AS FILED WITH SECURITIES AND EXCHANGE COMMISSION ON APRIL 25, 2005.

File Nos. 333-90324

811-21096

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.  8  x

AND/OR

REGISTRATION STATEMENT

UNDER THE

INVESTMENT COMPANY ACT OF 1940

AMENDMENT NO.  9  x

(CHECK APPROPRIATE BOX OR BOXES)

Variable Annuity Account Nine

(Exact Name of Registrant)

AIG SUNAMERICA LIFE ASSURANCE

COMPANY

(“AIG SUNAMERICA LIFE”)

(Name of Depositor)

1 SUNAMERICA CENTER

LOS ANGELES, CALIFORNIA 90067-6022

(Address and Telephone Number of Depositor’s Principal Offices) (Zip Code)

Depositor’s Telephone Number, including Area Code: (800) 871-2000

CHRISTINE A. NIXON, ESQ.

AIG SUNAMERICA LIFE ASSURANCE COMPANY

1 SUNAMERICA CENTER

LOS ANGELES, CALIFORNIA 90067-6022

(Name and Address of Agent for Service)

It is proposed that this filing will become effective:

¨ immediately upon filing pursuant to paragraph (b) of Rule 485

x on May 2, 2005 pursuant to paragraph (b) of Rule 485

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

¨ on [INSERT DATE if applicable] pursuant to paragraph (a)(1) of Rule 485

VARIABLE ANNUITY ACCOUNT NINE

Cross Reference Sheet

PART A - PROSPECTUS

Item Number in Form N-4		Caption
1.	Cover Page	Cover Page
2.	Definitions	Glossary
3.	Synopsis	Highlights; Fee Tables; Portfolio Expenses; Examples
4.	Condensed Financial Information	Appendix A – Condensed Financial Information
5.	General Description of Registrant, Depositor and Portfolio Companies	The AllianceBernstein Ovation Plus Variable Annuity; Other Information
6.	Deductions	Expenses
7.	General Description of Variable Annuity Contracts	The AllianceBernstein Ovation Plus Variable Annuity; Purchasing the AllianceBernstein Ovation Plus Variable Annuity Investment Options
8.	Annuity Period	Income Options
9.	Death Benefit	Death Benefits
10.	Purchases and contract value	Purchasing the AllianceBernstein Ovation Plus Variable Annuity
11.	Redemptions	Access To Your Money
12.	Taxes	Taxes
13.	Legal Proceedings	Legal Proceedings
14.	Table of Contents of Statement of Additional Information	Table of Contents of Statement of Additional Information

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.

Item Number in Form N-4		Caption
15.	Cover Page	Cover Page
16.	Table of Contents	Table of Contents
17.	General Information and History	The AllianceBernstein Ovation Plus Variable Annuity (P); Separate Account; General Account (P); Investment Options (P); Other Information (P)
18.	Services	Other Information (P)
19.	Purchase of Securities Being Offered	Purchasing the AllianceBernstein Ovation Plus Variable Annuity (P)
20.	Underwriters	Distribution of Contracts
21.	Calculation of Performance Data	Performance Data
22.	Annuity Payments	Income Options (P); Income Payments; Annuity Unit Values
23.	Financial Statements	Depositor: Other Information (P); Financial Statements; Registrant: Financial Statements

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.

PROSPECTUS

ALLIANCEBERNSTEIN OVATION PLUS VARIABLE ANNUITY

FLEXIBLE PAYMENT DEFERRED ANNUITY CONTRACTS

issued by

AIG SUNAMERICA LIFE ASSURANCE COMPANY

in connection with

VARIABLE ANNUITY ACCOUNT NINE

Please read this prospectus carefully before investing and keep it for future reference. It contains important information about the AllianceBernstein Ovation Plus Variable Annuity.

The annuity has several investment choices — Variable Portfolios listed below and certain Fixed Account options. The Variable Portfolios are part of the AllianceBernstein Variable Products Series Fund, Inc. (“Series Fund”), managed by Alliance Capital Management L.P. Only Class B shares are offered in this contract.

AllianceBernstein Americas Government Income Portfolio AllianceBernstein Balanced Wealth Strategy Portfolio AllianceBernstein Global Bond Portfolio AllianceBernstein Global Dollar Government Portfolio AllianceBernstein Global Research Growth Portfolio** AllianceBernstein Global Technology Portfolio AllianceBernstein Growth Portfolio AllianceBernstein Growth and Income Portfolio AllianceBernstein High-Yield Portfolio AllianceBernstein International Portfolio AllianceBernstein International Value Portfolio AllianceBernstein Large Cap Growth Portfolio AllianceBernstein Money Market Portfolio AllianceBernstein Real Estate Investment Portfolio AllianceBernstein Small Cap Growth Portfolio AllianceBernstein Small/Mid Cap Value Portfolio AllianceBernstein Total Return Portfolio AllianceBernstein U.S. Government/High Grade Securities Portfolio AllianceBernstein U.S. Large Cap Blended Style Portfolio AllianceBernstein Utility Income Portfolio AllianceBernstein Value Portfolio AllianceBernstein Wealth Appreciation Strategy Portfolio AllianceBernstein Worldwide Privatization Portfolio*

* An equity fund seeking long-term capital appreciation.

** Available on or about June 1, 2005.

We will add a credit to your contract value for each Purchase Payment you make equal to a maximum of 4% of that premium payment. We call this a Premium Enhancement and fund it from our general account. Charges for a contract with a Premium Enhancement may be higher than those for a contract without a Premium Enhancement. Over time, the amount of a Premium Enhancement may be more than offset by the charges associated with the Premium Enhancement. We may, at our sole discretion, discontinue offering the Premium Enhancement on additional purchase payments, and if such Premium Enhancements are discontinued, charges under the contract will remain the same.

To learn more about the annuity offered by this prospectus, you can obtain a copy of the Statement of Additional Information (“SAI”) dated May 2, 2005. The SAI has been filed with the Securities and Exchange Commission (“SEC”) and is incorporated by reference into this prospectus. For a free copy of the SAI, call us at (800) 255-8402 or write to us at Delaware Valley Financial Services, P.O. Box 3031, Berwyn, PA 19312-0031. In addition, the SEC maintains a website (http://www.sec.gov) that contains the SAI, materials incorporated by reference and other information filed electronically with the SEC.

The Contracts

• are not bank deposits

• are not federally insured

• are not endorsed by any bank or government agency

• are not guaranteed and may be subject to loss of principal

The Securities and Exchange Commission has not approved or disapproved these securities or determined if this prospectus is accurate or complete. Any representation to the contrary is a criminal offense.

May 2, 2005

TABLE OF CONTENTS

GLOSSARY	4
HIGHLIGHTS	5
FEE TABLES	7
UNDERLYING FUND EXPENSES	8
MAXIMUM AND MINIMUM EXPENSE EXAMPLES	9
THE ALLIANCEBERNSTEIN OVATION PLUS VARIABLE ANNUITY	11
PURCHASING AN ALLIANCEBERNSTEIN OVATION PLUS VARIABLE ANNUITY	12
Allocation of Purchase Payments	12
Premium Enhancement	13
Right to Cancel	13
Exchange Offers	14
INVESTMENT OPTIONS	14
Variable Portfolios	14
Accumulation Units	15
Fixed Account Options	15
Dollar Cost Averaging Fixed Accounts	16
Transfers During the Accumulation Phase	16
Dollar Cost Averaging Program	19
Automatic Asset Rebalancing Program	20
Voting Rights	20
Substitution	20
ACCESS TO YOUR MONEY	21
Systematic Withdrawal Program	22
Minimum Contract Value	22
OPTIONAL LIVING BENEFITS	22
Access Protector Feature	22
Capital Protector Feature	28
DEATH BENEFITS	30
Standard Death Benefit	31
Optional Death Benefits	31
Spousal Continuation	34
EXPENSES	35
Separate Account Charges	35
Withdrawal Charges	35
Underlying Fund Expenses	36
Transfer Fee	36
Optional Death Benefit Charges	36
Optional Access Protector Fee	37
Optional Capital Protector Fee	37
Premium Tax	37
Income Taxes	37
Reduction or Elimination of Charges and Expenses, and Additional Amounts Credited	37

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INCOME OPTIONS	38
Annuity Date	38
Income Options	38
Fixed or Variable Income Payments	39
Income Payments	39
Deferment of Payments	40
TAXES	40
Annuity Contracts in General	40
Tax Treatment of Distributions — Non-Qualified Contracts	40
Tax Treatment of Distributions — Qualified Contracts (including governmental 457(b) eligible deferred compensation plans)	41
Minimum Distributions	41
Tax Treatment of Death Benefits	42
Contracts Owned by a Trust or Corporation	43
Gifts, Pledges and/or Assignments of a Contract	43
Diversification and Investor Control	43
OTHER INFORMATION	44
AIG SunAmerica Life	44
The Separate Account	44
The General Account	44
Payments in Connection with Distribution of the Contract	45
Administration	46
Legal Proceedings	46
Registration Statement	46
TABLE OF CONTENTS OF STATEMENT OF ADDITIONAL INFORMATION	47
APPENDIX A — CONDENSED FINANCIALS	A-1
APPENDIX B — DEATH BENEFITS FOLLOWING SPOUSAL CONTINUATION	B-1
APPENDIX C — ACCESS PROTECTOR EXAMPLES	C-1

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GLOSSARY

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

Accumulation Phase — The period during which you invest money in your contract.

