<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 [ ]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 5 [X]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940 [X]
Amendment No. 6
(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)
Title and Amount
of Securities
Being Registered
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Flexible Payment
Deferred Annuity
Contracts
It is proposed that this filing will become effective:
[ ] immediately upon filing pursuant to paragraph (b) of Rule 485
[ ] on April 1, 1998 pursuant to paragraph (b) of Rule 485
[ ] 60 days after filing pursuant to paragraph (a) of Rule 485
[X] on January 29, 1999 pursuant to paragraph (a) of Rule 485
<PAGE> 2
VARIABLE ANNUITY ACCOUNT FOUR
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<CAPTION>
Item Number in Form N-4 Caption
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<S> <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; Income
Options
8. Annuity Period............................... Income 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>
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 ..................... Income 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
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
ANNUITY IS MORE FULLY DESCRIBED IN THE PROSPECTUS. PLEASE READ THE PROSPECTUS
CAREFULLY.
January 29, 1999
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1. THE ANCHOR ADVISOR VARIABLE ANNUITY
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The Anchor Advisor Variable Annuity 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 20 variable
portfolios and the one-year fixed account and one-year DCA fixed account
options. Your investment is not guaranteed. The value of your Anchor Advisor
contract can fluctuate up and down, based on the performance of the underlying
investments you select and you may experience a loss.
The variable portfolios offer professionally managed investment choices with
goals ranging from capital preservation to aggressive growth. Your choices for
the various investment options are found on the next page.
The contract also offers a one-year fixed account option and a one-year DCA
fixed account option. The interest rates are guaranteed by Anchor National.
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 portfolios to which your
money is allocated and/or the interest rate earned on the fixed account option
in which you invest. 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 may receive income payments from your annuity. Your
income payments may be fixed in dollar amount, vary with investment performance
or a combination of both, depending on where your money is allocated. Among
other factors, the amount of money you are able to accumulate in your contract
during the accumulation phase will affect the amount of your income payments
during the income phase.
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2. INCOME OPTIONS
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You can select from one of five income options:
(1) payments for your lifetime;
(2) payments for your lifetime and your survivor's lifetime;
(3) payments for your lifetime and your survivor's lifetime, but for not less
than 10 years;
(4) payments for your lifetime, but for not less than 10, or 20 years; and
(5) payments for a specified period of 5 to 30 years.
You will also need to decide when your income payments begin and if you want
your income payments to fluctuate with investment performance or remain
constant. Once you begin receiving income payments, you cannot change your
income option.
If your contract is part of a non-qualified 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
income payment is taxable as income.
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3. PURCHASING AN ANCHOR ADVISOR
VARIABLE ANNUITY CONTRACT
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You can buy a contract through your financial representative, who can also help
you complete the proper forms. The minimum initial purchase payment 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
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4. INVESTMENT OPTIONS
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You may allocate money to the following variable portfolios of the Anchor Series
Trust and/or the SunAmerica Series Trust:
ANCHOR SERIES TRUST
MANAGED BY WELLINGTON MANAGEMENT COMPANY, LLP
- Capital Appreciation Portfolio
- Growth Portfolio
- 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
- "Dogs" of Wall Street Portfolio
- SunAmerica Balanced Portfolio
- High-Yield Bond Portfolio
- Cash Management Portfolio
You may also allocate money to the one-year fixed account option or the one-year
DCA fixed account option. The interest rate applicable to the account will
differ from time to time, however, we will never credit less than a 3% annual
effective rate. Once established, the rate will not change during the one-year
period.
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5. EXPENSES
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We deduct insurance charges which equal 1.52% annually of the average daily
value of your contract allocated to the variable portfolios.
As with other professionally managed investments, there are also investment
charges imposed on contracts with money allocated to the variable portfolios. We
estimate these fees to range from .63 to 1.35.
Each year, you are allowed to make 15 transfers without charge. After your first
15 free transfers, a $25 transfer fee ($10 in Pennsylvania and Texas) applies to
each subsequent transfer. There are no withdrawal charges under the contract.
In a limited number of states, you may also be assessed a state premium tax of
up to 3.5% depending upon the state.
The following 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 contract which earns
5% annually and that you withdraw your money: (1) at the end of year 1, and (2)
at the end of year 10. The premium tax is assumed to be 0% in both examples.
<PAGE> 6
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<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% % %
Growth 1.52% % %
Natural Resources 1.52% % %
Government and Quality Bond 1.52% % %
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SUNAMERICA SERIES TRUST PORTFOLIO
International Diversified Equities 1.52% % %
Global Equities 1.52% % %
Aggressive Growth* 1.52% % %
Alliance Growth 1.52% % %
"Dogs" of Wall Street* 1.52% % %
Venture Value 1.52% % %
Federated Value* 1.52% % %
Growth-Income 1.52% % %
Utility* 1.52% % %
Asset Allocation 1.52% % %
SunAmerica Balanced* 1.52% % %
Worldwide High Income 1.52% % %
High-Yield Bond 1.52% % %
Corporate Bond 1.52% % %
Global Bond 1.52% % %
Cash Management 1.52% % %
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</TABLE>
* For these Portfolios, the adviser, SunAmerica Asset Management Corp., has
voluntarily agreed to waive fees or reimburse expenses, if necessary, to keep
operating expenses at or below an established maximum amount. All waivers or
reimbursements may be terminated at any time. For more detailed information,
see Fee Tables and Examples in the prospectus.
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6. TAXES
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Unlike taxable investments where earnings are taxed in the year they are earned,
taxes on amounts earned in a non-qualified contract are deferred until they are
withdrawn. In a qualified contract, 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.
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7. WITHDRAWALS
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You may take withdrawals from your contract at any time in the amount of $1,000
or more. Withdrawal requests must be in writing. You may also establish
systematic withdrawals in a minimum amount of $250. There are no withdrawal
charges under the contract.
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8. PERFORMANCE
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When you invest in the Anchor Advisor Variable Annuity, your money is actually
invested in the underlying portfolios of the Anchor Series Trust and/or the
SunAmerica Series Trust. 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, the contract maintenance fee
and the investment charges. Past performance is no guarantee of future results.
<TABLE>
<CAPTION>
- ------------------------------------------------------------
ANCHOR SERIES CALENDAR YEAR
TRUST PORTFOLIO 1998 1997 1996
- ------------------------------------------------------------
<S> <C> <C> <C>
Capital Appreciation 23.56% 5.33%
Growth 28.43% 11.74%
Natural Resources (9.94)% 5.76%
Government and Quality Bond 7.90 3.04%
SUNAMERICA SERIES
TRUST PORTFOLIO
International Diversified
Equities 4.80% 6.25%
Global Equities 13.33% 6.40%
Aggressive Growth 10.64% 12.67%
Alliance Growth 29.46% 16.46%
"Dogs" of Wall Street -- --
Venture Value 32.25% 14.01%
Federated Value 29.46% 11.51%
Growth-Income 31.90% 15.67%
Utility 23.87% 7.44%
Asset Allocation 19.98% 9.49%
SunAmerica Balanced 22.60% 8.09%
Worldwide High Income 13.81% 9.74%
High-Yield Bond 12.74% 5.60%
Corporate Bond 9.24% 3.94%
Global Bond 8.41% 5.18%
Cash Management 3.58% 1.07%
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</TABLE>
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9. DEATH BENEFIT
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If you should die during the accumulation phase, your beneficiary will receive a
death benefit. 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.
<PAGE> 7
OPTION 1 - PURCHASE PAYMENT ACCUMULATION OPTION:
The death benefit is the greater of:
(1) the value of your contract at the time we receive satisfactory proof of
death; or
(2) total purchase payments less withdrawals (and any fees or charges applicable
to such withdrawals), compounded at a 4% annual growth rate (3% growth rate
if 70 or older at the time of contract issue); or
(3) the value of your contract on the seventh contract anniversary, plus any
purchase payments since the seventh anniversary and less any withdrawals
(and any fees or charges applicable to such withdrawals), all compounded at
a 4% annual growth rate until the date of death (3% if 70 or older at the
time of contract issue).
OPTION 2 - MAXIMUM ANNIVERSARY OPTION:
The death benefit is the greater of:
(1) the value of your contract at the time we receive satisfactory proof of
death; or
(2) total purchase payments less any withdrawals (and any fees or charges
applicable to such withdrawals); or
(3) the maximum anniversary value on any contract anniversary prior to your 81st
birthday. The anniversary value equals the value of your contract on a
contract anniversary plus any purchase payments and less any withdrawals
(and any fees or charges applicable to such withdrawals) since that
anniversary.
If you are age 90 or older at the time of death and selected the option 2 death
benefit, the death benefit will be equal to the value of your contract at the
time we receive satisfactory proof of death.
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10. OTHER INFORMATION
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FREE LOOK: You may cancel your contract within ten days (or longer if required
by your state) by mailing it to our Annuity Service Center. Your contract will
be treated as void on the date we receive it and we will pay you an amount equal
to the value of your contract (unless otherwise required by state law). Its
value may be more or less than the money you initially invested.
ASSET ALLOCATION REBALANCING: If selected by you, this program seeks to keep
your investment in line with your goals. We will maintain your specified
allocation mix in the variable portfolios and the 1-year fixed account 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
transferred 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.
PRINCIPAL ADVANTAGE PROGRAM: If selected by you, this program allows you to
obtain growth potential without any market risk to your principal. We will
guarantee that the portion of your money allocated to the 1, 3, 5, 7 or 10-year
fixed account option will grow to equal your principal investment when it is
allocated in accordance with the program.
DOLLAR COST AVERAGING: If selected by you, this program allows you to invest
gradually in the variable portfolios from any of the variable portfolios, the
1-year fixed account option, the 6-month DCA fixed account option or the 1-year
DCA fixed account option.
AUTOMATIC PAYMENT PLAN: You can add to your contract directly from your bank
account with as little as $20 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.
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11. INQUIRIES
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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 29, 1999
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<S> <C> <C>
Please read this prospectus carefully FLEXIBLE PAYMENT DEFERRED ANNUITY CONTRACTS
before investing and keep it for issued by
future reference. It contains ANCHOR NATIONAL LIFE INSURANCE COMPANY
important information about the in connection with
Anchor Advisor Variable Annuity. VARIABLE SEPARATE ACCOUNT
The annuity has 22 investment choices -A one-year fixed
To learn more about the annuity account option, a one-year DCA fixed account option and the
offered by this prospectus, you can 20 Variable Portfolios listed below. The 20 Variable
obtain a copy of the Statement of Portfolios are part of the Anchor Series Trust or the
Additional Information ("SAI") dated SunAmerica Series Trust.
January 29, 1999. The SAI has been
filed with the Securities and ANCHOR SERIES TRUST:
Exchange Commission ("SEC") and is MANAGED BY WELLINGTON MANAGEMENT COMPANY, LLP
incorporated by reference into this - Capital Appreciation Portfolio
prospectus. The Table of Contents of - Growth Portfolio
the SAI appears on page 16 of this - Natural Resources Portfolio
prospectus. For a free copy of the - Government and Quality Bond Portfolio
SAI, call us at (800) 445-SUN2 or
write to us at our Annuity Service SUNAMERICA SERIES TRUST:
Center, P.O. Box 54299, Los Angeles, MANAGED BY ALLIANCE CAPITAL MANAGEMENT L.P.
California 90054-0299. - Global Equities Portfolio
- Alliance Growth Portfolio
In addition, the SEC maintains a - Growth-Income Portfolio
website (http://www.sec.gov) that MANAGED BY DAVIS SELECTED ADVISERS, L.P.
contains the SAI, materials - Venture Value Portfolio
incorporated by reference and other MANAGED BY FEDERATED INVESTORS
information filed electronically with - Federated Value Portfolio
the SEC by Anchor National. - Utility Portfolio
- Corporate Bond Portfolio
ANNUITIES INVOLVE RISKS, INCLUDING MANAGED BY GOLDMAN SACHS ASSET MANAGEMENT/
POSSIBLE LOSS OF PRINCIPAL, AND ARE GOLDMAN SACHS ASSET MANAGEMENT INTERNATIONAL
NOT A DEPOSIT OR OBLIGATION OF, OR - Asset Allocation Portfolio
GUARANTEED OR ENDORSED BY, ANY BANK. - Global Bond Portfolio
THEY ARE NOT FEDERALLY INSURED BY THE MANAGED BY MORGAN STANLEY ASSET MANAGEMENT INC.
FEDERAL DEPOSIT INSURANCE - International Diversified Equities Portfolio
CORPORATION, THE FEDERAL RESERVE - Worldwide High Income Portfolio
BOARD OR ANY OTHER AGENCY. MANAGED BY SUNAMERICA ASSET MANAGEMENT CORP.
