) from
securities transactions 1,729,230 168,119,810
Change in net unrealized appreciation/
depreciation of investments 484,514 193,026,335
--------------- ---------------
Increase (decrease) in net assets from operations 4,829,531 692,667,933
--------------- ---------------
From capital transactions:
Net proceeds from units sold 18,234,648 232,482,865
Cost of units redeemed (33,217,804) (390,532,081)
Net transfers 13,927,867 395,173,006
--------------- ---------------
Increase (decrease) in net assets
from capital transactions (1,055,289) 237,123,790
--------------- ---------------
Increase (decrease) in net assets 3,774,242 929,791,723
Net assets at beginning of period 128,314,920 5,206,632,667
--------------- ---------------
Net assets at end of period $ 132,089,162 $ 6,136,424,390
=============== ===============
ANALYSIS OF INCREASE (DECREASE)
IN UNITS OUTSTANDING:
Units sold 1,580,118
Units redeemed (2,853,817)
Units transferred 1,209,448
---------------
Increase (decrease) in units outstanding (64,251)
Beginning units 11,224,451
---------------
Ending units 11,160,200
===============
</TABLE>
See accompanying notes to financial statements.
<PAGE> 54
VARIABLE SEPARATE ACCOUNT
(PORTION RELATING TO THE POLARIS VARIABLE ANNUITY)
OF
ANCHOR NATIONAL LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Variable Separate Account (Portion Relating to the POLARIS Variable
Annuity) of Anchor National Life Insurance Company (the "Separate
Account") is a segregated investment account of Anchor National Life
Insurance Company (the "Company"). The Company is an indirect,
wholly owned subsidiary of American International Group, Inc.
("AIG"), an international insurance and financial services company.
At December 31, 1998, the company was a wholly owned indirect
subsidiary of SunAmerica Inc., a Maryland corporation. On January 1,
1999, SunAmerica Inc. merged with and into AIG in a tax-free
reorganization that has been treated as a pooling of interests and
accounting purposes. Thus, SunAmerica Inc. ceased to exist on that
date. However, immediately prior to the effectiveness of the merger,
substantially all of the net assets of SunAmerica Inc. were
contributed to a newly formed subsidiary of AIG named SunAmerica
Holdings, Inc., a Delaware corporation. SunAmerica Holdings, Inc.
subsequently changed its name to SunAmerica Inc. The Separate
Account is registered as a segregated unit investment trust pursuant
to the provisions of the Investment Company Act of 1940, as amended.
The Separate Account is composed of twenty-seven variable portfolios
(the "Variable Accounts"). Each of the Variable Accounts is invested
solely in the shares of either (1) one of the four currently
available investment portfolios of Anchor Series Trust ("Anchor
Trust") or (2) one of the twenty-three currently available
investment portfolios of SunAmerica Series Trust ("SunAmerica
Trust"). The Anchor Trust and the SunAmerica Trust (the "Trusts")
are each diversified, open-end, affiliated investment companies,
which retain investment advisors to assist in the investment
activities of the Trusts. The participant may elect to have payments
allocated to any of five guaranteed-interest funds of the Company
(the "General Account"), which are not a part of the Separate
Account. The financial statements include balances allocated by the
participant to the twenty-seven Variable Accounts and do not include
balances allocated to the General Account.
The inception date of the MFS Mid-Cap Growth Portfolio was April 1,
1999. The inception date of the "Dogs" of Wall Street Portfolio was
April 1, 1998. The inception date of the International Growth and
Income, Emerging Markets, and Real Estate Portfolios was June 2,
1997. The inception date of the Aggressive Growth, Federated Value,
SunAmerica Balanced, and Utility Portfolios was June 3, 1996. The
inception date of the Natural Resources, International Diversified
Equities, Venture Value, MFS Total Return and Worldwide High Income
Portfolios was October 31, 1994. The inception date of the Asset
Allocation, Global Bond and Corporate Bond Portfolios was July 1,
1993. The inception date for the remaining portfolios was February
9, 1993.
1
<PAGE> 55
VARIABLE SEPARATE ACCOUNT
(PORTION RELATING TO THE POLARIS VARIABLE ANNUITY)
OF
ANCHOR NATIONAL LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(continued)
The investment objectives and policies of the four portfolios of the
Anchor Trust are summarized below:
The CAPITAL APPRECIATION PORTFOLIO seeks long-term capital
appreciation. This portfolio invests in growth equity securities
which are widely diversified by industry and company using a
wide-ranging and flexible stock picking approach; may be
concentrated and will generally have less investments in large
company securities than the Growth Portfolio.