Accumulation Units — A measurement we use to calculate the value of the variable portion of your contract during the Accumulation Phase.

Annuitant(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(ies) — The person(s) designated to receive any benefits under the contract if you or the Annuitant dies.

Company — Refers to AIG SunAmerica Life Assurance Company, the insurer that issues this contract. The term “we,” “us,” “our” and “AIG SunAmerica Life” are also used to identify the Company.

Fixed Account — An account, if available, that we may offer in which you may invest money and earn a fixed rate of interest.

Income Phase — The period during which we make income payments to you.

IRS — The Internal Revenue Service.

Latest Annuity Date — The first day of the calendar month following the Annuitant’s 90th birthday or such earlier date as may be set by applicable law.

Market Close — The close of the New York Stock Exchange, usually 4:00 p.m. Eastern Time.

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 pre-tax dollars. These contracts are generally purchased under a pension plan, specially sponsored program or IRA.

Separate Account — A segregated Asset Account maintained separately from the Company’s regular portfolio of investments and general accounts. The Separate Account is established by the Company to purchase and hold the Variable Portfolios.

Series Fund — Refers to AllianceBernstein Variable Products Series Fund, Inc.

Underlying Funds — The underlying investment portfolios of the Series Fund in which the Variable Portfolios invest.

Variable Portfolios — A variable investment option available under the contract. Each Variable Portfolio has its own investment objective and is invested in the Underlying Funds of the Series Fund.

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HIGHLIGHTS

The AllianceBernstein Ovation Plus Variable Annuity is a contract between you and the Company. It is designed to help you invest on a tax-deferred basis and meet long-term financial goals. There are minimum Purchase Payment amounts required to purchase a contract. Purchase Payments may be invested in a variety of Variable Portfolios and Fixed Account options. Like all deferred annuities, the contract has an Accumulation Phase and an Income Phase. During the Accumulation Phase, you invest money in your contract. The Income Phase begins when you start receiving income payments from your annuity to provide for your retirement. We will issue the contract as an individual contract in most states, and as a certificate under a group annuity contract in other states.

Right to Cancel: You may cancel your contract within 10 days after receiving it (or whatever period is required in your state). You will receive whatever your contract is worth on the day that we receive your request. The amount refunded may be more or less than your original Purchase Payment. We will return your original Purchase Payment if required by law. See “Purchasing an AllianceBernstein Ovation Plus Variable Annuity” in this prospectus.

Purchasing a Contract: The minimum initial Purchase Payment we will accept is $2,000. For more information on purchasing a contract, see “Purchasing an AllianceBernstein Ovation Plus Variable Annuity” in this prospectus.

We will add a credit to your contract value for each purchase payment you make equal to a maximum of 4% of that purchase payment. We call this a Premium Enhancement and fund it from our general account. A Premium Enhancement is not a Purchase Payment under the contract. At our discretion we may discontinue offering Premium Enhancements on additional purchase payments.

Expenses: There are fees and charges associated with the contract. We deduct a Separate Account charge based on the age of the contract owner at the time of contract issue. For contract owners under age 66 at the time of purchase, the Separate Account charge, deducted daily, equals 1.60% annually of the average daily value of your contract allocated to the Variable Portfolios; and for contract owners age 66 and over at the time of contract purchase, the Separate Account charge, deducted daily, equals 1.70% annually of the average daily value of your contract allocated to the Variable Portfolios. Optional death benefit features are available under the contract for additional fees. For contract owners under age 66 at the time the fee is charged, the optional death benefit fees ranges from 0.05% to 0.45%; and for contract owners age 66 and older at the time the fee is charged, the optional death benefit fee ranges from 0.05% to 0.55%. There are investment charges on amounts invested in the Variable Portfolios. If you elect any optional features available under the contract we may charge additional fees for these features. A withdrawal charge schedule applies to each Purchase Payment. The amount of the withdrawal charge declines over time. After a Purchase Payment has been in the contract for seven complete years, withdrawal charges will no longer apply to that Purchase Payment. See the “Fee Table,” “Purchasing an AllianceBernstein Ovation Plus Variable Annuity” and “Expenses” in this prospectus.

Access to Your Money: You may withdraw money from your contract during the Accumulation Phase. If you do so, earnings are deemed to be withdrawn first. You will pay income taxes on earnings and untaxed contributions when you withdraw them. Payments received during the Income Phase are considered partly a return of your original investment. A federal tax penalty may apply if you make withdrawals before age 59 ¹/2. As noted above, a withdrawal charge may apply. See “Access to Your Money” and “Taxes” in this prospectus.

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Optional Living Benefits: You may elect one of the optional living benefits available under your contract. For an additional fee, these features are designed to protect a portion of your investment in the event your contract value declines due to unfavorable investment performance during the Accumulation Phase and before a death benefit is payable. See “Optional Living Benefits” in this prospectus.

Death Benefit: A death benefit feature is available under the contract to protect your Beneficiaries in the event of your death during the Accumulation Phase. This contract provides five death benefit options. The Standard Death Benefit is automatically included in your contract for no additional charge. We also offer, for an additional charge, the selection of one or more optional death benefits. See “Death Benefits” in this prospectus.

Income Options: When you are ready to begin taking income, you can choose to receive income payments on a variable basis, fixed basis or a combination of both. You may also choose from three different income options, including an option for income that you cannot outlive. See “Income Options” in this prospectus.

Inquiries: If you have questions about your contract call your financial representative or contact us at our Annuity Service Center:

Delaware Valley Financial Services

P.O. Box 3031

Berwyn, PA 19312-0031

(800) 255-8402

The Company offers several different variable annuity contracts to meet the diverse needs of our investors. Our contracts may provide different features and benefits offered at different fees, charges and expenses. When working with your financial representative to determine the best product to meet your needs, you should consider among other things, whether the features of this contract and the related fees provide the most appropriate package to help you meet your long-term retirement savings goals.

If you would like more information regarding how money is shared amongst our business partners, including broker-dealers through which you may purchase a variable annuity, see the “Payments in Connection with Distribution of the Contract” in the prospectus.

Please read the prospectus carefully for more detailed information regarding these and other features and benefits of the contract, as well as the risks of investing.

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FEE TABLES

The following describes the fees and expenses that you will pay at the time that you buy the contract, transfer cash value between investment options, or surrender the contract. If applicable, you may also be subject to state premium taxes.

MAXIMUM OWNER TRANSACTION EXPENSES

Maximum Withdrawal Charges (as a percentage of each
Purchase Payment)¹ 6.0%

Transfer Fee $
10 per transfer after the first 12
transfers in any contract year.²

The following describes the fees and expenses that you may pay periodically during the time that you own the contract, not including the Underlying Fund fees and expenses which are outlined in the next section.

CONTRACT MAINTENANCE FEE none

SEPARATE ACCOUNT ANNUAL EXPENSES

(Separate Account Annual Expenses are deducted daily as a percentage of your average daily net asset value and the optional death benefit fees are deducted monthly as a percentage of your average daily net asset value.)

If age 65 or younger:
Separate Account Annual charge3	1.60	%
Optional Annual Rachet4,5	0.10	%
Optional Equity Assurance4,5	0.10	%
Optional Estate Benefit Payment5	0.20	%
Optional Accidental Death Benefit5	0.05	%
Total Separate Account Annual Expense	2.05	%
If age 66 or older:
Separate Account Annual charge3	1.70	%
Optional Annual Rachet4,5	0.15	%
Optional Equity Assurance4,5	0.15	%
Optional Estate Benefit Payment5	0.20	%
Optional Accidental Death Benefit5	0.05	%
Total Separate Account Annual Expense	2.25	%

ADDITIONAL OPTIONAL FEATURE FEES

You may elect either Access Protector or Capital Protector described below.