- Aggressive Growth Portfolio
- "Dogs" of Wall Street Portfolio
- SunAmerica Balanced Portfolio
- High-Yield Bond Portfolio
- Cash Management Portfolio
</TABLE>
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, NOR HAS THE COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE> 9
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TABLE OF CONTENTS
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GLOSSARY.................................................... 2
FEE TABLES.................................................. 3
Owner Transaction Expenses............................ 3
Annual Separate Account Expenses...................... 3
Portfolio Expenses.................................... 3
EXAMPLES.................................................... 4
THE ANCHOR ADVISOR VARIABLE ANNUITY......................... 5
PURCHASING AN ANCHOR ADVISOR VARIABLE
ANNUITY................................................... 5
Allocation of Purchase Payments....................... 5
Accumulation Units.................................... 6
Free Look............................................. 6
INVESTMENT OPTIONS.......................................... 6
Variable Portfolios................................... 6
Anchor Series Trust................................... 6
SunAmerica Series Trust............................... 6
Fixed Account Options................................. 7
Transfers During the Accumulation Phase............... 7
Dollar Cost Averaging................................. 8
Asset Allocation Rebalancing.......................... 8
Principal Advantage Program........................... 9
Voting Rights......................................... 9
Substitution.......................................... 9
WITHDRAWAL.................................................. 9
Systematic Withdrawal Program......................... 9
Minimum Contract Value................................ 10
DEATH BENEFIT............................................... 10
EXPENSES.................................................... 11
Insurance Charges..................................... 11
Investment Charges.................................... 11
Transfer Fee.......................................... 11
Premium Tax........................................... 11
Income Taxes.......................................... 11
Reduction or Elimination of Charges and Expenses, and
Additional Amounts Credited........................... 11
INCOME OPTIONS.............................................. 11
Annuity Date.......................................... 11
Income Options........................................ 12
Fixed or Variable Income Payments..................... 12
Income Payments....................................... 12
Transfers During the Income Phase..................... 12
Deferment of Payments................................. 12
TAXES....................................................... 13
Annuity Contracts in General.......................... 13
Tax Treatment of Distributions -
Non-Qualified Contracts............................... 13
Tax Treatment of Distributions -
Qualified Contracts................................... 13
Minimum Distributions................................. 13
Diversification....................................... 13
PERFORMANCE................................................. 14
OTHER INFORMATION........................................... 14
Anchor National....................................... 14
The Separate Account.................................. 14
The General Account................................... 14
Distribution of the Contract.......................... 14
Administration........................................ 15
Year 2000............................................. 15
Legal Proceedings..................................... 15
Ownership............................................. 16
Custodian............................................. 16
Additional Information................................ 16
TABLE OF CONTENTS OF STATEMENT OF ADDITIONAL INFORMATION....
16
APPENDIX A -- CONDENSED FINANCIAL INFORMATION............... A-1
APPENDIX B -- MARKET VALUE ADJUSTMENT ("MVA")............... B-1
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GLOSSARY
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We have capitalized some of the technical terms used in this
prospectus. To help you understand these terms, we have defined
them in this glossary.
ACCUMULATION PHASE - The period during which you invest money in
your contract.
ACCUMULATION UNITS - A measurement we use to calculate the value
of the variable portion of your contract during the Accumulation
Phase.
ANNUITANT(S) - The person(s) on whose life (lives) we base income
payments.
ANNUITY DATE - The date on which income payments are to begin, as
selected by you.
ANNUITY UNITS - A measurement we use to calculate the amount of
income payments you receive from the variable portion of your
contract during the Income Phase.
BENEFICIARY - The person designated to receive any benefits under
the contract if you or the Annuitant dies.
COMPANY - Anchor National Life Insurance Company, We, Us, the
insurer which issues this contract.
INCOME PHASE - The period during which we make income payments to
you.
IRS - The Internal Revenue Service.
NON-QUALIFIED (CONTRACT) - A contract purchased with after-tax
dollars. In general, these contracts are not under any pension
plan, specially sponsored program or individual retirement account
("IRA").
PURCHASE PAYMENTS - The money you give us to buy the contract, as
well as any additional money you give us to invest in the contract
after you own it.
QUALIFIED (CONTRACT) - A contract purchased with pretax dollars.
These contracts are generally purchased under a pension plan,
specially sponsored program or IRA.
TRUSTS - Refers to the Anchor Series Trust and the SunAmerica
Series Trust collectively.
VARIABLE PORTFOLIO(S) - The variable investment options available
under the contract. Each Variable Portfolio has its own investment
objective and is invested in the underlying investments of the
Anchor Series Trust or the SunAmerica Series Trust.
</TABLE>
2
<PAGE> 10
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FEE TABLES
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OWNER TRANSACTION EXPENSES
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<S> <C> <C> <C>
WITHDRAWAL CHARGE............... None
CONTRACT MAINTENANCE CHARGE..... None
TRANSFER FEE.................... No charge for first 15 transfers
each contract year; thereafter,
fee is $25 ($10 in Pennsylvania
and Texas) per transfer
</TABLE>
ANNUAL SEPARATE ACCOUNT EXPENSES
(AS A PERCENTAGE OF AVERAGE ACCOUNT VALUE)
<TABLE>
<S> <C>
Mortality and Expense Risk Charge................ 1.37%
Distribution Expense Charge...................... 0.15%
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TOTAL SEPARATE ACCOUNT EXPENSES 1.52%
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</TABLE>
PORTFOLIO EXPENSES
ANCHOR SERIES TRUST
(AS A PERCENTAGE OF AVERAGE NET ASSETS FOR THE TRUST'S TWELVE-MONTH PERIOD ENDED
NOVEMBER 30, 1998)
(PORTFOLIO EXPENSE INFORMATION TO BE PROVIDED BY AMENDMENT)
<TABLE>
<CAPTION>
MANAGEMENT OTHER TOTAL ANNUAL
PORTFOLIO FEE EXPENSES EXPENSES
<S> <C> <C> <C>
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Capital Appreciation % % %
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Growth % % %
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Natural Resources % % %
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Government and Quality Bond % % %
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</TABLE>
SUNAMERICA SERIES TRUST
(AS A PERCENTAGE OF AVERAGE NET ASSETS AFTER REIMBURSEMENT OR WAIVER OF EXPENSES
FOR THE TRUST'S FISCAL YEAR ENDED
NOVEMBER 30, 1998)
(PORTFOLIO EXPENSE INFORMATION TO BE PROVIDED BY AMENDMENT)
<TABLE>
<CAPTION>
MANAGEMENT OTHER TOTAL ANNUAL
PORTFOLIO FEE EXPENSES EXPENSES
<S> <C> <C> <C>
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International Diversified Equities % % %
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Global Equities % % %
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Aggressive Growth % % %
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Alliance Growth % % %
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"Dogs" of Wall Street* % % %
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Venture Value % % %
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Federated Value % % %
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Growth-Income % % %
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Utility** % % %
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Asset Allocation % % %
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SunAmerica Balanced % % %
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Worldwide High Income % % %
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High-Yield Bond % % %
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Corporate Bond % % %
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Global Bond % % %
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Cash Management % % %
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</TABLE>
* Annualized.
** As of January 4, 1999, the Growth/Phoenix Portfolio was renamed the MFS
Growth and Income Portfolio and the Balanced/Phoenix Portfolio was renamed
the MFS Total Return Portfolio, each managed by Massachusetts Financial
Services. The expenses shown here are those of the former Growth/Phoenix
and Balanced Phoenix Portfolios managed by Phoenix Investment Counsel.
** Absent fee waivers and reimbursement of expenses by the adviser, the total
annual expenses for the Utility portfolio would have been %.
THE ABOVE PORTFOLIO EXPENSES WERE PROVIDED BY THE TRUSTS. WE HAVE NOT
INDEPENDENTLY VERIFIED THE ACCURACY OF THE INFORMATION.
3
<PAGE> 11
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
EXAMPLES
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
You will pay the following expenses on a $1,000 investment in each Variable
Portfolio, assuming a 5% annual return on assets and:
(a) surrendered the contract at the end of the stated time period; and
(b) if the contract is not surrendered.*
(EXPENSE EXAMPLES TO BE PROVIDED BY AMENDMENT)
<TABLE>
<CAPTION>
PORTFOLIO 1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
Capital Appreciation (a) $ (a) $ (a) $ (a) $
(b) $ (b) $ (b) $ (b) $
- -------------------------------------------------------------------------------------------------------
Growth (a) $ (a) $ (a) $ (a) $
(b) $ (b) $ (b) $ (b) $
- -------------------------------------------------------------------------------------------------------
Natural Resources (a) $ (a) $ (a) $ (a) $
(b) $ (b) $ (b) $ (b) $
- -------------------------------------------------------------------------------------------------------
Government and Quality Bond (a) $ (a) $ (a) $ (a) $
(b) $ (b) $ (b) $ (b) $
- -------------------------------------------------------------------------------------------------------
International Diversified Equities (a) $ (a) $ (a) $ (a) $
(b) $ (b) $ (b) $ (b) $
- -------------------------------------------------------------------------------------------------------
Global Equities (a) $ (a) $ (a) $ (a) $
(b) $ (b) $ (b) $ (b) $
- -------------------------------------------------------------------------------------------------------
Aggressive Growth (a) $ (a) $ (a) $ (a) $
(b) $ (b) $ (b) $ (b) $
- -------------------------------------------------------------------------------------------------------
Alliance Growth (a) $ (a) $ (a) $ (a) $
(b) $ (b) $ (b) $ (b) $
- -------------------------------------------------------------------------------------------------------
"Dogs" of Wall Street (a) $ (a) $ (a) $ (a) $
(b) $ (b) $ (b) $ (b) $
- -------------------------------------------------------------------------------------------------------
Venture Value (a) $ (a) $ (a) $ (a) $
(b) $ (b) $ (b) $ (b) $
- -------------------------------------------------------------------------------------------------------
Federated Value (a) $ (a) $ (a) $ (a) $
(b) $ (b) $ (b) $ (b) $
- -------------------------------------------------------------------------------------------------------
Growth-Income (a) $ (a) $ (a) $ (a) $
(b) $ (b) $ (b) $ (b) $
- -------------------------------------------------------------------------------------------------------
Utility (a) $ (a) $ (a) $ (a) $
(b) $ (b) $ (b) $ (b) $
- -------------------------------------------------------------------------------------------------------
Asset Allocation (a) $ (a) $ (a) $ (a) $
(b) $ (b) $ (b) $ (b) $
- -------------------------------------------------------------------------------------------------------
SunAmerica Balanced (a) $ (a) $ (a) $ (a) $
(b) $ (b) $ (b) $ (b) $
- -------------------------------------------------------------------------------------------------------
Worldwide High Income (a) $ (a) $ (a) $ (a) $
(b) $ (b) $ (b) $ (b) $
- -------------------------------------------------------------------------------------------------------
High-Yield Bond (a) $ (a) $ (a) $ (a) $
(b) $ (b) $ (b) $ (b) $
- -------------------------------------------------------------------------------------------------------
Corporate Bond (a) $ (a) $ (a) $ (a) $
(b) $ (b) $ (b) $ (b) $
- -------------------------------------------------------------------------------------------------------
Global Bond (a) $ (a) $ (a) $ (a) $
(b) $ (b) $ (b) $ (b) $
- -------------------------------------------------------------------------------------------------------
Cash Management (a) $ (a) $ (a) $ (a) $
(b) $ (b) $ (b) $ (b) $
- -------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
</TABLE>
* Anchor National does not impose any fees or charges when beginning the
Income Phase of your contract.
4
<PAGE> 12
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 Variable 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 Variable Portfolio's average net assets:
SunAmerica Balanced (1.00%); "Dogs" of Wall Street (.85%); Aggressive Growth
(.90%); Federated Value (1.03%); and Utility (1.05%). The adviser also may
voluntarily waive or reimburse additional amounts to increase a Variable
Portfolio's investment return. All waivers and/or reimbursements may be
terminated at any time. Furthermore, the adviser may recoup any waivers or
reimbursements within two years after such waivers or reimbursements are
granted, provided that the Variable 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. Although premium
taxes may apply in certain states, they are not reflected in the Examples.
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.
- ----------------------------------------------------------------
- ----------------------------------------------------------------
THE ANCHOR ADVISOR VARIABLE ANNUITY
- ----------------------------------------------------------------
- ----------------------------------------------------------------
An annuity is a contract between you and an insurance company. You are the owner
of the contract. The contract provides three main benefits:
- Tax Deferral: This means that you do not pay taxes on your earnings from
the annuity until you withdraw them.
