<PAGE> 1
File Nos. 33-86642
811-8874
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. 2 [ X ]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940 [ X ]
Amendment No. 3
(Check appropriate box or boxes)
VARIABLE ANNUITY ACCOUNT FOUR
(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)
<TABLE>
<CAPTION>
Title and Amount
of Securities Amount of
Being Registered Registration Fee
- ---------------- ----------------
<S> <C> <C>
Flexible Payment Pursuant to Rule 24f-2, the $
Deferred Annuity Registrant has filed an election
Contracts to register an indefinite
number of securities
under the Securities Act of 1933
</TABLE>
It is proposed that this filing will become effective:
-- immediately upon filing pursuant to paragraph (b) of Rule 485
X on January 28, 1997 pursuant to paragraph (b) of Rule 485
--
-- 60 days after filing pursuant to paragraph (a) of Rule 485
-- on [date] pursuant to paragraph (a) of Rule 485
The registrant has elected pursuant to Rule 24f-2 under the Investment Company
Act of 1940 to register an indefinite amount of securities. The Registrant
filed its Rule 24f-2 Notice for the fiscal year ended September 30, 1996 on or
about November 30, 1996.
<PAGE> 2
VARIABLE ANNUITY ACCOUNT FOUR
<TABLE>
<CAPTION>
Item Number in Form N-4 Caption
- ----------------------- -------
<S> <C> <C>
1. Cover Page. . . . . . . . . . . . . . . Cover Page
2. Definitions . . . . . . . . . . . . . . Glossary
3. Synopsis. . . . . . . . . . . . . . . . Profile; Fee Tables;
Examples
4. Condensed Financial Information . . . . Appendix A - Condensed
Financial Information
5. General Description of Registrant,
Depositor and Portfolio Companies . . . Investment Options; Other
Information
6. Deductions and Expenses . . . . . . . . Expenses
7. General Description of
Variable Annuity Contracts. . . . . . . The Anchor Advisor
Variable Annuity; Annuity
Options
8. Annuity Period. . . . . . . . . . . . . Annuity Options
9. Death Benefit . . . . . . . . . . . . . Death Benefit
10. Purchases and Contract Value. . . . . . Purchasing An Anchor
Advisor Variable Annuity
Contract
11. Redemptions . . . . . . . . . . . . . . Withdrawals
12. Taxes . . . . . . . . . . . . . . . . . Taxes
13. Legal Proceedings . . . . . . . . . . . Other Information
14. Table of Contents of Statement
of Additional Information . . . . . . . Additional Information
About the Separate Account
</TABLE>
<PAGE> 3
PART B - STATEMENT OF ADDITIONAL INFORMATION
--------------------------------------------
Certain information required in Part B of the Registration Statement has
been included within the Prospectus forming part of this Registration Statement;
the following cross-references suffixed with a "P" are made by reference to the
captions in the Prospectus.
<TABLE>
<CAPTION>
Item Number in Form N-4 Caption
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<S> <C> <C>
15. Cover Page ...........................Cover Page
16. Table of Contents ....................Table of Contents
17. General Information and History.......The Anchor Advisor
Variable Annuity(P);
Investment Options(P);
Other Information(P)
18. Services .............................Other Information(P)
19. Purchase of Securities Being Offered .Purchasing An Anchor
Advisor Variable Annuity
Contract(P)
20. Underwriters .........................Distribution of Contracts
21. Calculation of Performance Data ......Performance Data
22. Annuity Payments .....................Annuity Options(P);
Annuity Unit Values;
Annuity Payments
23. Financial Statement ..................Financial Statements
</TABLE>
PART C
Information required to be included in Part C is set forth under the
appropriate item, so numbered, in Part C of this Registration Statement.
<PAGE> 4
[LOGO]
P R O F I L E
January 28, 1997
[LOGO]
This profile is a summary of some of the more important points that you
should know and consider before purchasing the Anchor Advisor
Variable Annuity. The sections in this profile correspond to
sections in the accompanying prospectus which discuss the
topics in more detail. The annuity is more fully described in
the prospectus. Please read the prospectus carefully.
1. THE ANCHOR ADVISOR
VARIABLE ANNUITY CONTRACT
The Anchor Advisor Variable Annuity Contract is a contract between you and
Anchor National Life Insurance Company. It is designed to help you invest on
a tax-deferred basis and meet long-term financial goals, such as retirement
funding. Tax deferral means all your money, including the amount you would
otherwise pay in current income taxes, remains in your contract to generate
more earnings. Your money could grow faster than it would in a comparable
taxable investment.
Anchor Advisor offers a diverse selection of money managers and investment
options. You may divide your money among any or all of our 19 variable
investment portfolios and the one-year fixed investment option. Your
contract may also provide for a one-year DCA account option specifically for
dollar cost averaging, subject to certain restrictions. Your investment is
not guaranteed. The value of your contract can fluctuate up or down, based
on the performance of the underlying investments you select, and you may
experience a loss.
The variable investment portfolios offer professionally managed investment
choices with goals ranging from capital preservation to aggressive growth.
More detailed information on the various investment options is found at
right.
Like most annuities, the contract has an Accumulation Phase and an Income
Phase. During the Accumulation Phase, you invest money in your contract.
Your earnings are based on the investment performance of the variable
investment portfolios to which your money is allocated and/or the interest
rate earned on the fixed investment options. You may withdraw money from
your contract during the Accumulation Phase. However, as with other
tax-deferred investments, you will pay taxes on earnings and untaxed
contributions when you withdraw them. A federal tax penalty may apply if you
make withdrawals before age 59 1/2. During the Income Phase, you will
receive monthly payments from your annuity. Your monthly payments may be
fixed in dollar amount, vary with investment performance or a combination of
both, depending on the annuity option you select. Among other factors, the
amount of money you are able to accumulate in your contract during the
Accumulation Phase will determine the amount of your payments during the
Income Phase.
2. ANNUITY OPTIONS
You can select from one of five annuity options:
(1) payments for your lifetime;
(2) payments for your lifetime and your survivor's lifetime;
(3) payments for your lifetime and your survivor's lifetime, but for not
less than 120 months;
(4) payments for your lifetime, but for not less than 120 or 240 months;
and
(5) payments for a specified period of 5 to 30 years.
You will also need to decide if you want your payments to fluctuate with
investment performance or remain constant, and the date on which your
payments will begin. Once you begin receiving payments, you cannot change
your annuity option. If your contract is part of a nonqualified retirement
plan (one that is established with after tax dollars), payments during the
Income Phase are considered partly a return of your original investment. The
"original investment" part of each payment is not taxable as income. For
contracts which are part of a qualified retirement plan using before tax
dollars, the entire payment is taxable as income.
3. PURCHASING AN ANCHOR ADVISOR
VARIABLE ANNUITY CONTRACT
You can buy a contract through your financial representative, who can also
help you complete the proper forms. The minimum initial investment is
$20,000 and subsequent amounts of $500 or more may be added to your contract
at any time during the Accumulation Phase.
<PAGE> 5
4. INVESTMENT OPTIONS
You may allocate money to the following variable investment portfolios of
Anchor Series Trust and/or SunAmerica Series Trust:
ANCHOR SERIES TRUST
MANAGED BY WELLINGTON MANAGEMENT COMPANY, LLP
- Capital Appreciation Portfolio
- Growth Portfolio
- Natural Resources Portfolio
- Government and Quality Bond Portfolio
SUNAMERICA SERIES TRUST
MANAGED BY ALLIANCE CAPITAL MANAGEMENT L.P.
- Global Equities Portfolio
- Alliance Growth Portfolio
- Growth-Income Portfolio
MANAGED BY DAVIS SELECTED ADVISERS, L.P.
- Venture Value Portfolio
MANAGED BY FEDERATED INVESTORS
- Federated Value Portfolio
- Utility Portfolio
- Corporate Bond Portfolio
MANAGED BY GOLDMAN SACHS ASSET MANAGEMENT/
GOLDMAN SACHS ASSET MANAGEMENT INTERNATIONAL
- Asset Allocation Portfolio
- Global Bond Portfolio
MANAGED BY MORGAN STANLEY ASSET MANAGEMENT INC.
- International Diversified Equities Portfolio
- Worldwide High Income Portfolio
MANAGED BY SUNAMERICA ASSET MANAGEMENT CORP.
- Aggressive Growth Portfolio
- SunAmerica Balanced Portfolio
- High-Yield Bond Portfolio
- Cash Management Portfolio
You may also allocate money to the one-year fixed investment option and the
one-year DCA account option, if provided for by your contract. The interest
rate may differ from time to time but will never be less than 3%. Once
established, the rate will not change during the one-year period.
5. EXPENSES
We deduct insurance charges which amount to 1.52% annually of the average
daily value of your contract allocated to the variable portfolios. The
insurance charges include: Mortality and Expense Risk, 1.25%; Enhanced Death
Benefit, .12%; and Distribution Expense, .15%.
As with other professionally managed investments, there are also investment
charges imposed on contracts with money allocated to the variable portfolios
which are estimated to range from .62% to 1.59%. In a limited number of
states, you may also be assessed a state premium tax of up to 3.5% depending
upon the state.
There are no charges under the contract for withdrawals. A $25 transfer fee
($10 in Pennsylvania and Texas) will apply after your first 15 free
transfers.
The following chart is designed to help you understand the charges in your
contract. The column "Total Annual Charges" shows the total of the 1.52%
insurance charges and the investment charges for each variable portfolio.
The next two columns show two examples of the charges you would pay under
the contract. The examples assume that you invested $1,000 in a portfolio
which earns 5% annually and that you withdraw your money: (1) at the end of
year 1, and (2) at the end of year 10. The premium tax is assumed to be 0%
in both examples.
<PAGE> 6
<TABLE>
<CAPTION>
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EXAMPLES:
TOTAL ANNUAL TOTAL ANNUAL TOTAL EXPENSES TOTAL EXPENSES
INSURANCE INVESTMENT TOTAL ANNUAL AT END OF AT END OF
ANCHOR SERIES TRUST PORTFOLIO CHARGES CHARGES CHARGES 1 YEAR 10 YEARS
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Capital Appreciation 1.52% .75% 2.27% $ 23 $261
Growth 1.52% .81% 2.33% $ 24 $267
Natural Resources 1.52% .94% 2.46% $ 25 $280
Government and Quality Bond 1.52% .71% 2.23% $ 23 $256
- ---------------------------------------------------------------------------------------------------------------------------
SUNAMERICA SERIES TRUST PORTFOLIO
Aggressive Growth 1.52% 1.05% 2.57% $ 26 $290
International Diversified
Equities 1.52% 1.59% 3.11% $ 31 $342
Global Equities 1.52% 1.03% 2.55% $ 26 $289
Alliance Growth 1.52% .71% 2.23% $ 23 $256
Venture Value 1.52% .85% 2.37% $ 24 $271
Federated Value 1.52% 1.05% 2.57% $ 26 $290
Growth-Income 1.52% .72% 2.24% $ 23 $257
Utility 1.52% 1.05% 2.57% $ 26 $290
Asset Allocation 1.52% .74% 2.26% $ 23 $260
SunAmerica Balanced 1.52% 1.00% 2.52% $ 26 $286
Worldwide High Income 1.52% 1.18% 2.70% $ 27 $303
High-Yield Bond 1.52% .77% 2.29% $ 23 $263
Corporate Bond 1.52% .97% 2.49% $ 25 $283
Global Bond 1.52% .89% 2.41% $ 24 $275
Cash Management 1.52% .62% 2.14% $ 22 $247
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
For more detailed information, see the Fee Tables and Examples in the
prospectus.
6. TAXES
Unlike taxable investments where earnings are taxed in the year they are
earned, taxes on amounts earned in a Nonqualified contract (one that is
established with after tax dollars) are deferred until they are withdrawn.
In a Qualified contract (one that is established with before after tax
dollars like an IRA), all amounts are taxable when they are withdrawn.
When you begin taking distributions or withdrawals from your contract,
earnings are considered to be taken out first and will be taxed at your
ordinary income rate. You may be subject to a 10% federal tax penalty for
distributions or withdrawals before age 59 1/2.
7. WITHDRAWALS
Withdrawals may be made from your contract in the amount of $1,000 or more.
You may request a withdrawal in writing or by establishing systematic
withdrawals. Under systematic withdrawals, the minimum withdrawal amount is
$250. There are no withdrawal charges.
8. PERFORMANCE
The value of your annuity will fluctuate depending upon the investment
performance of the portfolio(s) you choose. The following chart shows total
returns for each portfolio for the time periods shown. These numbers reflect
the insurance charges and the investment charges of the portfolio. Past
performance is not a guarantee of future results.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------
INCEPTION TO
ANCHOR SERIES TRUST PORTFOLIO DATE
- ----------------------------------------------------------------
<S> <C>
Capital Appreciation 5.33%
Growth 11.74%
Natural Resources 5.76%
Government and Quality Bond 3.04%
- ----------------------------------------------------------------
SUNAMERICA SERIES TRUST PORTFOLIO
Aggressive Growth 12.67%
International Diversified Equities 6.25%
Global Equities 6.40%
Alliance Growth 16.46%
Venture Value 14.01%
Federated Value 11.51%
Growth-Income 15.67%
Utility 7.44%
Asset Allocation 9.49%
SunAmerica Balanced 8.09%
Worldwide High Income 9.74%
High-Yield Bond 5.60%
Corporate Bond 3.94%
Global Bond 5.18%
Cash Management 1.07%
- ----------------------------------------------------------------
</TABLE>
The Anchor Advisor Variable Annuity was first offered on August 19, 1996.
Inception date for each portfolio varies.
<PAGE> 7
9. DEATH BENEFITS
If you should die during the Accumulation Phase, your beneficiary will
receive a death benefit. Unless your contract states otherwise, you must
select from the two death benefit options described below at the time you
purchase your contract. Once selected, your death benefit may not be
changed. You should discuss with your financial representative the options
available to you and which option is best for you.
OPTION 1 - PURCHASE PAYMENT ACCUMULATION OPTION:
The death benefit is the greater of:
(1) the value of your contract,
(2) the money you put in less any withdrawals, all compounded at 4% annually
(3% if age 70 or older at time of issue), or
(3) the value of your contract on the seventh contract anniversary less any
withdrawals plus any additional money you put in since the seventh
anniversary, all compounded at 4% annually (3% if age 70 or older at
time of issue).
OPTION 2 - MAXIMUM ANNIVERSARY VALUE OPTION:
The death benefit is the greater of:
(1) the value of your contract,
(2) the money you put in less any
withdrawals, or
(3) the maximum of the anniversary values up to your 81st birthday. The
anniversary value is equal to the value of your contract on the
contract anniversary less any withdrawals plus any additional money
you put in since that anniversary.
If you are age 90 or older at the time of death, the death benefit under
option 2 is the value of your contract.
10. OTHER INFORMATION
Free Look: You may cancel your contract within ten days (or longer if
required by state law) by mailing it to our Annuity Service Center. Your
contract will be treated as void on the date we receive it and we will pay
you an amount equal to the value of your contract (unless otherwise
required by state law). Its value may be more or less than the money you
initially invested. If state law requires us to return your original
investment, we may put your money in the Cash Management Portfolio during
the free look period.
Asset Allocation Rebalancing: If selected by you, this program seeks to
keep your investment in line with your goals. We will maintain your
specified allocation mix in the variable investment portfolios and the
one-year fixed investment option by readjusting your money on a calendar
quarter, semiannual or annual basis.
Systematic Withdrawal Program: If selected by you, this program allows you
to receive either monthly, quarterly, semiannual or annual checks during
the Accumulation Phase. Systematic withdrawals may also be electronically
wired to your bank account. Of course, withdrawals may be taxable and a
10% federal tax penalty may apply if you are under age 59 1/2.
Dollar Cost Averaging: If selected by you, this program allows you to
invest gradually in the equity and bond portfolios from any of the
variable investment portfolios or the one-year fixed investment option.
Your contract may also provide for a one-year DCA account option for
dollar cost averaging.
Automatic Payment Plan: You can add to your contract directly from your
bank account with as little as $100 per month.
Confirmations and Quarterly Statements: You will receive a confirmation of
each transaction within your contract. On a quarterly basis, you will
receive a complete statement of your transactions over the past quarter
and a summary of your account values.
11. INQUIRIES
If you have questions about your contract or need to make changes, call
your financial representative or contact us at:
Anchor National Life Insurance Company
Annuity Service Center
P.O. Box 54299
Los Angeles, California 90054-0299
Telephone Number: (800) 445-SUN2
If money accompanies your correspondence, you should direct it to:
Anchor National Life Insurance Company
P.O. Box 100330
Pasadena, California 91189-0001
<PAGE> 8
[LOGO]
PROSPECTUS
JANUARY 28, 1997
<TABLE>
<S> <C>
Please read this prospectus FLEXIBLE PAYMENT DEFERRED ANNUITY CONTRACTS
carefully before investing and issued by
keep it for future reference. ANCHOR NATIONAL LIFE INSURANCE COMPANY
It contains important in connection with
information about the Anchor VARIABLE ANNUITY ACCOUNT FOUR
Advisor Variable Annuity. The annuity has 20 investment choices - a one-year fixed
investment option and 19 variable investment portfolios listed
To learn more about the annuity below. Your contract may also provide for a one-year DCA
offered by this prospectus, you account option. The 19 variable investment portfolios are part
can obtain a copy of the of Anchor Series Trust or SunAmerica Series Trust.
Statement of Additional
Information ("SAI") dated ANCHOR SERIES TRUST:
January 28, 1997. The SAI has MANAGED BY WELLINGTON MANAGEMENT COMPANY, LLP
been filed with the Securities - Capital Appreciation Portfolio
and Exchange Commission ("SEC") - Growth Portfolio
and is incorporated by - Natural Resources Portfolio
reference into this prospectus. - Government and Quality Bond Portfolio
The Table of Contents of the
SAI appears on page 15 of this SUNAMERICA SERIES TRUST:
prospectus. For a free copy of MANAGED BY ALLIANCE CAPITAL MANAGEMENT L.P.
the SAI, call us at (800) - Global Equities Portfolio
445-SUN2 or write to us at our - Alliance Growth Portfolio
Annuity Service Center, P.O. - Growth-Income Portfolio
Box 54299, Los Angeles, MANAGED BY DAVIS SELECTED ADVISERS, L.P.
California 90054-0299. - Venture Value Portfolio
MANAGED BY FEDERATED INVESTORS
ANNUITIES INVOLVE RISKS, - Federated Value Portfolio
INCLUDING POSSIBLE LOSS OF - Utility Portfolio
PRINCIPAL, AND ARE NOT A - Corporate Bond Portfolio
DEPOSIT OR OBLIGATION OF, OR MANAGED BY GOLDMAN SACHS ASSET MANAGEMENT/
GUARANTEED OR ENDORSED BY, ANY GOLDMAN SACHS ASSET MANAGEMENT INTERNATIONAL
BANK. THEY ARE NOT FEDERALLY - Asset Allocation Portfolio
INSURED BY THE FEDERAL DEPOSIT - Global Bond Portfolio
INSURANCE CORPORATION, THE MANAGED BY MORGAN STANLEY ASSET MANAGEMENT INC.
FEDERAL RESERVE BOARD OR ANY - International Diversified Equities Portfolio
OTHER AGENCY. - Worldwide High Income Portfolio
MANAGED BY SUNAMERICA ASSET MANAGEMENT CORP.
- Aggressive Growth Portfolio
- SunAmerica Balanced Portfolio
- High-Yield Bond Portfolio
- Cash Management Portfolio
</TABLE>
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, NOR HAS THE COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE> 9
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- --------------------------------------------------------------------------------
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
GLOSSARY............................................. 2
FEE TABLES........................................... 3
Owner Transaction Expenses..................... 3
Annual Separate Account Expenses............... 3
Portfolio Expenses............................. 3
EXAMPLES............................................. 4
1. THE ANCHOR ADVISOR VARIABLE ANNUITY............ 5
2. ANNUITY OPTIONS................................ 5
Allocation of Annuity Payments................. 6
Annuity Payments............................... 6
Transfers During the Income Phase.............. 6
Deferment of Payments.......................... 6
3. PURCHASING AN ANCHOR ADVISOR VARIABLE ANNUITY
CONTRACT....................................... 7
Allocation of Purchase Payments................ 7
Accumulation Units............................. 7
Free Look...................................... 7
4. INVESTMENT OPTIONS............................. 8
Anchor Series Trust............................ 8
SunAmerica Series Trust........................ 8
Fixed Investment Option........................ 8
Transfers During the Accumulation Phase........ 9
Dollar Cost Averaging Program.................. 9
Asset Allocation Rebalancing Program........... 10
Voting Rights.................................. 10
Substitution................................... 10
5. EXPENSES....................................... 10
Insurance Charges.............................. 10
Mortality and Expense Risk Charge.............. 10
Distribution Expense Charge.................... 10
Investment Charges............................. 11
Transfer Fee................................... 11
Premium Taxes.................................. 11
Income Taxes................................... 11
Reduction or Elimination of Certain Charges.... 11
6. TAXES.......................................... 11
Annuity Contracts in General................... 11
Tax Treatment of Distributions - Nonqualified
Contracts...................................... 11
Tax Treatment of Distributions - Qualified
Contracts...................................... 12
Diversification................................ 12
7. WITHDRAWALS.................................... 12
Systematic Withdrawal Program.................. 13
Minimum Contract Value......................... 13
8. PERFORMANCE.................................... 13
9. DEATH BENEFIT.................................. 13
10. OTHER INFORMATION.............................. 14
Anchor National................................ 14
The Separate Account........................... 14
The General Account............................ 15
Distribution................................... 15
Administration................................. 15
Legal Proceedings.............................. 15
Ownership...................................... 15
Custodian...................................... 15
TABLE OF CONTENTS OF STATEMENT OF ADDITIONAL
INFORMATION.......................................... 15
APPENDIX A - CONDENSED FINANCIAL INFORMATION......... A-1
APPENDIX B - PREMIUM TAXES........................... B-1
</TABLE>
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GLOSSARY
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
We have capitalized some of the technical terms used in this prospectus. To help
you understand these terms, we have defined them in this glossary.
ACCUMULATION PHASE - The period during which you invest money in your contract.
ACCUMULATION UNITS - A measurement we use to calculate the value of the variable
portion of your contract during the Accumulation Phase.
ANNUITANT - The person on whose life we base annuity payments.
ANNUITY DATE - The date on which annuity payments are to begin, as selected by
you.
ANNUITY UNITS - A measurement we use to calculate the amount of annuity payments
you receive from the variable portion of your contract during the Income Phase.
BENEFICIARY (IES) - The person(s) designated to receive any benefits under the
contract if you or the Annuitant dies.
INCOME PHASE - The period during which we make annuity payments to you.
NONQUALIFIED (CONTRACT) - A contract purchased with after-tax dollars. In
general, these contracts are not under any pension plan, specially sponsored
program or individual retirement annuity ("IRA").
PORTFOLIO(S) - The variable investment options available under the contract.
Each Portfolio has its own investment objective and is invested in the
underlying investments of Anchor Series Trust or SunAmerica Series Trust.