Optional Access Protector Fee

(calculated as a percentage of your Purchase Payments received in the first 90 days adjusted for withdrawals)

Contract Year	Annualized Fee6
0-7	0.65	%
8-10	0.45	%
11+	none

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Optional Capital Protector Fee

(calculated as a percentage of your contract value minus Purchase Payments received after the 90th day since you purchased your contract)

Contract Year	Annualized Fee7
0-7	0.50	%
8-10	0.25	%
11+	none

UNDERLYING FUND EXPENSES

The following shows the minimum and maximum total operating expenses charged by the Underlying Funds of the Series Fund, before any waivers or reimbursements, that you may pay periodically during the time you own the contract. More detail concerning the Series Fund’s fees and expenses is contained in the prospectus for the Series Fund. Please read the Series Fund prospectus carefully before investing

Total Annual Underlying Fund Expenses	Minimum	Maximum
(expenses that are deducted from Underlying Funds of the Series Fund, including management fees, other expenses and 12b-1 fees if applicable)8	0.85%	4.78%9

Footnotes to the Fee Table:

¹ Withdrawal Charge Schedule (as a percentage of each Purchase Payment) declines over 7 years:

Years
1	2	3	4	5	6	7	8+
6%	6%	5%	5%	4%	3%	2%	0%

² Transfers for dollar cost averaging or asset rebalancing are not counted against your 12 free transfers.

³ The Separate Account Annual Expenses are based on the age of the owner at contract issue.

⁴ The Enhanced Equity Assurance Plan includes both the Annual Ratchet Plan and the Equity Assurance Plan.

⁵ The optional death benefits/fees are based on the attained age of the owner at the time the fee is charged.

⁶ The Access Protector is an optional guaranteed minimum withdrawal benefit. The fee is deducted from your contract at the end of the first quarter following election and quarterly thereafter.

⁷ The Capital Protector is an optional guaranteed minimum accumulation benefit. The fee is deducted from your contract value at the end of the first contract quarter and quarterly thereafter.

⁸ For individual expenses of each of the Variable Portfolios available in your contract, please refer to the Series Fund prospectus.

⁹ Alliance Capital contractually waives a portion of its advisory fee and reimburses certain other expenses of the AllianceBernstein Wealth Appreciation Strategy Portfolio, which is the maximum charge represented. The contractual waiver for the AllianceBernstein Wealth Appreciation Strategy Portfolio extends through May 1, 2006 and may be extended by Alliance Capital for additional one-year terms. When the waivers are taken into account the maximum Underlying Fund expense is 1.45%. The waivers do not affect the minimum Underlying Fund expense.

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MAXIMUM AND MINIMUM EXPENSE EXAMPLES

These Examples are intended to help you compare the cost of investing in the contract with the cost of investing in other variable annuity contracts. These costs include owner transaction expenses, Separate Account Annual Expenses and expenses of the Underlying Funds of the Series Fund.

The Examples assumes that you invest $10,000 in the contract for the time periods indicated; that your investment has a 5% return each year; and that the maximum and minimum fees and expenses of the Series Fund are reflected. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:

MAXIMUM EXPENSE EXAMPLES

(assuming maximum Separate Account Annual Expenses of 2.25% and investment in an Underlying Fund with total expenses of 4.78%).

(1) If you surrender your contract at the end of the applicable time period and you elect the optional benefits at the maximum charges offered (Annual Ratchet Plan, Ages 66+, 0.15%; Equity Assurance Plan, Ages 66+, 0.15%; Estate Benefit Payment, 0.20%, the Accidental Death Benefit, 0.05%; and Access Protector, 0.65% for years 0-7 or 0.45% for years 8-10):

1 Year	3 Years	5 Years	10 Years
$1,298	$2,663	$3,951	$6,683

(2) If you annuitize your contract at the end of the applicable time period:

1 Year	3 Years	5 Years	10 Years
$643	$1,901	$3,122	$6,020

(3) If you do not surrender your contract and you elect the optional benefits at the maximum charges offered (Annual Ratchet Plan, Ages 66+, 0.15%; Equity Assurance Plan, Ages 66+, 0.15%; Estate Benefit Payment, 0.20%, the Accidental Death Benefit, 0.05%; and Access Protector, 0.65% for years 0-7 or 0.45% for years 8-10):

1 Year	3 Years	5 Years	10 Years
$758	$2,213	$3,591	$6,683

MINIMUM EXPENSE EXAMPLES

(assuming minimum Separate Account Annual Expenses of 1.70% and investment in an Underlying Fund with total expenses of 0.85%).

(1) If you surrender your contract at the end of the applicable time period and you do not elect any optional features:

1 Year	3 Years	5 Years	10 Years
$798	$1,243	$1,715	$2,885

(2) If you annuitize your contract at the end of the applicable time period:

1 Year	3 Years	5 Years	10 Years
$258	$793	$1,355	$2,885

(3) If you do not surrender your contract and you do not elect any optional features:

1 Year	3 Years	5 Years	10 Years
$258	$793	$1,355	$2,885

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Explanation of Fee Table and Example

1. The purpose of the Fee Tables and Expense Examples is to show you the various expenses you would incur directly and indirectly by investing in the contract. The Fee Tables and Expense Examples represent both the Separate Account expenses as well as the Variable Portfolio expenses. The Expense Examples reflect a 10% free withdrawal amount available upon a full surrender. Please see Access to Your Money below. Additional information on the Variable Portfolios’ fees and expenses can be found in the Series Fund prospectus located behind this prospectus.

2. In addition to the stated assumptions, the Expense Examples also assume Maximum Separate Account Annual Expenses as indicated and that no transfer fees were imposed. Although premium taxes may apply in certain states, they are not reflected in the Expense Examples.

3. Expense Examples reflecting application of optional features and benefits use the highest fees and charges being offered for those features. If you are age 65 or younger at the time you purchased your contract, expenses will be lower than those shown in these tables. If your attained age is 65 or younger at the time the fee for the Optional Annual Rachet, Optional Equity Assurance, or Optional Enhanced Equity Assurance benefits is assessed, or you did not elect those benefits, your expenses would be lower than those shown in these tables. If you elected Capital Protector, instead of Access Protector, your expenses would be lower than those shown in the tables. The fee for the Capital Protector and Access Protector features are not calculated as a percentage of your daily net asset value, but on other calculations more fully described in the prospectus.

4. These examples should not be considered a representation of past or future expenses. Actual expenses may be more or less than those shown.

CONDENSED FINANCIAL INFORMATION APPEARS IN APPENDIX A OF THIS PROSPECTUS.

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THE ALLIANCEBERNSTEIN OVATION PLUS VARIABLE ANNUITY

When you purchase an AllianceBernstein Ovation Plus Variable Annuity, a contract exists between you and AIG SunAmerica Life. You are the owner of the contract. The contract provides three main benefits:

1. Tax Deferral: This means that you do not pay taxes on your earnings from the annuity until you withdraw them.

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

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

Tax-qualified retirement plans (e.g., IRAs, 401(k) or 403(b) plans) defer payment of taxes on earnings until withdrawal. If you are considering funding a tax-qualified retirement plan with an annuity, you should know that an annuity does not provide any additional tax deferral treatment of earnings beyond the treatment provided by the tax-qualified retirement plan itself. However, annuities do provide other features and benefits which may be valuable to you. You should fully discuss this decision with your financial representative.

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 start receiving income payments 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.

The Fixed Account options earn interest at a rate set and guaranteed by AIG SunAmerica Life. 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 particular Fixed Account option in which you invest.

For more information on investment options available under this contract please see “Investment Options” in this prospectus.

This annuity is designed for long-term investors who desire to save for retirement. Under certain circumstances, you may be assessed a 10% federal tax penalty on any withdrawal made prior to your reaching age 59 ¹/2. Additionally, this contract provides that you will be charged a withdrawal charge on each Purchase Payment withdrawn if that Purchase Payment has not been invested in this contract for at least 7 years. Because of these potential penalties, you should fully discuss all of the benefits and risks of this contract with your financial representative prior to purchase.

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PURCHASING AN ALLIANCEBERNSTEIN

OVATION PLUS VARIABLE ANNUITY

An initial Purchase Payment is the money you give us to buy a contract. Any additional money you give us to invest in the contract after purchase is a subsequent Purchase Payment.