- Death Benefit: If you die during the Accumulation Phase, the insurance
company pays a death benefit to your Beneficiary.
- Guaranteed Income: If elected, you receive a stream of income for your
lifetime, or another available period you select.
This annuity was developed to help you contribute to your retirement savings.
This annuity works in two stages, the Accumulation Phase and the Income Phase.
Your contract is in the Accumulation Phase during the period when you make
payments into the contract. The Income Phase begins when you request us to start
making income payments to you out of the money accumulated in your contract.
The contract is called a "variable" annuity because it allows you to invest in
variable portfolios which, like mutual funds, have different investment
objectives and performance which varies. You can gain or lose money if you
invest in these Variable Portfolios. The amount of money you accumulate in your
contract depends on the performance of the Variable Portfolios in which you
invest. This contract currently offers 20 Variable Portfolios.
The contract also offers a one-year fixed account option and a one-year DCA
fixed account option. Fixed account options earn interest at a rate set and
guaranteed by Anchor National. If you allocate money to a fixed account option,
the amount of money that accumulates in the contract depends on the total
interest credited to the fixed account option.
For more information on investment options available under this contract SEE
INVESTMENT OPTIONS ON PAGE 6.
Anchor National Life Insurance Company (Anchor National, The Company, Us, We)
issues the Anchor Advisor Variable Annuity. When you purchase an Anchor Advisor
Variable Annuity, a contract exists between you and Anchor National. The Company
is a stock life insurance company organized under the laws of the state of
Arizona. Its principal place of business is 1 SunAmerica Center, Los Angeles,
California 90067. The Company conducts life insurance and annuity business in
the District of Columbia and all states except New York. Anchor National is an
indirect, wholly owned subsidiary of American International Group, a Delaware
corporation ("AIG").
- ----------------------------------------------------------------
- ----------------------------------------------------------------
PURCHASING AN ANCHOR ADVISOR VARIABLE ANNUITY
- ----------------------------------------------------------------
- ----------------------------------------------------------------
A Purchase Payment is the money you give us to buy a contract. Any additional
money you give us to invest in the contract after purchase is a subsequent
Purchase Payment. The minimum initial and Purchase Payments is $20,000 and
subsequent amounts of $500 or more may be added to your contract. Prior Company
approval is required to accept Purchase Payments greater than $1,000,000. Also,
the optional automatic payment plan allows you to make subsequent Purchase
Payments of as little as $100.00.
We may refuse any Purchase Payment. In general, we will not issue a Qualified
contract to anyone who is age 70 1/2 or older, unless it is shown that the
minimum distribution required by the IRS is being made. In addition we may not
issue a contract to anyone over age 90.
ALLOCATION OF PURCHASE PAYMENTS
We invest your Purchase Payments in the fixed and variable investment options
according to your instructions. If we receive a Purchase Payment without
allocation instructions,
5
<PAGE> 13
we will invest the money according to your last allocation instructions. SEE
INVESTMENT OPTIONS.
In order to issue your contract, we must receive your completed application,
Purchase Payment allocation instructions and any other required paperwork at our
principal place of business. We allocate your initial purchase payment within
two days of receiving it. If we do not have complete information necessary to
issue your contract, we will contact you. If we do not have the information
necessary to issue your contract within 5 business days we will:
- Send your money back to you, or;
- Ask your permission to keep your money until we get the information
necessary to issue the contract.
ACCUMULATION UNITS
When you allocate a Purchase Payment to the Variable Portfolios, we credit your
contract with Accumulation Units of the separate account. The value of an
Accumulation Unit goes up and down based on the performance of the Variable
Portfolios.
We calculate the value of an Accumulation Unit each day that the New York Stock
Exchange ("NYSE") is open as follows:
1. We determine the total value of money invested in a particular Variable
Portfolio;
2. We subtract from that amount all applicable contract charges; and
3. We divide this amount by the number of outstanding Accumulation Units.
We determine the number of Accumulation Units credited to your contract by
dividing the Purchase Payment by the Accumulation Unit value for the specific
Variable Portfolio.
EXAMPLE:
We receive a $25,000 Purchase Payment from you on Wednesday. You allocate
the money to the Global Bond Portfolio. We determine that the value of an
Accumulation Unit for the Global Bond Portfolio is $11.10 when the NYSE
closes on Wednesday. We then divide $25,000 by $11.10 and credit your
contract on Wednesday night with 2252.52 Accumulation Units for the Global
Bond Portfolio.
Performance of the Variable Portfolios and expenses under your contract affect
Accumulation Unit values. These factors cause the value of your contract to go
up and down.
FREE LOOK
You may cancel your contract within ten days after receiving it (or longer if
required by state law). We call this a "free look." To cancel, you must mail the
contract along with your free look request to our Annuity Service Center at P.O.
Box 54299, Los Angeles, California 90054-0299. We will refund to you the value
of your contract on the day we receive your request. The amount refunded to you
may be more or less than the amount you originally invested.
Certain states require us to return your Purchase Payments upon a free look
request. Additionally, all contracts issued as an IRA require the full return of
Purchase Payments upon a free look. With respect to those contracts, we reserve
the right to put your money in the Cash Management Portfolio or the 1-year fixed
investment option during the free look period. If you cancel your contract
during the free look period, we return your Purchase Payment or the value of
your contract, whichever is larger. At the end of the free look period, we
allocate your money according to your instructions.
- ----------------------------------------------------------------
- ----------------------------------------------------------------
INVESTMENT OPTIONS
- ----------------------------------------------------------------
- ----------------------------------------------------------------
VARIABLE PORTFOLIOS
The contract currently offers 20 Variable Portfolios. These Variable Portfolios
invest in shares of the Anchor Series Trust and the SunAmerica Series Trust (the
"Trusts"). Additional Variable Portfolios may be available in the future. The
Variable Portfolios operate similar to a mutual fund but are only available
through the purchase of certain insurance contracts.
SunAmerica Asset Management Corp., an indirect wholly owned subsidiary of AIG,
is the investment adviser to the Trusts. The Trusts serve as the underlying
investment vehicles for other variable annuity contracts issued by Anchor
National, and other affiliated/unaffiliated insurance companies. Neither Anchor
National nor the Trusts believe that offering shares of the Trusts in this
manner disadvantages you. The adviser monitors the Trusts for potential
conflicts.
The Variable Portfolios along with their respective subadvisers are listed
below:
ANCHOR SERIES TRUST
Wellington Management Company, LLP serves as subadviser to the Anchor Series
Trust Portfolios. Anchor Series Trust has Variable Portfolios in addition to
those listed below which are not available for investment under the contract.
The 4 available Variable 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 has Variable Portfolios in addition to those
listed below which
6
<PAGE> 14
are not available for investment under the contract. The 16 Variable 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, INC.
- Aggressive Growth Portfolio
- "Dogs" of Wall Street Portfolio
- SunAmerica Balanced Portfolio
- High-Yield Bond Portfolio
- Cash Management Portfolio
YOU SHOULD READ THE PROSPECTUSES FOR THE TRUSTS CAREFULLY. THESE PROSPECTUSES
CONTAIN DETAILED INFORMATION ABOUT THE PORTFOLIOS, INCLUDING EACH VARIABLE
PORTFOLIO'S INVESTMENT OBJECTIVE AND RISK FACTORS.
FIXED ACCOUNT OPTIONS
The contract also offers a one-year fixed account option and a one-year DCA
fixed account option. The one-year DCA account provides a fixed interest rate
when participating in the DCA program.
The fixed account options pay interest at a rate set and guaranteed by Anchor
National. Interest rates may differ from time to time and are set at our sole
discretion. We never credit less than a 3% annual effective rate. The interest
rate offered for new Purchase Payments may differ from that offered for
subsequent Purchase Payments and money already in the one-year fixed account
option. Once established, the interest rate does not change during the specified
period.
As for Purchase Payments allocated to the one-year fixed account, you may leave
your money in the account at the end of the one-year period or reallocate your
funds. If you want to reallocate your money you must contact us within 30 days
after the end of the one-year period and instruct us how to reallocate the
money. If we do not hear from you, we will keep your money in the one-year fixed
account where it will earn the renewal interest rate applicable at that time.
TRANSFERS DURING THE ACCUMULATION PHASE
During the Accumulation Phase you may transfer funds between the Variable
Portfolios and/or the fixed account options. Funds already in your contract
cannot be transferred into the DCA fixed accounts. You must transfer at least
$100. If less than $100 will remain in any Variable Portfolio after a transfer,
that amount must be transferred as well.
You may request transfers of your account value between the Variable Portfolios
and/or the fixed account options in writing or by telephone. We currently allow
15 free transfers per contract per year. We charge $25 ($10 in Pennsylvania and
Texas) for each additional transfer in any contract year. Transfers resulting
from your participation in the DCA program count against your 15 free transfers
per contract year. However, transfers resulting from your participation in the
automatic asset rebalancing program do not count against your 15 free transfers.
We accept transfer requests by telephone unless you tell us not to on your
contract application. Additionally, in the future you may be able to execute
transfers or other financial transactions over the internet. When receiving
instructions over the telephone, we follow appropriate procedures to provide
reasonable assurance that the transactions executed are genuine. Thus, we are
not responsible for any claim, loss or expense from any error resulting from
instructions received over the telephone.
Upon implementation of internet account transactions we will have appropriate
procedures in place to provide reasonable assurance that the transactions
executed are genuine. Thus, we would not be responsible for any claim, loss or
expense from any error resulting from instructions received over the internet.
If we fail to follow our procedures, we may be liable for any losses due to
unauthorized or fraudulent instructions.
We may limit the number of transfers in any contract year or refuse any transfer
request for you or others invested in the contract if we believe that:
- Excessive trading or a specific transfer request or group transfer
requests may have a detrimental effect on unit values or the share prices
of the underlying Variable Portfolios; or
- The underlying Variable Portfolios inform us that they need to restrict
the purchase or redemption of the shares because of excessive trading or
because a specific transfer or group of transfers is deemed to have a
detrimental effect on share prices of affected underlying Variable
Portfolios.
Where permitted by law, we may accept your authorization for a third party to
make transfers for you subject to our
7
<PAGE> 15
rules. We reserve the right to suspend or cancel such acceptance at any time and
will notify you accordingly. Additionally, we may restrict the investment
options available for transfers during any period in which such third party acts
for you. We notify such third party beforehand regarding any restrictions.
However, we will not enforce these restrictions if we are satisfied that:
- such third party has been appointed by a court of competent jurisdiction
to act on your behalf; or
- such third party is a trustee/fiduciary, for you or appointed by you, to
act on your behalf for all your financial affairs.
We may provide administrative or other support services to independent third
parties you authorize to make transfers on your behalf. We do not currently
charge you extra for providing these support services. This includes, but is not
limited to, transfers between investment options in accordance with market
timing strategies. Such independent third parties may or may not be appointed
with us for the sale of annuities. However, WE DO NOT ENGAGE ANY THIRD PARTIES
TO OFFER INVESTMENT ALLOCATION SERVICES OF ANY TYPE. WE TAKE NO RESPONSIBILITY
FOR THE INVESTMENT ALLOCATION AND TRANSFERS TRANSACTED ON YOUR BEHALF BY SUCH
THIRD PARTIES OR FOR ANY INVESTMENT ALLOCATION RECOMMENDATIONS MADE BY SUCH
PARTIES.
For information regarding transfers during the Income Phase, SEE INCOME OPTIONS
ON PAGE 11.
We reserve the right to modify, suspend, waive or terminate these transfer
provisions at any time.
DOLLAR COST AVERAGING
The Dollar Cost Averaging ("DCA") program allows you to invest gradually in the
Variable Portfolios. Under the program you systematically transfer a set dollar
amount or percentage of portfolio value from one Variable Portfolio or the
1-year fixed account option (source accounts) to any other Variable Portfolio.
Transfers may be monthly or quarterly and count against your 15 free transfers
per contract year. You may change the frequency at any time by notifying us in
writing. The minimum transfer amount under the DCA program is $100, regardless
of the source account.
We also offer the one-year DCA fixed account exclusively to facilitate this
program. The DCA fixed account only accepts new Purchase Payments. You can not
transfer money already in your contract into the account. If you allocate a
Purchase Payment into the DCA fixed account, we transfer all your money into the
Variable Portfolios over the one-year period. You cannot change the option or
the frequency of transfers once selected.
We determine the amount of the transfers from the one-year DCA fixed account
based on:
- the total amount of money allocated to the account, and
- the frequency of transfers selected.
For example, let's say you allocate $1,000 to the 1-year DCA account. You select
monthly transfers. We completely transfer all of your money to the selected
investment options over a period of ten months.