PURCHASE PAYMENTS - The money you give us to buy the contract, as well as any
additional money you give us to invest in the contract after you own it.
QUALIFIED (CONTRACT) - A contract purchased with pretax dollars. These contracts
are generally purchased under a pension plan, specially sponsored program or
individual retirement annuity ("IRA").
TRUSTS - Refers to Anchor Series Trust and SunAmerica Series Trust,
collectively.
2
<PAGE> 10
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FEE TABLES
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
OWNER TRANSACTION EXPENSES
<TABLE>
<S> <C>
Withdrawal Charge............. None
Contract Maintenance Charge... None
Transfer Fee.................. No charge for first 15
transfers each year;
thereafter, fee is $25
($10 in Pennsylvania
and Texas)
</TABLE>
ANNUAL SEPARATE ACCOUNT EXPENSES
(AS A PERCENTAGE OF DAILY NET ASSET VALUE)
<TABLE>
<S> <C>
Mortality Risk Charge
Standard................................. 0.90%
Enhanced................................. 0.12%
Expense Risk Charge........................ 0.35%
Distribution Expense Charge................ 0.15%
-----
TOTAL SEPARATE ACCOUNT EXPENSES 1.52%
=====
</TABLE>
PORTFOLIO EXPENSES
ANCHOR SERIES TRUST
(AS A PERCENTAGE OF AVERAGE NET ASSETS FOR THE TRUST'S TWELVE-MONTH PERIOD ENDED
NOVEMBER 30, 1996)
<TABLE>
<CAPTION>
MANAGEMENT OTHER TOTAL ANNUAL
PORTFOLIO FEE EXPENSES EXPENSES
<S> <C> <C> <C>
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
Capital Appreciation .67% .08% .75%*
--------------------------------------------------------------------------------------
Growth .73% .08% .81%*
--------------------------------------------------------------------------------------
Natural Resources .75% .19% .94%*
--------------------------------------------------------------------------------------
Government and Quality Bond .62% .09% .71%*
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</TABLE>
SUNAMERICA SERIES TRUST
(AS A PERCENTAGE OF AVERAGE NET ASSETS FOR THE TRUST'S FISCAL YEAR ENDED
NOVEMBER 30, 1996)
<TABLE>
<CAPTION>
MANAGEMENT OTHER TOTAL ANNUAL
PORTFOLIO FEE EXPENSES EXPENSES
<S> <C> <C> <C>
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
Aggressive Growth .75% .30% 1.05%*
--------------------------------------------------------------------------------------
International Diversified Equities 1.00% .59% 1.59%
--------------------------------------------------------------------------------------
Global Equities .80% .23% 1.03%
--------------------------------------------------------------------------------------
Alliance Growth .64% .07% .71%
--------------------------------------------------------------------------------------
Venture Value .77% .08% .85%
--------------------------------------------------------------------------------------
Federated Value .75% .30% 1.05%*
--------------------------------------------------------------------------------------
Growth-Income .64% .08% .72%
--------------------------------------------------------------------------------------
Utility .75% .30% 1.05%*
--------------------------------------------------------------------------------------
Asset Allocation .65% .09% .74%
--------------------------------------------------------------------------------------
SunAmerica Balanced .70% .30% 1.00%*
--------------------------------------------------------------------------------------
Worldwide High Income 1.00% .18% 1.18%
--------------------------------------------------------------------------------------
High-Yield Bond .68% .09% .77%
--------------------------------------------------------------------------------------
Corporate Bond .70% .27% .97%
--------------------------------------------------------------------------------------
Global Bond .73% .16% .89%
--------------------------------------------------------------------------------------
Cash Management .54% .08% .62%
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</TABLE>
* Annualized
THE ABOVE PORTFOLIO EXPENSES WERE PROVIDED BY THE TRUSTS. WE HAVE NOT
INDEPENDENTLY VERIFIED THE ACCURACY OF THE INFORMATION.
3
<PAGE> 11
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- --------------------------------------------------------------------------------
EXAMPLES
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
You would pay the following expenses on a $1,000 investment in each Portfolio,
assuming (1) a 5% annual return on assets and (2) surrender of the contract at
the end of the stated time period. As noted in the Fee Tables, we do not impose
any withdrawal charges. Your expenses are identical whether you continue the
contract or surrender your contract at the end of the applicable period as a
lump sum or under one of the annuity options.
<TABLE>
<CAPTION>
TIME PERIODS
PORTFOLIO 1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
------------------------------------------------------------------------------------
------------------------------------------------------------------------------------
Capital Appreciation $ 23 $71 $ 122 $261
------------------------------------------------------------------------------------
Growth $ 24 $73 $ 125 $267
------------------------------------------------------------------------------------
Natural Resources $ 25 $77 $ 131 $280
------------------------------------------------------------------------------------
Government and Quality Bond $ 23 $70 $ 119 $256
------------------------------------------------------------------------------------
Aggressive Growth $ 26 $80 $ 137 $290
------------------------------------------------------------------------------------
International Diversified Equities $ 31 $96 $ 163 $342
------------------------------------------------------------------------------------
Global Equities $ 26 $79 $ 136 $289
------------------------------------------------------------------------------------
Alliance Growth $ 23 $70 $ 119 $256
------------------------------------------------------------------------------------
Venture Value $ 24 $74 $ 127 $271
------------------------------------------------------------------------------------
Federated Value $ 26 $80 $ 137 $290
------------------------------------------------------------------------------------
Growth-Income $ 23 $70 $ 120 $257
------------------------------------------------------------------------------------
Utility $ 26 $80 $ 137 $290
------------------------------------------------------------------------------------
Asset Allocation $ 23 $71 $ 121 $260
------------------------------------------------------------------------------------
SunAmerica Balanced $ 26 $78 $ 134 $286
------------------------------------------------------------------------------------
Worldwide High Income $ 27 $84 $ 143 $303
------------------------------------------------------------------------------------
High-Yield Bond $ 23 $72 $ 123 $263
------------------------------------------------------------------------------------
Corporate Bond $ 25 $78 $ 133 $283
------------------------------------------------------------------------------------
Global Bond $ 24 $75 $ 129 $275
------------------------------------------------------------------------------------
Cash Management $ 22 $67 $ 115 $247
------------------------------------------------------------------------------------
------------------------------------------------------------------------------------
</TABLE>
EXPLANATION OF FEE TABLES AND EXAMPLES
1. The purpose of the Fee Tables is to show you the various expenses you would
incur directly and indirectly by investing in the contract.
2. For certain Portfolios, the adviser, SunAmerica Asset Management Corp., has
voluntarily agreed to waive fees or reimburse certain expenses, if
necessary, to keep annual operating expenses at or below the lesser of the
maximum allowed by any applicable state expense limitations or the following
percentages of each Portfolio's average net assets: Aggressive Growth
(1.05%); Federated Value (1.05%); SunAmerica Balanced (1.00); and Utility
(1.05%). The adviser also may voluntarily waive or reimburse additional
amounts to increase a Portfolio's investment return. All waivers and/or
reimbursements may be terminated at any time. Furthermore, effective June 3,
1996, the adviser may recoup any waivers or reimbursements within the
following two years, provided that the Portfolio is able to make such
payment and remain in compliance with the foregoing expense limitations.
3. The Examples assume that no transfer fees were imposed. Premium taxes are
not reflected.
4. THESE EXAMPLES SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
THE HISTORICAL ACCUMULATION UNIT VALUES ARE CONTAINED IN
APPENDIX A - CONDENSED FINANCIAL INFORMATION
4
<PAGE> 12
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1. THE ANCHOR ADVISOR VARIABLE ANNUITY
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An annuity is a contract between you, as the owner, and an insurance company.
The contract provides tax deferral for your earnings, as well as a death benefit
and a guaranteed income in the form of annuity payments beginning on a date you
select. Until you decide to begin receiving annuity payments, your annuity is in
the Accumulation Phase. Once you begin receiving annuity payments, your contract
switches to the Income Phase. If you die during the Accumulation Phase, the
insurance company guarantees a death benefit to your Beneficiary.
The Anchor Advisor Variable Annuity Contract is issued by Anchor National Life
Insurance Company ("Anchor National"), a stock life insurance company organized
under the laws of the state of Arizona. Its principal business address is 1
SunAmerica Center, Los Angeles, California 90067-6022. Anchor National conducts
life insurance and annuity business in the District of Columbia and in all
states except New York. Anchor National is an indirect wholly owned subsidiary
of SunAmerica Inc., a Maryland corporation.
During the Accumulation Phase, the value of your annuity benefits from tax
deferral. This means your earnings accumulate on a tax-deferred basis until you
take money out of your contract. The Income Phase occurs if you decide to
receive annuity payments. You select the date on which annuity payments are to
begin.
The contract is called a variable annuity because you can choose among 19
variable investment Portfolios. Depending upon market conditions, you can make
or lose money in any of these Portfolios. If you allocate money to the
Portfolios, the amount of money you are able to accumulate in the variable
portion of your contract during the Accumulation Phase depends upon the
investment performance of the Portfolio(s) you select. The amount of the annuity
payments you receive during the Income Phase from the variable portion of your
contract also depends upon the investment performance of the Portfolios you
select for the Income Phase.
The contract also contains a one-year fixed investment option and if provided
for by your contract, a one-year DCA account option. Your money will earn
interest at the rate set by Anchor National. The interest rate is guaranteed by
Anchor National for the time you agree to leave your money in the fixed
investment option or the DCA account. If you allocate money to the fixed
investment option, the amount of money you are able to accumulate in the fixed
portion of your contract during the Accumulation Phase depends upon the total
interest credited to your fixed investment option. The amount of annuity
payments you receive during the Income Phase from the fixed portion of your
contract will remain level for the entire Income Phase.
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2. ANNUITY OPTIONS
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When you switch to the Income Phase, you will receive regular income payments
under the contract. You can choose to have your annuity payments sent to you by
check or electronically wired to your bank.
You select the date on which annuity payments are to begin, which must be the
first day of a month and must be at least two years after the date your contract
is issued. We call this the Annuity Date. You may change your Annuity Date at
least seven days prior to the date that your payments are to begin. However,
annuity payments must begin by the later of your 90th birthday or ten years
after the date your contract is issued. If no Annuity Date is selected, annuity
payments will begin on the later of your 90th birthday or ten years after the
date your contract is issued. Certain states may require you to receive annuity
payments prior to such date. If the Annuity Date is past your 85th birthday, it
is possible that the contract would not be treated as an annuity and you may
incur adverse tax consequences.
The Annuitant is the person on whose life annuity payments are based. You may
change the Annuitant at any time prior to the Annuity Date if an individual is
designated as the owner of the contract. You may also designate a second person
on whose life annuity payments are based. If the Annuitant dies before the
Annuity Date, you must notify us and designate a new Annuitant.
If you do not choose an annuity option, annuity payments will be made in
accordance with option 4 (below) for 120 months. If the annuity payments are for
joint lives, then we will make payments in accordance with option 3. We may pay
the annuity in one lump sum if your contract is less than $5,000, where
permitted by state law. Likewise, if your annuity payments
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<PAGE> 13
would be less than $50 a month, we have the right to change the frequency of
your payment to be on a quarterly, semiannual or annual basis so that your
annuity payments are at least $50. Annuity payments will be made to you unless
you designate another person to receive them. In that case, you must notify us
in writing at least thirty days before the Annuity Date. You will remain fully
responsible for any taxes related to the annuity payments.
The contract offers 5 annuity options. Other annuity options may be available in
the future.
OPTION 1 - LIFE INCOME
Under this option, we will make monthly annuity payments as long as the
Annuitant is alive. Annuity payments stop when the Annuitant dies.
OPTION 2 - JOINT AND SURVIVOR ANNUITY
Under this option, we will make monthly annuity payments as long as the
Annuitant and a designated second person are alive. Upon the death of either
person, we will continue to make annuity payments so long as the survivor is
alive. You choose the amount of the annuity payments to the survivor, which can
be equal to 100%, 66.66% or 50% of the full amount. Annuity payments stop upon
the death of the survivor.
OPTION 3 - JOINT AND SURVIVOR LIFE
ANNUITY - 120 MONTHLY PAYMENTS GUARANTEED
This option is similar to option 2 above, with the additional guarantee that
payments will be made for at least 120 months. If the Annuitant and designated
second person die before all payments have been made, the rest will be made to
the Beneficiary.
OPTION 4 - LIFE ANNUITY WITH 120 OR 240 MONTHLY PAYMENTS GUARANTEED
This option is similar to option 1 above, with the additional guarantee that
payments will be made for at least 120 or 240 months, as selected by you. Under
this option, if the Annuitant dies before all payments have been made, the rest
will be made to the Beneficiary.
OPTION 5 - INCOME FOR A SPECIFIED PERIOD
Under this option, we will make monthly annuity payments for any period of time
from 5 to 30 years, as selected by you. However, the period must be for full 12
month periods. This option does not contain an element of mortality risk.
Therefore, you will not get the benefit of the mortality component of the
mortality and expense risk change if this option is selected.
ALLOCATION OF ANNUITY PAYMENTS
On the Annuity Date, if your money is invested in the fixed investment option,
your annuity payments will be fixed in amount. If your money is invested in the
variable Portfolios, your annuity payments will vary depending on the investment
performance of the Portfolios. If you have money in the fixed and variable
investment options, your annuity payments will be based on the investment
allocations. Unless your contract states otherwise, you may not convert between
fixed and variable payments once annuity payments begin.
ANNUITY PAYMENTS
If you choose to have any portion of your annuity payments come from the
variable Portfolios, the dollar amount of your payment will depend upon three
things: (1) the value of your contract in the Portfolios on the Annuity Date,
(2) the 3.5% assumed investment rate used in the annuity table for the contract
and (3) the performance of the Portfolios you selected. If the actual
performance exceeds the 3.5% assumed rate, your annuity payments will increase.
Similarly, if the actual rate is less than 3.5%, your annuity payments will
decrease. The SAI contains detailed information and sample calculations.
TRANSFERS DURING THE INCOME PHASE
Transfers are subject to the same limitations as transfers during the
Accumulation Phase. However, you can only make one transfer each month without
charge. You may not transfer money from the fixed investment option to the
Portfolios or from the Portfolios to the fixed investment option during the
Income Phase, unless your contract states otherwise. You may transfer money
among the variable Portfolios.
DEFERMENT OF PAYMENTS
We may defer making fixed payments for up to six months, or less if required by
state law. Interest will be credited to you during the deferral period.
6
<PAGE> 14
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3. PURCHASING AN ANCHOR ADVISOR
VARIABLE ANNUITY
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A Purchase Payment is the money you give to us to buy the contract, as well as
any additional money you give us to invest in the contract after you own it. You
can purchase a contract with a minimum initial investment of $20,000. The
maximum we accept is $1,000,000 without prior approval. Payments in amounts of
$500 or more may be added to your contract at any time during the Accumulation
Phase. You can make scheduled subsequent Purchase Payments of $100 or more per
month by enrolling in the Automatic Payment Plan.
We may refuse any Purchase Payment. In general, we will not issue a Nonqualified
contract to anyone who is age 90 or older or a Qualified contract to anyone who
is age 70 1/2 or older unless you can show that the minimum distributions
required by the IRS are being made. You should also consider the appropriateness
of this annuity for Qualified contracts given the minimum initial investment
amount.
ALLOCATION OF PURCHASE PAYMENTS
When you purchase a contract, you will allocate your Purchase Payment to the
variable investment Portfolios and/or the fixed investment option. If you make
additional Purchase Payments, we will allocate them in the same way unless you
tell us otherwise.
Once we receive your Purchase Payment and a complete application at our
principal place of business, we will issue your contract and allocate your first
Purchase Payment within two business days. If you do not give us all the
necessary information, we will contact you to obtain it. If we are unable to
complete this process within five business days, we will either send back your
money or get your permission to keep it until we get all the necessary
information.
ACCUMULATION UNITS
The value of the variable portion of your contract will go up or down depending
upon the investment performance of the Portfolio(s) you choose. In order to keep
track of the value of your contract, we use a unit of measure called an
Accumulation Unit, which works like a share of a mutual fund. During the Income
Phase, we call them Annuity Units.
The value of an Accumulation Unit is determined each day that the New York Stock
Exchange ("NYSE") is open. We calculate an Accumulation Unit value for each
Portfolio after the NYSE closes each day. We do this by:
(1) determining the total value of money invested in the particular
Portfolio;
(2) subtracting from that amount any insurance charges and any other
charges such as taxes; and
(3) dividing this amount by the number of outstanding Accumulation Units.
The value of an Accumulation Unit may go up or down from day to day. When you
make a Purchase Payment, we credit your contract with Accumulation Units. The
number of Accumulation Units credited is determined by dividing the amount of
the Purchase Payment allocated to a Portfolio by the value of the Accumulation
Unit for that Portfolio.
EXAMPLE:
We receive a $25,000 Purchase Payment from you on Wednesday. You want the
money to go to the Global Bond Portfolio. We determine that the value of an
Accumulation Unit for the Global Bond Portfolio is $11.10 when the NYSE
closes on Wednesday. We then divide $25,000 by $11.10 and credit your
contract on Wednesday night with 2252.252 Accumulation Units for the Global
Bond Portfolio.
FREE LOOK
If you change your mind about owning this contract, you can cancel it within ten
days after receiving it (or longer if required by state law) by mailing it back
to our Annuity Service Center at P.O. Box 54299, Los Angeles, California
90054-0299. You will receive back whatever your contract is worth on the day we
receive your request. Its value may be more or less than the money you initially
invested. Thus, the investment risk is borne by you during the free look period.
In certain states or if you purchase your contract as an IRA, we may be required
to return your Purchase Payment. If that is the case, we reserve the right to
put your money in the Cash Management Portfolio during the free look period. At
the end of the period, we will reallocate your money as you selected.
7
<PAGE> 15
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4. INVESTMENT OPTIONS
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The contract offers 19 variable investment Portfolios which invest in shares of
Anchor Series Trust or SunAmerica Series Trust. These Portfolios are listed
below. Additional Portfolios may be available in the future. SunAmerica Asset
Management Corp., an indirect wholly owned subsidiary of SunAmerica Inc., is the
investment adviser for both Trusts.
The Trusts serve as underlying investments for other variable contracts sold by
Anchor National, its affiliate, First SunAmerica Life Insurance Company, and
other unaffiliated insurance companies. Neither Anchor National nor the Trusts
believes offering shares of the Trusts in this manner will be disadvantageous to
you.
ANCHOR SERIES TRUST
Wellington Management Company, LLP serves as subadviser to the Anchor Series
Trust Portfolios. Anchor Series Trust has Portfolios in addition to those listed
below which are not available for investment under the contract. The 4 available
Portfolios are:
MANAGED BY WELLINGTON MANAGEMENT COMPANY, LLP
- Capital Appreciation Portfolio
- Growth Portfolio
- Natural Resources Portfolio
- Government and Quality Bond Portfolio
SUNAMERICA SERIES TRUST
Various subadvisers provide investment advice for the SunAmerica Series Trust
Portfolios. SunAmerica Series Trust also has Portfolios in addition to those
listed below which are not available for investment under the contract. The 15
available Portfolios and the subadvisers are:
MANAGED BY ALLIANCE CAPITAL MANAGEMENT L.P.
- Global Equities Portfolio
- Alliance Growth Portfolio
- Growth-Income Portfolio
MANAGED BY DAVIS SELECTED ADVISERS, L.P.
- Venture Value Portfolio
MANAGED BY FEDERATED INVESTORS
- Federated Value Portfolio
- Utility Portfolio
- Corporate Bond Portfolio
MANAGED BY GOLDMAN SACHS ASSET MANAGEMENT/ GOLDMAN SACHS ASSET MANAGEMENT
INTERNATIONAL
- Asset Allocation Portfolio
- Global Bond Portfolio
MANAGED BY MORGAN STANLEY ASSET MANAGEMENT INC.
- International Diversified Equities Portfolio
- Worldwide High Income Portfolio
MANAGED BY SUNAMERICA ASSET MANAGEMENT CORP.
- Aggressive Growth Portfolio
- SunAmerica Balanced Portfolio
- High-Yield Bond Portfolio
- Cash Management Portfolio
YOU SHOULD READ THE PROSPECTUSES FOR ANCHOR SERIES TRUST AND SUNAMERICA SERIES
TRUST CAREFULLY BEFORE INVESTING. THESE PROSPECTUSES CONTAIN DETAILED
INFORMATION ABOUT THE PORTFOLIOS AND ARE ATTACHED TO THIS PROSPECTUS.
FIXED INVESTMENT OPTION
The contract also offers a one-year fixed investment option and if provided for
by your contract, a one-year DCA account option. Anchor National will guarantee
the interest rate on money you allocate to the fixed investment option. We will
also guarantee the interest rate on money you allocate to the DCA account, which
is available only if you are participating in the Dollar Cost Averaging Program.
(See "Dollar Cost Averaging Program" for more complete information and
limitations on the availability of the one-year DCA account).
Interest rates may differ from time to time due to changes in market conditions
but will not be less than 3%. The interest rates offered for new Purchase
Payments may differ from the interest rates offered for money already in the
contract. Once an interest rate is established for your contract, it will not
change during the one-year period. The interest rates are set at Anchor
National's sole discretion.
After the one-year period, you can reallocate your money to the one-year fixed
investment option or put your money into one or more of the variable Portfolios.
Unless you specify otherwise before the end of the one-year period, we will keep
your money in the fixed investment option. You will receive the interest rate
then in effect, which may be more or less than the rate you initially received.
The one-year fixed investment option and the one-year DCA account are not
registered under the Securities Act of 1933 and are not subject to other
provisions of the Investment Company Act of 1940.
8
<PAGE> 16
TRANSFERS DURING THE ACCUMULATION PHASE
You can transfer money among the Portfolios and the one-year fixed investment
option by written request or by telephone. You can make fifteen transfers every
year without charge. We measure a year from the anniversary of the day we issued
your contract. If you make more than fifteen transfers in a year, there is a $25
transfer fee for each transfer thereafter ($10 in Pennsylvania and Texas).
The minimum amount you can transfer is $100. You cannot make a partial transfer
if the value of the Portfolio from which the transfer is being made would be
less than $100 after the transfer. Your request for transfer must clearly state
which investment options are involved and the amount. We will accept transfers
by telephone unless you specify otherwise on your contract application. We have
in place procedures to provide reasonable assurance that instructions given to
us by telephone are genuine. Thus, we disclaim all liability for any claim, loss
or expense from any error. If we fail to use such procedures, we may be liable
for any losses due to unauthorized or fraudulent instructions.
We reserve the right to modify, suspend or terminate the transfer provisions at
any time. We also reserve the right to waive the $100 minimum amount for Dollar
Cost Averaging and Asset Allocation Rebalancing.
DOLLAR COST AVERAGING PROGRAM
The Dollar Cost Averaging Program allows you to systematically transfer a set
percentage or amount from one Portfolio or the one-year fixed investment option
to any other Portfolio(s). You can also select to transfer the entire value in a
Portfolio or the one-year fixed investment option in a stated number of
transfers. Transfers may be on a monthly or quarterly basis. You can change the
amount or frequency at any time by notifying us in writing. The minimum amount
that can be transferred is $100.