The minimum initial Purchase Payment permitted under your contract is $2,000. Subsequent payments must be at least $1,000 except that automated subsequent payments may be $100 or more. Prior Company approval is required to accept Purchase Payments greater than $1,000,000. The Company reserves the right to refuse Purchase Payments, including one which would cause total Purchase Payments to exceed $1,000,000 at the time of the Purchase Payment. Subsequent Purchase Payments which would cause total Purchase Payments in the contract to exceed this limit are also subject to prior Company approval. Further, we reserve the right to aggregate all contracts having the same owner and/or Annuitants’ social security or federal tax identification number for purposes of determining which contracts and/or Purchase Payments require Company pre-approval. We also reserve the right to change the amount at which pre-approval is required, at any time.

We may not issue a contract to anyone over age 80 on the contract issue date (effective date of the contract). In general, we will issue a Qualified contract to anyone who is age 70 ¹/2 or older, but it is your responsibility to ensure that the minimum distribution required by the IRS is being made.

We allow spouses to jointly own this contract. However, the age of the older spouse is used to determine the availability of any age driven benefits. The addition of a joint owner after the contract has been issued is contingent upon prior review and approval by the Company. If we learn of a misstatement of age, we reserve the right to fully pursue our remedies including termination of the contract and/or revocation of any age-driven benefits.

You may assign this contract before beginning the Income Phase by sending us a written request for an assignment. Your rights and those of any other person with rights under this contract will be subject to the assignment. We reserve the right to not recognize assignments if it changes the risk profile of the owner of the contract, as determined in our sole discretion. Please see the Statement of Additional Information for details on the tax consequences of an assignment.

Allocation of Purchase Payments

We invest your Purchase Payments in the Variable Portfolios and available Fixed Accounts according to your instructions. If we receive a Purchase Payment without allocation instructions, we will invest the money according to your last allocation instructions.

In order to issue your contract, we must receive your completed application and/or Purchase Payment allocation instructions and any other required paperwork at our Annuity Service Center. We allocate your initial Purchase Payment within two days of receiving it. If we do not have complete information necessary to issue your contract, we will contact you. If we do not have the information necessary to issue your contract within 5 business days we will:

• send your money back to you, or;

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• ask your permission to keep your money until we get the information necessary to issue the contract.

Premium Enhancement

For each Purchase Payment you make, we will add a Premium Enhancement to your contract equal to a maximum of 4% of that Purchase Payment. We will allocate the Premium Enhancement pro rata among the investment options in the same proportion as the corresponding Purchase Payment. We may discontinue offering a Premium Enhancement on additional Purchase Payments at our discretion. We intend to recoup the cost of the Premium Enhancement from the Separate Account charge. (See “Expenses — Separate Account Charges”) Premium Enhancements are not part of the amount refunded to you if you cancel your contract during the Right to Cancel period. Premium Enhancements are not included in amounts payable as a death benefit or upon surrender during the first twenty-four month period following receipt of a Premium Enhancement, except as part of your systematic withdrawal program. We will reduce the Premium Enhancement in the same proportion and deduct it from your contract value. Under certain circumstances, receipt of the Premium Enhancement may have a negative effect on the investment performance of the portion of your contract allocated to the variable investment options. For example, if your contract value decreases due to market conditions during the twenty-four months after receipt of a Premium Enhancement and, during that time, you surrender your contract or you die, the amount payable will be lower than it would have been had you not received a Premium Enhancement. In the case of a partial surrender under those conditions and during that time, the contract value that remains after the partial surrender will be lower than it would have been had you not received a Premium Enhancement. There may be other instances in which you may be worse off for having the bonus. For income tax purposes, the Premium Enhancement is treated as income on the contract and will be includible in taxable income.

Right to Cancel

You may cancel your contract within ten days after receiving it (or longer if required by state law). To cancel, you must mail the contract along with your written request to our Annuity Service Center:

Delaware Valley Financial Services

P.O. Box 3031

Berwyn, PA 19312-0031

If you decide to cancel your contract during this examination period, we will refund to you the value of your contract less any Premium Enhancement on the day we receive your request.

Certain states require us to return your Purchase Payments upon a written request mailed during the examination period as described above and in the contract. Additionally, all contracts issued as an IRA require the full return of Purchase Payments upon a written request as described above. With respect to those contracts, we reserve the right to put your money in the Money Market Portfolio during the examination period and will allocate your money according to your instructions at the end of the applicable examination period. Currently, we do not put your money in the Money Market Portfolio during the examination period unless you allocate your money to it. If your contract was issued in a state requiring return of Purchase Payments or as an IRA and you cancel your contract during the examination period, we return the greater of (1) your Purchase Payments; or (2) the value of your contract, less any Premium Enhancement. A Premium Enhancement is not considered part of your Purchase Payment.

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Exchange Offers

From time to time, we may offer to allow you to exchange an older variable annuity, issued by AIG SunAmerica Life or one of its affiliates, for a newer product with more current features and benefits, also issued by AIG SunAmerica Life or one of its affiliates. Such an exchange offer will be made in accordance with applicable state and federal securities and insurance rules and regulations. we will explain the specific terms and conditions of any such exchange offer at the time the offer is made.

INVESTMENT OPTIONS

Variable Portfolios

The Variable Portfolios invest in shares of the AllianceBernstein Variable Products Series Fund, Inc. (“Series Fund”). The Variable Portfolios are only available through the purchase of certain insurance contracts.

Alliance Capital Management L.P. is the investment adviser to the Series Fund. The Trust also serves as the current underlying investment vehicle for other variable contracts issued by our affiliates, AIG Life Insurance Company and American International Life Assurance Company of New York, and other affiliated/unaffiliated insurance companies. Neither AIG SunAmerica Life nor the Series Fund believes that offering shares of the Series Fund in this manner disadvantages you. The adviser monitors the Series Fund for potential conflicts.

The Variable Portfolios are listed below. Only Class B is offered for this contract.

AllianceBernstein Americas Government Income Portfolio

AllianceBernstein Balanced Wealth Strategy Portfolio

AllianceBernstein Global Bond Portfolio

AllianceBernstein Global Dollar Government Portfolio

AllianceBernstein Global Research Growth Portfolio**

AllianceBernstein Global Technology Portfolio⁺

AllianceBernstein Growth Portfolio

AllianceBernstein Growth and Income Portfolio

AllianceBernstein High-Yield Portfolio

AllianceBernstein International Portfolio

AllianceBernstein International Value Portfolio

AllianceBernstein Large Cap Growth Portfolio⁺⁺

AllianceBernstein Money Market Portfolio

AllianceBernstein Real Estate Investment Portfolio

AllianceBernstein Small Cap Growth Portfolio

AllianceBernstein Small/Mid Cap Value Portfolio⁺⁺⁺

AllianceBernstein Total Return Portfolio

AllianceBernstein U.S. Government/High Grade Securities Portfolio

AllianceBernstein U.S. Large Cap Blended Style Portfolio

AllianceBernstein Utility Income Portfolio

AllianceBernstein Value Portfolio

AllianceBernstein Wealth Appreciation Strategy Portfolio

AllianceBernstein Worldwide Privatization Portfolio*

* An equity fund seeking long-term capital appreciation.

** Available on or about June 1, 2005.

+ Previously known as the AllianceBernstein Technology Portfolio.

++ Previously known as the AllianceBernstein Premier Growth Portfolio.

+++  Previously known as the AllianceBernstein Small Cap Value Portfolio.

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You should read the attached prospectus for the Series Fund carefully. This prospectus contains detailed information about the Variable Portfolios, including each Variable Portfolio’s investment objective and risk factors.

Accumulation Units

When you allocate a Purchase Payment to the Variable Portfolios, we credit your contract with Accumulation Units of the Separate Account. We base the number of Accumulation Units you receive on the unit value of the Variable Portfolio as of the day we receive your money if we receive it before Market Close, or on the next business day’s unit value if we receive your money after Market Close. 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.

Accumulation Units are credited to your contract when Purchase Payments are allocated or amounts are transferred into a Variable Portfolio. Accumulation Units are deducted when the charge, if any, for an Optional Death Benefit is deducted. Accumulation Units are also deducted when you make a withdrawal or a transfer out of a 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 2,252.2523 Accumulation Units for the Global Bond Portfolio.

Performance of the Variable Portfolios and expenses of the Separate Account affect Accumulation Unit values. These factors cause the value of your contract to go up and down.

Fixed Account Options

Your contract may offer Fixed Account options for varying guarantee periods. Available guarantee periods may be for different lengths of time and may have different guaranteed interest rates, as noted below. We guarantee the interest rate credited to amounts allocated to any available Fixed Account and that the rate will never be less than the minimum guaranteed interest rate as specified in your contract. Once established, the rates for specified payments do not change during the guarantee period. We determine the Fixed Accounts offered at any time in our sole discretion and we reserve the right to change the Fixed Accounts that we make available at any time, unless state law requires us to do otherwise. Please check with your financial representative to learn if any Fixed Accounts are currently offered.