You may terminate your DCA program at any time. If money remains in the DCA
fixed account, we transfer the remaining money to the one-year fixed account
option, unless we receive different instructions from you. Transfers resulting
from a termination of this program do not count towards your 15 free transfers.
The DCA program is designed to lessen the impact of market fluctuations on your
investment. However, we cannot ensure that you will make a profit. When you
elect the DCA program, you are continuously investing in securities regardless
of fluctuating price levels. You should consider your tolerance for investing
through periods of fluctuating price levels.
We reserve the right to modify, suspend or terminate this program at any time.
EXAMPLE:
Assume that you want to gradually move $750 each quarter from the Cash
Management Portfolio to the Aggressive Growth Portfolio over six quarters.
You set up dollar cost averaging and purchase Accumulation Units at the
following values:
<TABLE>
<CAPTION>
- -------------------------------------------
ACCUMULATION UNITS
QUARTER UNIT PURCHASED
- -------------------------------------------
<S> <C> <C>
1 $ 7.50 100
2 $ 5.00 150
3 $10.00 75
4 $ 7.50 100
5 $ 5.00 150
6 $ 7.50 100
- -------------------------------------------
</TABLE>
You paid an average price of only $6.67 per Accumulation Unit over six
quarters, while the average market price actually was $7.08. By investing
an equal amount of money each month, you automatically buy more
Accumulation Units when the market price is low and fewer Accumulation
Units when the market price is high. This example is for illustrative
purposes only.
ASSET ALLOCATION REBALANCING
Earnings in your contract may cause the percentage of your investment in each
investment option to differ from your original allocations. The Automatic Asset
Rebalancing program addresses this situation. At your election, we
8
<PAGE> 16
periodically rebalance your investments in the Variable Portfolios to return
your allocations to their original percentages. Asset rebalancing typically
involves shifting a portion of your money out of an investment option with a
higher return into an investment option with a lower return.
At your request, rebalancing occur on a quarterly, semiannual or annual basis.
Transfers made as a result of rebalancing do not count against your 15 free
transfers for the contract 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
Variable 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%.
PRINCIPAL ADVANTAGE PROGRAM
The Principal Advantage Program allows you to invest in one or more Variable
Portfolios without putting your principal at direct risk. The program
accomplishes this by allocating your investment strategically between the fixed
account options and Variable Portfolios. You decide how much you want to invest
and approximately when you want a return of principal. We calculate how much of
your Purchase Payment to allocate to the particular fixed account option to
ensure that it grows to an amount equal to your total principal invested under
this program. We invest the rest of your principal in the Variable Portfolio(s)
of your choice.
We reserve the right to modify, suspend or terminate this program at any time.
EXAMPLE:
Assume that you want to allocate a portion of your initial Purchase Payment
of $100,000 to the fixed account option. You want the amount allocated to
the fixed account option to grow to $100,000 in 7 years. If the 7-year
fixed account option is offering a 5% interest rate, we will allocate
$71,069 to the 7-year fixed account option to ensure that this amount will
grow to $100,000 at the end of the 7-year period. The remaining $28,931 may
be allocated among the Variable Portfolios, as determined by you, to
provide opportunity for greater growth.
VOTING RIGHTS
Anchor National is the legal owner of the Trusts' shares. However, when a
Variable Portfolio solicits proxies in conjunction with a vote of shareholders,
we must obtain your instructions on how to vote those shares. We vote all of the
shares we own in proportion to your instructions. This includes any shares we
own on our own behalf. Should we determine that we are no longer required to
comply with these rules, we will vote the shares in our own right.
SUBSTITUTION
If Variable Portfolios become unavailable for investment, we may be required to
substitute shares of another Variable Portfolio. We will seek prior approval of
the SEC and give you notice before substituting shares.
- ----------------------------------------------------------------
- ----------------------------------------------------------------
WITHDRAWAL
- ----------------------------------------------------------------
- ----------------------------------------------------------------
You can access money in your contract in two ways:
- by making a partial or total withdrawal, and/or;
- by receiving income payments during the Income Phase. SEE INCOME OPTIONS
ON PAGE 11.
Under most circumstances, the partial withdrawals minimum is $1,000. We require
that the value left in any investment option be at least $100, after the
withdrawal. You must send a written withdrawal request. Unless you provide us
with different instructions, partial withdrawals will be made pro rata from each
Variable Portfolio and the fixed account option in which your contract is
invested.
Under certain Qualified plans, access to the money in your contract may be
restricted. Additionally, withdrawals made prior to age 59 1/2 may result in a
10% IRS penalty tax. SEE TAXES ON PAGE 13.
We may be required to suspend or postpone the payment of a withdrawal for any
period of time when: (1) the NYSE is closed (other than a customary weekend and
holiday closings); (2) trading with the NYSE is restricted; (3) an emergency
exists such that disposal of or determination of the value of shares of the
Variable Portfolios is not reasonably practicable; (4) the SEC, by order, so
permits for the protection of contract owners.
Additionally, we reserve the right to defer payments for a withdrawal from a
fixed account in option. Such deferrals are limited to no longer than six
months.
SYSTEMATIC WITHDRAWAL PROGRAM
During the Accumulation Phase, you may elect to receive periodic income payments
under the systematic withdrawal
9
<PAGE> 17
program. Under the program, you may choose to take monthly, quarterly,
semi-annual or annual payments from your contract. Electronic transfer of these
funds to your bank account is also available. The minimum amount of each
withdrawal is $250. There must be at least $500 remaining in your contract at
all times. Withdrawals may be taxable and a 10% IRS penalty tax may apply if you
are under age 59 1/2. There is no additional charge for participating in this
program.
The program is not available to everyone. Please check with our Annuity Service
Center, which can provide the necessary enrollment forms. We reserve the right
to modify, suspend or terminate this program at any time.
MINIMUM CONTRACT VALUE
Where permitted by state law, we may terminate your contract if both of the
following occur: (1) your contract is less than $500 as a result of withdrawals;
and (2) you have not made any Purchase Payments during the past three years. We
will provide you with sixty days written notice. At the end of the notice
period, we will distribute the contract's remaining value to you.
- ----------------------------------------------------------------
- ----------------------------------------------------------------
DEATH BENEFIT
- ----------------------------------------------------------------
- ----------------------------------------------------------------
If you die during the Accumulation Phase of your contract, we pay a death
benefit to your Beneficiary. At the time you purchase your contract, you must
select one of the two death benefits described below. Once selected, you can not
change your death benefit option. You should discuss the available options with
your financial representative to determine 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 at the time we receive satisfactory proof of
death; or
2. total Purchase Payments less withdrawals (and any fees or charges
applicable to such withdrawals), compounded at a 4% annual growth rate
until the date of death (3% growth rate if 70 or older at the time of
contract issue); or
3. the value of your contract on the seventh contract anniversary, plus any
Purchase Payments and less any withdrawals (and any fees or charges
applicable to such withdrawals), since the seventh contract anniversary,
all compounded at a 4% annual growth rate until the date of death (3%
growth rate if age 70 or older at the time of contract issue).
OPTION 2 - MAXIMUM ANNIVERSARY OPTION
The death benefit is the greater of:
1. the value of your contract at the time we receive satisfactory proof of
death; or
2. total Purchase Payments less any withdrawals (and any fees or charges
applicable to such withdrawals); or
3. the maximum anniversary value on any contract anniversary prior to your
81st birthday. The anniversary value equals the value of your contract
on a contract anniversary plus any Purchase Payments and less any
withdrawals (and any fees or charges applicable to such withdrawals),
since that contract anniversary.
If you are age 90 or older at the time of death and selected the Option 2 death
benefit, the death benefit will be equal to the value of your contract at the
time we receive satisfactory proof of death. Accordingly, you do not get the
advantage of option 2 if:
- you are over age 80 at the time of contract issue, or
- you are 90 or older at the time of your death.
We do not pay the death benefit if you die after you switch to the Income Phase.
However, if you die during the Income Phase, your Beneficiary receives any
remaining guaranteed income payments in accordance with the income option you
selected. SEE INCOME OPTIONS ON PAGE 11.
You name your Beneficiary. You may change the Beneficiary at any time, unless
you previously made an irrevocable Beneficiary designation.
We pay the death benefit when we receive satisfactory proof of death. We
consider the following satisfactory proof of death:
1. a certified copy of the death certificate; or
2. a certified copy of a decree of a court of competent jurisdiction as to
the finding of death; or
3. a written statement by a medical doctor who attended the deceased at the
time of death; or
4. any other proof satisfactory to us.
We may require additional proof before we pay the death benefit.
The death benefit payment must begin immediately upon receipt of all necessary
documents. In any event, the death benefit must be paid within 5 years of the
date of death unless the Beneficiary elects to have it payable in the form of an
income option. If the Beneficiary elects an income option, it must be paid over
the Beneficiary's lifetime or for a period not extending beyond the
Beneficiary's life expectancy. Payments must begin within one year of your
death.
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<PAGE> 18
If the Beneficiary is the spouse of a deceased owner, he or she can elect to
continue the Contract at the then current value. If the Beneficiary/spouse
continues the contract, we do not pay a death benefit to him or her.
If a Beneficiary does not elect a specific form of pay out within 60 days of our
receipt of proof of death, we pay a lump sum death benefit to the Beneficiary.
- ----------------------------------------------------------------
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EXPENSES
- ----------------------------------------------------------------
- ----------------------------------------------------------------
There are charges and expenses associated with your contract. These charges and
expenses reduce your investment return. We will not increase the charges or
expenses under your contract. Some states may require that we charge less than
the amounts described below.
INSURANCE CHARGES
The amount of this charge is 1.52% annually, of the value of your contract
invested in the Variable Portfolios. We deduct the charge daily.
The insurance charge compensates us for the mortality and expense risks and the
costs of contract distribution assumed by Anchor National.
If these charges do not cover all of our expenses, we will pay the difference.
Likewise, if these charges exceed our expenses, we will keep the difference.
INVESTMENT CHARGES
Charges are deducted from your Variable Portfolios for the advisory and other
expenses of the Variable Portfolios. THE FEE TABLES LOCATED AT PAGE 3 illustrate
these charges and expenses. For more detailed information on these investment
charges, refer to the prospectuses for the Trusts, enclosed or attached.
TRANSFER FEE
We currently permit 15 free transfers between investment options each contract
year. We charge you $25 for each additional transfer that contract year ($10 in
Pennsylvania and Texas). SEE INVESTMENT OPTIONS ON PAGE 6.
PREMIUM TAX
Certain states charge the Company a tax on the premiums you pay into the
contract. We deduct from your contract these premium tax charges. Currently we
deduct the charge for premium taxes when you take a full withdrawal or begin the
Income Phase of the contract. In the future, we may assess this deduction at the
time you put Purchase Payment(s) into the contract or upon payment of a death
benefit.
APPENDIX B provides more information about premium taxes.
INCOME TAXES
We do not currently deduct income taxes from your contract. We reserve the right
to do so in the future.
REDUCTION OR ELIMINATION OF CHARGES AND EXPENSES, AND ADDITIONAL AMOUNTS
CREDITED
Sometimes sales of the contracts to groups of similarly situated individuals may
lower our administrative and/or sales expenses. We reserve the right to reduce
or waive certain charges and expenses when this type of sale occurs. In
addition, we may also credit additional interest to policies sold to such
groups. We determine which groups are eligible for such treatment. Some of the
criteria we evaluate to make a determination are: size of the group; amount of
expected Purchase Payments; relationship existing between us and prospective
purchaser; nature of the purchase; length of time a group of contracts is
expected to remain active; purpose of the purchase and whether that purpose
increases the likelihood that our expenses will be reduced; and/or any other
factors that we believe indicate that administrative and/or sales expenses may
be reduced.
Anchor National may make such a determination regarding sales to its employees,
it affiliates' employees and employees of currently contracted broker-dealers;
its registered representatives and immediate family members of all of those
described.
We reserve the right to change or modify any such determination or the treatment
applied to a particular group, at any time.
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INCOME OPTIONS
- ----------------------------------------------------------------
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ANNUITY DATE
During the Income Phase, we use the money accumulated in your contract to make
regular income payments to you. You may switch to the Income Phase any time
after your 2nd contract anniversary. You select the month and year you want
income payments to begin. The first day of that month is the Annuity Date. You
may change your Annuity Date, so long as you do so at least seven days before
the income payments are scheduled to begin. Once you begin receiving income
payments, you cannot change your income option.
Income payments must begin on or before your 90th birthday or on your tenth
contract anniversary, whichever occurs later. If you do not choose an Annuity
Date, your income payments will automatically begin on this date. Certain states
may require your income payments to start earlier.