The GROWTH PORTFOLIO seeks capital appreciation. This portfolio
invests in core equity securities that are widely diversified by
industry and company.
The NATURAL RESOURCES PORTFOLIO seeks a total return in excess of
the U.S. rate of inflation as represented by the Consumer Price
Index. This portfolio invests primarily in equity securities of U.S.
or foreign companies that are expected to provide favorable returns
in periods of rising inflation.
The GOVERNMENT AND QUALITY BOND PORTFOLIO seeks relatively high
current income, liquidity and security of principal. This portfolio
invests in obligations issued, guaranteed or insured by the U.S.
Government, its agencies or instrumentalities and in high quality
corporate fixed securities.
Anchor Trust has portfolios in addition to those identified above;
however, none of these other portfolios is currently available for
investment under the Separate Account.
The investment objectives and policies of the twenty-three
portfolios of the SunAmerica Trust are summarized below:
The INTERNATIONAL DIVERSIFIED EQUITIES PORTFOLIO seeks long-term
capital appreciation. This portfolio invests (in accordance with
country weightings as determined by the Subadviser) in common stocks
of foreign issuers which, in the aggregate, replicate broad country
and sector indices.
The GLOBAL EQUITIES PORTFOLIO seeks long-term growth of capital.
This portfolio invests primarily in common stocks or securities of
U.S. and foreign issuers with common stock characteristics which
demonstrate the potential for appreciation and engages in
transactions in foreign currencies.
2
<PAGE> 56
VARIABLE SEPARATE ACCOUNT
(PORTION RELATING TO THE POLARIS VARIABLE ANNUITY)
OF
ANCHOR NATIONAL LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(continued)
The AGGRESSIVE GROWTH PORTFOLIO seeks capital appreciation. This
portfolio invests primarily in equity securities of high growth
companies including small companies with market capitalizations
under $1 billion.
The VENTURE VALUE PORTFOLIO seeks growth of capital. This portfolio
invests primarily in common stocks of companies with market
capitalizations of at least $5 billion.
The FEDERATED VALUE PORTFOLIO seeks growth of capital and income.
This portfolio invests primarily in the securities of high quality
companies.
The PUTNAM GROWTH PORTFOLIO seeks long-term growth of capital. This
portfolio invests primarily in common stocks or securities with
common stock characteristics that its Subadviser believes have
above-average growth prospects.
The MFS GROWTH AND INCOME PORTFOLIO (PREVIOUSLY KNOWN AS
GROWTH/PHOENIX INVESTMENT COUNSEL PORTFOLIO) seeks reasonable
current income and long-term growth of capital and income. This
portfolio invests primarily in equity securities.
The ALLIANCE GROWTH PORTFOLIO seeks long term growth of capital.
This portfolio invests primarily in common stocks or securities of a
limited number of large, carefully selected, high quality U.S.
companies that are judged likely to achieve superior earnings.
The GROWTH-INCOME PORTFOLIO seeks growth of capital and income. This
portfolio invests primarily in common stocks or securities which
demonstrate the potential for appreciation and/or dividends.
The ASSET ALLOCATION PORTFOLIO seeks high total return (including
income and capital gains) consistent with preservation of capital
over the long term. This portfolio invests in a diversified
selection of common stocks and other securities having common stock
characteristics, bonds and other intermediate and long-term
fixed-income securities and money market instruments (debt
securities maturing in one year or less) in any combination.
The SUNAMERICA BALANCED PORTFOLIO seeks to conserve principal. This
portfolio maintains at all times a balanced portfolio of stocks and
bonds, with at least 25% invested in fixed income securities.
3
<PAGE> 57
VARIABLE SEPARATE ACCOUNT
(PORTION RELATING TO THE POLARIS VARIABLE ANNUITY)
OF
ANCHOR NATIONAL LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(continued)
The MFS TOTAL RETURN PORTFOLIO (PREVIOUSLY KNOWN AS BALANCED/PHOENIX
INVESTMENT COUNSEL PORTFOLIO) seeks reasonable income, long-term
capital growth and conservation of capital. This portfolio invests
primarily in common stocks and fixed-income securities, with an
emphasis on income-producing securities which appear to have some
potential for capital enhancement.
The UTILITY PORTFOLIO seeks high current income and moderate capital
appreciation. This portfolio invests primarily in the equity and
debt securities of utility companies.