If available under your contract, you may also set up dollar cost averaging when
you make your initial Purchase Payment or a subsequent Purchase Payment using
the one-year DCA account. You cannot transfer money from the Portfolios or the
one-year fixed investment option into the one-year DCA account. When the
one-year DCA account is used, all your money in that account will be transferred
to the variable Portfolio(s) in either 12 or 4 transfers by the end of the
one-year period, depending on the frequency you selected. Once selected, you
cannot change the amount or frequency. The minimum amount that can be
transferred from the one-year DCA account is also $100.
The interest rate offered for the one-year DCA account may be different from the
interest rate offered to contract owners using the one-year fixed investment
option for this program. If you terminate this program and are dollar cost
averaging from the one-year DCA account, any money remaining in the one-year DCA
account will be automatically transferred to the one-year fixed investment
option and earn the interest rate then in effect for that investment options.
By allocating amounts on a regular schedule as opposed to allocating the total
amount at one particular time, you may be less susceptible to the impact of
market fluctuations. However, there is no assurance that you will make a greater
profit. You are still subject to loss in a declining market. Dollar cost
averaging involves continuous investment in securities regardless of fluctuating
price levels. You should consider your financial ability to continue to invest
through periods of low prices.
Transfers under the program are included as part of your 15 free transfers each
year. However, any transfer to the one-year fixed investment option upon
termination of this program will not be counted against your 15 free transfers.
We reserve the right to modify, suspend or terminate this program at any time.
EXAMPLE:
Assume that you want to move $750 each quarter from the Cash Management
Portfolio to the Aggressive Growth Portfolio over six quarters. You set up
dollar cost averaging and purchase Accumulation Units at the following
values:
<TABLE>
<CAPTION>
-----------------------------------------
ACCUMULATION UNITS
QUARTER UNIT PURCHASED
-----------------------------------------
<S> <C> <C>
1 $ 7.50 100
2 $ 5.00 150
3 $10.00 75
4 $ 7.50 100
5 $ 5.00 150
6 $ 7.50 100
-----------------------------------------
</TABLE>
You paid an average price of only $6.67 per Accumulation Unit over the six
quarters, while the average market price actually was $7.08. By investing
an equal amount of money each month, you automatically buy
9
<PAGE> 17
more Accumulation Units when the market price is low and fewer Accumulation
Units when the market price is high.
ASSET ALLOCATION REBALANCING PROGRAM
Once your money has been allocated among the investment options, the earnings
from each investment option may cause your allocation to shift. You can direct
us to automatically rebalance your contract to return to your original
percentage allocations by selecting our Asset Allocation Rebalancing Program.
Rebalancing may be on a calendar quarter, semiannual or annual basis.
Rebalancing will occur on the last business day of the month for the period you
selected.
Transfers under the program are not counted against your 15 free transfers each
year. We reserve the right to modify, suspend or terminate this program at any
time.
EXAMPLE:
Assume that you want your initial Purchase Payment split between two
Portfolios. You want 50% in the Corporate Bond Portfolio and 50% in the
Growth Portfolio. Over the next calendar quarter, the bond market does very
well while the stock market performs poorly. At the end of the calendar
quarter, the Corporate Bond Portfolio now represents 60% of your holdings
because it has increased in value and the Growth Portfolio represents 40%
of your holdings. If you had chosen quarterly rebalancing, on the last day
of that quarter, we would sell some of your units in the Corporate Bond
Portfolio to bring its holdings back to 50% and use the money to buy more
units in the Growth Portfolio to increase those holdings to 50%.
VOTING RIGHTS
Anchor National is the legal owner of the Trusts' shares. However, when a
Portfolio solicits proxies in conjunction with a vote of shareholders, we are
required to obtain from you instructions as to how to vote those shares. When we
receive those instructions, we will vote all of the shares we own in proportion
to those instructions. This will also include any shares that we own on our
behalf. Should we determine that we are no longer required to comply with the
above, we will vote the shares in our own right.
SUBSTITUTION
If any of the Portfolios you selected are no longer available, we may be
required to substitute shares of another Portfolio. We will seek prior approval
of the SEC and give you notice before doing this.
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5. EXPENSES
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There are charges and other expenses associated with the contract that will
reduce your investment return. These charges and expenses are described below.
There are no withdrawal charges and no contract maintenance charges under the
contract.
INSURANCE CHARGES
Each day, we make a deduction for our insurance charges. This is done as part of
our calculation of the value of the Accumulation Units during the Accumulation
Phase and the Annuity Units during the Income Phase. The insurance charges
consist of the mortality and expense risk charge and the distribution expense
charge.
MORTALITY AND EXPENSE RISK CHARGE
This charge is equal, on an annual basis, to 1.37% of the daily value of the
contract invested in a Portfolio. This charge is for our obligation to make
annuity payments, to provide the 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.
If the charges under the contract are not sufficient, we will bear the loss. We
will not increase this charge. We may use any profits from this charge to pay
for the costs of distributing the contract.
DISTRIBUTION EXPENSE CHARGE
This charge is equal, on an annual basis, to .15% of the daily value of the
contract invested in a Portfolio. 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, we will bear the loss.
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<PAGE> 18
INVESTMENT CHARGES
If you have money allocated to the variable Portfolios, there are deductions
from and expenses paid out of the assets of the various Portfolios. These
investment charges are summarized in the Fee Tables. For more detailed
information, you should refer to the prospectuses for Anchor Series Trust and
SunAmerica Series Trust.
TRANSFER FEE
You can make 15 free transfers every year. We measure a year from the day we
issue your contract. If you make more than 15 transfers a year, we will deduct a
$25 transfer fee ($10 in Pennsylvania and Texas).
PREMIUM TAXES
We are responsible for the payment of premium taxes, if any, charged by some
states and will make a deduction from your contract for them. These taxes are
due either when the contract is issued or when annuity payments begin. It is our
current practice not to charge you for these taxes until annuity payments begin
or a full surrender is made. In the future, we may discontinue this practice and
assess the tax when it is due or upon the payment of the death benefit.
Appendix B provides more information about the premium taxes assessed in each
state.
INCOME TAXES
Although we do not currently deduct any income taxes borne under your contract,
we reserve the right to do so in the future.
REDUCTION OR ELIMINATION OF CERTAIN CHARGES
We will reduce or eliminate the amount of certain insurance charges when the
contract is sold to groups of individuals under circumstances which reduce its
sales expenses. We will determine the eligibility of such groups by considering
the following factors: (1) the size of the group; (2) the total amount of
Purchase Payments we expect to receive from the group; (3) the nature of the
purchase and the persistency we expect in that group; (4) the purpose of the
purchase and whether that purpose makes it likely that expenses will be reduced;
and (5) any other circumstances which we believe to be relevant in determining
whether reduced sales expenses may be expected.
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6. TAXES
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NOTE: WE HAVE PREPARED THE FOLLOWING INFORMATION ON TAXES AS A GENERAL
DISCUSSION OF THE SUBJECT. IT IS NOT INTENDED AS TAX ADVICE. YOU ARE CAUTIONED
TO SEEK COMPETENT TAX ADVICE ABOUT YOUR OWN CIRCUMSTANCES. WE DO NOT GUARANTEE
THE TAX STATUS OF THE ANNUITY.
ANNUITY CONTRACTS IN GENERAL
The Internal Revenue Code ("IRC") provides for special rules regarding the tax
treatment of annuity contracts. Generally, you will not be taxed on the earnings
in your annuity contract until you take the money out. Different rules apply
depending on how you take the money out and whether your contract is Qualified
or Nonqualified.
If you do not purchase your contract under a pension plan, specially sponsored
program or an individual retirement account, your contract is referred to as a
Nonqualified contract and receives different tax treatment than a Qualified
contract. In general, your cost basis in a Nonqualified contract is equal to the
Purchase Payments you put into the contract. You have already been taxed on the
cost basis in your contract.
If you purchase your contract under a pension plan, specially sponsored program
or as an individual retirement account, your contract is referred to as a
Qualified contract. Examples of qualified plans are: Individual Retirement
Annuities, Tax-sheltered Annuities (referred to as 403(b) contracts), H.R. 10
Plans (referred to as Keogh Plans) and pension and profit sharing plans,
including 401(k) plans. Typically you have not paid any tax on the Purchase
Payments used to buy your contract and therefore, you have no cost basis in your
contract.
TAX TREATMENT OF DISTRIBUTIONS - NONQUALIFIED CONTRACTS
If you make a withdrawal from a Nonqualified contract, the IRC treats such a
withdrawal as first coming from the earnings and then as coming from your
Purchase Payments. For annuity payments, any portion of each payment that is
considered a return of your Purchase Payment will not be taxed. Withdrawn
earnings
11
<PAGE> 19
are treated as income to you and are taxable. The IRC further provides for a 10%
tax penalty on any earnings that are withdrawn other than in conjunction with
the following circumstances: (1) after reaching age 59 1/2; (2) by your
Beneficiary after you die; (3) after you become disabled (as defined in the
IRC); (4) in a series of substantially equal installments made for your life or
for the joint lives of you and your Beneficiary; (5) under an immediate annuity;
or (6) which come from Purchase Payments made prior to August 14, 1982.
TAX TREATMENT OF DISTRIBUTIONS - QUALIFIED CONTRACTS
Generally, you have not paid any taxes on the Purchase Payments used to buy a
Qualified contract or on any earnings and therefore, any amount you take out as
a withdrawal or as annuity payments will be taxable income. The IRC further
provides for a 10% tax penalty on any withdrawal or annuitization paid to you
other than in conjunction with the following circumstances: (1) after reaching
age 59 1/2; (2) by your Beneficiary after you die; (3) after you become disabled
(as defined in the IRC); (4) in a series of substantially equal installments
made for your life or for the joint lives of you and your Beneficiary; and,
except in the case of an IRA as to the following: (5) after you separate from
service after attaining age 55; (6) to the extent such withdrawals do not exceed
limitations set by the IRC for amounts paid during the taxable year for medical
care; and (7) to an alternate payee pursuant to a qualified domestic relations
order.
The IRC limits the withdrawal of Purchase Payments from certain Tax-sheltered
Annuities. Withdrawals can only be made when an owner: (1) reaches age 59 1/2;
(2) leaves his or her job; (3) dies; (4) becomes disabled (as defined in the
IRC); or (5) in the case of hardship. In the case of hardship, the owner can
only withdraw the Purchase Payments and not any earnings.
DIVERSIFICATION
The IRC imposes certain diversification requirements on the underlying
investments for a variable annuity in order to be treated as a variable annuity
for tax purposes. We believe that the variable Portfolios are being managed so
as to comply with these requirements.
The diversification regulations do not provide guidance as to the circumstances
under which you, because of the degree of control you exercise over the
underlying investments, and not Anchor National, would be considered the owner
of the shares of the Portfolios. It is unknown to what extent owners are
permitted to select investments, to make transfers among portfolios or the
number and type of portfolios owners may select from. If any guidance is
provided which is considered a new position, then the guidance would generally
be applied prospectively. However, if such guidance is considered not to be a
new position, it may be applied retroactively. This would mean you, as the owner
of the contract, could be treated as the owner of the variable investment
Portfolios.
Due to the uncertainty in this area, we reserve the right to modify the contract
in an attempt to maintain favorable tax treatment.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
7. WITHDRAWALS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Under your contract, money can be accessed in the following ways: (1) by making
a withdrawal, either for a part of the value of your contract or for the entire
value of your contract during the Accumulation Phase; (2) by receiving annuity
payments during the Income Phase; and (3) when a death benefit is paid to your
Beneficiary. There are no withdrawal charges under the contract.
If you make a complete withdrawal, you will receive the value of your contract,
less any applicable fees and charges, as calculated on the day following receipt
by us at our principal place of business of a complete request to make such a
withdrawal. Your contract must be submitted as well.
Under most circumstances, partial withdrawals must be for a minimum of $1,000.
We require that the value left in any Portfolio or the fixed investment option
be at least $500 after the withdrawal. Unless you provide us with different
instructions, partial withdrawals will be made pro rata from each Portfolio and
the fixed investment option in which your contract is invested. You must send a
written withdrawal request to us prior to any withdrawal being made.
We may be required to suspend or postpone the payment of a withdrawal for any
period of time when: (1) the NYSE is closed (other than a customary weekend and
holiday closings);
12
<PAGE> 20
(2) trading on the NYSE is restricted; (3) an emergency exists such that
disposal of or determination of the value of shares of the portfolios is not
reasonably practicable; (4) the SEC, by order, so permits for the protection of
contract owners.
Additionally, we reserve the right to defer payments for a withdrawal from the
fixed investment option for the period permitted by law but not for more than
six months.
SYSTEMATIC WITHDRAWAL PROGRAM
This program allows you to receive either monthly, quarterly, semiannual or
annual checks during the Accumulation Phase. You can also choose to have
systematic withdrawals electronically wired to your bank account. The minimum
amount of each withdrawal is $250. Withdrawals are taxable and a 10% federal tax
penalty may apply if you are under age 59 1/2. There is no charge for
participating in this program.
This program is not available to everyone. Please check with our Annuity Service
Center, which can provide the necessary enrollment forms. We reserve the right
to modify, suspend or terminate this program at any time.
INCOME TAXES, TAX PENALTIES AND CERTAIN RESTRICTIONS MAY APPLY TO ANY WITHDRAWAL
YOU MAKE.
MINIMUM CONTRACT VALUE
Where permitted by state law, we may terminate your contract if both of the
following occur: (1) your contract is less than $500 as a result of withdrawals
and (2) no Purchase Payments have been made during the past three years. We will
provide you with sixty days written notice and distribute the contract's
remaining value to you.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
8. PERFORMANCE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
From time to time we may advertise the Cash Management Portfolio's yield and
effective yield. In addition, the other variable investment Portfolios may also
advertise total return, gross yield and yield to maturity information. These
figures are based on historical data and are not intended to indicate future
performance.
For periods starting prior to the date the contracts were first offered, the
performance will be derived from the performance of the corresponding portfolios
of the trusts, modified to reflect Anchor Advisor's charges and expenses as if
the contracts had been in existence during the period stated in the
advertisement. Thus, these figures should not be construed to reflect actual
historic performance.
At times Anchor National may also advertise the ratings and other information
assigned to it by independent rating organizations such as A.M. Best Company
("A.M. Best"), Moody's Investors Service, Inc. ("Moody's"), Standard & Poor's
Insurance Rating Services ("S&P"), and Duff & Phelps. A.M. Best's and Moody's
ratings reflect their current opinion of our financial strength and performance
in comparison to others in the life/health insurance industry. S&P's and Duff &
Phelps' ratings measure the ability of an insurance company to meet its
obligations under insurance policies it issues and do not measure the ability of
such companies to meet other non-policy obligations.
The performance of each Portfolio may also be measured against unmanaged market
indices, including but not limited to the Dow Jones Industrial Average, the
Standard & Poor's 500, the Russell 1000 Growth Index, the Morgan Stanley Capital
International Europe, Australia, and Far East Index (EAFE) and the Morgan
Stanley Capital International World Index, and may be compared to that of other
variable annuities with similar objectives and policies as reported by
independent rating services such as Morningstar, Inc., Lipper Analytical
Services, Inc. or Variable Annuity Reporting Data Service.
More detailed information on the method used to calculate performance for the
Portfolios is contained in the SAI.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
9. DEATH BENEFIT
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
If you should die during the Accumulation Phase of your contract, we will pay a
death benefit to your Beneficiary. Unless your contract states otherwise, you
must select from the two death benefit options described below at the time you
purchase your contract. Once selected, your death benefit may not be changed.
You should discuss with your financial representative the options available to
you and which option is best for you.
These death benefit options may not be available under certain contracts. In
that case,
13
<PAGE> 21
the death benefit under such contracts is option 1 only.
OPTION 1 - PURCHASE PAYMENT ACCUMULATION OPTION:
The death benefit is the greater of:
(1) the value of your contract at the time we receive adequate proof of death,
(2) total Purchase Payments less any withdrawals, all compounded at 4% annually
until the date of death (3% if age 70 or older at time of issue), or
(3) the value of your contract on the seventh contract anniversary less any
withdrawals plus any additional Purchase Payments since the seventh
anniversary, all compounded at 4% annually until the date of death (3% if
age 70 or older at time of issue).
OPTION 2 - MAXIMUM ANNIVERSARY VALUE OPTION:
The death benefit is the greater of:
(1) the value of your contract at the time we receive adequate proof of death,
(2) total Purchase Payments less any withdrawals, or
(3) the maximum of the anniversary values up to your 81st birthday. The
anniversary value is equal to the value of your contract on the contract
anniversary less any withdrawals plus any additional Purchase Payments since
that anniversary.
If you are age 90 or older at the time of death, the death benefit under option
2 is the value of your contract at the time we receive adequate proof of death.
In general, you would not get the advantage of the second option if you are over
age 80 at the time your contract is issued or age 90 or older at the time of
death.
The death benefit is not paid after you switch to the Income Phase. During the
Income Phase, your Beneficiary(ies) will receive any remaining annuity payments
in accordance with the annuity option you choose.
You may select the Beneficiary(ies) to receive any amounts payable on death. You
may change the Beneficiary at any time unless you previously made an irrevocable
Beneficiary designation. A new Beneficiary designation is not effective until we
record the change.
The death benefit is immediately payable under the contract. However, in any
event, the entire death benefit must be paid within five years of the date of
death unless the Beneficiary elects to have it payable in the form of an
annuity. If the Beneficiary elects an annuity option, it must be paid over the
Beneficiary's lifetime or for a period not extending beyond the Beneficiary's
life expectancy. If the Beneficiary is the spouse of the owner, he or she can
elect to continue the contract at the then current value, in which case he or
she will not receive the death benefit.
The death benefit will be paid out when we receive adequate proof of death: (1)
a certified copy of a death certificate; (2) a certified copy of a decree of
court of competent jurisdiction as to the finding of death; (3) a written
statement by a medical doctor who attended the deceased at the time of death; or
(4) any other proof satisfactory to us. If the Beneficiary does not make a
specific election within sixty days of our receipt of such proof of death, the
death benefit will be paid in a lump sum.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
10. OTHER INFORMATION
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
ANCHOR NATIONAL
Anchor National and its affiliates, SunAmerica Life Insurance Company, First
SunAmerica Life Insurance Company, CalFarm Life Insurance Company, SunAmerica
Asset Management Corp., Imperial Premium Finance, Inc., Resources Trust Company
and three broker-dealers, offer a full line of financial services, including
fixed and variable annuities, mutual funds, premium finance, broker-dealer and
trust administration services. Anchor National is an indirect wholly owned
subsidiary of SunAmerica Inc. Anchor National is licensed to do business in the
District of Columbia and all states except New York.
THE SEPARATE ACCOUNT
Anchor National originally established a separate account, Variable Annuity
Account Four, under California law on November 8, 1994. The separate account is
registered with the SEC as a unit investment trust under the Investment Company
Act of 1940.
Anchor National owns the assets in the separate account. However, the assets in
the separate account are not chargeable with liabilities arising out of any
other business Anchor National may
14
<PAGE> 22
conduct. Income, gains and losses (realized and unrealized) resulting from the
assets in the separate account are credited to or charged against the separate
account without regard to other income, gains or losses of Anchor National.
THE GENERAL ACCOUNT
If you put your money into the fixed investment option, it goes into Anchor
National's general account. The general account is made up of all of Anchor
National's assets other than assets attributable to a separate account. All of
the assets in the general account are chargeable with the claims of any Anchor
National contract owners as well as all creditors. The general account is
invested in assets permitted by state insurance law.
DISTRIBUTION
The contract is sold through registered representatives of broker-dealers.
Commissions are paid to registered representatives for the sale of contracts.
Commissions are not expected to exceed 2% of your Purchase Payment. Under some
circumstances, we may pay a persistency bonus in addition to standard
commissions. Usually the standard commission is lower when we pay a persistency
bonus, which is not anticipated to exceed 1% annually. SunAmerica Capital
Services, Inc., 733 Third Avenue, 4th Floor, New York, New York 10017 acts as
the distributor of the contracts. SunAmerica Capital Services, Inc., an
affiliate of Anchor National, is registered as a broker-dealer under the
Exchange Act of 1934 and is a member of the National Association of Securities
Dealers, Inc.
ADMINISTRATION
We are responsible for all the administrative servicing of your contract. Please
contact Anchor National's Annuity Service Center at the telephone number and
address provided in the profile section of this prospectus if you have any
comment, question or service request.
We will send out transaction confirmations and quarterly statements. Please
review these documents carefully and notify us of any inaccuracies immediately.
We will investigate all questions and, to the extent we have made an error, we
will retroactively adjust your contract provided you have notified us within
thirty days of receiving the transaction confirmation or quarterly statement, as
applicable. All other adjustments will be made as of the time we receive notice
of the error.
LEGAL PROCEEDINGS
There are no pending legal proceedings affecting the separate account. Anchor
National and its subsidiaries are engaged in various kinds of routine litigation
which, in management's judgment, is not of material importance to their
respective total assets or material with respect to the separate account.
OWNERSHIP
The Anchor Advisor Variable Annuity is a Flexible Payment Group Deferred Annuity
Contract. A group contract is issued to a contractholder, for the benefits of
the participants in the group. You are a participant in the group and will
receive a certificate evidencing your ownership. You, as the owner of a
certificate, are entitled to all the rights and privileges of ownership. As used
in this prospectus, the term contract refers to your certificate. In some states
a Flexible Payment Individual Modified Guaranteed and Variable Deferred Annuity
Contract may be available instead, which is identical to the group contract
described in this prospectus except that it is issued directly to the owner.