If the Annuity Date is past your 85th birthday, your contract could lose its
status as an annuity under Federal tax laws. This may cause you to incur adverse
tax consequences.
11
<PAGE> 19
In addition, most Qualified contracts require you to take minimum distributions
after you reach age 70 1/2. SEE TAXES ON PAGE 13.
INCOME OPTIONS
Currently, this Contract offers five income options. If you elect to receive
income payments but do not select an option, your income payments will be made
in accordance with option 4 for a period of 10 years. For income payments based
on joint lives, we pay according to option 3.
We base our calculation of income payments on the life of the Annuitant and the
annuity rates set forth in your contract. As the contract owner, you may change
the Annuitant at any time prior to the Annuity Date. You must notify us if the
Annuitant dies before the Annuity Date and designate a new Annuitant.
OPTION 1 - LIFE INCOME ANNUITY
This option provides income payments for the life of the Annuitant. Income
payments stop when the Annuitant dies.
OPTION 2 - JOINT AND SURVIVOR LIFE ANNUITY
This option provides income payments for the life of the Annuitant and for the
life of another designated person. Upon the death of either person, we will
continue to make income payments during the lifetime of the survivor. Income
payments stop when the survivor dies.
OPTION 3 - JOINT AND SURVIVOR LIFE ANNUITY WITH 10 OR 20 YEARS GUARANTEED
This option is similar to option 2 above, with an additional guarantee of
payments for at least 10 years. If the Annuitant and the survivor die before all
of the guaranteed income payments have been made, the remaining payments are
made to the Beneficiary under your contract.
OPTION 4 - LIFE ANNUITY WITH 10 OR 20 YEARS GUARANTEED
This option is similar to option 1 above. In addition, this option provides a
guarantee that income payments will be made for at least 10 or 20 years. You
select the number of years. If the Annuitant dies before all guaranteed income
payments are made, the remaining income payments go to the Beneficiary under
your contract.
OPTION 5 - INCOME FOR A SPECIFIED PERIOD
This option provides income payments for a guaranteed period ranging from 5 to
30 years. If the Annuitant dies before all of the guaranteed income payments are
made, the remaining income payments are made to the Beneficiary under your
contract.
Please read the Statement of Additional Information ("SAI") for a more detailed
discussion of the income options.
FIXED OR VARIABLE INCOME PAYMENTS
You can choose income payments that are fixed, variable or both. If at the date
when income payments begin you are invested in the Variable Portfolios only,
your income payments will be variable. If your money is only in fixed accounts
at that time, your income payments will be fixed in amount. Further, if you are
invested in both fixed and variable investment options when income payments
begin, your payments will be fixed and variable. If income payments are fixed,
Anchor National guarantees the amount of each payment. If the income payments
are variable the amount is not guaranteed.
INCOME PAYMENTS
We make income payments on a monthly, quarterly, semiannual or annual basis. You
instruct us to send you a check or to have the payments directly deposited into
your bank account. If state law allows, we distribute annuities with a contract
value of $5,000 or less in a lump sum. Also, if the selected income option
results in income payments of less than $50 per payment, we may decrease the
frequency of payments, state law allowing.
If you are invested in the Variable Portfolios after the Annuity date, your
income payments vary depending on four things:
- for life options, your age when payments begin, and;
- the value of your contract in the Variable Portfolios on the Annuity
Date, and;
- the 3.5% assumed investment rate used in the annuity table for the
contract, and;
- the performance of the Variable Portfolios in which you are invested
during the time you receive income payments.
If you are invested in both the fixed account options and the Variable
Portfolios after the Annuity Date, the allocation of funds between the fixed and
variable options also impacts the amount of your annuity payments.
TRANSFERS DURING THE INCOME PHASE
During the Income Phase, one transfer per month is permitted between the
Variable Portfolios. No other transfers are allowed during the Income Phase.
DEFERMENT OF PAYMENTS
We may defer making fixed payments for up to six months, or less if required by
law. Interest is credited to you during the deferral period.
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<PAGE> 20
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TAXES
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NOTE: WE PREPARED THE FOLLOWING INFORMATION ON TAXES AS A GENERAL DISCUSSION OF
THE SUBJECT. IT IS NOT TAX ADVICE. WE CAUTION YOU TO SEEK COMPETENT TAX ADVICE
ABOUT YOUR OWN CIRCUMSTANCES. WE DO NOT GUARANTEE THE TAX STATUS OF YOUR
ANNUITY. TAX LAWS CONSTANTLY CHANGE, THEREFORE WE CANNOT GUARANTEE THAT THE
INFORMATION CONTAINED HEREIN IS COMPLETE AND/OR ACCURATE.
ANNUITY CONTRACTS IN GENERAL
The Internal Revenue Code ("IRC") provides for special rules regarding the tax
treatment of annuity contracts. Generally, taxes on the earnings in your annuity
contract are deferred until you take the money out. Different rules apply
depending on how you take the money out and whether your contract is Qualified
or Non-qualified.
If you do not purchase your contract under a pension plan, a specially sponsored
employer program or an individual retirement account, your contract is referred
to as a Non-qualified contract. A Non-qualified contract receives different tax
treatment than a Qualified contract. In general, your cost basis in a
Non-qualified contract is equal to the Purchase Payments you put into the
contract. You have already been taxed on the cost basis in your contract.
If you purchase your contract under a pension plan, a specially sponsored
employer program or as an individual retirement account, your contract is
referred to as a Qualified contract. Examples of qualified plans are: Individual
Retirement Accounts ("IRAs"), Roth IRAs, Tax-Sheltered Annuities (referred to as
403(b) contracts), H.R. 10 Plans (referred to as Keogh Plans) and pension and
profit sharing plans, including 401(k) plans. Typically you have not paid any
tax on the Purchase Payments used to buy your contract and therefore, you have
no cost basis in your contract.
TAX TREATMENT OF DISTRIBUTIONS -
NON-QUALIFIED CONTRACTS
If you make a withdrawal from a Non-qualified contract, the IRC treats such a
withdrawal as first coming from the earnings and then as coming from your
Purchase Payments. For income payments, any portion of each payment that is
considered a return of your Purchase Payment will not be taxed. Withdrawn
earnings are treated as income to you and are taxable. The IRC provides for a
10% penalty tax on any earnings that are withdrawn other than in conjunction
with the following circumstances: (1) after reaching age 59 1/2; (2) when paid
to your Beneficiary after you die; (3) after you become disabled (as defined in
the IRC); (4) when paid in a series of substantially equal installments made for
your life or for the joint lives of you and you Beneficiary; (5) under an
immediate annuity; or (6) which come from Purchase Payments made prior to August
14, 1982.
TAX TREATMENT OF DISTRIBUTIONS - QUALIFIED CONTRACTS
Generally, you have not paid any taxes on the Purchase Payments used to buy a
Qualified contract. Any amount of money you take out as a withdrawal or as
income payments is taxable income. The IRC further provides for a 10% penalty
tax on any withdrawal or income payment paid to you other than in conjunction
with the following circumstances: (1) after reaching age 59 1/2; (2) when paid
to your Beneficiary after you die; (3) after you become disabled (as defined in
the IRC); (4) in a series of substantially equal installments made for your life
or for the joint lives of you and your Beneficiary; (5) to the extent such
withdrawals do not exceed limitations set by the IRC for amounts paid during the
taxable year for medical care; (6) to fund higher education expenses (as defined
in IRC); (7) to fund certain first-time home purchase expenses; and, except in
the case of an IR; (8) when you separate from service after attaining age 55;
and (9) when paid to an alternate payee pursuant to a qualified domestic
relations order.
The 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) experiences a hardship (as defined in the IRC). In the case of
hardship, the owner can only withdraw Purchase Payments.
MINIMUM DISTRIBUTIONS
Generally, the IRS requires that you begin taking annual distributions from
qualified annuity contracts by April 1 of the calendar year following the later
of (1) the calendar year in which you attain age 70 1/2 or (2) the calendar year
in which you retire. Failure to satisfy the minimum distribution requirements
may result in a tax penalty. You should consult your tax advisor for more
information.
DIVERSIFICATION
The IRC imposes certain diversification requirements on the underlying
investments for a variable annuity. We believe that each underlying Variable
Portfolios' management monitors the Variable Portfolios so as to comply with
these requirements. To be treated as a variable annuity for tax purposes, the
underlying investments must meet these requirements.
The diversification regulations do not provide guidance as to the circumstances
under which you, because of the degree of control you exercise over the
underlying investments, and not Anchor National, would be considered the owner
of the shares of the Variable Portfolios. It is unknown to what extent owners
are permitted to select investments, to make transfers
13
<PAGE> 21
among Variable Portfolios or the number and type of Variable Portfolios owners
may select from. If any guidance is provided which is considered a new position,
then the guidance would generally be applied prospectively. However, if such
guidance is considered not to be a new position, it may be applied
retroactively. This would mean you, as the owner of the contract, could be
treated as the owner of the underlying Variable Portfolios. Due to the
uncertainty in this area, we reserve the right to modify the contract in an
attempt to maintain favorable tax treatment.
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PERFORMANCE
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We advertise the Cash Management Portfolio's yield and effective yield. In
addition, the other Variable Portfolios advertise total return, gross yield and
yield-to-maturity. These figures represent past performance of the Variable
Portfolios. These performance numbers do not indicate future results.
When we advertise performance for periods prior to the date the contracts were
first issued, we derive the figures from the performance of the corresponding
portfolios for the Trusts, if available. We modify these numbers to reflect
charges and expenses as if the contract was in existence during the period
stated in the advertisement. Figures calculated in this manner do not represent
actual historic performance of the particular Variable Portfolio.
Consult the SAI for more detailed information regarding the calculation of
performance data. The performance of each Variable Portfolio may also be
measured against unmanaged market indices. The indices we use include but are
not limited to the Dow Jones Industrial Average, the Standard & Poor's 500, the
Russell 1000 Growth Index, the Morgan Stanley Capital International Europe,
Australia and Far East Index ("EAFE") and the Morgan Stanley Capital
International World Index. We may compare the Variable Portfolios' performance
to that of other variable annuities with similar objectives and policies as
reported by independent ranking agencies such as Morningstar, Inc., Lipper
Analytical Services, Inc. or Variable Annuity Research & Data Service ("VARDS").
Anchor National may also advertise the rating and other information assigned to
it by independent industry ratings organizations. Some of those organizations
are A.M. Best Company ("A.M. Best"), Moody's Investor's Service ("Moody's"),
Standard & Poor's Insurance Rating Services ("S&P"), and Duff & Phelps. A.M.
Best's and Moody's ratings reflect their current opinion of our financial
strength and performance in comparison to others in the life and health
insurance industry. S&P's and Duff & Phelps' ratings measure the ability of an
insurance company to meet its obligations under insurance policies it issues.
These two ratings do not measure the insurer's ability to meet non-policy
obligations. Ratings in general do not relate to the performance of the Variable
Portfolios.
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OTHER INFORMATION
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ANCHOR NATIONAL
Anchor National is a stock life insurance company originally organized under the
laws of the state of California in April 1965. On January 1, 1996, Anchor
National redomesticated under the laws of the state of Arizona.
Anchor National and its affiliates, SunAmerica Life Insurance Company, First
SunAmerica Life Insurance Company, CalAmerica Life Insurance Company, SunAmerica
National Life Insurance Company, SunAmerica Asset Management, Imperial Premium
Finance, Inc., Resources Trust Company, and five broker-dealers, specialize in
retirement savings and investment products and services. Business focuses
include fixed and variable annuities, mutual funds, premium finance,
broker-dealer services and trust administration services.
THE SEPARATE ACCOUNT
Anchor National established a separate account, Variable Separate Account Four
("separate account"), under Arizona law on January 1, 1996, when it assumed the
separate account, originally established under California law on June 25, 1981.
The separate account is registered with the SEC as a unit investment trust under
the Investment Company Act of 1940, as amended.
Anchor National owns the assets in the separate account. However, the assets in
the separate account are not chargeable with liabilities arising out of any
other business conducted by Anchor National. Income gains and losses (realized
and unrealized) resulting from assets in the separate account are credited to or
charged against the separate account without regard to other income gains or
losses of Anchor National.
THE GENERAL ACCOUNT
Money allocated to the fixed account options goes into Anchor National's general
account. The general account consists of all of Anchor National's assets other
than assets attributable to a separate account. All of the assets in the general
account are chargeable with the claims of any Anchor National contract holders
as well as all of its creditors. The general account funds are invested as
permitted under state insurance laws.