The WORLDWIDE HIGH INCOME PORTFOLIO seeks high current income and,
secondarily, capital appreciation. This portfolio invests primarily
in a selection of high-yielding fixed-income securities of issuers
located throughout the world.
The HIGH-YIELD BOND PORTFOLIO seeks a high level of current income
and, secondarily, capital appreciation. This portfolio invests
primarily in intermediate and long-term corporate obligations, with
emphasis on higher-yielding, higher-risk, lower-rated or unrated
securities with a primary focus on "B" rated high-yield bonds.
The GLOBAL BOND PORTFOLIO seeks a high total return, emphasizing
current income and, to a lesser extent, providing opportunities for
capital appreciation. This portfolio invests in high quality
fixed-income securities of U.S. and foreign issuers and engages in
transactions in foreign currencies.
The CORPORATE BOND PORTFOLIO seeks a high total return with only
moderate price risk. This portfolio invests primarily in investment
grade fixed-income securities.
The INTERNATIONAL GROWTH AND INCOME PORTFOLIO seeks growth of
capital with current income as a secondary objective. This portfolio
invests primarily in common stocks traded on markets outside the
United States.
The EMERGING MARKETS PORTFOLIO seeks long-term capital appreciation.
This portfolio invests mainly in the common stocks and other equity
securities of companies that its Subadviser believes have
above-average growth prospects primarily in emerging markets outside
the United States.
4
<PAGE> 58
VARIABLE SEPARATE ACCOUNT
(PORTION RELATING TO THE POLARIS VARIABLE ANNUITY)
OF
ANCHOR NATIONAL LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(continued)
The REAL ESTATE PORTFOLIO seeks to achieve total return through a
combination of growth and income. This portfolio invests primarily
in securities of companies principally engaged in or related to the
real estate industry or which own significant real estate assets or
which primarily invest in real estate financial instruments.
The "DOGS" OF WALL STREET PORTFOLIO seeks total return (including
capital appreciation and current income) primarily through the
annual selection of thirty high dividend yielding common stocks from
the Dow Jones Industrial Average and the broader market.
The MFS MID-CAP GROWTH PORTFOLIO seeks long-term growth of capital.
This portfolio invests primarily in equity securities of
medium-sized companies, generally with market capitalizations
between $1 billion and $5 billion, that its Subadvisor believes have
above-average growth potential.
The CASH MANAGEMENT PORTFOLIO seeks high current yield while
preserving capital. This portfolio invests in a diversified
selection of money market instruments.
The SunAmerica Trust has portfolios in addition to those identified
above; however, none of these other portfolios is currently
available for investment under the Separate Account.
Purchases and sales of shares of the portfolios of the Trusts are
valued at the net asset values of the shares on the date the shares
are purchased or sold. Dividends and capital gains distributions are
recorded when received. Realized gains and losses on the sale of
investments in the Trusts are recognized at the date of sale and are
determined on an average cost basis.
Accumulation unit values are computed daily based on the total net
assets of the Variable Accounts.
5
<PAGE> 59
VARIABLE SEPARATE ACCOUNT
(PORTION RELATING TO THE POLARIS VARIABLE ANNUITY)
OF
ANCHOR NATIONAL LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
2. CHARGES AND DEDUCTIONS
Charges and deductions are applied against the current value of the
Separate Account and are paid as follows:
WITHDRAWAL CHARGE: The contract value may be withdrawn at any time
during the accumulation period. Purchase payments that are no longer
subject to the withdrawal charge and not previously withdrawn and
earnings in the contract may be withdrawn free of withdrawal charges
at any time. In addition, there is a free withdrawal amount for the
first withdrawal during a contract year after the first contract
year. The free withdrawal amount is the greater of earnings in the
contract or 10% of the purchase payments that have been invested for
at least one year, and not withdrawn, less any withdrawals made
during the year. Should a withdrawal exceed the free withdrawal
amount, a withdrawal charge, in certain circumstances, is imposed
and paid to the Company.
Withdrawal charges vary in amount depending upon the number of years
since the purchase payment being withdrawn was made. The withdrawal
charge is deducted from the remaining contract value so that the
actual reduction in contract value as a result of the withdrawal
will be greater than the withdrawal amount requested and paid. For
purposes of determining the withdrawal charge, withdrawals will be
allocated first to investment income, if any (which may generally be
withdrawn free of a withdrawal charge), and then to the oldest
purchase payments first so that all withdrawals are allocated to
purchase payments to which the lowest (if any) withdrawal charge
applies.