CUSTODIAN
State Street Bank and Trust Company, 225 Franklin Street, Boston, Massachusetts
02110, serves as the custodian of the assets of the separate account. Anchor
National pays State Street Bank for services based on a schedule of fees.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TABLE OF CONTENTS OF
STATEMENT OF ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Separate Account......................... 3
General Account.......................... 4
Performance Data......................... 4
Annuity Payments......................... 8
Annuity Unit Values...................... 8
Taxes.................................... 11
Distribution of Contracts................ 15
Financial Statements..................... 16
</TABLE>
15
<PAGE> 23
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
APPENDIX A - CONDENSED FINANCIAL INFORMATION
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INCEPTION TO
PORTFOLIOS 9/30/96
------------------------------------------------------------------------------
------------------------------------------------------------------------------
<S> <C>
Capital Appreciation (Inception Date - 8/27/96)
Beginning AUV $16.67
End AUV $17.61
End #AUs 11,922
------------------------------------------------------------------------------
Growth (Inception Date - 9/6/96)
Beginning AUV $14.31
End AUV $15.06
End #AUs 5,060
------------------------------------------------------------------------------
Natural Resources (Inception Date - 9/12/96)
Beginning AUV $11.56
End AUV $11.57
End #AUs 1,157
------------------------------------------------------------------------------
Government and Quality Bond (Inception Date - 9/16/96)
Beginning AUV $11.47
End AUV $11.50
End #AUs 1,151
------------------------------------------------------------------------------
Aggressive Growth (Inception Date - 8/29/96)
Beginning AUV $ 9.26
End AUV $ 9.93
End #AUs 4,313
------------------------------------------------------------------------------
International Diversified Equities (Inception Date - 9/12/96)
Beginning AUV $10.61
End AUV $11.10
End #AUs 3,352
------------------------------------------------------------------------------
Global Equities (Inception Date - 8/27/96)
Beginning AUV $14.13
End AUV $14.38
End #AUs 6,223
------------------------------------------------------------------------------
Alliance Growth (Inception Date - 9/12/96)
Beginning AUV $16.39
End AUV $17.14
End #AUs 3,827
------------------------------------------------------------------------------
Venture Value (Inception Date - 8/27/96)
Beginning AUV $14.43
End AUV $14.85
End #AUs 24,362
------------------------------------------------------------------------------
Federated Value (Inception Date - 9/6/96)
Beginning AUV $ 9.63
End AUV $10.07
End #AUs 7,752
------------------------------------------------------------------------------
Growth-Income (Inception Date - 9/6/96)
Beginning AUV $14.27
End AUV $15.03
End #AUs 3,515
------------------------------------------------------------------------------
Utility (Inception Date - 9/16/96)
Beginning AUV $10.08
End AUV $ 9.92
End #AUs 1,310
------------------------------------------------------------------------------
</TABLE>
A-1
<PAGE> 24
<TABLE>
<CAPTION>
INCEPTION TO
PORTFOLIOS 9/30/96
------------------------------------------------------------------------------
------------------------------------------------------------------------------
<S> <C>
Asset Allocation (Inception Date - 9/16/96)
Beginning AUV $13.75
End AUV $13.84
End #AUs 1,310
------------------------------------------------------------------------------
SunAmerica Balanced (Inception Date - 9/16/96)
Beginning AUV $10.12
End AUV $10.34
End #AUs 3,534
------------------------------------------------------------------------------
Worldwide High Income (Inception Date - 8/27/96)
Beginning AUV $13.10
End AUV $13.60
End #AUs 9,345
------------------------------------------------------------------------------
High-Yield Bond (Inception Date - 9/23/96)
Beginning AUV $12.46
End AUV $12.62
End #AUs 1,440
------------------------------------------------------------------------------
Corporate Bond (Inception Date - 9/23/96)
Beginning AUV $11.13
End AUV $11.21
End #AUs 3,525
------------------------------------------------------------------------------
Global Bond (Inception Date - 9/4/96)
Beginning AUV $11.61
End AUV $11.85
End #AUs 2,148
------------------------------------------------------------------------------
Cash Management (Inception Date - 9/5/96)
Beginning AUV $10.95
End AUV $10.98
End #AUs 12,143
------------------------------------------------------------------------------
------------------------------------------------------------------------------
</TABLE>
AUV - Accumulation Unit Value
AU - Accumulation Units
A-2
<PAGE> 25
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APPENDIX B - PREMIUM TAXES
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Premium taxes vary according to the state and are subject to change without
notice. In many states, there is no tax at all. Listed below are the current
premium tax rates in those states that assess a premium tax. For current
information, you should consult your tax adviser.
<TABLE>
<CAPTION>
QUALIFIED NON-QUALIFIED
STATE CONTRACT CONTRACT
-------------------------------------------------------------------
-------------------------------------------------------------------
<S> <C> <C>
California .50% 2.35%
-------------------------------------------------------------------
District of Columbia 2.25% 2.25%
-------------------------------------------------------------------
Kansas 0% 2%
-------------------------------------------------------------------
Kentucky 2% 2%
-------------------------------------------------------------------
Maine 0% 2%
-------------------------------------------------------------------
Michigan .00075% .00075%
-------------------------------------------------------------------
Nevada 0% 3.5%
-------------------------------------------------------------------
South Dakota 0% 1.25%
-------------------------------------------------------------------
West Virginia 1% 1%
-------------------------------------------------------------------
Wyoming 0% 1%
-------------------------------------------------------------------
-------------------------------------------------------------------
</TABLE>
B-1
<PAGE> 26
- --------------------------------------------------------------------------------
Please forward a copy (without charge) of the Anchor Advisor Variable Annuity
Statement of Additional Information to:
(Please print or type and fill in all information.)
----------------------------------------------------------------
Name
----------------------------------------------------------------
Address
----------------------------------------------------------------
City/State/Zip
Date: Signed:
---------------------------- -----------------------------
Return to: Anchor National Life Insurance Company, Annuity Service Center,
P.O. Box 54299, Los Angeles, California 90054-0299.
- --------------------------------------------------------------------------------
<PAGE> 27
STATEMENT OF ADDITIONAL INFORMATION
Fixed and Variable Group Deferred
Annuity Contracts issued by
VARIABLE ANNUITY ACCOUNT FOUR
Depositor: ANCHOR NATIONAL LIFE INSURANCE COMPANY
This Statement of Additional Information is not a prospectus; it should be
read with the prospectus 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
JANUARY 28, 1997
<PAGE> 28
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
Separate Account......................................................... 3
General Account.......................................................... 4
Performance Data......................................................... 4
Annuity Payments......................................................... 8
Annuity Unit Values...................................................... 8
Taxes....................................................................11
Distribution of Contracts................................................15
Financial Statements.....................................................16
</TABLE>
<PAGE> 29
SEPARATE ACCOUNT
Variable Annuity Account Four was originally established by the
Anchor National Life Insurance Company (the "Company") on November 8, 1994,
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 Portfolios, with the assets of
each Portfolio invested in the shares of one of the underlying funds. The
Company does not guarantee the investment performance of the separate
account, its Portfolios or the underlying funds. Values allocated to the
separate account and the amount of variable annuity payments will vary with
the values of shares of the underlying funds, and are also reduced by
contract charges.
The basic objective of a variable annuity contract is to provide
variable annuity payments which will be to some degree responsive to changes
in the economic environment, including inflationary forces and changes in
rates of return available from various types of investments. The Contract is
designed to seek to accomplish this objective by providing that variable
annuity payments will reflect the investment performance of the separate
account with respect to amounts allocated to it both before and after the
Annuity Date. Since the separate account is always fully invested in shares
of the underlying funds, its investment performance reflects the investment
performance of those entities. The values of such shares held by the
separate account fluctuate and are subject to the risks of changing economic
conditions as well as the risk inherent in the ability of the underlying
funds' managements to make necessary changes in their Portfolios to
anticipate changes in economic conditions. Therefore, the owner bears the
entire investment risk that the basic objectives of the contract may not be
realized, and that the adverse effects of inflation may not be lessened.
There can be no assurance that the aggregate amount of variable annuity
payments will equal or exceed the Purchase Payments made with respect to a
particular account for the reasons described above, or because of the
premature death of an Annuitant.
Another important feature of the contract related to its basic
objective is the Company's promise that the dollar amount of variable annuity
payments made during the lifetime of the Annuitant will not be adversely
affected by the actual mortality experience of the Company or by the actual
expenses incurred by the Company in excess of expense deductions provided for
in the Contract (although the Company does not guarantee the amounts of the
variable annuity payments).
GENERAL ACCOUNT
The General Account is made up of all of the general assets of the
Company other than those 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 the fixed investment
options and/or the one-year DCA account become part of the Company's general
account assets and are available to fund the claims of all classes of
customers of the Company, as well as of its creditors. Accordingly, all of
the Company's assets held in the general account will be available to fund
the Company's obligations under the contracts as well as such other claims.
- 3 -
<PAGE> 30
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 Portfolio
(which invests in shares of the Cash Management Portfolio of SunAmerica
Series Trust) over a seven-day period (which period will be stated in the
advertisement). This income is then "annualized." That is, the amount of
income generated by the investment during that week is assumed to be
generated each week over a 52-week period and is shown as a percentage of the
investment. The "effective yield" is calculated similarly but, when
annualized, the income earned by an investment in the Portfolio is assumed to
be reinvested at the end of each seven day period. The "effective yield"
will be slightly higher than the "yield" because of the compounding effect of
this assumed reinvestment. Neither the yield nor the effective yield takes
into consideration the effect of any capital changes that might have occurred
during the seven day period, nor do they reflect the impact of premium taxes.
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" date
for its other 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 Portfolio made at the beginning of the
period, will produce the same contract value at the end of the period that
the hypothetical investment would have produced over the same period
(assuming a complete redemption of the contract at the end of the period.)
Recurring contract charges are reflected in the total return figures in the
same manner as they are reflected in the yield data for contracts funded
through the Cash Management Portfolio.
For periods starting prior to the date the contracts were first
offered to the public, the total return data for the Portfolios of the
separate account will be derived from the performance of the corresponding
Portfolios of Anchor Series Trust and SunAmerica Series Trust, modified to
reflect the charges and expenses as if the separate account Portfolio had
been in existence since the inception date of each respective Anchor Series
Trust and SunAmerica Series Trust Portfolio. Thus, such performance figures
should not be construed to be actual historic performance of the relevant
separate account Portfolio. Rather, they are intended to indicate the
historical performance of the corresponding Portfolios of Anchor Series Trust
and SunAmerica Series Trust, adjusted to provide direct comparability to the
performance of the Portfolios after the date the contracts were first offered
to the public (which will reflect the effect of fees and charges imposed
under the contracts). Anchor Series Trust and SunAmerica Series Trust have
served since their inception as underlying investment media for separate
accounts of other insurance companies in connection with variable contracts
not having the same fee and charge schedules as those imposed under the
contracts.
Performance data for the various Portfolios are computed in the
manner described below.
- 4 -
<PAGE> 31
Cash Management Portfolio
The annualized yield and the effective yield for the Cash Management
Portfolio for the 7 day period ending September 30, 1996 were 3.67% and
3.74%, respectively.
Current yield is computed by first determining the Base Period Return
attributable to a hypothetical contract having a balance of one Accumulation
Unit at the beginning of a 7 day period using the formula:
Base Period Return = (EV-SV)/(SV)
where:
SV = value of one Accumulation Unit at the start of a 7 day
period
EV = value of one Accumulation Unit at the end of the 7 day
period
The value of the Accumulation Unit at the end of the period (EV) is
determined by (1) adding, to the value of the Accumulation Unit at the
beginning of the period (SV), the investment income from the underlying fund
attributed to the Accumulation Unit over the period, and (2) subtracting,
from the result, the portion of the annual mortality and expense risk and
distribution expense charges allocable to the 7 day period (obtained by
multiplying the annually-based charges by the fraction 7/365).
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. However, the effective yield accounts for dividend reinvestment by
compounding the current yield according to the formula:
365/7
Effective Yield = [(Base Period Return + 1) - 1]
The yield quoted should not be considered a representation of the
yield of the Cash Management Portfolio in the future since the yield is not
fixed. Actual yields will depend on the type, quality and maturities of the
investments held by the underlying fund and changes in interest rates on such
investments.
Yield information may be useful in reviewing the performance of the
Cash Management Portfolio and for providing a basis for comparison with other
investment alternatives. However, the Cash Management Portfolio's yield
fluctuates, unlike bank deposits or other investments that typically pay a
fixed yield for a stated period of time.
Other Portfolios
The Portfolios of the separate account other than the Cash Management
Portfolio compute their performance data as "total return".
- 5 -
<PAGE> 32
The total returns of the various Portfolios since inception are shown
below.
TOTAL ANNUAL RETURN (IN PERCENT) FOR
PERIOD ENDING SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
Portfolio Inception Date Since Inception
--------- ------------- ---------------
<S> <C> <C>
Anchor Trust
- ------------
Capital Appreciation 8/27/96 5.66%
Growth 9/6/96 5.24%
Natural Resources 9/12/96 0.04%
Gov't & Quality Bond 9/16/96 0.30%
SunAmerica Trust
- ----------------
Aggressive Growth 8/29/96 7.20%
International Diversified Equities 9/12/96 4.58%
Global Equities 8/27/96 1.78%
Alliance Growth 9/12/96 4.57%
Venture Value 8/27/96 2.91%
Federated Value 9/6/96 4.62%
Growth-Income 9/6/96 5.33%
Utility 9/16/96 -1.63%
Asset Allocation 9/16/96 0.70%
SunAmerica Balanced 9/16/96 2.15%
Worldwide High Income 8/27/96 3.86%
High-Yield Bond 9/23/96 1.27%
Corporate Bond 9/23/96 0.73%
Global Bond 9/4/96 2.08%
</TABLE>
_________________
Total return figures are based on historical data and are not intended to
indicate future performance.
Total return for a Portfolio represents a single computed annual rate
of return that, when compounded annually over a specified time period (one,
five, and ten years, or since inception) and applied to a hypothetical
initial investment in a contract funded by that Portfolio made at the
beginning of the period, will produce the same contract value at the end of
the period that the hypothetical investment would have produced over the same
period. The total rate of return (T) is computed so that it satisfies the
formula:
n
P(1+T) = ERV
where: P = a hypothetical initial payment of $1,000
T = average annual total return
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 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. 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.
ANNUITY PAYMENTS
Initial Monthly Annuity Payments
The initial annuity 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 annuity
- 6 -
<PAGE> 33
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 annuity payment. In the case of a
variable annuity, that amount is divided by the value of an Annuity Unit as
of the Annuity Date to establish the number of Annuity Units representing
each variable annuity payment. The number of Annuity Units determined for
the first variable annuity payment remains constant for the second and
subsequent monthly variable annuity payments, assuming that no reallocation
of contract values is made.
Subsequent Monthly Payments
For fixed annuity payments, the amount of the second and each
subsequent monthly annuity payment is the same as that determined above for
the first monthly payment.
For variable annuity payments, the amount of the second and each
subsequent monthly annuity payment is determined by multiplying the number of
Annuity Units, as determined in connection with the determination of the
initial monthly payment, above, by the Annuity Unit value as of the day
preceding the date on which each annuity payment is due.
ANNUITY UNIT VALUES
The value of an Annuity Unit is determined independently for each
Portfolio.
The annuity tables contained in the contract are based on a 3.5% per
annum assumed investment rate. If the actual net investment rate experienced
by a Portfolio exceed 3.5%, variable annuity payments derived from
allocations to that Portfolio will increase over time. Conversely, if the
actual rate is less than 3.5%, variable annuity payments will decrease over
time. If the net investment rate equals 3.5%, the variable annuity 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 annuity 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 Portfolios elected, and the amount of each
annuity payment will vary accordingly.
For each Portfolio, the value of an Annuity Unit is determined by
multiplying the Annuity Unit value for the preceding month by the Net
Investment Factor for the month for which the Annuity Unit value is being
calculated. The result is then multiplied by a second factor which offsets
the effect of the assumed net investment rate of 3.5% per annum which is
assumed in the annuity tables contained in the contract.
Net Investment Factor
The Net Investment Factor ("NIF") is an index applied to measure the
net investment performance of a Portfolio from one day to the next. The NIF
may be greater or less than or equal to one; therefore, the value of an
Annuity Unit may increase, decrease or remain the same.
The NIF for any Portfolio for a certain month is determined by
dividing (a) by (b) where:
(a) is the Accumulation Unit value of the Portfolio determined
as of the end of that month, and
(b) is the Accumulation Unit value of the Portfolio determined
as of the end of the preceding month.
- 7 -
<PAGE> 34
The NIF for a Portfolio for a given month is a measure of the net
investment performance of the Portfolio from the end of the prior month to
the end of the given month. A NIF of 1.000 results from no change in the
value of the Portfolio; a NIF greater than 1.000 results in from increase in
the value of the Portfolio; and a NIF less than 1.000 results from a decrease
in the value of the 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 Portfolio invests; it is also
reduced by separate account asset charges.
Illustrative Example
--------------------
Assume that one share of a given Portfolio had an Accumulation Unit
value of $11.46 as of the close of the New York Stock Exchange ("NYSE") on
the last business day in September; that its Accumulation Unit value had been
$11.44 at the close of the NYSE on the last business day at the end of the
previous month. The NIF for the month of September is:
NIF = ($11.46/$11.44)
= 1.00174825
Illustrative Example
--------------------
The change in Annuity Unit value for a Portfolio from one month to
the next is determined in part by multiplying the Annuity Unit value at the
prior month end by the NIF for that Portfolio for the new month. In
addition, however, the result of that computation must also be multiplied by
an additional factor that takes into account, and neutralizes, the assumed
investment rate of 3.5 percent per annum upon which the annuity payment
tables are based. For example, if the net investment rate for a Portfolio
(reflected in the NIF) were equal to the assumed investment rate, the
variable annuity payments should remain constant (i.e., the Annuity Unit
value should not change). The monthly factor that neutralizes the assumed
investment rate of 3.5 percent per annum is:
(1/12)
1/[(1.035) ] = 0.99713732
In the example given above, if the Annuity Unit value for the
Portfolio was $10.103523 on the last business day in August, the Annuity Unit
value on the last business day in September would have been:
$10.103523 x 1.00174825 x 0.99713732 = $10.092213
Variable Annuity Payments
Illustrative Example
--------------------
Assume that a male owner, P, owns a contract in connection with which
P has allocated all of his contract value to a single Portfolio. P is also
the sole Annuitant and, at age 60, has elected to annuitize his contract
under Option 4, a Life Annuity With 120 Monthly Payments Guaranteed. As of
the last valuation preceding the Annuity Date, P's Account was credited with
7543.2456 Accumulation Units each having a value of $15.432655, (i.e., P's
account value is equal to 7543.2456 x $15.432655 = $116,412.31). Assume also
that the Annuity Unit value for the Portfolio on that same date is
$13.256932, and that the Annuity Unit value on the day immediately prior to
the second annuity payment date is $13.327695.
P's first variable annuity payment is determined from the annuity
rate tables in P's contract, using the information assumed above. From the
tables, which supply monthly annuity payments for each $1,000 of applied
contract value, P's first variable annuity payment is determined by
multiplying the monthly installment of $5.42 (Option 4 or 4v 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
- 8 -
<PAGE> 35
The number of P's Annuity Units (which will be fixed; i.e., it will
not change unless he transfers his Annuity Units to Annuity Units of another
Portfolio) is also determined at this time and is equal to the amount of the
first variable annuity 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 annuity payment is determined by multiplying the
number of Annuity Units by the Annuity Unit value as of the day immediately
prior to the second payment due date:
Second Payment = 47.593968 x $13.327695 = $634.32
The third and subsequent variable annuity payments are computed in
a manner similar to the second variable annuity payment.
Note that the amount of the first variable annuity payment depends
on the contract value in the relevant Portfolio on the Annuity Date and thus
reflects the investment performance of the Portfolio net of fees and charges
during the Accumulation Phase. The amount of that payment determines the
number of Annuity Units, which will remain constant during the Annuity Phase
(assuming no transfers from the Portfolio). The net investment performance
of the Portfolio during the Annuity Phase is reflected in continuing changes
during this phase in the Annuity Unit value, which determines the amounts of
the second and subsequent variable annuity payments.
TAXES
General
Section 72 of the Internal Revenue Code of 1986, as amended (the
"Code") governs taxation of annuities in general. An owner is not taxed on
increases in the value of a contract until distribution occurs, either in the
form of a non-annuity distribution or as annuity payments under the annuity
option elected. For a lump sum payment received as a total surrender (total
redemption), the recipient is taxed on the portion of the payment that
exceeds the cost basis of the contract. For a payment received as a
withdrawal (partial redemption), federal tax liability is determined on a
last-in, first-out basis, meaning taxable income is withdrawn before the cost
basis of the contract is withdrawn. For contracts issued in connection with
Nonqualified plans, the cost basis is generally the Purchase Payments, while
for contracts issued in connection with Qualified plans there may be no cost
basis. The taxable portion of the lump sum payment is taxed at ordinary
income tax rates. Tax penalties may also apply.
For annuity payments, the taxable portion is determined by a formula
which establishes the ratio that the cost basis of the contract bears to the
total value of annuity payments for the term of the annuity contract. The
taxable portion is taxed at ordinary income tax rates. Owners, Annuitants
and Beneficiaries under the contracts should seek competent financial advice
about the tax consequences of distributions under the retirement plan under
which the contracts are purchased.
The Company is taxed as a life insurance company under the Code. For
federal income tax purposes, the separate account is not a separate entity
from the Company and its operations form a part of the Company.
Withholding Tax on Distributions
The Code generally requires the Company (or, in some cases, a plan
administrator) to withhold tax on the taxable portion of any distribution or
withdrawal from a contract. For "eligible rollover distributions" from
contracts issued under certain types of Qualified plans, 20% of the
distribution must be withheld, unless the payee elects to have the
distribution "rolled over" to another eligible plan in a direct "trustee to
trustee" transfer. This requirement is mandatory and cannot be waived by the
owner. Withholding on other types of distributions can be waived.
An "eligible rollover distribution" is the estimated taxable portion
of any amount received by a covered employee from a plan qualified under
Section 401(a) or 403(a) of the Code, or from a tax-sheltered annuity
- 9 -
<PAGE> 36
qualified under Section 403(b) of the Code (other than (1) annuity payments
for the life (or life expectancy) of the employee, or joint lives (or joint
life expectancies) of the employee and his or her designated Beneficiary, or
for a specified period of ten years or more; and (2) distributions required
to be made under the Code). Failure to "roll over" the entire amount of an
eligible rollover distribution (including an amount equal to the 20% portion
of the distribution that was withheld) could have adverse tax consequences,
including the imposition of a penalty tax on premature withdrawals, described
later in this section.
Withdrawals or distributions from a contract other than eligible
rollover distributions are also subject to withholding on the estimated
taxable portion of the distribution, but the owner may elect in such cases to
waive the withholding requirement. If not waived, withholding is imposed (1)
for periodic 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 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
- 10 -
<PAGE> 37
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
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 on 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. Purchasers of contracts for use with an H.R. 10 Plan
should obtain competent tax advice as to the tax treatment and
suitability of such an investment.
(b) Tax-Sheltered Annuities
Section 403(b) of the Code permits the purchase of "tax-
sheltered annuities" by public schools and certain charitable,
education 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. Any employee
should obtain competent tax advice as to the tax treatment and
suitability of such an investment.
(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
- 11 -
<PAGE> 38
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. Purchasers of contracts to be
qualified as IRAs should obtain competent tax advice as to the tax
treatment and suitability of such an investment.
(d) Corporate Pension and Profit-Sharing Plans
Sections 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 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 interests;
nondiscrimination in eligibility and participation; and the tax
treatment of distributions, withdrawals and surrenders. Purchasers
of contracts for use with corporate pension or profit sharing plans
should obtain competent tax advice as to the tax treatment and
suitability of such an investment.
(e) 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.
DISTRIBUTION OF CONTRACTS
The contracts are offered through SunAmerica Capital Services, Inc.,
located at 733 Third Avenue, 4th Floor, New York, New York 10017. SunAmerica
Capital Services, Inc. is registered as a broker-dealer under the Securities
Exchange Act of 1934, as amended, and is a member of the National Association
of Securities Dealers, Inc. The Company and SunAmerica Capital Services,
Inc. are each an indirect wholly owned subsidiary of SunAmerica Inc.
For the period from inception to September 30, 1996, the aggregate
amount of underwriting commissions paid by the Company to SunAmerica Capital
Services, Inc. was $12,448.33, of which $1,231.12 was retained by it.