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There are three interest rate scenarios for money allocated to the Fixed Accounts. Each of these rates may differ from one another. Once declared, the applicable rate is guaranteed until the corresponding guarantee period expires. Under each scenario your money may be credited a different rate of interest as follows:

Initial Rate: The rate credited to any portion of the initial Purchase Payment allocated to a Fixed Account.

Current Rate: The rate credited to any portion of the subsequent Purchase Payments allocated to a Fixed Account.

Renewal Rate: The rate credited to money transferred from a Fixed Account or a Variable Portfolio into a Fixed Account and to money remaining in a Fixed Account after expiration of a guarantee period.

When a Fixed Account guarantee period ends, you may leave your money in the same Fixed Account or you may reallocate your money to another Fixed Account or to the Variable Portfolios. If you want to reallocate your money, you must contact us within 30 days after the end of the current interest guarantee period and instruct us as to where you would like the money invested. We do not contact you. If we do not hear from you, your money will remain in the same Fixed Account where it will earn interest at the renewal rate then in effect for that Fixed Account.

If available, you may systematically transfer interest in available Fixed Accounts into any of the Variable Portfolios on certain periodic schedules offered by us. Systematic transfers may be started, changed or terminated at any time by contacting our Annuity Service Center. Check with your financial representative about the current availability of this service.

All Fixed Accounts may not be available in all states. At any time that we are crediting the guaranteed minimum interest rate specified in your contract to the Fixed Accounts, we reserve the right to restrict transfers and Purchase Payments into the Fixed Accounts. We may also offer the specific dollar cost averaging Fixed Accounts. The rules, restrictions and operation of the dollar cost averaging Fixed Accounts may differ from the standard Fixed Accounts described above, please see “Dollar Cost Averaging Program” below for more details.

Dollar Cost Averaging Fixed Accounts

You may invest initial and/or subsequent Purchase Payments in the dollar cost averaging Fixed Accounts (“DCA Fixed Accounts”), if available. DCA Fixed Accounts also credit a fixed rate of interest but are specifically designed to facilitate a dollar cost averaging program. Interest is credited to amounts allocated to the DCA Fixed Accounts while your investment is transferred to the Variable Portfolios over certain specified time frames. The interest rates applicable to the DCA Fixed Account may differ from those applicable to any available Fixed Accounts but will never be less than the minimum annual guaranteed interest rate as specified in your contract. However, when using a DCA Fixed Account the annual interest rate is paid on a declining balance as you systematically transfer your investment to the Variable Portfolios. Therefore, the actual effective yield will be less than the annual crediting rate. We determine the DCA Fixed Accounts offered at any time in our sole discretion and we reserve the right to change to DCA Fixed Accounts that we make available at any time, unless state law requires us to do otherwise. See “Dollar Cost Averaging Program” below for more information.

Transfers During the Accumulation Phase

Subject to our rules, restrictions and policies, during the Accumulation Phase you may transfer funds between the Variable Portfolios and/or any available Fixed Account options by telephone or through the Company’s website (http://www.aigsunamerica.com) or in writing by mail or facsimile. We may accept transfers by telephone or the Internet unless you tell us not to on your contract application.

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When receiving instructions over the telephone or the Internet, we follow procedures we have adopted 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 or the Internet. If we fail to follow our procedures, we may be liable for any losses due to unauthorized or fraudulent instructions.

Any transfer request will be priced as of the day it is confirmed in good order by us if the request is processed before Market Close. If the transfer request is processed after Market Close, the request will be priced as of the next business day.

Funds already in your contract cannot be transferred into the DCA Fixed Accounts. You must transfer at least $1,000 per transfer. If less than $1,000 remains in any Variable Portfolio after a transfer, that amount must be transferred as well.

Transfer Policies

We do not want to issue this variable annuity contract to contract owners engaged in trading strategies that seek to benefit from short-term price fluctuations or price inefficiencies in the Variable Portfolios of this product (“Short-Term Trading”) and we discourage Short-Term Trading as more fully described below. However, we cannot always anticipate if a potential contract owner intends to engage in Short-Term Trading. Short-Term Trading may create risks that may result in adverse effects on investment return of an Underlying Fund. Such risks may include, but are not limited to: (1) interference with the management and planned investment strategies of an Underlying Fund and/or (2) increased brokerage and administrative costs due to forced and unplanned fund turnover; both of which may dilute the value of the shares in the Underlying Fund and reduce value for all investors in the Variable Portfolio. In addition to negatively impacting the contract owner, a reduction in contract value may also be harmful to annuitants and/or beneficiaries.

We have adopted the following administrative procedures to discourage Short-Term Trading.

We charge for transfers in excess of 12 in any contract year. Currently, the fee is $10 for each transfer exceeding this limit. Transfers resulting from your participation in the DCA or Asset Rebalancing programs are not counted towards the number of free transfers per contract year.

In addition to charging a fee when you exceed 12 transfers as described in the preceding paragraph, all transfer request in excess of 15 transfers per contract year must be submitted in writing by United States Postal Service first-class mail (“U.S. Mail”) until your next contract anniversary (“Standard U.S. Mail Policy”). We will not accept transfer requests sent by any other medium except U.S. Mail until your next contract anniversary. Transfer requests required to be submitted by U.S. Mail can only be cancelled by a written request sent by U.S. Mail with the appropriate paperwork received prior to the execution of the transfer. All transfers made on the same day prior to Market Close are considered one transfer request. Transfers resulting from your participation in the DCA or Asset Rebalancing programs are not included for the purposes of determining the number of transfers before applying the Standard U.S. Mail Policy. We apply the Standard U.S. Mail Policy uniformly and consistently to all contract owners except for omnibus group contracts and contracts utilizing third party asset allocation services as described below.

We believe that the Standard U.S. Mail Policy is a sufficient deterrent to Short-Term Trading and we do not conduct any additional routine monitoring. However, we may become aware of transfer patterns among the Variable Portfolios and/or available Fixed Accounts which reflect what we consider to be Short-Term Trading or otherwise detrimental to the Variable Portfolios but have not yet triggered the

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limitations of the Standard U.S. Mail Policy described above. If such transfer activity cannot be controlled by the Standard U.S. Mail Policy, we may require you to adhere to our Standard U.S. Mail Policy prior to reaching the specified number of transfers (“Accelerated U.S. Mail Policy”). To the extent we become aware of Short-Term Trading activities which cannot be reasonably controlled by the Standard U.S. Mail Policy or the Accelerated U.S. Mail Policy, we also reserve the right to evaluate, in our sole discretion, whether to impose further limits on the number and frequency of transfers you can make, impose minimum holding periods and/or reject any transfer request or terminate your transfer privileges. We will notify you in writing if your transfer privileges are terminated. In addition, we reserve the right to not accept transfers from a third party acting for you and not to accept preauthorized transfer forms.

Some of the factors we may consider when determining whether to accelerate the Standard U.S. Mail Policy, reject or impose other conditions on transfer privileges include:

(1) the number of transfers made in a defined period;

(2) the dollar amount of the transfer;

(3) the total assets of the Variable Portfolio involved in the transfer and/or transfer requests that represent a significant portion of the total assets of the Variable Portfolio;

(4) the investment objectives and/or asset classes of the particular Variable Portfolio involved in your transfers;

(5) whether the transfer appears to be part of a pattern of transfers to take advantage of short-term market fluctuations or market inefficiencies; and/or

(6) other activity, as determined by us, that creates an appearance, real or perceived, of Short-Term Trading.

Notwithstanding the administrative procedures above, there are limitations on the effectiveness of these procedures. Our ability to detect and/or deter Short-Term Trading is limited by operational systems and technological limitations. We cannot guarantee that we will detect and/or deter all Short-Term Trading. To the extent that we are unable to detect and/or deter Short-Term Trading, the Variable Portfolios may be negatively impacted as described above. Additionally, the Variable Portfolios may be harmed by transfer activity related to other insurance companies and/or retirement plans or other investors that invest in shares of the Underlying Fund. You should be aware that the design of our administrative procedures involves inherently subjective decisions, which we attempt to make in a fair and reasonable manner consistent with the interests of all owners of this contract. We do not enter into agreements with contract owners whereby we permit or intentionally disregard Short-Term Trading.

The Standard and Accelerated U.S. Mail Policies are applied uniformly and consistently to contract owners utilizing third party trading services/strategies performing asset allocation services for a number of contract owners at the same time except for purposes of calculating the number of transfers for the Standard U.S. Mail Policy. A calendar year will be used (instead of a contract year) for these contracts. You should be aware that such third party trading services may engage in transfer activities that can also be detrimental to the Variable Portfolios. These transfer activities may not be intended to take advantage of short-term price fluctuations or price inefficiencies. However, such activities can create the same or similar risks to Short-Term Trading and negatively impact the Variable Portfolios as described above.