Any amount withdrawn which exceeds a free withdrawal may be subject
to a withdrawal charge in accordance with the withdrawal charge
table shown below:
<TABLE>
<CAPTION>
Year since Purchase Applicable Withdrawal
Payment Charge Percentage
------- -----------------
<S> <C>
First 7%
Second 6%
Third 5%
Fourth 4%
Fifth 3%
Sixth 2%
Seventh 1%
Eighth and beyond 0%
</TABLE>
6
<PAGE> 60
VARIABLE SEPARATE ACCOUNT
(PORTION RELATING TO THE POLARIS VARIABLE ANNUITY)
OF
ANCHOR NATIONAL LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
CHARGES AND DEDUCTIONS (continued)
CONTRACT MAINTENANCE FEE: An annual contract maintenance fee of $35
($30 in North Dakota and Utah) is charged against each contract,
which reimburses the Company for expenses incurred in establishing
and maintaining records relating to a contract. The contract
maintenance fee will be assessed on each anniversary during the
accumulation phase. In the event that a total surrender of contract
value is made, the entire charge will be assessed as of the date of
surrender.
TRANSFER FEE: A transfer fee of $25 ($10 in Pennsylvania and Texas)
is assessed on each transfer of funds in excess of fifteen
transactions within a contract year.
PREMIUM TAXES: Premium taxes or other taxes payable to a state or
other governmental entity will be charged against the contract
values. Some states assess premium taxes at the time purchase
payments are made; others assess premium taxes at the time annuity
payments begin. The Company currently intends to deduct premium
taxes at the time of surrender or upon annuitization; however, it
reserves the right to deduct any premium taxes when incurred or upon
the payment of the death benefit.
MORTALITY RISK, GUARANTEE DEATH BENEFIT AND EXPENSE RISK CHARGE: The
Company deducts mortality risk, guarantee death benefit and expense
risk charges, which total to an annual rate of 1.37% of the net
asset value of each portfolio, computed on a daily basis. The
mortality risk charge (0.90%) is compensation for the mortality
risks assumed by the Company from its contractual obligations to
make annuity payments after the contract has annuitized for the life
of the annuitant. The guarantee death benefit and expense risk
charges (0.12% and 0.35%, respectively) are compensation for
providing death benefits, and for assuming the risk that the current
charges will be insufficient in the future to cover the cost of
administering the contract.
DISTRIBUTION EXPENSE CHARGE: The Company deducts a distribution
expense charge at an annual rate of 0.15% of the net asset value of
each portfolio, computed on a daily basis. This charge is for all
expenses associated with the distribution of the contract. These
expenses include preparing the contract, confirmations and
statements, providing sales support and maintaining contract
records. If this charge is not enough to cover the costs of
distributing the contract, the Company will bear the loss.
SEPARATE ACCOUNT INCOME TAXES: The Company currently does not
maintain a provision for taxes, but has reserved the right to
establish such a provision for taxes in the future if it determines,
in its sole discretion, that it will incur a tax as a result of the
operation of the Separate Account.