Contracts are offered on a continuous basis.
FINANCIAL STATEMENTS
The consolidated financial statements of the Company as of September
30, 1996 and 1995 and for each of the three years in the period ended
September 30, 1996 are presented in this Statement of Additional Information.
The consolidated financial statements of the Company should be considered
only as bearing on the ability of the Company to meet its obligation under
the Contracts. The financial statements of Variable Annuity Account Four as
of September 30, 1996 and for the period from inception (August 19, 1996) to
September 30, 1996 are included in this Statement of Additional Information.
- 12 -
<PAGE> 39
Price Waterhouse 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 Price Waterhouse LLP, independent accountants,
given on the authority of said firm as experts in auditing and accounting.
- 13 -
<PAGE> 40
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholder of Anchor National Life Insurance
Company
In our opinion, the accompanying consolidated balance sheet and the related
consolidated income statement and statement of cash flows present fairly, in
all material respects, the financial position of Anchor National Life Insurance
Company and its subsidiaries at September 30, 1996 and 1995, and the results
of their operations and their cash flows for each of the three years in the
period ended September 30, 1996, in conformity with generally accepted
accounting principles. These financial statements are the responsibility of
the Company's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for the opinion expressed above.
As discussed in Note 2, the Company adopted Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes," in fiscal 1994.
Price Waterhouse LLP
Los Angeles, California
November 8, 1996
<PAGE> 41
ANCHOR NATIONAL LIFE INSURANCE COMPANY
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
September 30,
--------------------------------
1996 1995
-------------- --------------
<S> <C> <C>
ASSETS
Investments:
Cash and short-term investments $ 122,058,000 $ 249,209,000
Bonds, notes and redeemable
preferred stocks:
Available for sale, at fair value
(amortized cost: 1996, $2,001,024,000;
1995, $1,500,062,000) 1,987,271,000 1,489,213,000
Held for investment, at amortized cost
(fair value: 1995, $165,004,000) -- 157,901,000
Mortgage loans 98,284,000 94,260,000
Common stocks, at fair value (cost:
1996, $2,911,000; 1995, $6,576,000) 3,970,000 4,097,000
Real estate 39,724,000 55,798,000
Other invested assets 77,925,000 64,430,000
-------------- --------------
Total investments 2,329,232,000 2,114,908,000
Variable annuity assets 6,311,557,000 5,230,246,000
Receivable from brokers for sales
of securities 52,348,000 --
Accrued investment income 19,675,000 14,192,000
Deferred acquisition costs 443,610,000 383,069,000
Other assets 48,113,000 41,282,000
-------------- --------------
TOTAL ASSETS $9,204,535,000 $7,783,697,000
============== ==============
</TABLE>
<PAGE> 42
ANCHOR NATIONAL LIFE INSURANCE COMPANY
CONSOLIDATED BALANCE SHEET (Continued)
<TABLE>
<CAPTION>
September 30,
-----------------------------------
1996 1995
--------------- ---------------
<S> <C> <C>
LIABILITIES AND SHAREHOLDER'S EQUITY
Reserves, payables and accrued liabilities:
Reserves for fixed annuity contracts $ 1,789,962,000 $ 1,497,052,000
Reserves for guaranteed investment
contracts 415,544,000 277,095,000
Payable to brokers for purchases of
securities -- 155,861,000
Income taxes currently payable 21,486,000 15,720,000
Other liabilities 74,710,000 56,372,000
--------------- ---------------
Total reserves, payables
and accrued liabilities 2,301,702,000 2,002,100,000
--------------- ---------------
Variable annuity liabilities 6,311,557,000 5,230,246,000
--------------- ---------------
Subordinated notes payable to Parent 35,832,000 35,832,000
--------------- ---------------
Deferred income taxes 70,189,000 73,459,000
--------------- ---------------
Shareholder's equity:
Common Stock 3,511,000 3,511,000
Additional paid-in capital 280,263,000 252,876,000
Retained earnings 207,002,000 191,346,000
Net unrealized losses on debt and equity
securities available for sale (5,521,000) (5,673,000)
--------------- ---------------
Total shareholder's equity 485,255,000 442,060,000
--------------- ---------------
TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY $ 9,204,535,000 $ 7,783,697,000
=============== ===============
</TABLE>
See accompanying notes
<PAGE> 43
ANCHOR NATIONAL LIFE INSURANCE COMPANY
CONSOLIDATED INCOME STATEMENT
<TABLE>
<CAPTION>
Years ended September 30,
-------------------------------------------------
1996 1995 1994
------------- ------------- -------------
<S> <C> <C> <C>
Investment income $ 164,631,000 $ 129,466,000 $ 127,758,000
------------- ------------- -------------
Interest expense on:
Fixed annuity contracts (82,690,000) (72,975,000) (66,311,000)
Guaranteed investment contracts (19,974,000) (3,733,000) --
Senior indebtedness (2,568,000) (227,000) (71,000)
Subordinated notes payable
to Parent (2,556,000) (2,448,000) (2,380,000)
------------- ------------- -------------
Total interest expense (107,788,000) (79,383,000) (68,762,000)
------------- ------------- -------------
NET INVESTMENT INCOME 56,843,000 50,083,000 58,996,000
------------- ------------- -------------
NET REALIZED INVESTMENT LOSSES (13,355,000) (4,363,000) (33,713,000)
------------- ------------- -------------
Fee income:
Variable annuity fees 103,970,000 84,171,000 79,101,000
Asset management fees 25,413,000 26,935,000 31,302,000
Net retained commissions 31,548,000 24,108,000 20,822,000
------------- ------------- -------------
TOTAL FEE INCOME 160,931,000 135,214,000 131,225,000
------------- ------------- -------------
Other income and expenses:
Surrender charges 5,184,000 5,889,000 5,034,000
General and administrative
expenses (80,048,000) (61,629,000) (52,636,000)
Amortization of deferred
acquisition costs (57,520,000) (58,713,000) (44,195,000)
Annual commissions (4,613,000) (2,658,000) (1,158,000)
Other, net 1,886,000 1,174,000 3,767,000
------------- ------------- -------------
TOTAL OTHER INCOME AND EXPENSES (135,111,000) (115,937,000) (89,188,000)
------------- ------------- -------------
PRETAX INCOME 69,308,000 64,997,000 67,320,000
Income tax expense (24,252,000) (25,739,000) (22,705,000)
------------- ------------- -------------
INCOME BEFORE CUMULATIVE EFFECT
OF CHANGE IN ACCOUNTING FOR
INCOME TAXES 45,056,000 39,258,000 44,615,000
Cumulative effect of change
in accounting for income taxes -- -- (20,463,000)
------------- ------------- -------------
NET INCOME $ 45,056,000 $ 39,258,000 $ 24,152,000
============= ============= =============
</TABLE>
See accompanying notes
<PAGE> 44
ANCHOR NATIONAL LIFE INSURANCE COMPANY
CONSOLIDATED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
Years ended September 30,
-------------------------------------------------
1996 1995 1994
------------- ------------- -------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 45,056,000 $ 39,258,000 $ 24,152,000
Adjustments to reconcile net
income to net cash provided
by operating activities:
Interest credited to:
Fixed annuity contracts 82,690,000 72,975,000 66,311,000
Guaranteed investment contracts 19,974,000 3,733,000 --
Net realized investment losses 13,355,000 4,363,000 33,713,000
Accretion of net discounts
on investments (8,976,000) (6,865,000) (2,050,000)
Amortization of goodwill 1,169,000 1,168,000 1,169,000
Provision for deferred
income taxes (3,351,000) (1,489,000) 19,395,000
Cumulative effect of change
in accounting for income taxes -- -- 20,463,000
Change in:
Accrued investment income (5,483,000) 3,373,000 (1,310,000)
Deferred acquisition costs (60,941,000) (7,180,000) (34,612,000)
Other assets (8,000,000) 7,047,000 5,133,000
Income taxes currently payable 5,766,000 3,389,000 6,559,000
Other liabilities 5,474,000 4,063,000 46,000
Other, net (129,000) 7,000 360,000
------------- ------------- -------------
NET CASH PROVIDED BY OPERATING
ACTIVITIES 86,604,000 123,842,000 139,329,000
------------- ------------- -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Premium receipts on:
Fixed annuity contracts 651,649,000 245,320,000 138,526,000
Guaranteed investment contracts 134,967,000 275,000,000 --
Net exchanges to (from) the fixed
accounts of variable annuity
contracts (236,705,000) 10,475,000 (29,286,000)
Withdrawal payments on:
Fixed annuity contracts (173,489,000) (237,977,000) (269,412,000)
Guaranteed investment contracts (16,492,000) (1,638,000) --
Claims and annuity payments on
fixed annuity contracts (31,107,000) (31,237,000) (31,146,000)
Net receipts from (repayments of)
other short-term financings (119,712,000) 3,202,000 (166,685,000)
Capital contribution received 27,387,000 -- --
Dividend paid (29,400,000) -- --
------------- ------------- -------------
NET CASH PROVIDED (USED) BY
FINANCING ACTIVITIES 207,098,000 263,145,000 (358,003,000)
------------- ------------- -------------
</TABLE>
<PAGE> 45
ANCHOR NATIONAL LIFE INSURANCE COMPANY
CONSOLIDATED STATEMENT OF CASH FLOWS (Continued)
<TABLE>
<CAPTION>
Years ended September 30,
---------------------------------------------------
1996 1995 1994
--------------- --------------- ---------------
<S> <C> <C> <C>
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of:
Bonds, notes and redeemable
preferred stocks $(1,937,890,000) $(1,556,586,000) $(1,197,743,000)
Mortgage loans (15,000,000) -- (10,666,000)
Other investments, excluding
short-term investments (36,770,000) (13,028,000) (26,317,000)
Sales of:
Bonds, notes and redeemable
preferred stocks 1,241,928,000 1,026,078,000 877,068,000
Real estate 900,000 36,813,000 33,443,000
Other investments, excluding
short-term investments 4,937,000 5,130,000 2,353,000
Redemptions and maturities of:
Bonds, notes and redeemable
preferred stocks 288,969,000 178,688,000 173,763,000
Mortgage loans 11,324,000 14,403,000 10,087,000
Other investments, excluding
short-term investments 20,749,000 13,286,000 13,500,000
--------------- --------------- ---------------
NET CASH USED BY INVESTING
ACTIVITIES (420,853,000) (295,216,000) (124,512,000)
--------------- --------------- ---------------
NET INCREASE (DECREASE) IN CASH
AND SHORT-TERM INVESTMENTS (127,151,000) 91,771,000 (343,186,000)
CASH AND SHORT-TERM INVESTMENTS
AT BEGINNING OF PERIOD 249,209,000 157,438,000 500,624,000
--------------- --------------- ---------------
CASH AND SHORT-TERM INVESTMENTS
AT END OF PERIOD $ 122,058,000 $ 249,209,000 $ 157,438,000
=============== =============== ===============
Supplemental cash flow information:
Interest paid on indebtedness $ 5,982,000 $ 3,235,000 $ 1,175,000
=============== =============== ===============
Net income taxes paid (recovered) $ 22,031,000 $ 23,656,000 $ (3,328,000)
=============== =============== ===============
</TABLE>
See accompanying notes
<PAGE> 46
ANCHOR NATIONAL LIFE INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. NATURE OF OPERATIONS
Anchor National Life Insurance Company (the "Company") is a wholly owned
indirect subsidiary of SunAmerica, Inc. (the "Parent"). The Company is
an Arizona-domiciled life insurance company and, on a consolidated basis,
conducts its business through three segments: annuity operations, asset
management operations and broker-dealer operations. Annuity operations
include the sale and administration of fixed and variable annuities and
guaranteed investment contracts. Asset management operations, which
include the sale and management of mutual funds, is conducted by
SunAmerica Asset Management Corp. Broker-dealer operations include the
sale of securities and financial services products, and is conducted by
Royal Alliance Associates, Inc.
The operations of the Company are influenced by many factors, including
general economic conditions, monetary and fiscal policies of the federal
government, and policies of state and other regulatory authorities. The
level of sales of the Company's financial products is influenced by many
factors, including general market rates of interest; strength, weakness
and volatility of equity market; and terms and conditions of competing
financial products. The Company is exposed to the typical risks normally
associated with a portfolio of fixed-income securities, namely interest
rate, option, liquidity and credit risks. The Company controls its
exposure to these risks by, among other things, closely monitoring and
matching the duration of its assets and liabilities, monitoring and
limiting prepayment and extension risk in its portfolio, maintaining a
large percentage of its portfolio in highly liquid securities, and
engaging in a disciplined process of underwriting, reviewing and
monitoring credit risk. The Company also is exposed to market risk, as
market volatility may result in reduced fee income in the case of assets
managed in mutual funds and held in separate accounts.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION: The accompanying consolidated financial statements
have been prepared in accordance with generally accepted accounting
principles and include the accounts of the Company and all of its wholly
owned subsidiaries. All significant intercompany accounts and
transactions are eliminated in consolidation. Certain 1995 and 1994
amounts have been reclassified to conform with the 1996 presentation.
The preparation of financial statements in conformity with generally
accepted accounting principles requires the use of estimates and
assumptions that affect the amounts reported in the financial statements
and the accompanying notes. Actual results could differ from those
estimates.
<PAGE> 47
ANCHOR NATIONAL LIFE INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
RECENTLY ISSUED ACCOUNTING STANDARDS: Effective October 1, 1993, the
Company adopted the provisions of Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes." Accordingly, the
cumulative effect of this change in accounting for income taxes was
recorded on October 1, 1993 to increase the liability for Deferred Income
Taxes by $20,463,000.
INVESTMENTS: Cash and short-term investments primarily include cash,
commercial paper, money market investments, repurchase agreements and
short-term bank participations. All such investments are carried at cost
plus accrued interest, which approximates fair value, have maturities of
three months or less and are considered cash equivalents for purposes of
reporting cash flows.
Bonds, notes and redeemable preferred stocks available for sale and
common stocks are carried at aggregate fair value and changes in
unrealized gains or losses, net of tax, are credited or charged directly
to shareholder's equity. Bonds, notes and redeemable preferred stocks
held for investment (the "Held for Investment Portfolio") are carried at
amortized cost. On December 1, 1995, the Company reassessed the
appropriateness of classifying a portion of its portfolio of bonds, notes
and redeemable preferred stocks as held for investment. This
reassessment was made pursuant to the provisions of "Special Report: A
Guide to Implementation of Statement 115 on Accounting for Certain
Investments in Debt and Equity Securities," issued by the Financial
Accounting Standards Board in November 1995. As a result of its
reassessment, the Company reclassified all of its Held for Investment
Portfolio as available for sale. At December 1, 1995, the amortized cost
of the Held for Investment Portfolio aggregated $157,830,000 and its fair
value was $166,215,000. Upon reclassification, the resulting net
unrealized gain of $8,385,000 was credited to Net Unrealized Losses on
Debt and Equity Securities Available for Sale in the shareholder's equity
section of the balance sheet.
Bonds, notes and redeemable preferred stocks are reduced to estimated net
realizable value when necessary for declines in value considered to be
other than temporary. Estimates of net realizable value are subjective
and actual realization will be dependent upon future events.
Mortgage loans are carried at amortized unpaid balances, net of
provisions for estimated losses. Real estate is carried at the lower of
cost or fair value. Other invested assets include investments in limited
partnerships, which are accounted for by using the cost method of
accounting; separate account investments; leveraged leases; policy loans,
which are carried at unpaid balances; and collateralized mortgage
obligation residuals.
Realized gains and losses on the sale of investments are recognized in
operations at the date of sale and are determined using the specific cost
identification method. Premiums and discounts on investments are
amortized to investment income using the interest method over the
contractual lives of the investments.
<PAGE> 48
ANCHOR NATIONAL LIFE INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
DEFERRED ACQUISITION COSTS: Policy acquisition costs are deferred and
amortized, with interest, over the estimated lives of the contracts in
relation to the present value of estimated gross profits, which are
composed of net interest income, net realized investment gains and
losses, variable annuity fees, surrender charges and direct
administrative expenses. Costs incurred to sell mutual funds are also
deferred and amortized over the estimated lives of the funds obtained.
Deferred acquisition costs consist of commissions and other costs that
vary with, and are primarily related to, the production or acquisition
of new business.
As debt and equity securities available for sale are carried at aggregate
fair value, an adjustment is made to deferred acquisition costs equal to
the change in amortization that would have been recorded if such
securities had been sold at their stated aggregate fair value and the
proceeds reinvested at current yields. The change in this adjustment,
net of tax, is included with the change in net unrealized gains or losses
on debt and equity securities available for sale that is credited or
charged directly to shareholder's equity. Deferred Acquisition Costs
have been increased by $4,200,000 at September 30, 1996, and by
$4,600,000 at September 30, 1995 for this adjustment.
VARIABLE ANNUITY ASSETS AND LIABILITIES: The assets and liabilities
resulting from the receipt of variable annuity premiums are segregated
in separate accounts. The Company receives administrative fees for
managing the funds and other fees for assuming mortality and certain
expense risks. Such fees are included in Variable Annuity Fees in the
income statement.
GOODWILL: Goodwill, amounting to $19,478,000 at September 30, 1996, is
amortized by using the straight-line method over periods averaging 25
years and is included in Other Assets in the balance sheet.
CONTRACTHOLDER RESERVES: Contractholder reserves for fixed annuity
contracts and guaranteed investment contracts are accounted for as
investment-type contracts in accordance with Statement of Financial
Accounting Standards No. 97, "Accounting and Reporting by Insurance
Enterprises for Certain Long-Duration Contracts and for Realized Gains
and Losses from the Sale of Investments," and are recorded at accumulated
value (premiums received, plus accrued interest, less withdrawals and
assessed fees).
FEE INCOME: Variable annuity fees and asset management fees are recorded
in income as earned. Net retained commissions are recognized as income
on a trade-date basis.
<PAGE> 49
ANCHOR NATIONAL LIFE INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
INCOME TAXES: The Company is included in the consolidated federal income
tax return of the Parent and files as a "life insurance company" under
the provisions of the Internal Revenue Code of 1986. Income taxes have
been calculated as if the Company filed a separate return. Deferred
income tax assets and liabilities are recognized based on the difference
between financial statement carrying amounts and income tax bases of
assets and liabilities using enacted income tax rates and laws.
<PAGE> 50
ANCHOR NATIONAL LIFE INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
3. INVESTMENTS
The amortized cost and estimated fair value of bonds, notes and redeemable
preferred stocks available for sale and held for investment by major
category follow:
<TABLE>
<CAPTION>
Estimated
Amortized fair
cost value
-------------- --------------
<S> <C> <C>
AT SEPTEMBER 30, 1996:
AVAILABLE FOR SALE:
Securities of the United States
Government $ 311,458,000 $ 304,538,000
Mortgage-backed securities 747,653,000 741,876,000
Securities of public utilities 3,684,000 3,672,000
Corporate bonds and notes 590,071,000 591,148,000
Redeemable preferred stocks 9,064,000 8,664,000
Other debt securities 339,094,000 337,373,000
-------------- --------------
Total available for sale $2,001,024,000 $1,987,271,000
============== ==============
AT SEPTEMBER 30, 1995:
AVAILABLE FOR SALE:
Securities of the United States
Government $ 59,756,000 $ 60,258,000
Mortgage-backed securities 1,121,064,000 1,110,676,000
Securities of public utilities 792,000 774,000
Corporate bonds and notes 290,924,000 288,883,000
Redeemable preferred stocks 3,945,000 4,937,000
Other debt securities 23,581,000 23,685,000
-------------- --------------
Total available for sale $1,500,062,000 $1,489,213,000
============== ==============
HELD FOR INVESTMENT:
Securities of the United States
Government $ 10,379,000 $ 10,797,000
Mortgage-backed securities 8,378,000 8,378,000
Corporate bonds and notes 105,980,000 112,665,000
Other debt securities 33,164,000 33,164,000
-------------- --------------
Total held for investment $ 157,901,000 $ 165,004,000
============== ==============
</TABLE>
<PAGE> 51
ANCHOR NATIONAL LIFE INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
3. INVESTMENTS (continued)
The amortized cost and estimated fair value of bonds, notes and
redeemable preferred stocks available for sale by contractual maturity,
as of September 30, 1996, follow:
<TABLE>
<CAPTION>
Estimated
Amortized fair
cost value
-------------- --------------
<S> <C> <C>
AVAILABLE FOR SALE:
Due in one year or less $ 18,792,000 $ 19,357,000
Due after one year through
five years 505,564,000 499,163,000
Due after five years through
ten years 378,249,000 378,250,000
Due after ten years 350,766,000 348,625,000
Mortgage-backed securities 747,653,000 741,876,000
-------------- --------------
Total available for sale $2,001,024,000 $1,987,271,000
============== ==============
</TABLE>
Actual maturities of bonds, notes and redeemable preferred stocks will
differ from those shown above due to prepayments and redemptions.
<PAGE> 52
ANCHOR NATIONAL LIFE INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
3. INVESTMENTS (continued)
Gross unrealized gains and losses on bonds, notes and redeemable preferred
stocks available for sale and held for investment by major category
follow:
<TABLE>
<CAPTION>
Gross Gross
unrealized unrealized
gains losses
------------- -------------
<S> <C> <C>
AT SEPTEMBER 30, 1996:
AVAILABLE FOR SALE:
Securities of the United States
Government $ 284,000 $ (7,204,000)
Mortgage-backed securities 7,734,000 (13,511,000)
Securities of public utilities 1,000 (13,000)
Corporate bonds and notes 11,709,000 (10,632,000)
Redeemable preferred stocks 16,000 (416,000)
Other debt securities 431,000 (2,152,000)
------------- -------------
Total available for sale $ 20,175,000 $ (33,928,000)
============= =============
AT SEPTEMBER 30, 1995:
AVAILABLE FOR SALE:
Securities of the United States
Government $ 553,000 $ (51,000)
Mortgage-backed securities 12,013,000 (22,401,000)
Securities of public utilities --- (18,000)
Corporate bonds and notes 5,344,000 (7,385,000)
Redeemable preferred stocks 992,000 ---
Other debt securities 104,000 ---
------------- -------------
Total available for sale $ 19,006,000 $ (29,855,000)
============= =============
HELD FOR INVESTMENT:
Securities of the United States
Government $ 432,000 $ (14,000)
Corporate bonds and notes 6,685,000 ---
------------- -------------
Total held for investment $ 7,117,000 $ (14,000)
============= =============
</TABLE>
<PAGE> 53
ANCHOR NATIONAL LIFE INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
3. INVESTMENTS (continued)
At September 30, 1996, gross unrealized gains on equity securities
aggregated $1,368,000 and gross unrealized losses aggregated $309,000. At
September 30, 1995, gross unrealized gains on equity securities aggregated
$1,082,000 and gross unrealized losses aggregated $3,561,000.