Omnibus group contracts may invest in the same Underlying Funds available in your contract but on an aggregate, not individual basis. Thus, we have limited ability to detect Short-Term Trading in omnibus

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group contracts and the Standard U.S. Mail Policy does not apply to these contracts. Our inability to detect Short-Term Trading may negatively impact the Variable Portfolios as described above.

We reserve the right to modify the policies and procedures described in this section at any time. To the extent that we exercise this reservation of rights, we will do so uniformly and consistently unless we disclose otherwise.

For information regarding transfers during the Income Phase, see INCOME OPTIONS below.

Dollar Cost Averaging Program

The Dollar Cost Averaging (“DCA”) program allows you to invest gradually in the Variable Portfolios. There is no fee to participate in this program. Under the program you systematically transfer a set dollar amount or percentage of the available Fixed Accounts or the Money Market Portfolio (source account) to any other Variable Portfolio. Transfers may occur on certain periodic schedules such as monthly or weekly and do not count against your 12 free transfers per contract year. The minimum transfer amount under the DCA program is $1,000 per transaction. Fixed Account options are not available as target accounts for the DCA program.

We may also offer DCA Fixed Accounts for a specified time period exclusively to facilitate this program. The DCA Fixed Accounts only accept new Purchase Payments of at least $12,000. You cannot transfer money already in your contract into these options. If you allocate new Purchase Payments into a DCA Fixed Account, we transfer all your money allocated to that account into the Variable Portfolios over the selected time period at an offered frequency of your choosing.

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.

Money Market Portfolio Example:

Assume that you want to gradually move $12,000 from the Money Market Portfolio to the Growth Portfolio over six months. You set up dollar cost averaging for $2,000 each month and purchase Accumulation Units at the following values:

Month	Accumulation Unit		Units Purchased
1	$	7.50	266.667
2	$	5.00	400
3	$	10.00	200
4	$	7.50	266.667
5	$	5.00	400
6	$	7.50	266.667

You paid an average price of only $6.67 per Accumulation Unit over six months, 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.

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Automatic Asset Rebalancing Program

Earnings in your contract may cause the percentage of your investment in each Variable Portfolio to differ from your original allocations. The Automatic Asset Rebalancing Program addresses this situation. There is no fee to participate in this program. At your election, we periodically rebalance your investments in the Variable Portfolios to return your allocations to their original percentages. There is no fee to participate in this program. Asset rebalancing typically involves shifting a portion of your money out of a Variable Portfolio which experienced a higher return into a Variable Portfolio which experienced a lower return.

At your request, rebalancing occurs on a monthly, quarterly, semiannual or annual basis. Transfers made as a result of rebalancing do not count against your 12 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 Global 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 Global 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 Global Bond Portfolio to bring its holdings back to 50% and use the money to buy more units in the Growth Portfolio to increase those holdings to 50%.

Voting Rights

AIG SunAmerica Life is the legal owner of the Series Fund’s shares. However, when a Variable Portfolio solicits proxies in conjunction with a vote of shareholders, you have the right to instruct us on how to vote the Variable Portfolio shares that are attributable to your contract. We vote all of the shares we own in the same proportion as the voting instructions we receive. 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

We may move assets and re-direct future Purchase Payment allocations from one Variable Portfolio to another if we receive contract owner approval through a proxy vote or SEC approval for a fund substitution. This would occur if a Variable Portfolio is no longer an appropriate investment for the contract, for reasons such as continuing substandard performance, or for changes to the portfolio manager, investment objectives, risks and strategies, or federal or state laws. The new Variable Portfolio offered may have different fees and expenses. You will be notified of any upcoming proxies or substitutions that affect your Variable Portfolio choices.

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ACCESS TO YOUR MONEY

You can access money in your contract in two ways:

• by making a partial or total withdrawal, and/or;

• by receiving income payments during the Income Phase. See “Income Options” below.

Generally, we deduct a withdrawal charge applicable to any total or partial withdrawal. See “Expenses” below.

Purchase payments that are withdrawn prior to the end of the seventh year will result in your paying a penalty in the form of a withdrawal charge. The amount of the charge and how it applies are discussed more fully below. See “Expenses” below. You should consider, before purchasing this contract, the effect this charge will have on your investment if you need to withdraw money during a withdrawal charge period. You should fully discuss this decision with your financial representative.

You may request a partial surrender for a minimum of $500. Your contract value must be at least $2,000 after the partial surrender, or we may cancel the contract. You must send a written withdrawal request. For withdrawals of $500,000 and more, you must submit a signature guarantee at the time of your request. Unless you provide us with different instructions, partial withdrawals will be made pro rata from each Variable Portfolio and the Fixed Account options in which your contract is invested.

You may withdraw free of a withdrawal charge an amount that is equal to the free withdrawal amount in your contract as of the date you make the withdrawal. Your free withdrawal amount is equal to the greater of (1) the contract value less Purchase Payments paid and not previously surrendered or (2) 10% of remaining unsurrendered Purchase Payments paid less the amount of any prior surrender since the last contract anniversary. Withdrawals in excess of the free withdrawal amount will be assessed a withdrawal charge. When you make a withdrawal, we assume that it is taken from earnings first, then from Purchase Payments on a first-in, first-out basis. This means that you can also access your Purchase Payments which are no longer subject to a withdrawal charge before those Purchase Payments which are still subject to the withdrawal charge.

The withdrawal charge percentage is determined by the age of the Purchase Payment remaining in the contract at the time of the withdrawal. If you make a partial withdrawal in an amount greater than your free withdrawal amount during the twenty-four month period following receipt of a Premium Enhancement, we will reduce the Premium Enhancement in the same proportion and deduct it from your contract value. This reduction does not apply to withdrawals you make as part of our systematic withdrawal program. See “Systematic Withdrawal Program” below. The Premium Enhancement is not considered a purchase payment.

We may be required to suspend or postpone any type of payment 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 option. Such deferrals are limited to no longer than six months.

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Systematic Withdrawal Program

During the Accumulation Phase, provided you have a minimum contract value of $24,000, you may elect to receive periodic income payments under the systematic withdrawal program, up to a maximum of 10% of your contract value each year. 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 $200. Withdrawals may be taxable and a 10% federal penalty tax may apply if you are under age 59 ¹/2. There is no additional charge for participating in this program, although a withdrawal charge may apply. You may not elect this program if you have made a partial surrender earlier in the same contract year.

The Annuity Service Center can provide the necessary 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 your contract is less than $2,000 as a result of partial withdrawals. 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.

OPTIONAL LIVING BENEFITS

You may elect one of the Optional Living Benefits described below. These features are designed to protect a portion of your investment in the event your contract value declines due to unfavorable investment performance during the Accumulation Phase and before a death benefit is payable. Please see the descriptions below for detailed information.

Access Protector Feature

What is Access Protector?

Access Protector is an optional living benefit feature. If you elect this feature, for which you will be charged an annualized fee, after a specified waiting period, you are guaranteed to receive withdrawals, over a minimum number of years that in total equal Purchase Payments made in the first 90 days adjusted for withdrawals during that period (the “Benefit”), even if the contract value falls to zero. Access Protector may offer protection in the event your contract value declines due to unfavorable investment performance. Access Protector has rules and restrictions that are discussed more fully below.

What options are currently available?

Three options are currently available under this feature. The available options, referred to as the Step-Up Options, provide a guaranteed minimum withdrawal amount over a minimum number of years equal to at least your initial Purchase Payment (adjusted for withdrawals) with an opportunity to receive a 10%, 20% or 50% step-up amount. If you take withdrawals prior to the Benefit Availability Date (as defined in the table below), the Benefit will be reduced and you may not receive a step-up amount depending on the option selected.

Each option and its components are fully described below. You should read each option carefully and discuss the feature with your financial representative before electing an option.

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How and when can I elect the feature?

You may only elect the feature at the time of contract issue and must choose one of the options discussed below. You may not change the option after election. You cannot elect the feature if you are age 81 or older on the contract issue date. Generally, once you elect the feature, it cannot be cancelled.

Access Protector cannot be elected if you elect the Capital Protector feature. See CAPITAL PROTECTOR below. Access Protector may not be available in your state or through the broker-dealer with which your financial representative is affiliated. Please check with your financial representative for availability.

How is the Benefit calculated?