7
<PAGE> 61
VARIABLE SEPARATE ACCOUNT
(PORTION RELATING TO THE POLARIS VARIABLE ANNUITY)
OF
ANCHOR NATIONAL LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
3. INVESTMENT IN ANCHOR TRUST AND SUNAMERICA TRUST
The aggregate cost of the Trusts' shares acquired and the aggregate
proceeds from shares sold during the one month ended December 31,
1999 consist of the following:
<TABLE>
<CAPTION>
Cost of Shares Proceeds from
Variable Accounts Acquired Shares Sold
--------------------------- -------------------------------------
<S> <C> <C>
ANCHOR TRUST:
Capital Appreciation Portfolio $ 26,608,037 $ 32,719,784
Growth Portfolio 5,366,944 7,629,463
Natural Resources Portfolio 169,770 942,624
Government and Quality Bond Portfolio 1,177,470 5,435,850
SUNAMERICA TRUST:
International Diversified Equities Portfolio 508,939 3,435,699
Global Equities Portfolio 7,119,216 4,232,905
Aggressive Growth Portfolio 6,106,632 3,841,548
Venture Value Portfolio 4,216,190 15,028,791
Federated Value Portfolio 35,386 2,846,788
Provident Growth Portfolio 164,542 4,071,433
MFS Growth & Income Portfolio 491,759 3,607,520
Alliance Growth Portfolio 3,041,189 19,871,142
Growth-Income Portfolio 286,889 14,264,914
Asset Allocation Portfolio 1,151,584 7,726,352
SunAmerica Balanced Portfolio 1,025,089 913,619
MFS Total Return Portfolio 857,050 1,169,873
Utility Portfolio 365,640 733,272
Worldwide High Income Portfolio 596,451 2,617,194
High-Yield Bond Portfolio 2,164,734 6,599,696
Global Bond Portfolio 0 3,300,221
Corporate Bond Portfolio 113,707 1,654,498
International Growth & Income Portfolio 7,801,355 2,293,774
Emerging Markets Portfolio 4,264,200 478,085
Real Estate Portfolio 356,840 2,341,517
"Dogs" of Wall Street Portfolio 117,378 1,388,328
MFS Mid-Cap Growth Portfolio 4,049,591 711,716
Cash Management Portfolio 52,193,797 40,469,283
</TABLE>
8
<PAGE> 62
VARIABLE SEPARATE ACCOUNT
(PORTION RELATING TO THE POLARIS VARIABLE ANNUITY)
OF
ANCHOR NATIONAL LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
INVESTMENT IN ANCHOR TRUST AND SUNAMERICA TRUST (continued)
The aggregate cost of the Trusts' shares acquired and the aggregate
proceeds from shares sold during the year ended November 30, 1999
consist of the following:
<TABLE>
<CAPTION>
Cost of Shares Proceeds from
Variable Accounts Acquired Shares Sold
--------------------------- -------------------------------------
<S> <C> <C>
ANCHOR TRUST:
Capital Appreciation Portfolio $ 383,140,673 $ 416,000,167
Growth Portfolio 82,282,243 93,043,456
Natural Resources Portfolio 10,235,203 13,384,222
Government and Quality Bond Portfolio 68,454,626 82,033,697
SUNAMERICA TRUST:
International Diversified Equities Portfolio 52,247,466 76,454,601
Global Equities Portfolio 54,436,734 82,231,522
Aggressive Growth Portfolio 57,072,015 41,325,768
Venture Value Portfolio 99,133,254 166,418,185
Federated Value Portfolio 26,303,991 25,260,758
Provident Growth Portfolio 38,768,833 50,159,371
MFS Growth & Income Portfolio 58,611,036 27,405,771
Alliance Growth Portfolio 294,073,330 212,407,437
Growth-Income Portfolio 98,697,075 108,943,434
Asset Allocation Portfolio 36,365,195 101,175,283
SunAmerica Balanced Portfolio 29,663,548 9,268,989
MFS Total Return Portfolio 25,285,642 8,581,556
Utility Portfolio 5,863,099 5,656,988
Worldwide High Income Portfolio 16,892,819 27,396,061
High-Yield Bond Portfolio 57,663,817 74,420,448
Global Bond Portfolio 10,676,132 16,048,945
Corporate Bond Portfolio 11,598,881 16,550,881
International Growth & Income Portfolio 30,897,414 17,350,760
Emerging Markets Portfolio 14,406,698 9,393,483
Real Estate Portfolio 5,798,038 8,736,384
"Dogs" of Wall Street Portfolio 5,486,929 4,700,679
MFS Mid-Cap Growth Portfolio 12,412,147 2,015,564
Cash Management Portfolio 824,879,480 769,540,901
</TABLE>
9
<PAGE> 63
VARIABLE SEPARATE ACCOUNT
(PORTION RELATING TO THE POLARIS VARIABLE ANNUITY)
OF
ANCHOR NATIONAL LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
4. FEDERAL INCOME TAXES
The Company qualifies for federal income tax treatment granted to
life insurance companies under subchapter L of the Internal Revenue
Service Code (the "Code"). The operations of the Separate Account
are part of the total operations of the Company and are not taxed
separately. The Separate Account is not treated as a regulated
investment company under the Code.
5. FISCAL YEAR CHANGE
Effective December 31, 1999, the Separate Account changed its fiscal
year end from November 30 to December 31. Accordingly, the financial
statements include the results of operations for the transition
period, which are not necessarily indicative of operations for a
full year.
Results for the comparable prior period are summarized below.