DISTRIBUTION OF THE CONTRACT
Registered representatives of broker-dealers sell the contract. We pay
commissions to these representatives for the sale of the contracts. We do not
expect the total commissions to exceed 7% of your Purchase Payments. We may also
pay a bonus to representatives for contracts which stay active for a
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<PAGE> 22
particular period of time, in addition to standard commissions. We do not deduct
commissions paid to registered representatives directly from your Purchase
Payments.
From time to time, we may pay or allow additional promotional incentives in the
form of cash or other compensation. We reserve the right to offer these
additional incentives only to certain broker-dealers that sell or are expected
to sell, certain minimum amounts of the contract, or other contracts offered by
us. Promotional incentives may change at any time.
SunAmerica Capital Services, Inc., 733 Third Avenue, 4th Floor, New York, New
York 10017 distributes the contracts. SunAmerica Capital Services is an
affiliate of , a registered as a broker-dealer under the Exchange Act of 1934
and a member of the National Association of Securities Dealers, Inc.
ADMINISTRATION
We are responsible for the administrative servicing of your contract. Please
contact our Annuity Service Center
at 1-800-445-SUN2, if you have any comment, question or service request.
We send out transaction confirmations and quarterly statements. It is your
responsibility to review these documents carefully and notify us of any
inaccuracies immediately. We investigate all inquiries. To the extent that we
believe we made an error, we retroactively adjust your contract, provided you
notify us within 30 days of receiving the transaction confirmation or quarterly
statement. Any other adjustments we deem warranted are made as of the time we
receive notice of the error.
YEAR 2000
We rely significantly on computer systems and applications in our daily
operations. Many of our systems are not presently year 2000 compliant, which
means that because they have historically used only two digits to identify the
year in a date, they will fail to distinguish dates in the "2000s" from dates in
the "1900s." Anchor National's business, financial condition and results of
operations could be materially and adversely affected by the failure of our
systems and applications (and those operated by third parties interfacing with
our systems and applications) to properly operate or manage these dates.
Anchor National has a coordinated plan to repair or replace these noncompliant
systems and to obtain similar assurances from third parties interfacing with our
systems and applications. In fiscal 1997, the Company's parent recorded on its
books, a $15.0 million provision for estimated programming costs to repair
noncompliant systems, of which $6.2 million was allocated to us. We are making
expenditures which we expect will ultimately total $5.0 million to replace
certain other noncompliant systems. Total expenditures relating to the repair of
noncompliant systems will be capitalized by the Company's parent as software
costs and will be paid for over future periods. Both phases of the project are
progressing according to plan and we expect to substantially complete them by
the end of calendar 1998. We will test both the repaired and replacement systems
during calendar 1999.
In addition, we distributed a year 2000 questionnaire to our significant
suppliers, distributors, financial institutions, lessors and others we do
business with to evaluate their year 2000 compliance plans and state of
readiness and to determine how our systems and applications may be affected by
their failure to solve their own year 2000 issues. To date, however, we have
only received preliminary feedback from such parties and have not independently
confirmed any information received from other parties with respect to the year
2000 issues. Therefore, we cannot assure that such other parties will complete
their year 2000 conversions in a timely fashion or will not suffer a year 2000
business disruption that may adversely affect our financial condition and
results of operations.
Because we expect to complete our year 2000 conversion prior to any potential
disruption to our business, we have not developed a comprehensive year 2000
contingency plan. Anchor National closely monitors the progression of its plan
for compliance, and if necessary, would devote additional resources to assure
the timely completion of our year 2000 plan. If we determine that our business
is at material risk of disruption due to the year 2000 issue or anticipate that
we will not complete our year 2000 conversion in a timely fashion, we will work
to enhance our contingency plans.
The above statements are forward-looking. The costs of our year 2000 conversion,
the date which we have set to complete such conversion and the possible risks
associated with the year 2000 issue are based on our current estimates and are
subject to various uncertainties that could cause the actual results to differ
materially from our expectations. Such uncertainties include, among others, our
success in identifying systems and applications that are not year 2000
compliant, the nature and amount of programming required to upgrade or replace
each of the affected systems and applications, the availability of qualified
personnel, consultants and other resources, and the success of the year 2000
conversion efforts of others.
LEGAL PROCEEDINGS
There are no pending legal proceedings affecting the separate account. Anchor
National and its subsidiaries engage in various kinds of routine litigation. In
management's opinion, these matters are not of material importance to their
respective total assets nor are they material with respect to the separate
account.
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<PAGE> 23
OWNERSHIP
The Anchor Advisor Variable Annuity is a Flexible Payment Group Deferred Annuity
contract. We issue a group contract to a contract holder for the benefit of the
participants in the group. As a participant in the group, you will receive a
certificate which evidences your 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 is
available instead. Such a contract is identical to the contract described in
this prospectus, with the exception that we issue it directly to the owner.
CUSTODIAN
State Street Bank and Trust Company, 255 Franklin Street, Boston, Massachusetts
02110, serves as the custodian of the assets of the separate account. Anchor
National pays State Street Bank for services provided, based on a schedule of
fees.
ADDITIONAL INFORMATION
Anchor National is subject to the informational requirements of the Securities
and Exchange Act of 1934 (as amended). We file reports and other information
with the SEC to meet those requirements. You can inspect and copy this
information at SEC public facilities at the following locations:
WASHINGTON, DISTRICT OF COLUMBIA
450 Fifth Street, N.W., Room 1024
Washington, D.C. 20549
CHICAGO, ILLINOIS
500 West Madison Street
Chicago, IL 60661
NEW YORK, NEW YORK
7 World Trade Center, 13th Fl.
New York, NY 10048
To obtain copies by mail contact the Washington, D.C. location. After you pay
the fees as prescribed by the rules and regulations of the SEC, the required
documents are mailed.
Registration statements under the Securities Act of 1933, as amended, related to
the contracts offered by this prospectus are on file with the SEC. This
prospectus does not contain all of the information contained in the
registrations statement and its exhibits. For further information regarding the
separate account, Anchor National and its general account, the Variable
Portfolios and the contract, please refer to the registration statement and its
exhibits.
The SEC also maintains a website (http://www.sec.gov) that contains the SAI,
materials incorporated by reference and other information filed electronically
with the SEC by Anchor National.
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TABLE OF CONTENTS OF
STATEMENT OF ADDITIONAL INFORMATION
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<TABLE>
<S> <C>
Separate Account.............................. 3
General Account............................... 3
Performance Data.............................. 4
Income Payments............................... 8
Annuity Unit Values........................... 8
Taxes......................................... 11
Distribution of Contracts..................... 14
Financial Statements.......................... 15
</TABLE>
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- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
APPENDIX A - CONDENSED FINANCIAL INFORMATION
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INCEPTION TO FISCAL YEAR FISCAL YEAR
PORTFOLIOS 9/30/96 9/30/97 9/30/98
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C>
Capital Appreciation (Inception Date -
8/27/96)
Beginning AUV................... $ 16.67 $ 17.61 $
End AUV......................... $ 17.61 22.13
End #AUs........................ 11,922 463,440
- -----------------------------------------------------------------------------------------
Growth (Inception Date - 9/6/96)
Beginning AUV................... $ 14.31 $ 15.06 $
End AUV......................... $ 15.06 20.33
End #AUs........................ 5,060 258,234
- -----------------------------------------------------------------------------------------
Natural Resources (Inception Date -
9/12/96)
Beginning AUV................... $ 11.56 $ 11.57 $
End AUV......................... $ 11.57 13.39
End #AUs........................ 1,157 120,153
- -----------------------------------------------------------------------------------------
Government and Quality Bond (Inception Date - 9/16/96)
Beginning AUV................... $ 11.47 $ 11.50 $
End AUV......................... $ 11.50 12.44
End #AUs........................ 1,151 160,820
- -----------------------------------------------------------------------------------------
Aggressive Growth (Inception Date -
8/29/96)
Beginning AUV................... $ 9.26 $ 9.93 $
End AUV......................... $ 9.93 12.59
End #AUs........................ 4,313 331,531
- -----------------------------------------------------------------------------------------
International Diversified Equities (Inception Date - 9/12/96)
Beginning AUV................... $ 10.61 $ 11.10 $
End AUV......................... $ 11.10 12.48
End #AUs........................ 3,352 664,200
- -----------------------------------------------------------------------------------------
Global Equities (Inception
Date - 8/27/96)
Beginning AUV................... $ 14.13 $ 14.38 $
End AUV......................... $ 14.38 18.04
End #AUs........................ 6,223 266,074
- -----------------------------------------------------------------------------------------
Alliance Growth (Inception
Date - 9/12/96)
Beginning AUV................... $ 16.39 $ 17.14 $
End AUV......................... $ 17.14 25.45
End #AUs........................ 3,827 541,482
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"Dogs" of Wall Street
Beginning AUV................... -- -- $ 10.00
End AUV......................... -- --
End #AUs........................ -- --
- -----------------------------------------------------------------------------------------
Venture Value (Inception
Date - 8/27/96)
Beginning AUV................... $ 14.43 $ 14.85 $
End AUV......................... $ 14.85 21.75
End #AUs........................ 24,362 1,144,284
- -----------------------------------------------------------------------------------------
Federated Value (Inception
Date - 9/6/96)
Beginning AUV................... $ 9.63 $ 10.07 $
End AUV......................... $ 10.07 13.67
End #AUs........................ 7,752 215,531
- -----------------------------------------------------------------------------------------
Growth-Income (Inception Date - 9/6/96)
Beginning AUV................... $ 14.27 $ 15.03 $
End AUV......................... $ 15.03 21.56
End #AUs........................ 3,515 717,459
- -----------------------------------------------------------------------------------------
Utility (Inception Date - 9/16/96)
Beginning AUV................... $ 10.08 $ 9.92 $
End AUV......................... $ 9.92 11.93
End #AUs........................ 1,310 94,759
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
</TABLE>
AUV - Accumulation Unit Value
AU - Accumulation Units
A-1
<PAGE> 25
<TABLE>
<CAPTION>
INCEPTION TO FISCAL YEAR FISCAL YEAR
PORTFOLIOS 9/30/96 9/30/97 9/30/98
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C>
Asset Allocation (Inception
Date - 9/16/96)
Beginning AUV................... $ 13.75 13.84 $
End AUV......................... $ 13.84 18.38
End #AUs........................ 1,310 649,819
- -----------------------------------------------------------------------------------------
SunAmerica Balanced (Inception Date - 9/16/96)
Beginning AUV................... $ 10.12 $ 10.34 $
End AUV......................... $ 10.34 13.26
End #AUs........................ 3,534 233,752
- -----------------------------------------------------------------------------------------
Worldwide High Income (Inception Date -
8/27/96)
Beginning AUV................... $ 13.10 $ 13.60 $
End AUV......................... $ 13.60 16.77
End #AUs........................ 9,345 279,672
- -----------------------------------------------------------------------------------------
High-Yield Bond (Inception
Date - 9/23/96)
Beginning AUV................... $ 12.46 $ 12.62 $
End AUV......................... $ 12.62 14.66
End #AUs........................ 1,440 341,232
- -----------------------------------------------------------------------------------------
Corporate Bond (Inception
Date - 9/23/96)
Beginning AUV................... $ 11.13 $ 11.21 $
End AUV......................... $ 11.21 12.35
End #AUs........................ 3,525 119,358
- -----------------------------------------------------------------------------------------
Global Bond (Inception Date - 9/4/96)
Beginning AUV................... $ 11.61 $ 11.85 $
End AUV......................... $ 11.85 12.95
End #AUs........................ 2,148 163,409
- -----------------------------------------------------------------------------------------
Cash Management (Inception
Date - 9/5/96)
Beginning AUV................... $ 10.95 $ 10.98 $
End AUV......................... $ 10.98 11.37
End #AUs........................ 12,143 520,152
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
</TABLE>
AUV - Accumulation Unit Value
AU - Accumulation Units
A-2
<PAGE> 26
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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%
- ----------------------------------------------------------------------------------------
Kentucky 2% 2%
- ----------------------------------------------------------------------------------------
Maine 0% 2%
- ----------------------------------------------------------------------------------------
Nevada 0% 3.5%
- ----------------------------------------------------------------------------------------
South Dakota 0% 1.25%
- ----------------------------------------------------------------------------------------
West Virginia 1% 1%
- ----------------------------------------------------------------------------------------
Wyoming 0% 1%
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
</TABLE>
B-1
<PAGE> 27
- --------------------------------------------------------------------------------
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
<TABLE>
<S> <C> <C> <C>
Date: ------------------------------------ Signed: ---------------------------------------
</TABLE>
Return to: Anchor National Life Insurance Company, Annuity Service Center,
P.O. Box 52499, Los Angeles, California 90054-0299
- --------------------------------------------------------------------------------
<PAGE> 28
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 29, 1999
<PAGE> 29
TABLE OF CONTENTS
<TABLE>
PAGE
----
<S> <C>
Separate Account............................................................ 3
General Account............................................................. 4
Performance Data ........................................................... 4
Income Payments............................................................. 8
Annuity Unit Values......................................................... 8
Taxes....................................................................... 11
Distribution of Contracts................................................... 16
Financial Statements........................................................ 16
</TABLE>
<PAGE> 30
SEPARATE ACCOUNT
Variable Annuity Account Four was originally established by 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 Company has since redomesticated to Arizona, effective January 1, 1996. The
separate account meets the definition of a "separate account" under the federal
securities laws and is registered with the Securities and Exchange Commission
(the "SEC") as a unit investment trust under the Investment Company Act of 1940.