In order to determine the Benefit’s value, we calculate each of the components as described below. The Benefit’s components and value may vary depending on the option you choose. The earliest date you may begin taking withdrawals under the Benefit is the Benefit Availability Date. Each one-year period beginning on the contract issue date and ending on the day before the contract anniversary date is considered a Benefit Year.

The table below is a summary of the three Step-Up Options we are currently offering:

Option	Benefit Availability Date	Step-Up Amount	Maximum Annual Withdrawal Amount+ Percentage	Minimum Withdrawal Period* (if Maximum Annual Withdrawal Amount taken each year)
1	3 years following contract issue date	10%* of Withdrawal Benefit Base	10% of Withdrawal Benefit Base	11 years
2	5 years following contract issue date	20%* of Withdrawal Benefit Base	10% of Withdrawal Benefit Base	12 years
3	10 years following contract issue date	50%** of Withdrawal Benefit Base	10% of Withdrawal Benefit Base	15 years

* You will not receive a Step-Up Amount if you elect Options 1 or 2 and take a withdrawal prior to the Benefit Availability Date. The Minimum Withdrawal Period for Options 1 and 2 will be 10 years if you do not receive a Step-Up Amount.

** If you elect Option 3 and take a withdrawal prior to the Benefit Availability Date, you will receive a reduced Step-Up Amount of 30% of the Withdrawal Benefit Base. The Minimum Withdrawal Period will be 13 years if you receive a reduced Step-Up Amount.

+ For contract holders subject to annual required minimum distributions, the Maximum Annual Withdrawal Amount for this contract will be the greater of: (1) the amount indicated in the table above; or (2) the annual required minimum distribution amount. Required minimum distributions may reduce your Minimum Withdrawal Period.

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How are the components for the Step-Up Options calculated?

First, we determine the Eligible Purchase Payments, which include the amount of Purchase Payments made to the contract up to and including the 90th day after your contract issue date, adjusted for any withdrawals in the same proportion that the withdrawal reduced the contract value on the date of the withdrawal.

Second, we determine the Withdrawal Benefit Base, on the Benefit Availability Date. The Withdrawal Benefit Base equals the sum of all Eligible Purchase Payments.

Third, we determine a Step-Up Amount, if any, which is calculated as a specified percentage (listed in the table above) of the Withdrawal Benefit Base on the Benefit Availability Date. If you elect Option 1 or 2, you will not receive a Step-Up Amount if you take any withdrawals prior to the Benefit Availability Date. If you elect Option 3, the Step-Up Amount will be reduced to 30% of the Withdrawal Benefit Base if you take any withdrawals prior to the Benefit Availability Date. The Step-Up Amount is not considered a Purchase Payment and cannot be used in calculating any other benefits, such as death benefits, contract values or annuitization value.

Fourth, we determine a Stepped-Up Benefit Base, which is the total amount available for withdrawal under the feature and is used to calculate the minimum time period over which you may take withdrawals under the feature. The Stepped-Up Benefit Base equals the Withdrawal Benefit Base plus the Step-Up Amount, if any.

Fifth, we determine the Maximum Annual Withdrawal Amount, which is a stated percentage (listed in the table above) of the Withdrawal Benefit Base and represents the maximum amount of withdrawals that are available under this feature each Benefit Year after the Benefit Availability Date.

Finally, we determine the Minimum Withdrawal Period, which is the minimum period over which you may take withdrawals under the feature. The Minimum Withdrawal Period is calculated by dividing the Stepped-Up Benefit Base by the Maximum Annual Withdrawal Amount.

What is the fee for Access Protector?

The annualized Access Protector fee will be assessed as a percentage of the Withdrawal Benefit Base. The fee will be deducted quarterly from your contract value starting on the first quarter following the contract issue date and ending upon the termination of the feature. If your contract value falls to zero before the feature has been terminated, the fee will no longer be assessed. We will not assess the quarterly fee if you surrender or annuitize before the end of a quarter.

Contract Year	Annualized Fee
0-7 years	0.65% of Withdrawal Benefit Base
8-10 years	0.45% of Withdrawal Benefit Base
11+ years	none

What are the effects of withdrawals on the Step-Up Options?

The Benefit amount, Maximum Annual Withdrawal Amount and Minimum Withdrawal Period may change over time as a result of withdrawal activity. Withdrawals after the Benefit Availability Date equal to or less than the Maximum Annual Withdrawal Amount generally reduce the Benefit by the amount of the withdrawal. Withdrawals in excess of the Maximum Annual Withdrawal Amount will

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reduce the Benefit in the same proportion that the contract value was reduced at the time of the withdrawal. This means if investment performance is down and contract value is reduced, withdrawals greater than the Maximum Annual Withdrawal Amount will result in a greater reduction of the Benefit. The impact of withdrawals and the effect on each component of Access Protector are further explained through the calculations below:

Withdrawal Benefit Base: Withdrawals prior to the Benefit Availability Date reduce the Withdrawal Benefit Base in the same proportion that the contract value was reduced at the time of the withdrawal. Withdrawals prior to the Benefit Availability Date also eliminate any Step-Up Amount for Options 1 and 2 and reduce the Step-Up Amount to 30% of the Withdrawal Benefit Base for Option 3.

Withdrawals after the Benefit Availability Date will not reduce the Withdrawal Benefit Base until the sum of withdrawals after the Benefit Availability Date exceeds the Step-Up Amount. Thereafter, any withdrawal or portion of a withdrawal that exceeds the Step-Up Amount will reduce the Withdrawal Benefit Base as follows: (1) If the withdrawal does not cause total withdrawals in the Benefit Year to exceed the Maximum Annual Withdrawal Amount, the Withdrawal Benefit Base will be reduced by the amount of the withdrawal, or (2) If the withdrawal causes total withdrawals in the Benefit Year to exceed the Maximum Annual Withdrawal Amount, the Withdrawal Benefit Base is reduced to the lesser of (a) or (b), where:

a. is the Withdrawal Benefit Base immediately prior to the withdrawal minus the amount of the withdrawal, or;

b. is the Withdrawal Benefit Base immediately prior to the withdrawal minus the amount of the withdrawal that makes total withdrawals for the Benefit Year equal to the current Maximum Annual Withdrawal Amount, and further reduced in the same proportion that the contract value was reduced by the amount of the withdrawal that exceeds the Maximum Annual Withdrawal Amount.

Stepped-Up Benefit Base: Since withdrawals prior to the Benefit Availability Date eliminate any Step-Up Amount for Options 1 and 2, the Stepped-Up Benefit Base will be equal to the Withdrawal Benefit Base if you take withdrawals prior to the Benefit Availability Date. For Option 3, if you take withdrawals prior to the Benefit Availability Date, the Stepped-Up Benefit Base will be equal to the Withdrawal Benefit Base plus the reduced Step-Up Amount which will be 30% of the Withdrawal Benefit Base, adjusted for such withdrawals.

If you do not take withdrawals prior to the Benefit Availability Date, you will receive the entire Step-Up Amount and the Stepped-Up Benefit Base will equal the Withdrawal Benefit Base plus the Step-Up Amount.

After the Benefit Availability Date, any withdrawal that does not cause total withdrawals in a Benefit Year to exceed the Maximum Annual Withdrawal Amount will reduce the Stepped-Up Benefit Base by the amount of the withdrawal. After the Benefit Availability Date, any withdrawal that causes total withdrawals in a Benefit Year to exceed the Maximum Annual Withdrawal Amount (in that Benefit Year) reduces the Stepped-Up Benefit Base to the lesser of (a) or (b), where:

a. is the Stepped-Up Benefit Base immediately prior to the withdrawal minus the amount of the withdrawal, or;

b. is the Stepped-Up Benefit Base immediately prior to the withdrawal minus the amount of the withdrawal that makes total withdrawals for the Benefit Year equal to the current Maximum Annual Withdrawal Amount, and further reduced in the same proportion that the contract value was reduced by the amount of the withdrawal that exceeds the Maximum Annual Withdrawal Amount.

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Maximum Annual Withdrawal Amount: If the sum of withdrawals in a Benefit Year does not exceed the Maximum Annual Withdrawal Amount for that Benefit Year, the Maximum Annual Withdrawal Amount does not change for the next Benefit Year. If total withdrawals in a Benefit Year exceed the Maximum Annual Withdrawal Amount, the Maximum Annual Withdrawal Amount will be recalculated at the start of the next Benefit Year. The new Maximum Annual Withdrawal Amount will equal the Stepped-Up Benefit Base on that Benefit Year anniversary divided by the Minimum Withdrawal Period on that Benefit Year anniversary. The new Maximum Annual Withdrawal Amount may be lower than your previous Maximum Annual Withdrawal Amounts.