<TABLE>
<CAPTION>
One Month Ended
December 31 ,1998
-----------------
<S> <C>
Investment income $ 718,734
-------------
Net investment income (loss) (7,373,465)
Net realized gains (losses)
from securities transactions 23,452,490
Change in net unrealized appreciation (depreciation)
of investments 380,227,081
-------------
Increase (decrease) in net assets from operations $ 396,306,106
=============
</TABLE>
10
<PAGE> 64
PART C - OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements
The following financial statements are included in Part B of the
Registration Statement:
Consolidated Financial Statements of Anchor National Life
Insurance Company for the fiscal year ended September 30, 1998.
[Incorporated by Reference]
Audited Transition Report of Anchor National Life Insurance
Company as of and for the three months ended December 31, 1998.
[Incorporated by Reference]
Audited Financial Statements of Variable Separate Account
(Portion Relating to the POLARIS Variable Annuity) for the one
month ended December 31, 1999 and for the fiscal year ended
November 30, 1999.
(b) Exhibits
<TABLE>
<S> <C> <C>
(1) Resolutions Establishing Separate Account...... ***
(2) Custody Agreements............................. **
(3) (a) Distribution Contract...................... ***
(b) Selling Agreement.......................... ***
(4) Variable Annuity Contract...................... ****
(5) Application for Contract....................... ****
(6) Depositor - Corporate Documents
(a) Certificate of Incorporation............... ***
(b) By-Laws.................................... ***
(7) Reinsurance Contract........................... **
(8) Fund Participation Agreement................... ***
(9) Opinion of Counsel............................. ***
Consent of Counsel............................. ***
(10) Consent of Independent Accountants............. *
(11) Financial Statements Omitted from Item 23...... **
(12) Initial Capitalization Agreement............... **
(13) Performance Computations....................... **
(14) Diagram and Listing of All Persons Directly
or Indirectly Controlled By or Under Common
Control With Anchor National Life Insurance
Company, the Depositor of Registrant........... *****
(15) Powers of Attorney............................. ***
</TABLE>
* Filed Herewith
** Not Applicable
*** Filed January 30, 1998, Post-Effective Amendments 11
and 28 to this Registration Statement
**** Filed March 20, 1998, Post-Effective Amendments 12 and 29
to this Registration Statement
***** Filed December 15, 1999, Post-Effective Amendments 17 and
34 to this Registration Statement
Item 25. Directors and Officers of the Depositor
The officers and directors of Anchor National Life Insurance Company are
listed below. Their principal business address is 1 SunAmerica Center, Los
Angeles, California 90067-6022, unless otherwise noted.
<TABLE>
<CAPTION>
Name Position
- ---- --------
<S> <C>
Eli Broad Chairman, President and
Chief Executive Officer
Jay S. Wintrob Director and Executive Vice President
James R. Belardi Director and Senior Vice President
Susan L. Harris Director, Senior Vice President
and Secretary
Jana W. Greer Director and Senior Vice President
Marc H. Gamsin Director and Senior Vice President
N. Scott Gillis Director and Senior Vice President
</TABLE>
<PAGE> 65
<TABLE>
<CAPTION>
Name Position
- ---- --------
<S> <C>
Edwin R. Raquel Senior Vice President and Chief Actuary
David R. Bechtel Vice President and Treasurer
J. Franklin Grey Vice President
P. Daniel Demko, Jr. Vice President
Kevin J. Hart Vice President
Edward P. Nolan* Vice President
Gregory M. Outcalt Senior Vice President and Controller
Stewart R. Polakov Vice President
Scott H. Richland Vice President
</TABLE>
- ------------------
* 88 Bradley Road, P.O. Box 4005, Woodbridge, Connecticut 06525
<PAGE> 66
Item 26. Persons Controlled By or Under Common Control With Depositor or
Registrant
The Registrant is a separate account of Anchor National Life Insurance
Company (Depositor). For a complete listing and diagram of all persons directly
or indirectly controlled by or under common control with the Depositor of
Registrant, see Exhibit 14 of the Initial Registration Statement of Variable
Annuity Account Seven and Anchor National Life Insurance Company (File Nos.
333-56965 and 811-09003)(N-4) and (333-65953)(S-1), which is incorporated
herein by reference. As of January 4, 1999, Anchor National became an indirect
wholly-owned subsidiary of American International Group, Inc. ("AIG"). An
organizational chart for AIG can be found in Form 10-K, SEC file number
001-08787 filed March 31, 1999.
Item 27. Number of Contract Owners
As of December 31, 1999, the number of Contracts funded by the Variable
Separate Account of Anchor National Life Insurance Company (Portion
relating to the Polaris Variable Annuity) was 94,297, of which 58,558
were Qualified Contracts and 35,739 were Nonqualified Contracts.