This registration does not involve supervision of the management of the separate
account or the Company by the SEC.
The assets of the separate account are the property of the Company.
However, the assets of the separate account, equal to its reserves and other
contract liabilities, are not chargeable with liabilities arising out of any
other business the Company may conduct. Income, gains, and losses, whether or
not realized, from assets allocated to the separate account are credited to or
charged against the separate account without regard to other income, gains, or
losses of the Company.
The separate account is divided into Variable Portfolios, with the assets
of each Variable Portfolio invested in the shares of one of the underlying
funds. The Company does not guarantee the investment performance of the separate
account, its Variable Portfolios or the underlying funds. Values allocated to
the separate account and the amount of variable Income Payments will vary with
the values of shares of the underlying funds, and are also reduced by contract
charges.
The basic objective of a variable annuity contract is to provide variable
Income Payments which will be to some degree responsive to changes in the
economic environment, including inflationary forces and changes in rates of
return available from various types of investments. The Contract is designed to
seek to accomplish this objective by providing that variable Income Payments
will reflect the investment performance of the separate account with respect to
amounts allocated to it both before and after the Annuity Date. Since the
separate account is always fully invested in shares of the underlying funds, its
investment performance reflects the investment performance of those entities.
The values of such shares held by the separate account fluctuate and are subject
to the risks of changing economic conditions as well as the risk inherent in the
ability of the underlying funds' managements to make necessary changes in their
funds to anticipate changes in economic conditions. Therefore, the owner bears
the entire investment risk that the basic objectives of the contract may not be
realized, and that the adverse effects of inflation may not be lessened. There
can be no assurance that the aggregate amount of variable Income Payments will
equal or exceed the Purchase Payments made with respect to a particular account
for the reasons described above, or because of the premature death of an
Annuitant.
Another important feature of the contract related to its basic objective
is the Company's promise that the dollar amount of variable Income Payments made
during the lifetime of the Annuitant will not be adversely affected by the
actual mortality experience of the Company or by the actual expenses incurred by
the Company in excess of expense deductions provided for in the Contract
(although the Company does not guarantee the amounts of the variable
-3-
<PAGE> 31
Income Payments).
GENERAL ACCOUNT
The General Account is made up of all of the general assets of the Company
other than those allocated to the separate account or any other segregated asset
account of the Company. A Purchase Payment may be allocated to the one-year
fixed investment option and/or the one year DCA fixed account available in
connection with the general account, as elected by the owner at the time of
purchasing a contract or upon making a subsequent payment. Assets supporting
amounts allocated to the one-year fixed investment option 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.
The Company will invest the assets of the general account in the manner
chosen by the Company and allowed by applicable state laws regarding the nature
and quality of investments that may be made by life insurance companies and the
percentage of their assets that may be committed to any particular type of
investment. In general, these laws permit investments, within specified limits
and subject to certain qualifications, in federal, state and municipal
obligations, corporate bonds, preferred and common stocks, real estate
mortgages, real estate and certain other investments.
PERFORMANCE DATA
From time to time the separate account may advertise the Cash Management
Portfolio's "yield" and "effective yield." Both yield figures are based on
historical earnings and are not intended to indicate future performance. The
"yield" of the Cash Management Portfolio refers to the net income generated for
a contract funded by an investment in the Cash Management Portfolio (which
invests in shares of the Cash Management Portfolio of SunAmerica 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 Cash Management Portfolio is assumed to be reinvested at the end of each
seven day period. The "effective yield" will be slightly higher than the "yield"
because of the compounding effect of this assumed reinvestment. Neither the
yield nor the effective yield takes into consideration the effect of any capital
changes that might have occurred during the seven day period, nor do they
reflect the impact of premium taxes. 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 Variable
-4-
<PAGE> 32
Portfolios. Like the yield figures described above, total return figures are
based on historical data and are not intended to indicate future performance.
The "total return" is a computed rate of return that, when compounded annually
over a stated period of time and applied to a hypothetical initial investment in
a Variable Portfolio made at the beginning of the period, will produce the same
contract value at the end of the period that the hypothetical investment would
have produced over the same period (assuming a complete redemption of the
contract at the end of the period.) Recurring contract charges are reflected in
the total return figures in the same manner as they are reflected in the yield
data for contracts funded through the Cash Management Portfolio.
For periods starting prior to the date the contracts were first offered to
the public, the total return data for the Variable Portfolios of the separate
account will be derived from the performance of the corresponding underlying
funds of Anchor Series Trust and SunAmerica Series Trust, modified to reflect
the charges and expenses as if the separate account Variable Portfolio had been
in existence since the inception date of each respective Anchor Series Trust and
SunAmerica Series Trust underlying fund. Thus, such performance figures should
not be construed to be actual historic performance of the relevant separate
account Variable Portfolio. Rather, they are intended to indicate the historical
performance of the corresponding underlying funds of Anchor Series Trust and
SunAmerica Series Trust, adjusted to provide direct comparability to the
performance of the Variable 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 Variable Portfolios are computed in the
manner described below.
CASH MANAGEMENT PORTFOLIO
The annualized current yield and the effective yield for the Cash
Management Portfolio for the 7 day period ending September 30, 1998 were
[__________]% and [________]%, 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
-5-
<PAGE> 33
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:
Effective Yield = [(Base Period Return + 1)365/7 - 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 VARIABLE PORTFOLIOS
The Variable Portfolios of the separate account other than the Cash
Management Portfolio compute their performance data as "total return".
The total returns of the various Variable Portfolios for 1 year and since
each Variable Portfolio's inception date are shown below.
-6-
<PAGE> 34
TOTAL ANNUAL RETURN (IN PERCENT) FOR
PERIOD ENDING DECEMBER 31, 1998
<TABLE>
<CAPTION>
INCEPTION SINCE
VARIABLE PORTFOLIO DATE 1 YEAR INCEPTION
---------------------------------- --------- ------ ---------
<S> <C> <C> <C>
To Be Provided by
Amendment
Capital Appreciation 8/27/96
Growth 9/6/96
Natural Resources 9/12/96
Government & Quality Bond 9/16/96
Aggressive Growth 8/29/96
"Dogs" of Wall Street* 4/01/98
International Diversified Equities 9/12/96
Global Equities 8/27/96
Alliance Growth 9/12/96
Venture Value 8/27/96
Federated Value 9/6/96
Growth-Income 9/6/96
Utility 9/16/96
Asset Allocation 9/16/96
SunAmerica Balanced 9/16/96
Worldwide High Income 8/27/96
High-Yield Bond 9/23/96
Corporate Bond 9/23/96
Global Bond 9/4/96
</TABLE>
- -------------
Total return figures are based on historical data and are not intended to
indicate future performance.
Total return for a Variable Portfolio represents a single computed annual
rate of return that, when compounded annually over 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 Variable Portfolio made at the beginning
of the period, will produce the same contract value at the end of the period
that the hypothetical investment would have produced over the same period. The
total rate of return (T) is computed so that it satisfies the formula:
P(1+T)n = 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).
-7-
<PAGE> 35
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.
INCOME PAYMENTS
INITIAL MONTHLY INCOME PAYMENTS
The initial Income Payment is determined by applying separately that
portion of the contract value allocated to the fixed investment option and the
Variable Portfolio(s), less any premium tax, and then applying it to the annuity
table specified in the contract for fixed and variable Income Payments. Those
tables are based on a set amount per $1,000 of proceeds applied. The appropriate
rate must be determined by the sex (except where, as in the case of certain
Qualified contracts and other employer-sponsored retirement plans, such
classification is not permitted) and age of the Annuitant and designated second
person, if any.
The dollars applied are then divided by 1,000 and the result multiplied by
the appropriate annuity factor appearing in the table to compute the amount of
the first monthly Income Payment. In the case of a variable annuity, that amount
is divided by the value of an Annuity Unit as of the Annuity Date to establish
the number of Annuity Units representing each variable Income Payment. The
number of Annuity Units determined for the first variable Income Payment remains
constant for the second and subsequent monthly variable Income Payments,
assuming that no reallocation of contract values is made.
SUBSEQUENT MONTHLY PAYMENTS
For fixed Income Payments, the amount of the second and each subsequent
monthly Income Payment is the same as that determined above for the first
monthly payment.
For variable Income Payments, the amount of the second and each subsequent
monthly Income Payment is determined by multiplying the number of Annuity Units,
as determined in connection with the determination of the initial monthly
payment, above, by the Annuity Unit value as of the day preceding the date on
which each Income Payment is due.
ANNUITY UNIT VALUES
The value of an Annuity Unit is determined independently for each Variable
Portfolio.
-8-
<PAGE> 36
The annuity tables contained in the contract are based on a 3.5% per annum
assumed investment rate. If the actual net investment rate experienced by a
Variable Portfolio exceed 3.5%, variable Income Payments derived from
allocations to that Variable Portfolio will increase over time. Conversely, if
the actual rate is less than 3.5%, variable Income Payments will decrease over
time. If the net investment rate equals 3.5%, the variable Income Payments will
remain constant. If a higher assumed investment rate had been used, the initial
monthly payment would be higher, but the actual net investment rate would also
have to be higher in order for Income Payments to increase (or not to decrease).
The payee receives the value of a fixed number of Annuity Units each
month. The value of a fixed number of Annuity Units will reflect the investment
performance of the Variable Portfolios elected, and the amount of each Income
Payment will vary accordingly.
For each Variable Portfolio, the value of an Annuity Unit is determined by
multiplying the Annuity Unit value for the preceding month by the Net Investment
Factor for the month for which the Annuity Unit value is being calculated. The
result is then multiplied by a second factor which offsets the effect of the
assumed net investment rate of 3.5% per annum which is assumed in the annuity
tables contained in the contract.
NET INVESTMENT FACTOR
The Net Investment Factor ("NIF") is an index applied to measure the net
investment performance of a Variable Portfolio from one day to the next. The NIF
may be greater or less than or equal to one; therefore, the value of an Annuity
Unit may increase, decrease or remain the same.
The NIF for any Variable Portfolio for a certain month is determined by
dividing (a) by (b) where:
(a) is the Accumulation Unit value of the Variable Portfolio determined
as of the end of that month, and
(b) is the Accumulation Unit value of the Variable Portfolio determined
as of the end of the preceding month.
The NIF for a Variable Portfolio for a given month is a measure of the net
investment performance of the Variable Portfolio from the end of the prior month
to the end of the given month. A NIF of 1.000 results from no change in the
value of the Variable Portfolio; a NIF greater than 1.000 results in from
increase in the value of the Variable Portfolio; and a NIF less than 1.000
results from a decrease in the value of the Variable Portfolio. The NIF is
increased (or decreased) in accordance with the increases (or decreases,
respectively) in the value of a share of the underlying fund in which the
Variable Portfolio invests; it is also reduced by separate account asset
charges.