Gross realized investment gains and losses on sales of all types of
investments are as follows:
<TABLE>
<CAPTION>
Years ended September 30,
----------------------------------------
1996 1995 1994
------------ ------------ ------------
<S> <C> <C> <C>
BONDS, NOTES AND REDEEMABLE
PREFERRED STOCKS:
Available for sale:
Realized gains $ 14,532,000 $ 15,983,000 $ 12,760,000
Realized losses (10,432,000) (21,842,000) (31,066,000)
Held for investment:
Realized gains --- 2,413,000 890,000
Realized losses --- (586,000) (1,913,000)
EQUITIES:
Realized gains 511,000 994,000 467,000
Realized losses (3,151,000) (114,000) (303,000)
OTHER INVESTMENTS:
Realized gains 1,135,000 3,561,000 ---
Realized losses (1,729,000) (12,000) (358,000)
IMPAIRMENT WRITEDOWNS (14,221,000) (4,760,000) (14,190,000)
------------ ------------ ------------
Total net realized
investment losses $(13,355,000) $ (4,363,000) $(33,713,000)
============ ============ ============
</TABLE>
<PAGE> 54
ANCHOR NATIONAL LIFE INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
3. INVESTMENTS (continued)
The sources and related amounts of investment income are as follows:
<TABLE>
<CAPTION>
Years ended September 30,
------------------------------------------
1996 1995 1994
-------------- ------------- -------------
<S> <C> <C> <C>
Short-term investments $ 10,647,000 $ 8,308,000 $ 4,648,000
Bonds, notes and
redeemable preferred stocks 140,387,000 107,643,000 98,935,000
Mortgage loans 8,701,000 7,419,000 12,133,000
Common stocks 8,000 3,000 1,000
Real estate (196,000) (51,000) 1,379,000
Limited partnerships 4,073,000 5,128,000 9,487,000
Other invested assets 1,011,000 1,016,000 1,175,000
-------------- ------------- -------------
Total investment income $164,631,000 $129,466,000 $127,758,000
============== ============= =============
</TABLE>
Expenses incurred to manage the investment portfolio amounted to
$1,737,000 for the year ended September 30, 1996, $1,983,000 for the year
ended September 30, 1995, and $1,714,000 for the year ended September 30,
1994 and are included in General and Administrative Expenses in the income
statement.
At September 30, 1996, no investment exceeded 10% of the Company's
consolidated shareholder's equity.
At September 30, 1996, mortgage loans were collateralized by properties
located in 11 states, with loans totaling approximately 21% of the
aggregate carrying value of the portfolio secured by properties located in
Colorado, approximately 17% by properties located in New Jersey and
approximately 14% by properties located in California. No more than 12% of
the portfolio was secured by properties in any other single state.
At September 30, 1996, bonds, notes and redeemable preferred stocks
included $160,801,000 (fair value, $160,158,000) of bond and notes not
rated investment grade by either Standard & Poor's Corporation, Moody's
Investors Service, Duff and Phelps Credit Rating Co., Fitch Investor
Service, Inc. or under National Association of Insurance Commissioners'
guidelines. The Company had no material concentrations of
non-investment-grade assets at September 30, 1996.
At September 30, 1996, the amortized cost of investments in default as to
the payment of principal or interest was $3,115,000, consisting of
$1,580,000 of non- investment-grade bonds and $1,535,000 of mortgage
loans. Such nonperforming investments had an estimated fair value of
$2,935,000.
<PAGE> 55
ANCHOR NATIONAL LIFE INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
3. INVESTMENTS (continued)
At September 30, 1996, $6,486,000 of bonds, at amortized cost, were on
deposit with regulatory authorities in accordance with statutory
requirements.
The Company has undertaken to dispose of certain real estate investments,
having an aggregate carrying value of $28,410,000, during the next year,
to affiliated or nonaffiliated parties, and the Parent has guaranteed that
the Company will receive its current carrying value for these assets.
4. FAIR VALUE OF FINANCIAL INSTRUMENTS
The following estimated fair value disclosures are limited to reasonable
estimates of the fair value of only the Company's financial instruments.
The disclosures do not address the value of the Company's recognized and
unrecognized nonfinancial assets (including its other invested assets,
equity investments and real estate investments) and liabilities or the
value of anticipated future business. The Company does not plan to sell
most of its assets or settle most of its liabilities at these estimated
fair values.
The fair value of a financial instrument is the amount at which the
instrument could be exchanged in a current transaction between willing
parties, other than in a forced or liquidation sale. Selling expenses and
potential taxes are not included. The estimated fair value amounts were
determined using available market information, current pricing information
and various valuation methodologies. If quoted market prices were not
readily available for a financial instrument, management determined an
estimated fair value. Accordingly, the estimates may not be indicative of
the amounts the financial instruments could be exchanged for in a current
or future market transaction.
The following methods and assumptions were used to estimate the fair value
of each class of financial instruments for which it is practicable to
estimate that value:
CASH AND SHORT TERM INVESTMENTS: Carrying value is considered to be a
reasonable estimate of fair value.
BONDS, NOTES AND REDEEMABLE PREFERRED STOCKS: Fair value is based
principally on independent pricing services, broker quotes and other
independent information.
MORTGAGE LOANS: Fair values are primarily determined by discounting future
cash flows to the present at current market rates, using expected
prepayment rates.
VARIABLE ANNUITY ASSETS: Variable annuity assets are carried at the market
value of the underlying securities.
RECEIVABLE FROM (PAYABLE TO) BROKERS FOR SALES (PURCHASES) OF SECURITIES:
Such obligations represent net transactions of a short-term nature for
which the carrying value is considered a reasonable estimate of fair
value.
<PAGE> 56
ANCHOR NATIONAL LIFE INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
4. FAIR VALUE OF FINANCIAL INSTRUMENTS (continued)
RESERVES FOR FIXED ANNUITY CONTRACTS: Deferred annuity contracts and
single premium life contracts are assigned a fair value equal to current
net surrender value. Annuitized contracts are valued based on the present
value of future cash flows at current pricing rates.
RESERVES FOR GUARANTEED INVESTMENT CONTRACTS: Fair value is based on the
present value of future cash flows at current pricing rates.
VARIABLE ANNUITY LIABILITIES: Fair values of contracts in the accumulation
phase are based on net surrender values. Fair values of contracts in the
payout phase are based on the present value of future cash flows at
assumed investment rates.
SUBORDINATED NOTES PAYABLE TO PARENT: Fair value is estimated based on the
quoted market prices for similar issues.
<PAGE> 57
ANCHOR NATIONAL LIFE INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
4. FAIR VALUE OF FINANCIAL INSTRUMENTS (continued)
The estimated fair values of the Company's financial instruments at
September 30, 1996 and 1995, compared with their respective carrying
values, are as follows:
<TABLE>
<CAPTION>
Carrying Fair
value value
-------------- --------------
<S> <C> <C>
1996:
ASSETS:
Cash and short-term investments $ 122,058,000 $ 122,058,000
Bonds, notes and redeemable
preferred stocks 1,987,271,000 1,987,271,000
Mortgage loans 98,284,000 102,112,000
Receivable from brokers for sales
of securities 52,348,000 52,348,000
Variable annuity assets 6,311,557,000 6,311,557,000
LIABILITIES:
Reserves for fixed annuity contracts 1,789,962,000 1,738,784,000
Reserves for guaranteed investment
contracts 415,544,000 416,695,000
Variable annuity liabilities 6,311,557,000 6,117,508,000
Subordinated notes payable to Parent 35,832,000 37,339,000
============== ==============
1995:
ASSETS:
Cash and short-term investments $ 249,209,000 $ 249,209,000
Bonds, notes and redeemable
preferred stocks 1,647,114,000 1,654,217,000
Mortgage loans 94,260,000 95,598,000
Variable annuity assets 5,230,246,000 5,230,246,000
LIABILITIES:
Reserves for fixed annuity contracts 1,497,052,000 1,473,757,000
Reserves for guaranteed investment
contracts 277,095,000 277,095,000
Payable to brokers for purchases
of securities 155,861,000 155,861,000
Variable annuity liabilities 5,230,246,000 5,077,257,000
Subordinated notes payable to Parent 35,832,000 34,620,000
============== ==============
</TABLE>
<PAGE> 58
ANCHOR NATIONAL LIFE INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
5. SUBORDINATED NOTES PAYABLE TO PARENT
Subordinated notes payable to Parent averaged $35,832,000 at a weighted
average interest rate of 8.71% (with rates ranging from 7% to 9%) at
September 30, 1996 and require principal payments of $5,272,000 in 1997,
$7,500,000 in 1998 and $23,060,000 in 1999.
6. CONTINGENT LIABILITIES
The Company has entered into two agreements in which it has guaranteed the
liquidity of certain short-term securities of two municipalities by
agreeing to purchase such securities in the event there is no other buyer
in the short-term marketplace. In return the Company receives a fee. These
guarantees total up to $182,600,000. Management does not anticipate any
material future losses with respect to these guarantees.
The Company is involved in various kinds of litigation common to its
businesses. These cases are in various stages of development and, based on
reports of counsel, management believes that provisions made for potential
losses are adequate and any further liabilities and costs will not have a
material adverse impact upon the Company's financial position or results
of operations.
7. SHAREHOLDER'S EQUITY
The Company is authorized to issue 4,000 shares of its $1,000 par value
Common Stock. At September 30, 1996, 1995 and 1994, 3,511 shares are
outstanding.
Changes in shareholder's equity are as follows:
<TABLE>
<CAPTION>
Years ended September 30,
---------------------------------------------
1996 1995 1994
------------- ------------- -------------
<S> <C> <C> <C>
ADDITIONAL PAID-IN CAPITAL:
Beginning balance $ 252,876,000 $ 252,876,000 $ 252,876,000
Capital contributions received 27,387,000 --- ---
------------- ------------- -------------
Ending balance $ 280,263,000 $ 252,876,000 $ 252,876,000
============= ============= =============
RETAINED EARNINGS:
Beginning balance 191,346,000 152,088,000 127,936,000
Net income 45,056,000 39,258,000 24,152,000
Dividend paid (29,400,000) --- ---
------------- ------------- -------------
Ending balance $ 207,002,000 $ 191,346,000 $ 152,088,000
============= ============= =============
</TABLE>
<PAGE> 59
ANCHOR NATIONAL LIFE INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
7. SHAREHOLDER'S EQUITY (continued)
<TABLE>
<CAPTION>
Years ended September 30,
---------------------------------------------
1996 1995 1994
------------- ------------- -------------
<S> <C> <C> <C>
NET UNREALIZED LOSSES ON
DEBT AND EQUITY SECURITIES
AVAILABLE FOR SALE:
Beginning balance $ (5,673,000) $ (24,953,000) $ (13,230,000)
Change in net unrealized
gains/losses on debt
securities available
for sale (2,904,000) 71,302,000 (69,407,000)
Change in net unrealized
gains/losses on equity
securities available for sale 3,538,000 (1,240,000) (753,000)
Change in adjustment to
deferred acquisition costs (400,000) (40,400,000) 45,000,000
Tax effects of net changes (82,000) (10,382,000) 13,437,000
------------- ------------- -------------
Ending balance $ (5,521,000) $ (5,673,000) $ (24,953,000)
============= ============= =============
</TABLE>
Dividends that the Company may pay to its shareholder in any year without
prior approval of the Arizona Department of Insurance are limited by
statute. The maximum amount of dividends which can be paid to shareholders
of insurance companies domiciled in the state of Arizona without obtaining
the prior approval of the Insurance Commissioner is limited to the lesser
of either 10% of the preceding year's Statutory Surplus or the preceding
year's statutory net gain from operations. A dividend in the amount of
$29,400,000 was paid on March 18, 1996. No dividends were paid in fiscal
years 1995 or 1994.
Under statutory accounting principles utilized in filings with insurance
regulatory authorities, the Company's net income for the nine months ended
September 30, 1996 was $21,898,000. The statutory net income for the year
ended December 31, 1995 was $30,673,000 and for the year ended December
31, 1994 was $35,060,000. The Company's statutory capital and surplus was
$282,275,000 at September 30, 1996, $294,767,000 at December 31, 1995 and
$219,577,000 at December 31, 1994.
<PAGE> 60
ANCHOR NATIONAL LIFE INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
8. INCOME TAXES
The components of the provisions for federal income taxes on pretax income
consist of the following:
<TABLE>
<CAPTION>
Net realized
investment
gains (losses) Operations Total
------------- ------------ ------------
<S> <C> <C> <C>
1996:
Currently payable $ 5,754,000 $ 21,849,000 $ 27,603,000
Deferred (10,347,000) 6,996,000 (3,351,000)
------------- ------------ ------------
Total income tax expense $ (4,593,000) $ 28,845,000 $ 24,252,000
============= ============ ============
1995:
Currently payable $ 4,248,000 $ 22,980,000 $ 27,228,000
Deferred (6,113,000) 4,624,000 (1,489,000)
------------- ------------ ------------
Total income tax expense $ (1,865,000) $ 27,604,000 $ 25,739,000
============= ============ ============
1994:
Currently payable $ (6,825,000) $ 10,135,000 $ 3,310,000
Deferred (1,320,000) 20,715,000 19,395,000
------------- ------------ ------------
Total income tax expense $ (8,145,000) $ 30,850,000 $ 22,705,000
============= ============ ============
</TABLE>
<PAGE> 61
ANCHOR NATIONAL LIFE INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
8. INCOME TAXES (continued)
Income taxes computed at the United States federal income tax rate of 35%
and income taxes provided differ as follows:
<TABLE>
<CAPTION>
Years ended September 30,
------------------------------------------
1996 1995 1994
------------ ----------- ------------
<S> <C> <C> <C>
Amount computed at
statutory rate $ 24,258,000 $ 22,749,000 $ 23,562,000
Increases (decreases)
resulting from:
Amortization of differences
between book and tax
bases of net assets
acquired 464,000 3,049,000 465,000
State income taxes, net of
federal tax benefit 2,070,000 437,000 (662,000)
Dividends-received deduction (2,357,000) --- ---
Tax credits (257,000) (168,000) (612,000)
Other, net 74,000 (328,000) (48,000)
------------ ------------ ------------
Total income tax expense $ 24,252,000 $ 25,739,000 $ 22,705,000
============ ============ ============
</TABLE>
For United States federal income tax purposes, certain amounts from life
insurance operations are accumulated in a memorandum policyholders'
surplus account and are taxed only when distributed to shareholders or
when such account exceeds prescribed limits. The accumulated
policyholders' surplus was $14,300,000 at September 30, 1996. The Company
does not anticipate any transactions which would cause any part of this
surplus to be taxable.
<PAGE> 62
ANCHOR NATIONAL LIFE INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
8. INCOME TAXES (continued)
Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for income tax reporting purposes.
The significant components of the liability for Deferred Income Taxes are
as follows:
<TABLE>
<CAPTION>
September 30,
----------------------------
1996 1995
------------- -------------
<S> <C> <C>
DEFERRED TAX LIABILITIES:
Investments $ 15,036,000 $ 14,181,000
Deferred acquisition costs 136,747,000 118,544,000
State income taxes 1,466,000 1,847,000
------------- -------------
Total deferred tax liabilities 153,249,000 134,572,000
------------- -------------
DEFERRED TAX ASSETS:
Contractholder reserves (77,522,000) (55,910,000)
Guaranty fund assessments (1,031,000) (1,123,000)
Other assets (1,534,000) (1,025,000)
Net unrealized losses on certain
debt and equity securities (2,973,000) (3,055,000)
------------- -------------
Total deferred tax assets (83,060,000) (61,113,000)
------------- -------------
Deferred income taxes $ 70,189,000 $ 73,459,000
============= =============
</TABLE>
<PAGE> 63
ANCHOR NATIONAL LIFE INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
9. RELATED PARTY MATTERS
The Company pays commissions to two affiliated companies, SunAmerica
Securities, Inc. and Advantage Capital Corp. These broker-dealers
represent a significant portion of the Company's business, amounting to
approximately 15.6%, 14.1% and 14.5% of premiums in 1996, 1995 and 1994,
respectively. Commissions paid to these broker- dealers totaled
$16,906,000 in 1996, $9,435,000 in 1995 and $9,725,000 in 1994.
The Company purchases administrative, investment management, accounting,
marketing and data processing services from SunAmerica Financial, Inc.,
whose purpose is to provide services to the SunAmerica companies. Amounts
paid for such services totaled $65,351,000 for the year ended September
30, 1996, $42,083,000 for the year ended September 30, 1995 and
$36,934,000 for the year ended September 30, 1994. Such amounts are
included in General and Administrative Expenses in the income statement.
On December 31, 1995, the Parent made a $27,387,000 capital contribution
to the Company, through the Company's direct parent, in exchange for the
termination of its guaranty with respect to certain real estate owned in
Arizona. Accordingly, the Company reduced the carrying value of this real
estate to estimated fair value to reflect the termination of the guaranty.
During the year ended September 30, 1995, the Company sold to the Parent
real estate for cash equal to its carrying value of $29,761,000.
During the year ended September 30, 1996, the Company sold various
invested assets to the Parent, SunAmerica Life Insurance Company and Ford
Life Insurance Company ("Ford") for cash equal to their current market
values of $274,000, $8,968,000 and $38,353,000, respectively. The Company
recorded net losses of $3,000 on such transactions.
During the year ended September 30, 1996, the Company also purchased
certain invested assets from SunAmerica Life Insurance Company and Ford
for cash equal to their current market values of $5,159,000 and
$23,220,000, respectively.
<PAGE> 64
ANCHOR NATIONAL LIFE INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
10. BUSINESS SEGMENTS
Summarized data for the Company's business segments follow:
<TABLE>
<CAPTION>
Total
depreciation
and
Total amortization Pretax Total
revenues expense income assets
------------- ------------ ------------ --------------
<S> <C> <C> <C> <C>
1996:
Annuity operations $ 250,645,000 $ 43,974,000 $ 53,827,000 $9,092,770,000
Asset management 29,711,000 18,295,000 2,448,000 74,410,000
Broker-dealer operations 31,851,000 449,000 13,033,000 37,355,000
------------- ------------ ------------ --------------
Total $ 312,207,000 $ 62,718,000 $ 69,308,000 $9,204,535,000
============= ============ ============ ==============
1995:
Annuity operations $ 205,698,000 $ 38,350,000 $ 55,462,000 $7,667,946,000
Asset management 30,253,000 24,069,000 510,000 86,510,000
Broker-dealer operations 24,366,000 411,000 9,025,000 29,241,000
------------- ------------ ------------ --------------
Total $ 260,317,000 $ 62,830,000 $ 64,997,000 $7,783,697,000
============= ============ ============ ==============
1994:
Annuity operations $ 171,553,000 $ 26,501,000 $ 52,284,000 $6,473,065,000
Asset management 32,803,000 19,330,000 7,916,000 102,192,000
Broker-dealer operations 20,914,000 408,000 7,120,000 26,869,000
------------- ------------ ------------ --------------
Total $ 225,270,000 $ 46,239,000 $ 67,320,000 $6,602,126,000
============= ============ ============ ==============
</TABLE>
<PAGE> 65
VARIABLE ANNUITY ACCOUNT FOUR
OF
ANCHOR NATIONAL LIFE INSURANCE COMPANY
FINANCIAL STATEMENTS
SEPTEMBER 30, 1996
<PAGE> 66
REPORT OF INDEPENDENT ACCOUNTANTS
January 15, 1997
To the Board of Directors of Anchor National Life Insurance Company and the
Participants of its separate account, Variable Annuity Account Four
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 each of the Variable Accounts constituting Variable Annuity Account
Four, a separate account of Anchor National Life Insurance Company (the
"Separate Account") at September 30, 1996, and the results of their operations
and the changes in their net assets for the period from inception (August 19,
1996) to September 30, 1996, in conformity with generally accepted accounting
principles. 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 audit. We conducted our audit of these
financial statements in accordance with generally accepted auditing standards
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 audit, which included
confirmation of securities owned at September 30, 1996 by correspondence with
the custodian, provides a reasonable basis for the opinion expressed above.
<PAGE> 67
VARIABLE ANNUITY ACCOUNT FOUR
OF
ANCHOR NATIONAL LIFE INSURANCE COMPANY
STATEMENT OF NET ASSETS
September 30, 1996
<TABLE>
<CAPTION>
International
Capital Natural Government and Diversified
Appreciation Growth Resources Quality Bond Equities
Portfolio Portfolio Portfolio Portfolio Portfolio
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Assets:
Investments in Anchor Series Trust,
at market value $209,948 $ 76,218 $ 13,382 $ 13,239 $ 0
Investments in SunAmerica Series Trust,
at market value 0 0 0 0 37,196
Liabilities 0 0 0 0 0
Net Assets $209,948 $ 76,218 $ 13,382 $ 13,239 $ 37,196
===============================================================================
Accumulation units outstanding 11,922 5,060 1,157 1,151 3,352
-------------------------------------------------------------------------------
Unit value of accumulation units $ 17.61 $ 15.06 $ 11.57 $ 11.50 $ 11.10
===============================================================================
</TABLE>
<TABLE>
<CAPTION>
Global Aggressive
Equities Growth
Portfolio Portfolio
-------------------------
<S> <C> <C>
Assets:
Investments in Anchor Series Trust,
at market value $ 0 $ 0
Investments in SunAmerica Series Trust,
at market value 89,468 42,831
Liabilities 0 0
Net Assets $ 89,468 $ 42,831
========================
Accumulation units outstanding 6,223 4,313
------------------------
Unit value of accumulation units $ 14.38 $ 9.93
========================
</TABLE>
See accompanying notes to financial statements.
<PAGE> 68
VARIABLE ANNUITY ACCOUNT FOUR
OF
ANCHOR NATIONAL LIFE INSURANCE COMPANY
STATEMENT OF NET ASSETS
September 30, 1996
(Continued)
<TABLE>
<CAPTION>
Venture Federated Alliance Growth- Asset SunAmerica
Value Value Growth Income Allocation Balanced Utility
Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Assets:
Investments in Anchor Series Trust,
at market value $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
Investments in SunAmerica Series Trust,
at market value 361,795 78,076 65,581 52,815 18,135 36,547 12,991
Liabilities 0 0 0 0 0 0 0
---------------------------------------------------------------------------------------
Net Assets $361,795 $ 78,076 $ 65,581 $ 52,815 $ 18,135 $ 36,547 $ 12,991
=======================================================================================
Accumulation units outstanding 24,362 7,752 3,827 3,515 1,310 3,534 1,310
=======================================================================================
Unit value of accumulation units $ 14.85 $ 10.07 $ 17.14 $ 15.03 $ 13.84 $ 10.34 $ 9.92
=======================================================================================
</TABLE>
See accompanying notes to financial statements.
<PAGE> 69
VARIABLE ANNUITY ACCOUNT FOUR
OF
ANCHOR NATIONAL LIFE INSURANCE COMPANY
STATEMENT OF NET ASSETS
September 30, 1996
(Continued)
<TABLE>
<CAPTION>
Worldwide High-Yield Global Corporate Cash
High Income Bond Bond Bond Management
Portfolio Portfolio Portfolio Portfolio Portfolio TOTAL
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Assets:
Investments in Anchor Series Trust,
at market value $ 0 $ 0 $ 0 $ 0 $ 0 $ 312,787
Investments in SunAmerica Series Trust,
at market value 127,107 18,173 25,436 39,528 133,249 1,138,928
Liabilities 0 0 0 0 0 0
---------------------------------------------------------------------------------
Net Assets $ 127,107 $ 18,173 $ 25,436 $ 39,528 $ 133,249 $1,451,715
=================================================================================
Accumulation units outstanding 9,345 1,440 2,148 3,525 12,143
===================================================================
Unit value of accumulation units $ 13.60 $ 12.62 $ 11.85 $ 11.21 $ 10.98
===================================================================
</TABLE>
See accompanying notes to financial statements.