Item 28. Indemnification
None.
Item 29. Principal Underwriter
SunAmerica Capital Services, Inc. serves as distributor to the
Registrant, Presidential Variable Account One, FS Variable Separate Account,
Variable Annuity Account One, FS Variable Annuity Account One, Variable Annuity
Account Four, Variable Annuity Account Five and Variable Annuity Account Seven.
SunAmerica Capital Services, Inc. also serves as the underwriter to the
SunAmerica Income Funds, SunAmerica Equity Funds, SunAmerica Money Market Funds,
Inc., Style Select Series, Inc. and the SunAmerica Strategic Investment Series,
Inc.; all issued by SunAmerica Asset Management Corp.
Its principal business address is 733 Third Avenue, 4th Floor, New York,
New York 10017. The following are the directors and officers of SunAmerica
Capital Services, Inc.
<TABLE>
<CAPTION>
Name Position with Distributor
---- -------------------------
<S> <C>
J. Steven Neamtz Director and President
Robert M. Zakem Director, Executive Vice
President, General Counsel
and Assistant Secretary
Peter Harbeck Director
Debbie Potash-Turner Controller
James Nichols Vice President
Susan L. Harris Secretary
</TABLE>
<TABLE>
<CAPTION>
Net
Distribution Compensation
Name of Discounts and on Redemption Brokerage
Distributor Commissions Annuitization Commission Commissions*
- ------------ -------------- ------------- ----------- ------------
<S> <C> <C> <C> <C>
SunAmerica None None None None
Capital
Services, Inc.
</TABLE>
- ------------------
* Distribution fee is paid by Anchor National Life Insurance Company.
Item 30. Location of Accounts and Records
Anchor National Life Insurance Company, the Depositor for the
Registrant, is located at 1 SunAmerica Center, Los Angeles, California 90067-
6022. SunAmerica Capital Services, Inc., the distributor of the Contracts, is
located at 733 Third Avenue, 4th Floor, New York, New York 10017. Each maintains
those accounts and records required to be maintained by it pursuant to Section
31(a) of the Investment Company Act and the rules promulgated thereunder.
State Street Bank and Trust Company, 225 Franklin Street, Boston,
Massachusetts 02100, maintains certain accounts and records pursuant to the
instructions of the Registrant.
<PAGE> 67
Item 31. Management Services
Not Applicable.
<PAGE> 68
Item 32. Undertakings
Registrant undertakes to (1) file post-effective amendments to this
Registration Statement as frequently as is necessary to ensure that the audited
financial statements in the Registration Statement are never more than 16 months
old for so long as payments under the variable annuity Contracts may be
accepted; (2) include either (A) as part of any application to purchase a
Contract offered by the prospectus forming a part of the Registration Statement,
a space that an applicant can check to request a Statement of Additional
Information, or (B) a postcard or similar written communication affixed to or
included in the Prospectus that the Applicant can remove to send for a Statement
of Additional Information; and (3) deliver any Statement of Additional
Information and any financial statements required to be made available under
this Form N-4 promptly upon written or oral request.
Item 33. Representation
A) The Company hereby represents that it is relying upon a No-Action Letter
issued to the American Council of Life Insurance dated November 28, 1988
(Commission ref. IP-6-88) and that the following provisions have been complied
with:
1. Include appropriate disclosure regarding the redemption restrictions
imposed by Section 403(b)(11) in each registration statement, including
the prospectus, used in connection with the offer of the contract;
2. Include appropriate disclosure regarding the redemption restrictions
imposed by Section 403(b)(11) in any sales literature used in connection
with the offer of the contract;
3. Instruct sales representatives who solicit participants to purchase the
contract specifically to bring the redemption restrictions imposed by
Section 403(b)(11) to the attention of the potential participants;
4. Obtain from each plan participant who purchases a Section 403(b) annuity
contract, prior to or at the time of such purchase, a signed statement
acknowledging the participant's understanding of (1) the restrictions on
redemption imposed by Section 403(b)(11), and (2) other investment
alternatives available under the employer's Section 403(b) arrangement
to which the participant may elect to transfer his contract value.
B) REPRESENTATION PURSUANT TO SECTION 26(e) OF THE INVESTMENT COMPANY ACT
OF 1940: The Company represents that the fees and charges to be deducted under
the variable annuity contract described in the prospectus contained in this
registration statement are, in the aggregate, reasonable in relation to the
services rendered, the expenses expected to be incurred, and the risks assumed
in connection with the contract.