-9-
<PAGE> 37
ILLUSTRATIVE EXAMPLE
Assume that one share of a given Variable Portfolio had an Accumulation
Unit value of $11.46 as of the close of the New York Stock Exchange ("NYSE") on
the last business day in September; that its Accumulation Unit value had been
$11.44 at the close of the NYSE on the last business day at the end of the
previous month. The NIF for the month of September is:
NIF = ($11.46/$11.44)
= 1.00174825
ILLUSTRATIVE EXAMPLE
The change in Annuity Unit value for a Variable Portfolio from one month
to the next is determined in part by multiplying the Annuity Unit value at the
prior month end by the NIF for that Variable Portfolio for the new month. In
addition, however, the result of that computation must also be multiplied by an
additional factor that takes into account, and neutralizes, the assumed
investment rate of 3.5 percent per annum upon which the Income Payment tables
are based. For example, if the net investment rate for a Variable Portfolio
(reflected in the NIF) were equal to the assumed investment rate, the variable
Income Payments should remain constant (i.e., the Annuity Unit value should not
change). The monthly factor that neutralizes the assumed investment rate of 3.5
percent per annum is:
1/[(1.035)(1/12)] = 0.99713732
In the example given above, if the Annuity Unit value for the Variable
Portfolio was $10.103523 on the last business day in August, the Annuity Unit
value on the last business day in September would have been:
$10.103523 x 1.00174825 x 0.99713732 = $10.092213
VARIABLE INCOME PAYMENTS
ILLUSTRATIVE EXAMPLE
Assume that a male owner, P, owns a contract in connection with which P
has allocated all of his contract value to a single Variable Portfolio. P is
also the sole Annuitant and, at age 60, has elected to annuitize his contract
under Option 4, a Life Annuity With 120 Monthly Payments Guaranteed. As of the
last valuation preceding the Annuity Date, P's Account was credited with
7543.2456 Accumulation Units each having a value of $15.432655, (i.e., P's
account value is equal to 7543.2456 x $15.432655 = $116,412.31). Assume also
that the Annuity Unit value for the Variable Portfolio on that same date is
$13.256932, and that the Annuity Unit value on the day immediately prior to the
second Income Payment date is
-10-
<PAGE> 38
$13.327695.
P's first variable Income Payment is determined from the annuity rate tables in
P's contract, using the information assumed above. From the tables, which supply
monthly Income Payments for each $1,000 of applied contract value, P's first
variable Income Payment is determined by multiplying the monthly installment of
$5.42 (Option 4v table, male Annuitant age 60 at the Annuity Date) by the result
of dividing P's account value by $1,000:
First Payment = $5.42 x ($116,412.31/$1,000) = $630.95
The number of P's Annuity Units (which will be fixed; i.e., it will not
change unless he transfers his Annuity Units to Annuity Units of another
Variable Portfolio) is also determined at this time and is equal to the amount
of the first variable Income Payment divided by the value of an Annuity Unit on
the day immediately prior to annuitization:
Annuity Units = $630.95/$13.256932 = 47.593968
P's second variable Income Payment is determined by multiplying the number
of Annuity Units by the Annuity Unit value as of the day immediately prior to
the second payment due date:
Second Payment = 47.593968 x $13.327695 = $634.32
The third and subsequent variable Income Payments are computed in a manner
similar to the second variable Income Payment.
Note that the amount of the first variable Income Payment depends on the
contract value in the relevant Variable Portfolio on the Annuity Date and thus
reflects the investment performance of the Variable Portfolio net of fees and
charges during the Accumulation Phase. The amount of that payment determines the
number of Annuity Units, which will remain constant during the Annuity Phase
(assuming no transfers from the Variable Portfolio). The net investment
performance of the Variable 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 Income Payments.
TAXES
GENERAL
Section 72 of the Internal Revenue Code of 1986, as amended (the "Code")
governs taxation of annuities in general. An owner is not taxed on increases in
the value of a contract until distribution occurs, either in the form of a
non-annuity distribution or as income payments under the annuity option elected.
For a lump sum payment received as a total surrender (total redemption), the
recipient is taxed on the portion of the payment that exceeds the cost basis of
-11-
<PAGE> 39
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 income payments, the taxable portion is determined by a formula which
establishes the ratio that the cost basis of the contract bears to the total
value of income payments for the term of the annuity contract. The taxable
portion is taxed at ordinary income tax rates. Owners, Annuitants and
Beneficiaries under the contracts should seek competent financial advice about
the tax consequences of distributions under the retirement plan under which the
contracts are purchased.
The Company is taxed as a life insurance company under the Code. For
federal income tax purposes, the separate account is not a separate entity from
the Company and its operations form a part of the Company.
WITHHOLDING TAX ON DISTRIBUTIONS
The Code generally requires the Company (or, in some cases, a plan
administrator) to withhold tax on the taxable portion of any distribution or
withdrawal from a contract. For "eligible rollover distributions" from contracts
issued under certain types of Qualified plans, 20% of the distribution must be
withheld, unless the payee elects to have the distribution "rolled over" to
another eligible plan in a direct "trustee to trustee" transfer. This
requirement is mandatory and cannot be waived by the owner. Withholding on other
types of distributions can be waived.
An "eligible rollover distribution" is the estimated taxable portion of
any amount received by a covered employee from a plan qualified under Section
401(a) or 403(a) of the Code, or from a tax-sheltered annuity qualified under
Section 403(b) of the Code (other than (1) income payments for the life (or life
expectancy) of the employee, or joint lives (or joint life expectancies) of the
employee and his or her designated Beneficiary, or for a specified period of ten
years or more; and (2) distributions required to be made under the Code).
Failure to "roll over" the entire amount of an eligible rollover distribution
(including an amount equal to the 20% portion of the distribution that was
withheld) could have adverse tax consequences, including the imposition of a
penalty tax on premature withdrawals, described later in this section.
Withdrawals or distributions from a contract other than eligible rollover
distributions are also subject to withholding on the estimated taxable portion
of the distribution, but the owner may elect in such cases to waive the
withholding requirement. If not waived, withholding is imposed (1) for periodic
payments, at the rate that would be imposed if the payments were wages, or (2)
for other distributions, at the rate of 10%. If no withholding exemption
certificate is in effect for the payee, the rate under (1) above is computed by
treating the payee as a married individual claiming 3 withholding exemptions.
-12-
<PAGE> 40
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
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.
-13-
<PAGE> 41
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
-14-
<PAGE> 42
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 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) ROTH IRAS
Section 408A of the Code permits an individual to contribute to an
individual retirement program called a Roth IRA. Unlike contributions to a
regular IRA under Section 408(b) of the Code, contributions to a Roth IRA
are not made on a tax deferred basis, but distributions are tax-free if
certain requirements are satisfied. Like regular IRAs, Roth IRAs are
subject to limitations on the amount that may be contributed, those who
may be eligible and the time when distributions may commence without tax
penalty. Certain persons may be eligible to convert a regular IRA into a
Roth IRA, and the resulting income tax may be spread over four years if
the conversion occurs before January 1, 1999. If and when Contracts are
made available for use with Roth IRAs they may be subject to special
requirements imposed by the Internal Revenue Service. Purchasers of the
Contracts for this purpose will be provided with such supplementary
information as may be required by the Internal Revenue Service or other
appropriate agency.
(e) 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.
-15-
<PAGE> 43
(f) DEFERRED COMPENSATION PLANS - SECTION 457
Under Section 457 of the Code, governmental and certain other
tax-exempt employers may establish, for the benefit of their employees,
deferred compensation plans which may invest in annuity contracts. The
Code, as in the case of Qualified plans, establishes limitations and
restrictions on eligibility, contributions and distributions. Under these
plans, contributions made for the benefit of the employees will not be
includible in the employees' gross income until distributed from the plan.
However, under a 457 plan all the plan assets shall remain solely the
property of the employer, subject only to the claims of the employer's
general creditors until such time as made available to an owner or a
Beneficiary.
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 ended September 30, 1998, the aggregate amount of
underwriting commissions paid by the Company to SunAmerica Capital Services,
Inc. was $__________, of which $_________was retained by it. For the period from
inception to September 30, 1997, the aggregate amount of underwriting
commissions paid by the Company to SunAmerica Capital Services, Inc. was
$202,414, of which $23,398 was retained by it.
Contracts are offered on a continuous basis.
FINANCIAL STATEMENTS
The consolidated financial statements of the Company as of September 30,
1998 and 1997 and for each of the three years in the period ended September 30,
1998 are 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, 1998 and for
each of the two years ended September 30, 1998 are included in this Statement of
Additional Information.
PricewaterhouseCoopers LLP, 400 South Hope Street, Los Angeles, California
90071, serves as the independent accountants for the separate account and the
Company. The financial
-16-
<PAGE> 44
statements referred to above have been so included in reliance on the reports of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.
-17-
<PAGE> 45
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, 1998
Financial Statements of Variable Annuity Account Four for the fiscal
year ended September 30, 1998
[TO BE FILED BY AMENDMENT]
(b) Exhibits
--------
(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...................... N/A
(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 ...... To Be Filed By
Amendment
(15) Powers of Attorney.......................... Previously Filed
(27) Financial Data Schedules ................... Not Applicable
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
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
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
David Bechtel Vice President and Treasurer
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
</TABLE>
<PAGE> 46
- ------------
(1) 88 Bradley Road, P.O. Box 4005, Woodbridge, Connecticut 06525
Item 26. Persons Controlled By or Under Common Control With Depositor
or Registrant
- ----------------------------------------------------------------------
The Registrant is a separate account of Anchor National Life Insurance
Company (Depositor). For a complete listing and diagram of all persons
directly or indirectly controlled by or under common control with the
Depositor or Registrant, see Exhibit 14 (to be filed by amendment).
Item 27. Number of Contract Owners
- -----------------------------------
As of December 31, 1998, the number of Contracts funded by Variable
Annuity Account Four of Anchor National Life Insurance Company was
______ of which ___ were Qualified Contracts and ________ 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
Debbie Petash-Turner Controller
Per Furmark Vice President
James Nichols Vice President
Susan L. Harris Secretary
</TABLE>
<TABLE>
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,
<PAGE> 47
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> 48
Item 32. Undertakings ---------------------- Registrant undertakes to
(1) file post-effective amendments to this Registration Statement as
frequently as is necessary to ensure that the audited financial
statements in the Registration Statement are never more than 16 months
old for so long as payments under the variable annuity Contracts may be
accepted; (2) include either (A) as part of any application to purchase
a Contract offered by the prospectus forming a part of the Registration
Statement, a space that an applicant can check to request a Statement
of Additional Information, or (B) a postcard or similar written
communication affixed to or included in the Prospectus that the
Applicant can remove to send for a Statement of Additional Information;
and (3) deliver any Statement of Additional Information and any
financial statements required to be made available under this Form N-4
promptly upon written or oral request.
Item 33. Representation
- -----------------------
A. The Company hereby represents that it is relying upon a No-Action
Letter issued to the American Council of Life Insurance dated November
28, 1988 (Commission ref. IP-6-88) and that the following provisions
have been complied with:
1. Include appropriate disclosure regarding the redemption
restrictions imposed by Section 403(b)(11) in each
registration statement, including the prospectus, used in
connection with the offer of the contract;
2. Include appropriate disclosure regarding the redemption
restrictions imposed by Section 403(b)(11) in any sales
literature used in connection with the offer of the contract;
3. Instruct sales representatives who solicit participants to
purchase the contract specifically to bring the redemption
restrictions imposed by Section 403(b)(11) to the attention of
the potential participants;
4. Obtain from each plan participant who purchases a
Section 403(b) annuity contract, prior to or at the
time of such purchase, a signed statement
acknowledging the participant's understanding of
(1) the restrictions on redemption imposed by
Section 403(b)(11), and (2) other investment
alternatives available under the employer's Section
403(b) arrangement to which the participant may
elect to transfer his contract value.
B. REPRESENTATION PURSUANT TO SECTION 26(e) OF THE INVESTMENT COMPANY ACT
OF 1940: The Company and Registrant represent that the fees and charges
to be deducted under the variable annuity contract described in the
prospectus contained in this registration statement are, in the
aggregate, reasonable in relation to the services rendered, the
expenses expected to be incurred, and the risks assumed in connection
with the contract.
<PAGE> 49
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company
Act of 1940, the Registrant certifies that it meets the requirements of
Securities Act Rule 485 for effectiveness of this Registration Statement and has
caused this Post-Effective Amendment to the Registration Statement to be signed
on its behalf, in the City of Los Angeles, and the State of California, on this
25th day of November, 1998.
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 capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------- ----- ----
<S> <C> <C>
ELI BROAD* President, Chief
- -------------------- Executive Officer and
Eli Broad Chairman of the Board
(Principal Executive
Officer)
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
JANA W. GREER* Director
- --------------------
Jana W. Greer
/s/ SUSAN L. HARRIS Director November 25, 1998
- --------------------
Susan L. Harris
</TABLE>
<PAGE> 50
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------- ----- ----
<S> <C> <C>
PETER MCMILLAN* Director
- --------------------
Peter McMillan
JAY S. WINTROB* Director
- --------------------
Jay S. Wintrob
JAMES W. ROWAN* Director
- ---------------------
James W. Rowan
</TABLE>
* By: /s/ SUSAN L. HARRIS Attorney-in-Fact
----------------------
Susan L. Harris
Date: November 25, 1998
<PAGE> 51
EXHIBIT INDEX
-------------
<TABLE>
<CAPTION>
Exhibit Description
- ------- -----------
<S> <C>
(4)
(5)
(10)
</TABLE>