<PAGE> 70
VARIABLE ANNUITY ACCOUNT FOUR
OF
ANCHOR NATIONAL LIFE INSURANCE COMPANY
SCHEDULE OF PORTFOLIO INVESTMENTS
September 30, 1996
<TABLE>
<CAPTION>
Market Value Market
Variable Accounts Shares Per Share Value Cost
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ANCHOR SERIES TRUST:
Capital Appreciation Portfolio 7,504 $27.98 $ 209,948 $ 205,557
Growth Portfolio 3,502 21.76 76,218 75,615
Natural Resources Portfolio 842 15.89 13,382 13,397
Government and Quality Bond Portfolio 999 13.26 13,239 13,192
---------------------------
312,787 307,761
---------------------------
SUNAMERICA SERIES TRUST:
International Diversified Equities Portfolio 3,366 11.05 37,196 36,675
Global Equities Portfolio 6,333 14.13 89,468 88,178
Aggressive Growth Portfolio 4,292 9.98 42,831 41,888
Venture Value Portfolio 24,117 15.00 361,795 353,090
Federated Value Portfolio 7,714 10.12 78,076 75,824
Alliance Growth Portfolio 3,987 16.45 65,581 64,760
Growth-Income Portfolio 3,500 15.09 52,815 51,781
Asset Allocation Portfolio 1,354 13.39 18,135 18,007
SunAmerica Balanced Portfolio 3,517 10.39 36,547 35,918
Utility Portfolio 1,304 9.97 12,991 13,193
Worldwide High Income Portfolio 9,969 12.75 127,107 123,653
High-Yield Bond Portfolio 1,700 10.69 18,173 17,935
Global Bond Portfolio 2,312 11.00 25,436 25,053
Corporate Bond Portfolio 3,711 10.65 39,528 39,295
Cash Management Portfolio 12,484 10.67 133,249 133,060
---------------------------
1,138,928 1,118,310
---------------------------
$1,451,715 $1,426,071
===========================
</TABLE>
See accompanying notes to financial statements.
<PAGE> 71
VARIABLE ANNUITY ACCOUNT FOUR
OF
ANCHOR NATIONAL LIFE INSURANCE COMPANY
STATEMENT OF OPERATIONS
For the period from inception (August 19, 1996) to September 30, 1996
<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 $ 5,210 $ 2,176 $ 0 $ 0
--------------------------------------------------------
Total investment income 5,210 2,176 0 0
--------------------------------------------------------
Expenses:
Mortality risk charge (132) (35) (2) (5)
Expense risk charge (45) (12) (1) (2)
Distribution expense charge (20) (5) 0 (1)
--------------------------------------------------------
Total expenses (197) (52) (3) (8)
--------------------------------------------------------
Net investment income (loss) 5,013 2,124 (3) (8)
--------------------------------------------------------
Net realized gains (losses) from securities transactions:
Proceeds from shares sold 128 118 3 8
Cost of shares sold (128) (117) (3) (8)
--------------------------------------------------------
Net realized gains (losses) from securities transactions 0 1 0 0
--------------------------------------------------------
Net unrealized appreciation (depreciation) of investments:
Beginning of period 0 0 0 0
End of period 4,391 603 (15) 47
--------------------------------------------------------
Change in net unrealized appreciation/depreciation
of investments 4,391 603 (15) 47
--------------------------------------------------------
Increase (decrease) in net assets from operations $ 9,404 $ 2,728 $ (18) $ 39
========================================================
</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 (6) (62) (14)
Expense risk charge (2) (21) (5)
Distribution expense charge (1) (9) (2)
------------------------------------------
Total expenses (9) (92) (21)
------------------------------------------
Net investment income (loss) (9) (92) (21)
------------------------------------------
Net realized gains (losses) from securities transactions:
Proceeds from shares sold 6 84 15
Cost of shares sold (6) (84) (15)
------------------------------------------
Net realized gains (losses) from securities transactions 0 0 0
------------------------------------------
Net unrealized appreciation (depreciation) of investments:
Beginning of period 0 0 0
End of period 521 1,290 943
------------------------------------------
Change in net unrealized appreciation/depreciation
of investments 521 1,290 943
------------------------------------------
Increase (decrease) in net assets from operations $ 512 $ 1,198 $ 922
==========================================
</TABLE>
See accompanying notes to financial statements.
<PAGE> 72
VARIABLE ANNUITY ACCOUNT FOUR
OF
ANCHOR NATIONAL LIFE INSURANCE COMPANY
STATEMENT OF OPERATIONS
For the period from inception (August 19, 1996) to September 30, 1996
(Continued)
<TABLE>
<CAPTION>
Venture Federated Alliance Growth-
Value Value 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 (201) (36) (18) (20)
Expense risk charge (69) (12) (6) (7)
Distribution expense charge (30) (6) (3) (3)
-------------------------------------------------------
Total expenses (300) (54) (27) (30)
-------------------------------------------------------
Net investment income (loss) (300) (54) (27) (30)
-------------------------------------------------------
Net realized gains (losses) from securities transactions:
Proceeds from shares sold 124 44 16 7,003
Cost of shares sold (123) (43) (16) (7,027)
-------------------------------------------------------
Net realized gains (losses) from securities transactions 1 1 0 (24)
-------------------------------------------------------
Net unrealized appreciation (depreciation) of investments:
Beginning of period 0 0 0 0
End of period 8,705 2,252 821 1,034
-------------------------------------------------------
Change in net unrealized appreciation/depreciation
of investments 8,705 2,252 821 1,034
-------------------------------------------------------
Increase (decrease) in net assets from operations $ 8,406 $ 2,199 $ 794 $ 980
=======================================================
</TABLE>
<TABLE>
<CAPTION>
Asset SunAmerica
Allocation Balanced Utility
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 (6) (11) (5)
Expense risk charge (2) (4) (2)
Distribution expense charge (1) (1) (0)
----------------------------------------
Total expenses (9) (16) (7)
----------------------------------------
Net investment income (loss) (9) (16) (7)
----------------------------------------
Net realized gains (losses) from securities transactions:
Proceeds from shares sold 8 9 8
Cost of shares sold (8) (9) (8)
----------------------------------------
Net realized gains (losses) from securities transactions 0 0 0
----------------------------------------
Net unrealized appreciation (depreciation) of investments:
Beginning of period 0 0 0
End of period 128 629 (202)
----------------------------------------
Change in net unrealized appreciation/depreciation
of investments 128 629 (202)
----------------------------------------
Increase (decrease) in net assets from operations $ 119 $ 613 $ (209)
========================================
</TABLE>
See accompanying notes to financial statements.
<PAGE> 73
VARIABLE ANNUITY ACCOUNT FOUR
OF
ANCHOR NATIONAL LIFE INSURANCE COMPANY
STATEMENT OF OPERATIONS
For the period from inception (August 19, 1996) to September 30, 1996
(Continued)
<TABLE>
<CAPTION>
Worldwide High-Yield Global Corporate
High Income Bond Bond 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 (79) (3) (12) (7)
Expense risk charge (27) (1) (4) (2)
Distribution expense charge (11) (1) (2) (1)
------------------------------------------------------------
Total expenses (117) (5) (18) (10)
------------------------------------------------------------
Net investment income (loss) (117) (5) (18) (10)
------------------------------------------------------------
Net realized gains (losses) from securities transactions:
Proceeds from shares sold 82 5 16 6
Cost of shares sold (80) (5) (16) (6)
------------------------------------------------------------
Net realized gains (losses) from securities transactions 2 0 0 0
------------------------------------------------------------
Net unrealized appreciation (depreciation) of investments:
Beginning of period 0 0 0 0
End of period 3,454 238 383 233
------------------------------------------------------------
Change in net unrealized appreciation/depreciation
of investments 3,454 238 383 233
------------------------------------------------------------
Increase (decrease) in net assets from operations $ 3,339 $ 233 $ 365 $ 223
============================================================
</TABLE>
<TABLE>
<CAPTION>
Cash
Management
Portfolio TOTAL
--------------------------
<S> <C> <C>
Investment income:
Dividends and capital gains distributions $ 0 $ 7,386
--------------------------
Total investment income 0 7,386
--------------------------
Expenses:
Mortality risk charge (52) (702)
Expense risk charge (18) (242)
Distribution expense charge (7) (108)
--------------------------
Total expenses (77) (1,052)
--------------------------
Net investment income (loss) (77) 6,334
--------------------------
Net realized gains (losses) from securities transactions:
Proceeds from shares sold 90,608 98,291
Cost of shares sold (90,598) (98,300)
--------------------------
Net realized gains (losses) from securities transactions 10 (9)
--------------------------
Net unrealized appreciation (depreciation) of investments:
Beginning of period 0 0
End of period 189 25,644
--------------------------
Change in net unrealized appreciation/depreciation
of investments 189 25,644
--------------------------
Increase (decrease) in net assets from operations $ 122 $ 31,969
==========================
</TABLE>
See accompanying notes to financial statements.
<PAGE> 74
VARIABLE ANNUITY ACCOUNT FOUR
OF
ANCHOR NATIONAL LIFE INSURANCE COMPANY
STATEMENT OF CHANGES IN NET ASSETS
For the period from inception (August 19, 1996) to
September 30, 1996
<TABLE>
<CAPTION>
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) $ 5,013 $ 2,124 $ (3) $ (8)
Net realized gains (losses) from securities transactions 0 1 0 0
Change in net unrealized appreciation/depreciation
of investments 4,391 603 (15) 47
----------------------------------------------------------------
Increase (decrease) in net assets from operations 9,404 2,728 (18) 39
----------------------------------------------------------------
From capital transactions:
Net proceeds from units sold 199,749 73,565 13,250 13,200
Cost of units redeemed (75) (75) 0 0
Net transfers 870 0 150 0
----------------------------------------------------------------
Increase in net assets from capital transactions 200,544 73,490 13,400 13,200
----------------------------------------------------------------
Increase in net assets 209,948 76,218 13,382 13,239
Net assets at beginning of period 0 0 0 0
----------------------------------------------------------------
Net assets at end of period $ 209,948 $ 76,218 $ 13,382 $ 13,239
================================================================
ANALYSIS OF INCREASE (DECREASE) IN UNITS
OUTSTANDING:
Units sold 11,876 5,065 1,144 1,151
Units redeemed (4) (5) 0 0
Units transferred 50 0 13 0
----------------------------------------------------------------
Increase in units outstanding 11,922 5,060 1,157 1,151
Beginning units 0 0 0 0
----------------------------------------------------------------
Ending units 11,922 5,060 1,157 1,151
================================================================
</TABLE>
<TABLE>
<CAPTION>
Government 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) $ (9) $ (92) $ (21)
Net realized gains (losses) from securities transactions 0 0 0
Change in net unrealized appreciation/depreciation
of investments 521 1,290 943
---------------------------------------------
Increase (decrease) in net assets from operations 512 1,198 922
---------------------------------------------
From capital transactions:
Net proceeds from units sold 35,484 88,000 41,909
Cost of units redeemed 0 0 0
Net transfers 1,200 270 0
---------------------------------------------
Increase in net assets from capital transactions 36,684 88,270 41,909
---------------------------------------------
Increase in net assets 37,196 89,468 42,831
Net assets at beginning of period 0 0 0
---------------------------------------------
Net assets at end of period $ 37,196 $ 89,468 $ 42,831
=============================================
ANALYSIS OF INCREASE (DECREASE) IN UNITS
OUTSTANDING:
Units sold 3,243 6,204 4,313
Units redeemed 0 0 0
Units transferred 109 19 0
---------------------------------------------
Increase in units outstanding 3,352 6,223 4,313
Beginning units 0 0 0
---------------------------------------------
Ending units 3,352 6,223 4,313
=============================================
</TABLE>
See accompanying notes to financial statements.
<PAGE> 75
VARIABLE ANNUITY ACCOUNT FOUR
OF
ANCHOR NATIONAL LIFE INSURANCE COMPANY
STATEMENT OF CHANGES IN NET ASSETS
For the period from inception (August 19, 1996) to
September 30, 1996
(Continued)
<TABLE>
<CAPTION>
Venture Federated Alliance
Value Value Growth Income
Portfolio Portfolio Portfolio Portfolio
-------------------------------------------------------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations:
Net investment income (loss) $ (300) $ (54) $ (27) $ (30)
Net realized gains (losses) from securities transactions 1 1 0 (24)
Change in net unrealized appreciation/depreciation
of investments 8,705 2,252 821 1,034
-------------------------------------------------------------
Increase (decrease) in net assets from operations 8,406 2,199 794 980
-------------------------------------------------------------
From capital transactions:
Net proceeds from units sold 351,994 75,952 63,317 51,835
Cost of units redeemed (75) (75) 0 0
Net transfers 1,470 0 1,470 0
-------------------------------------------------------------
Increase in net assets from capital transactions 353,389 75,877 64,787 51,835
-------------------------------------------------------------
Increase in net assets 361,795 78,076 65,581 52,815
Net assets at beginning of period 0 0 0 0
-------------------------------------------------------------
Net assets at end of period $ 361,795 $ 78,076 $ 65,581 $ 52,815
=============================================================
ANALYSIS OF INCREASE (DECREASE) IN UNITS
OUTSTANDING:
Units sold 24,267 7,759 3,740 3,515
Units redeemed (5) (7) 0 0
Units transferred 100 0 87 0
-------------------------------------------------------------
Increase in units outstanding 24,362 7,752 3,827 3,515
Beginning units 0 0 0 0
-------------------------------------------------------------
Ending units 24,362 7,752 3,827 3,515
=============================================================
</TABLE>
<TABLE>
<CAPTION>
Growth- Asset SunAmerica
Allocation Balanced Utility
Portfolio Portfolio Portfolio
--------------------------------------------
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations:
Net investment income (loss) $ (9) $ (16) $ (7)
Net realized gains (losses) from securities transactions 0 0 0
Change in net unrealized appreciation/depreciation
of investments 128 629 (202)
--------------------------------------------
Increase (decrease) in net assets from operations 119 613 (209)
--------------------------------------------
From capital transactions:
Net proceeds from units sold 18,016 35,334 13,200
Cost of units redeemed 0 0 0
Net transfers 0 600 0
--------------------------------------------
Increase in net assets from capital transactions 18,016 35,934 13,200
--------------------------------------------
Increase in net assets 18,135 36,547 12,991
Net assets at beginning of period 0 0 0
--------------------------------------------
Net assets at end of period $ 18,135 $ 36,547 $ 12,991
============================================
ANALYSIS OF INCREASE (DECREASE) IN UNITS
OUTSTANDING:
Units sold 1,310 3,476 1,310
Units redeemed 0 0 0
Units transferred 0 58 0
--------------------------------------------
Increase in units outstanding 1,310 3,534 1,310
Beginning units 0 0 0
--------------------------------------------
Ending units 1,310 3,534 1,310
============================================
</TABLE>
See accompanying notes to financial statements.
<PAGE> 76
VARIABLE ANNUITY ACCOUNT FOUR
OF
ANCHOR NATIONAL LIFE INSURANCE COMPANY
STATEMENT OF CHANGES IN NET ASSETS
For the period from inception (August 19, 1996) to
September 30, 1996
(Continued)
<TABLE>
<CAPTION>
Worldwide High-Yield
High Income Bond Bond
Portfolio Portfolio Portfolio
--------------------------------------------------
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations:
Net investment income (loss) $ (117) $ (5) $ (18)
Net realized gains (losses) from securities transactions 2 0 0
Change in net unrealized appreciation/depreciation
of investments 3,454 238 383
--------------------------------------------------
Increase (decrease) in net assets from operations 3,339 233 365
--------------------------------------------------
From capital transactions:
Net proceeds from units sold 123,168 17,940 24,801
Cost of units redeemed 0 0 0
Net transfers 600 0 270
--------------------------------------------------
Increase in net assets from capital transactions 123,768 17,940 25,071
--------------------------------------------------
Increase in net assets 127,107 18,173 25,436
Net assets at beginning of period 0 0 0
--------------------------------------------------
Net assets at end of period $ 127,107 $ 18,173 $ 25,436
==================================================
ANALYSIS OF INCREASE (DECREASE) IN UNITS
OUTSTANDING:
Units sold 9,301 1,440 2,125
Units redeemed 0 0 0
Units transferred 44 0 23
--------------------------------------------------
Increase in units outstanding 9,345 1,440 2,148
Beginning units 0 0 0
--------------------------------------------------
Ending units 9,345 1,440 2,148
==================================================
</TABLE>
<TABLE>
<CAPTION>
Global Corporate Cash
Bond Management
Portfolio Portfolio TOTAL
-------------------------------------------------
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations:
Net investment income (loss) $ (10) $ (77) $ 6,334
Net realized gains (losses) from securities transactions 0 10 (9)
Change in net unrealized appreciation/depreciation
of investments 233 189 25,644
-------------------------------------------------
Increase (decrease) in net assets from operations 223 122 31,969
-------------------------------------------------
From capital transactions:
Net proceeds from units sold 38,705 134,627 1,414,046
Cost of units redeemed 0 0 (300)
Net transfers 600 (1,500) 6000
-------------------------------------------------
Increase in net assets from capital transactions 39,305 133,127 1,419,746
-------------------------------------------------
Increase in net assets 39,528 133,249 1,451,715
Net assets at beginning of period 0 0 0
-------------------------------------------------
Net assets at end of period $ 39,528 $ 133,249 $ 1,451,715
=================================================
ANALYSIS OF INCREASE (DECREASE) IN UNITS
OUTSTANDING:
Units sold 3,471 12,280
Units redeemed 0 0
Units transferred 54 (137)
------------------------------
Increase in units outstanding 3,525 12,143
Beginning units 0 0
------------------------------
Ending units 3,525 12,143
==============================
</TABLE>
See accompanying notes to financial statements.
<PAGE> 77
VARIABLE ANNUITY ACCOUNT FOUR
OF
ANCHOR NATIONAL LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Variable Annuity Account Four 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 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 nineteen variable portfolios (the
"Variable Accounts"). Each of the Variable Accounts is invested 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 fifteen 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 a guaranteed- interest fund
of the Company (the "General Account"), which is not a part of the
Separate Account. The financial statements include balances allocated
by the participant to the nineteen Variable Accounts and do not
include balances allocated to the General Account.
The Variable Accounts became initially available for sale on August
19, 1996. The inception dates for the nineteen individual Portfolios
were as follows: August 27, 1996 for the Capital Appreciation, Global
Equities, Venture Value and Worldwide High Income Portfolios; August
29, 1996 for the Aggressive Growth Portfolio; September 4, 1996 for
the Global Bond Portfolio; September 5, 1996 for the Cash Management
Portfolio; September 6, 1996 for the Growth, Federated Value and
Growth-Income Portfolios; September 12, 1996 for the Natural
Resources, International Diversified Equities and Alliance Growth
Portfolios; September 16, 1996 for the Government and Quality Bond,
Asset Allocation, SunAmerica Balanced and Utility Portfolios; and
September 23, 1996 for the High-Yield Bond and Corporate Bond
Portfolios.
1
<PAGE> 78
VARIABLE ANNUITY ACCOUNT FOUR
OF
ANCHOR NATIONAL LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
1. 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 and may engage in
transactions involving stock index futures and options thereon as a
hedge against changes in market conditions.
The GROWTH PORTFOLIO seeks long-term capital appreciation. This
portfolio invests in growth equity securities and may engage in
transactions involving stock index futures and options thereon as a
hedge against changes in market conditions.
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 which 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 corporate debt securities rated Aa
or better by Moody's Investors Service, Inc. or AA or better by
Standard & Poor's Corporation.
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 fifteen 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 subadvisor in common stocks of foreign
issuers which, in the aggregate, replicate broad country indices.
2
<PAGE> 79
VARIABLE ANNUITY ACCOUNT FOUR
OF
ANCHOR NATIONAL LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
The GLOBAL EQUITIES PORTFOLIO seeks long-term growth of capital. This
portfolio invests primarily in common stocks or securities of U.S. and
foreign issuers with common stock characteristics which demonstrate the
potential for appreciation and engages in transactions in foreign
currencies.
The AGGRESSIVE GROWTH PORTFOLIO seeks capital appreciation. This
portfolio invests primarily in equity securities of small
capitalization growth companies.
The VENTURE VALUE PORTFOLIO seeks growth of capital. This portfolio
invests primarily in common stocks.
The FEDERATED VALUE PORTFOLIO seeks growth of capital and income. This
portfolio invests primarily in the securities of high quality
companies.
The ALLIANCE GROWTH PORTFOLIO seeks long-term growth of capital. This
portfolio invests primarily in common stocks or securities with common
stock characteristics which demonstrate the potential for appreciation.
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 the 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).
The SUNAMERICA BALANCED PORTFOLIO seeks to conserve principal. This
porfolio maintains at all times a balanced portfolio of stocks and
bonds.
The UTILITY PORTFOLIO seeks high current income and moderate capital
appreciation. This portfolio invests primarily in the equity and debt
securities of utility companies.
3
<PAGE> 80
VARIABLE ANNUITY ACCOUNT FOUR
OF
ANCHOR NATIONAL LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
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, seeks capital appreciation. This portfolio invests
primarily in intermediate and long-term corporate obligations, with
emphasis on higher-yielding, higher-risk, lower-rated or unrated
securities.
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 CASH MANAGEMENT PORTFOLIO seeks high current yield while preserving
capital. This portfolio invests in a diversified selection of money
market instruments.
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 Trusts are valued at the net asset
value of the shares of the designated underlying portfolio of the
Trusts 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.
4
<PAGE> 81
VARIABLE ANNUITY ACCOUNT FOUR
OF
ANCHOR NATIONAL LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
2. CHARGES AND DEDUCTIONS
There are no withdrawal charges and no contract maintenance charges.
Other charges and deductions are applied against the current value of
the Separate Account and are paid as follows:
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 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, upon death of the participant or upon annuitization;
however, it reserves the right to deduct premium taxes when incurred.
Premium taxes generally range from 0% to 3.5%.
MORTALITY AND EXPENSE RISK CHARGE: The Company deducts mortality 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 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, to waive the
withdrawal charge in the event of the death of the participant and to
provide both a standard and an enhanced death benefit if the
participant dies prior to the date annuity payments begin. The expense
risk charge is compensation for the risk assumed by the Company that
the cost of administering the contracts will exceed the current
charges.
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. The distribution expense charge
is for all expenses associated with the distribution of the contract.
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.