<PAGE> 69
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company Act
of 1940, the Registrant certifies that it meets the requirements of Securities
Act Rule 485 for effectiveness of this Registration Statement and has caused
this Post-Effective Amendment to the Registration Statement to be signed on
its behalf, in the City of Los Angeles, and the State of California, on this
20th day of March 2000.
VARIABLE SEPARATE ACCOUNT
(Registrant)
By: ANCHOR NATIONAL LIFE INSURANCE COMPANY
(Depositor)
By: /s/ JAY S. WINTROB
----------------------------------------
Jay S. Wintrob
Executive Vice President
By: ANCHOR NATIONAL LIFE INSURANCE COMPANY
(Depositor, on behalf of itself and Registrant)
By: /s/ JAY S. WINTROB
----------------------------------------
Jay S. Wintrob
Executive Vice President
As required by the Securities Act of 1933, this Post-Effective Amendment
to the Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------- ----- ----
<S> <C> <C>
ELI BROAD* President, Chief
- -------------------- Executive Officer and
Eli Broad Chairman of the Board
(Principal Executive Officer)
MARC H. GAMSIN* Senior Vice President
- -------------------- and Director
Marc H. Gamsin
N. SCOTT GILLIS* Senior Vice President
- -------------------- and Director
N. Scott Gillis
JAMES R. BELARDI* Director
- --------------------
James R. Belardi
JANA W. GREER* Director
- --------------------
Jana W. Greer
/s/ SUSAN L. HARRIS Director March 20, 2000
- --------------------
Susan L. Harris
</TABLE>
<PAGE> 70
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------- ----- ----
<S> <C> <C>
JAY S. WINTROB* Director
- --------------------
Jay S. Wintrob
* By: /s/ SUSAN L. HARRIS Attorney-in-Fact
--------------------
Susan L. Harris
</TABLE>
Date: March 20, 2000
** KNOW ALL PERSONS BY THESE PRESENTS, that the person whose signature appears
below hereby constitutes and appoints SUSAN L. HARRIS AND CHRISTINE A. NIXON or
each of them, as his true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the
same, with all exhibits thereto, and other documents in connection therewith,
as fully to all intents as he might or could do in person, including
specifically, but without limiting the generality of the foregoing, to (i) take
any action to comply with any rules, regulations or requirements of the
Securities and Exchange Commission under the federal securities laws; (ii) make
application for and secure any exemptions from the federal securities laws;
(iii) register additional annuity contracts under the federal securities laws,
if registration is deemed necessary. The undersigned hereby ratifies and
confirms all that said attorneys-in-fact and agents or any of them, or their
substitutes, shall do or cause to be done by virtue thereof.
<TABLE>
<S> <C> <C>
**/s/ GREGORY M. OUTCALT Senior Vice President March 20, 2000
- ------------------------ and Controller
Gregory M. Outcalt
</TABLE>
<PAGE> 71
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Description
- ------- -----------
<S> <C>
Exhibit 10 Consent of Independent Accountants
</TABLE>
<PAGE> 1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Statement of
Additional Information constituting part of this Registration Statement
on Form N-4 for Variable Separate Account (Portion Relating to the
POLARIS Variable Annuity) of Anchor National Life Insurance Company of
our report dated November 19, 1999 and November 9, 1998, relating to the
financial statements of Anchor National Life Insurance Company, and the
use of our report dated March 3, 1999, relating to the financial
statements of Variable Separate Account (Portion Relating to the POLARIS
Variable Annuity), which appear in such Statement of Additional
Information. We also consent to the incorporation by reference of our
report dated November 9, 1998, relating to the financial statements of
Anchor National Life Insurance Company, into the Prospectus which
constitutes part of this Registration Statement. We also consent to the
incorporation by reference in such Prospectus of our report dated March
11, 1999, relating to the statement of assets acquired and liabilities
assumed in the MBL Life Assurance Corporation transaction at December
31, 1998, appearing on page 8 of Anchor National Life Insurance
Company's Current Report on Form 8-K/A dated March 12, 1999. We also
consent to the reference to us under the heading "Financial Statements"
in such Statement of Additional Information and to the reference to us
under the heading "Independent Accountants" in such Prospectus.
PricewaterhouseCoopers LLP
Los Angeles, California
March 20, 2000