5
<PAGE> 82
VARIABLE ANNUITY ACCOUNT FOUR
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 period from inception (August 19,
1996) to September 30, 1996 consist of the following:
<TABLE>
<CAPTION>
Cost of Shares Proceeds from
Variable Accounts Acquired Shares Sold
- --------------------------- ------------------------------------
<S> <C> <C>
ANCHOR TRUST:
Capital Appreciation Portfolio $ 205,685 $ 128
Growth Portfolio 75,733 118
Natural Resources Portfolio 13,400 3
Government and Quality Bond
Portfolio 13,200 8
SUNAMERICA TRUST:
International Diversified
Equities Portfolio 36,681 6
Global Equities Portfolio 88,262 84
Aggressive Growth Portfolio 41,903 15
Venture Value Portfolio 353,213 124
Federated Value Portfolio 75,866 44
Alliance Growth Portfolio 64,776 16
Growth-Income Portfolio 58,807 7,003
Asset Allocation Portfolio 18,015 8
SunAmerica Balanced Portfolio 35,928 9
Utility Portfolio 13,200 8
Worldwide High Income
Portfolio 123,733 82
High-Yield Bond Portfolio 17,940 5
Global Bond Portfolio 25,068 16
Corporate Bond Portfolio 39,302 6
Cash Management Portfolio 223,659 90,608
============== =============
</TABLE>
7
<PAGE> 83
VARIABLE ANNUITY ACCOUNT FOUR
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.
8
<PAGE> 84
PART C - OTHER INFORMATION
--------------------------
Item 24. Financial Statements and Exhibits
- -------------------------------------------
(a) Financial Statements
--------------------
The following financial statements are included in Part A of the
Registration Statement:
None.
The following financial statements are included in Part B of the
Registration Statement:
Consolidated Financial Statements of Anchor National Life Insurance
Company for the fiscal year ended September 30, 1996
Financial Statements of Variable Annuity Account Four for the fiscal
year ended September 30, 1996
(b) Exhibits
--------
<TABLE>
<S> <C> <C>
(1) Resolutions Establishing Separate Account . . . Previously Filed
(2) Custody Agreement . . . . . . . . . . . . . . . Not Applicable
(3) (a) Form of Distribution Contract . . . . . . . Previously Filed
(b) Form of Selling Agreement . . . . . . . . . Previously Filed
(4) Variable Annuity Contract . . . . . . . . . . . Previously Filed
(5) Application for Contract. . . . . . . . . . . . Previously Filed
(6) Depositor - Corporate Documents
(a) Certificate of Incorporation. . . . . . . . Previously Filed
(b) By-Laws . . . . . . . . . . . . . . . . . . Previously Filed
(7) Reinsurance Contract. . . . . . . . . . . . . . Not Applicable
(8) Form of Fund Participation Agreement. . . . . . Previously Filed
(9) Opinion of Counsel. . . . . . . . . . . . . . . Previously Filed
Consent of Counsel. . . . . . . . . . . . . . . Previously Filed
(10) Consent of Accountants. . . . . . . . . . . . . Filed Herewith
(11) Financial Statements Omitted from Item 23 . . . None
(12) Initial Capitalization Agreement. . . . . . . . Not Applicable
(13) Performance Computations. . . . . . . . . . . . Not Applicable
(14) Diagram and Listing of All Persons Directly
or Indirectly Controlled By or Under Common
Control with Anchor National Life Insurance
Company, the Depositor of Registrant . . . . . Previously Filed
(15) Powers of Attorney . . . . . . . . . . . . . . Previously Filed
(27) Financial Data Schedules . . . . . . . . . . . Filed Herewith
</TABLE>
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
Peter McMillan Director
Jay S. Wintrob Director and Executive Vice President
Joseph M. Tumbler Director and Executive Vice President
James R. Belardi Director and Senior Vice President
Scott L. Robinson Director and Senior Vice President
Jana W. Greer Director and Senior Vice President
James W. Rowan Director and Senior Vice President
Lorin M. Fife Director, Senior Vice President, General
Counsel and Assistant Secretary
Susan L. Harris Director, Senior Vice President and
Secretary
N. Scott Gillis Senior Vice President and Controller
Edwin R. Reoliquio Senior Vice President and Chief Actuary
Victor E. Akin Senior Vice President
J. Franklin Grey Vice President
Keith B. Jones Vice President
Michael L. Lindquist Vice President
Edward P. Nolan(1) Vice President
Gregory M. Outcalt Vice President
Scott H. Richland Vice President and Treasurer
</TABLE>
__________________
(1) 88 Bradley Road, P.O. Box 4005, Woodbridge, Connecticut 06525
<PAGE> 85
Item 26. Persons Controlled By or Under Common Control With Depositor
or Registrant
- ----------------------------------------------------------------
The Registrant is a separate account of Anchor National Life
Insurance Company (Depositor). For a complete listing and diagram
of all persons directly or indirectly controlled by or under common
control with the Depositor or Registrant, see Exhibit 14 which is
incorporated herein by reference.
Item 27. Number of Contract Owners
- -----------------------------------
As of December 31, 1996, the number of Contracts funded by Variable
Annuity Account Four of Anchor National Life Insurance Company was
356, of which 111 were Qualified Contracts and 245 were Nonqualified
Contracts.
Item 28. Indemnification
- -------------------------
None.
Item 29. Principal Underwriter
- -------------------------------
SunAmerica Capital Services, Inc. serves as distributor to the
Registrant.
Its principal business address is 733 Third Avenue, 4th Floor, New
York, New York 10017. The following are the directors and officers
of SunAmerica Capital Services, Inc.
<TABLE>
<CAPTION>
Name Position with Distributor
---- -------------------------
<S> <C>
J. Steven Neamtz Director & President
Robert M. Zakem Director, Executive Vice President,
General Counsel & Assistant Secretary
Peter Harbeck Director
Gary W. Krat Director
Joseph M. Tumbler Director
Enrique Lopez-Balboa Vice President
Steven Rothstein Treasurer
Susan L. Harris Secretary
Lorin M. Fife Assistant Secretary
</TABLE>
<TABLE>
<CAPTION>
Net Distribution Compensation on
Name of Discounts and Redemption or Brokerage
Distributor Commissions Annuitization Commissions Commissions*
- ----------- ---------------- ---------------- ----------- ------------
<S> <C> <C> <C> <C>
SunAmerica Capital None None None None
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.
Item 31. Management Services
- -----------------------------
Not Applicable.
<PAGE> 86
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.
Further, Registrant undertakes to deduct mortality and expense risk
charges, distribution expense charges, withdrawal charges
(contingent deferred sales charges), contract maintenance fees and
transfer fees that are in the aggregate (1) reasonable in relation
to the risks assumed by the Company and (2) reasonable in amount as
compared with other variable annuity products. Those determinations
are based on the Company's analysis of publicly available
information about similar industry practices, and by taking into
consideration factors such as current contract levels and benefits
provided, the existence of expense charges guarantees and guaranteed
annuity rates.
Item 33. Representation
- ------------------------
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.
<PAGE> 87
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company
Act of 1940, the Registrant has duly 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 23rd day of January, 1997.
VARIABLE ANNUITY ACCOUNT FOUR
(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 capacity 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)
SCOTT L. ROBINSON* Senior Vice President
- -------------------- and Director
Scott L. Robinson (Principal Financial
Officer)
N. SCOTT GILLIS* Senior Vice President
- -------------------- and Controller
N. Scott Gillis (Principal Accounting
Officer)
JAMES R. BELARDI* Director
- --------------------
James R. Belardi
LORIN M. FIFE* Director
- --------------------
Lorin M. Fife
JANA W. GREER* Director
- --------------------
Jana W. Greer
/s/ SUSAN L. HARRIS Director January 23, 1997
- --------------------
Susan L. Harris
PETER MCMILLAN* Director
- --------------------
Peter McMillan
JAY S. WINTROB* Director
- --------------------
Jay S. Wintrob
JAMES W. ROWAN* Director
- ---------------------
James W. Rowan
</TABLE>
<PAGE> 88
<TABLE>
<S> <C> <C>
JOSEPH M. TUMBLER* Director
- ---------------------
Joseph M. Tumbler
* By: /s/ SUSAN L. HARRIS Attorney-in-Fact
----------------------
Susan L. Harris
</TABLE>
Date: January 23, 1997
<PAGE> 89
EXHIBIT INDEX
-------------
<TABLE>
<CAPTION>
Exhibit Description
- ------- -----------
<S> <C>
(10) Consent of Independent Accountants
(27) Financial Data Schedules
</TABLE>
<PAGE> 1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in the Statement of Additional Information
constituting part of this Registration Statement on Form N-4 for Variable
Annuity Account Four of Anchor National Life Insurance Company, of our report
dated November 8, 1996 relating to the consolidated financial statements of
Anchor National Life Insurance Company, and of our report dated January 15, 1997
relating to the financial statements of Variable Annuity Account Four of Anchor
National Life Insurance Company, which appear in such Statement of Additional
Information. We also consent to the reference to us under the heading "Financial
Statements" in such Statement of Additional Information.
PRICE WATERHOUSE LLP
Los Angeles, California
January 23, 1996
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF VARIABLE ANNUITY ACCOUNT FOUR FOR THE FISCAL YEAR ENDED
SEPTEMBER 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 1
<NAME> CAPITAL APPRECIATION
<S> <C>
<PERIOD-TYPE> 2-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-START> AUG-27-1996
<PERIOD-END> SEP-30-1996
<INVESTMENTS-AT-COST> 205,557
<INVESTMENTS-AT-VALUE> 209,948
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 209,948
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 11,922
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 209,948
<DIVIDEND-INCOME> 5,210
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 197
<NET-INVESTMENT-INCOME> 5,013
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 4,391
<NET-CHANGE-FROM-OPS> 9,404
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 11,926
<NUMBER-OF-SHARES-REDEEMED> 4
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 209,948
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 16.67
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 17.61
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF VARIABLE ANNUITY ACCOUNT FOUR FOR THE FISCAL YEAR ENDED
SEPTEMBER 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 2
<NAME> GROWTH
<S> <C>
<PERIOD-TYPE> 1-MO
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-START> SEP-06-1996
<PERIOD-END> SEP-30-1996
<INVESTMENTS-AT-COST> 75,615
<INVESTMENTS-AT-VALUE> 76,218
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 76,218
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 5,060
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 76,218
<DIVIDEND-INCOME> 2,176
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 52
<NET-INVESTMENT-INCOME> 2,124
<REALIZED-GAINS-CURRENT> 1
<APPREC-INCREASE-CURRENT> 603
<NET-CHANGE-FROM-OPS> 2,728
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 5,065
<NUMBER-OF-SHARES-REDEEMED> 5
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 76,218
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 14.31
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 15.06
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF VARIABLE ANNUITY ACCOUNT FOUR FOR THE FISCAL YEAR ENDED
SEPTEMBER 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 3
<NAME> NATURAL RESOURCES
<S> <C>
<PERIOD-TYPE> 1-MO
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-START> SEP-12-1996
<PERIOD-END> SEP-30-1996
<INVESTMENTS-AT-COST> 13,397
<INVESTMENTS-AT-VALUE> 13,382
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 13,382
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 1,157
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 13,382
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 3
<NET-INVESTMENT-INCOME> (3)
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> (15)
<NET-CHANGE-FROM-OPS> (18)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,157
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 13,382
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 11.56
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.57
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF VARIABLE ANNUITY ACCOUNT FOUR FOR THE FISCAL YEAR ENDED
SEPTEMBER 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 4
<NAME> GOVERNMENT AND QUALITY BOND
<S> <C>
<PERIOD-TYPE> 1-MO
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-START> SEP-16-1996
<PERIOD-END> SEP-30-1996
<INVESTMENTS-AT-COST> 13,192
<INVESTMENTS-AT-VALUE> 13,239
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 13,239
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 1,151
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 13,239
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 8
<NET-INVESTMENT-INCOME> (8)
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 47
<NET-CHANGE-FROM-OPS> 39
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,151
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 13,239
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 11.47
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.50
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF VARIABLE ANNUITY ACCOUNT FOUR FOR THE FISCAL YEAR ENDED
SEPTEMBER 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 5
<NAME> INTERNATIONAL DIVERSIFIED EQUITIES
<S> <C>
<PERIOD-TYPE> 1-MO
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-START> SEP-12-1996
<PERIOD-END> SEP-30-1996
<INVESTMENTS-AT-COST> 36,675
<INVESTMENTS-AT-VALUE> 37,196
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 37,196
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 3,352
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 37,196
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 9
<NET-INVESTMENT-INCOME> (9)
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 521
<NET-CHANGE-FROM-OPS> 512
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 3,352
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 37,196
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 10.61
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.10
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF VARIABLE ANNUITY ACCOUNT FOUR FOR THE FISCAL YEAR ENDED
SEPTEMBER 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 6
<NAME> GLOBAL EQUITIES
<S> <C>
<PERIOD-TYPE> 2-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-START> AUG-27-1996
<PERIOD-END> SEP-30-1996
<INVESTMENTS-AT-COST> 88,178
<INVESTMENTS-AT-VALUE> 89,468
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 89,468
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 6,223
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 89,468
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 92
<NET-INVESTMENT-INCOME> (92)
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 1,290
<NET-CHANGE-FROM-OPS> 1,198
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 6,223
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 89,468
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 14.13
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 14.38
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF VARIABLE ANNUITY ACCOUNT FOUR FOR THE FISCAL YEAR ENDED
SEPTEMBER 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 7
<NAME> AGGRESSIVE GROWTH
<S> <C>
<PERIOD-TYPE> 2-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-START> AUG-29-1996
<PERIOD-END> SEP-30-1996
<INVESTMENTS-AT-COST> 41,888
<INVESTMENTS-AT-VALUE> 42,831
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 42,831
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 4,313
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 42,831
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 21
<NET-INVESTMENT-INCOME> (21)
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 943
<NET-CHANGE-FROM-OPS> 922
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 4,313
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 42,831
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 9.26
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.93
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF VARIABLE ANNUITY ACCOUNT FOUR FOR THE FISCAL YEAR ENDED
SEPTEMBER 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 8
<NAME> VENTURE VALUE
<S> <C>
<PERIOD-TYPE> 2-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-START> AUG-27-1996
<PERIOD-END> SEP-30-1996
<INVESTMENTS-AT-COST> 353,090
<INVESTMENTS-AT-VALUE> 361,795
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 361,795
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 24,362
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 361,795
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 300
<NET-INVESTMENT-INCOME> (300)
<REALIZED-GAINS-CURRENT> 1
<APPREC-INCREASE-CURRENT> 8,705
<NET-CHANGE-FROM-OPS> 8,406
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 24,367
<NUMBER-OF-SHARES-REDEEMED> 5
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 361,795
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 14.43
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 14.85
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF VARIABLE ANNUITY ACCOUNT FOUR FOR THE FISCAL YEAR ENDED
SEPTEMBER 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 9
<NAME> FEDERATED VALUE
<S> <C>
<PERIOD-TYPE> 1-MO
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-START> SEP-06-1996
<PERIOD-END> SEP-30-1996
<INVESTMENTS-AT-COST> 75,824
<INVESTMENTS-AT-VALUE> 78,076
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 78,076
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 7,752
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 78,076
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 54
<NET-INVESTMENT-INCOME> (54)
<REALIZED-GAINS-CURRENT> 1
<APPREC-INCREASE-CURRENT> 2,252
<NET-CHANGE-FROM-OPS> 2,199
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 7,759
<NUMBER-OF-SHARES-REDEEMED> 7
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 78,076
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 9.63
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.07
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF VARIABLE ANNUITY ACCOUNT FOUR FOR THE FISCAL YEAR ENDED
SEPTEMBER 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 10
<NAME> ALLIANCE GROWTH
<S> <C>
<PERIOD-TYPE> 1-MO
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-START> SEP-12-1996
<PERIOD-END> SEP-30-1996
<INVESTMENTS-AT-COST> 64,760
<INVESTMENTS-AT-VALUE> 65,581
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 65,581
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 3,827
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 65,581
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 27
<NET-INVESTMENT-INCOME> (27)
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 821
<NET-CHANGE-FROM-OPS> 794
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 3,827
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 65,581
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 16.39
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 17.14
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF VARIABLE ANNUITY ACCOUNT FOUR FOR THE FISCAL YEAR ENDED
SEPTEMBER 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 11
<NAME> GROWTH-INCOME
<S> <C>
<PERIOD-TYPE> 1-MO
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-START> SEP-06-1996
<PERIOD-END> SEP-30-1996
<INVESTMENTS-AT-COST> 51,781
<INVESTMENTS-AT-VALUE> 52,815
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 52,815
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 3,515
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 52,815
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 30
<NET-INVESTMENT-INCOME> (30)
<REALIZED-GAINS-CURRENT> (24)
<APPREC-INCREASE-CURRENT> 1,034
<NET-CHANGE-FROM-OPS> 980
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 3,515
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 52,815
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 14.27
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 15.03
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF VARIABLE ANNUITY ACCOUNT FOUR FOR THE FISCAL YEAR ENDED
SEPTEMBER 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 12
<NAME> ASSET ALLOCATION
<S> <C>
<PERIOD-TYPE> 1-MO
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-START> SEP-16-1996
<PERIOD-END> SEP-30-1996
<INVESTMENTS-AT-COST> 18,007
<INVESTMENTS-AT-VALUE> 18,135
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 18,135
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 1,310
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 18,135
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 9
<NET-INVESTMENT-INCOME> (9)
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 128
<NET-CHANGE-FROM-OPS> 119
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,310
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 18,135
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 13.75
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 13.84
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF VARIABLE ANNUITY ACCOUNT FOUR FOR THE FISCAL YEAR ENDED
SEPTEMBER 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 13
<NAME> SUNAMERICA BALANCED
<S> <C>
<PERIOD-TYPE> 1-MO
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-START> SEP-16-1996
<PERIOD-END> SEP-30-1996
<INVESTMENTS-AT-COST> 35,918
<INVESTMENTS-AT-VALUE> 36,547
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 36,547
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 3,534
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 36,547
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 16
<NET-INVESTMENT-INCOME> (16)
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 629
<NET-CHANGE-FROM-OPS> 613
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 3,534
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 36,547
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 10.12
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.34
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF VARIABLE ANNUITY ACCOUNT FOUR FOR THE FISCAL YEAR ENDED
SEPTEMBER 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 14
<NAME> UTILITY
<S> <C>
<PERIOD-TYPE> 1-MO
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-START> SEP-16-1996
<PERIOD-END> SEP-30-1996
<INVESTMENTS-AT-COST> 13,193
<INVESTMENTS-AT-VALUE> 12,991
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 12,991
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 1,310
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 12,991
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 7
<NET-INVESTMENT-INCOME> (7)
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> (202)
<NET-CHANGE-FROM-OPS> (209)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,310
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 12,991
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 10.08
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.92
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF VARIABLE ANNUITY ACCOUNT FOUR FOR THE FISCAL YEAR ENDED
SEPTEMBER 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 15
<NAME> WORLDWIDE HIGH INCOME
<S> <C>
<PERIOD-TYPE> 2-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-START> AUG-27-1996
<PERIOD-END> SEP-30-1996
<INVESTMENTS-AT-COST> 123,653
<INVESTMENTS-AT-VALUE> 127,107
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 127,107
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 9,345
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 127,107
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 117
<NET-INVESTMENT-INCOME> (117)
<REALIZED-GAINS-CURRENT> 2
<APPREC-INCREASE-CURRENT> 3,454
<NET-CHANGE-FROM-OPS> 3,339
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 9,345
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 127,107
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 13.10
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 13.60
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF VARIABLE ANNUITY ACCOUNT FOUR FOR THE FISCAL YEAR ENDED
SEPTEMBER 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 16
<NAME> HIGH-YIELD
<S> <C>
<PERIOD-TYPE> 1-MO
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-START> SEP-23-1996
<PERIOD-END> SEP-30-1996
<INVESTMENTS-AT-COST> 17,935
<INVESTMENTS-AT-VALUE> 18,173
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 18,173
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 1,440
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 18,173
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 5
<NET-INVESTMENT-INCOME> (5)
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 238
<NET-CHANGE-FROM-OPS> 233
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,440
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 18,173
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 12.46
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 12.62
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF VARIABLE ANNUITY ACCOUNT FOUR FOR THE FISCAL YEAR ENDED
SEPTEMBER 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 17
<NAME> GLOBAL BOND
<S> <C>
<PERIOD-TYPE> 1-MO
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-START> SEP-04-1996
<PERIOD-END> SEP-30-1996
<INVESTMENTS-AT-COST> 25,053
<INVESTMENTS-AT-VALUE> 25,436
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 25,436
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 2,148
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
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<NET-ASSETS> 25,436
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 18
<NET-INVESTMENT-INCOME> (18)
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 383
<NET-CHANGE-FROM-OPS> 365
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2,148
<NUMBER-OF-SHARES-REDEEMED> 0
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<NET-CHANGE-IN-ASSETS> 25,436
<ACCUMULATED-NII-PRIOR> 0
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<PER-SHARE-NAV-BEGIN> 11.61
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<PER-SHARE-NAV-END> 11.85
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<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF VARIABLE ANNUITY ACCOUNT FOUR FOR THE FISCAL YEAR ENDED
SEPTEMBER 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 18
<NAME> CORPORATE BOND
<S> <C>
<PERIOD-TYPE> 1-MO
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-START> SEP-23-1996
<PERIOD-END> SEP-30-1996
<INVESTMENTS-AT-COST> 39,295
<INVESTMENTS-AT-VALUE> 39,528
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<SENIOR-EQUITY> 0
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<SHARES-COMMON-STOCK> 3,525
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<ACCUMULATED-NII-CURRENT> 0
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<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 39,528
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 10
<NET-INVESTMENT-INCOME> (10)
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 233
<NET-CHANGE-FROM-OPS> 223
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 3,525
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<NET-CHANGE-IN-ASSETS> 39,528
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
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<OVERDIST-NET-GAINS-PRIOR> 0
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<PER-SHARE-NAV-BEGIN> 11.13
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<PER-SHARE-NAV-END> 11.21
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF VARIABLE ANNUITY ACCOUNT FOUR FOR THE FISCAL YEAR ENDED
SEPTEMBER 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 19
<NAME> CASH MANAGEMENT
<S> <C>
<PERIOD-TYPE> 1-MO
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-START> SEP-05-1996
<PERIOD-END> SEP-30-1996
<INVESTMENTS-AT-COST> 133,060
<INVESTMENTS-AT-VALUE> 133,249
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<ASSETS-OTHER> 0
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<TOTAL-ASSETS> 133,249
<PAYABLE-FOR-SECURITIES> 0
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<SENIOR-EQUITY> 0
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<SHARES-COMMON-STOCK> 12,143
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 133,249
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 77
<NET-INVESTMENT-INCOME> (77)
<REALIZED-GAINS-CURRENT> 10
<APPREC-INCREASE-CURRENT> 189
<NET-CHANGE-FROM-OPS> 122
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 12,280
<NUMBER-OF-SHARES-REDEEMED> 137
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<NET-CHANGE-IN-ASSETS> 133,249
<ACCUMULATED-NII-PRIOR> 0
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<PER-SHARE-NAV-BEGIN> 10.95
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<PER-SHARE-NAV-END> 10.98
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