Minimum Withdrawal Period: After each withdrawal, a new Minimum Withdrawal Period is calculated. If total withdrawals in a Benefit Year are less than or equal to the current Maximum Annual Withdrawal Amount, the new Minimum Withdrawal Period equals the Stepped-Up Benefit Base after the withdrawal, divided by the current Maximum Annual Withdrawal Amount.

During any Benefit Year in which the sum of withdrawals exceeds the Maximum Annual Withdrawal Amount, the new Minimum Withdrawal Period equals the Minimum Withdrawal Period calculated at the end of the prior Benefit Year reduced by one year.

Contract Value: Any withdrawal under the Benefit reduces the contract value by the amount of the withdrawal.

The ACCESS PROTECTOR EXAMPLES APPENDIX provides examples of the effects of withdrawals on the Access Protector feature.

What happens if my contract value is reduced to zero?

If the contract value is zero but the Stepped-Up Benefit Base is greater than zero, a Benefit remains payable under the feature. However, the contract and its other features and benefits will be terminated once the contract value equals zero. Once the contract is terminated, you may not make subsequent Purchase Payments and no death benefit or future annuitization payments are available. Therefore, under adverse market conditions, withdrawals taken under the Benefit may reduce the contract value to zero eliminating any other benefits of the contract.

To receive your remaining Benefit, you may select one of the following options:

1. Lump sum distribution of the actuarial present value as determined by us, of the total remaining guaranteed withdrawals; or

2. the current Maximum Annual Withdrawal Amount, paid equally on a quarterly, semi-annual or annual frequency as selected by you until the Stepped-Up Benefit Base equals zero; or

3. any payment option mutually agreeable between you and us.

If you do not select a payment option, the remaining Benefit will be paid as the current Maximum Annual Withdrawal Amount on a quarterly basis.

What happens to Access Protector upon a spousal continuation?

A Continuing Spouse may elect to continue or cancel the feature and its accompanying fee. The components of the feature will not change as a result of a spousal continuation. See SPOUSAL CONTINUATION below.

Can my non-spousal Beneficiary elect to receive any remaining withdrawals under Access Protector upon my death?

If the Stepped-Up Benefit Base is greater than zero when the original owner dies, and the contract value equals zero and therefore no death benefit is payable, a non-spousal Beneficiary may elect to

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continue receiving any remaining withdrawals under the feature. The components of the feature will not change. If the Stepped-Up Benefit Base and the contract value are greater than zero, a non-spousal Beneficiary must make a death claim under the contract provisions which terminates the Benefit. See DEATH BENEFITS below.

Can Access Protector be cancelled?

Once you elect the feature, you may not cancel it. The feature automatically terminates upon the occurrence of one of the following:

1. Stepped-Up Benefit Base is equal to zero; or

2. Annuitization of the contract; or

3. Full surrender of the contract; or

4. Death benefit is paid; or

5. Upon a spousal continuation, the Continuing Spouse elects not to continue the contract with the feature.

We reserve the right to terminate the feature if withdrawals in excess of Maximum Annual Withdrawal Amount in any Benefit Year reduce the Stepped-Up Benefit Base by 50% or more.

Important Information

Access Protector is designed to offer protection of your initial investment in the event of a significant market down turn. Access Protector may not guarantee an income stream based on all Purchase Payments made into your contract nor does it guarantee any investment gains. Access Protector does not guarantee a withdrawal of any subsequent Purchase Payments made after the 90th day following the contract issue date. This feature also does not guarantee lifetime income payments. You may never need to rely on Access Protector if your contract performs within a historically anticipated range. However, past performance is no guarantee of future results.

Withdrawals under the feature are treated like any other withdrawal for the purpose of reducing the contract value, free withdrawal amounts and all other benefits, features and conditions of your contract.

If you need to take withdrawals or are required to take required minimum distributions (“RMD”) under the Internal Revenue Code (“IRC”) from this contract prior to the Benefit Availability Date, you should know that such withdrawals may negatively impact the value of the Benefit. As noted above, your Stepped-Up Benefit Base will be reduced if you take withdrawals before the Benefit Availability Date. Any withdrawals taken under this feature or under the contract may be subject to a 10% IRS tax penalty if you are under age 59 ¹/2 at the time of the withdrawal. For information about how the feature is treated for income tax purposes, you should consult a qualified tax advisor concerning your particular circumstances. If you set up RMDs and have elected this feature, your distributions must be automated and will not be recalculated on an annual basis.

We reserve the right at the time your contract is issued to limit the maximum Eligible Purchase Payments to $1 million. For prospectively issued contracts, we reserve the right to limit the investment options available under the contract if you elect this Access Protector feature.

We reserve the right to modify, suspend or terminate the Access Protector feature (in its entirety or any component) at any time for prospectively issued contracts.

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Capital Protector Feature

What is Capital Protector?

The Capital Protector is an optional feature of your variable annuity. If you elect this feature, for which you will be charged an annualized fee, at the end of applicable waiting period your contract will be worth at least the amount of your initial Purchase Payment (less adjustments for withdrawals). The Capital Protector may offer protection in the event that your contract value declines due to unfavorable investment performance in your contract.

If you elect the Capital Protector, at the end of the applicable waiting period we will evaluate your contract to determine if a Capital Protector benefit is payable to you. The applicable waiting period is ten full contract years from your contract issue date. The last day in the waiting period is your benefit date, the date on which we will calculate any Capital Protector benefit payable to you.

How and when can I elect the feature?

You may only elect this feature at the time your contract is issued, so long as the applicable waiting period prior to receiving the benefit ends before your latest Annuity Date. You cannot elect the feature if you are age 81 or older on the contract issue date. The effective date for this feature will be your contract issue date. Capital Protector is not available if you elect the Access Protector. See Access Protector above.

The Capital Protector feature may not be available in your state or through the broker-dealer with which your financial representative is affiliated. Please check with your financial representative for availability.

Can Capital Protector be cancelled?

Generally, this feature and its corresponding charge cannot be cancelled or terminated prior to the end of the waiting period. The feature terminates automatically following the end of the waiting period. In addition, the Capital Protector will no longer be available and no benefit will be paid if a death benefit is paid or if the contract is fully surrendered or annuitized before the end of the waiting period.

How is the benefit calculated?

The Capital Protector is a one-time adjustment to your contract value in the event that your contract value at the end of the waiting period is less than the guaranteed amount. The amount of the benefit payable to you, if any, at the end of the waiting period will be based upon the amount of your initial Purchase Payment and may also include certain portions of subsequent Purchase Payments contributed to your contract over specified periods of time, as follows:

Time Elapsed Since Effective Date	Percentage of Purchase Payments included in the Capital Protector Benefit Calculation
0-90 days	100%
91+ days	0%

The Capital Protector benefit calculation is equal to your Capital Protector Base, as defined below, minus your contract value on the benefit date. If the resulting amount is positive, you will receive a benefit under the feature. If the resulting amount is negative, you will not receive a benefit. Your Capital Protector Base is equal to (a) minus (b) where:

(a) is the Purchase Payments received on or after the effective date multiplied by the applicable percentages in the table above, and;

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(b) is an adjustment for all withdrawals and applicable fees and charges made subsequent to the effective date, in an amount proportionate to the amount by which the withdrawal decreased the contract value at the time of the withdrawal.

We will allocate any benefit amount contributed to the contract value on the benefit date to the Cash Management portfolio. Any Capital Protector benefit paid is not considered a Purchase Payment for purposes of calculating other benefits. Benefits based on earnings, such as the Annual Rachet Plan, will continue to define earnings as the difference between contract value and Purchase Payments adjusted for withdrawals. For information about how the benefit is treated for income tax purposes, you should consult a qualified tax advisor for information concerning your particular circumstances.

What is the fee for Capital Protector?

Capital Protector is an optional feature. If elected, you will incur an additional charge for this feature. The annualized charge will be deducted from your contract value on a quarterly basis throughout the waiting period, beginning at the end of the first contract quarter following the effective date of the feature and up to and including on the benefit date. Once the feature is terminated, as discussed above, the charge will no longer be deducted. We will also not assess the quarterly fee if you surrender or annuitize before the end of the quarter.

Contract Year	Annualized Fee *
0-7	0.50%
8-10	0.25%
11+	none

* As a percentage of your contract value minus Purchase Payments received after the 90th day since the purchase of your contract. The amount of this charge is subject to change at any time for prospectively issued contracts.

What happens to Capital Protector upon a Spousal Continuation?

If your qualified spouse chooses to continue this contract upon your death, this benefit cannot be terminated. The effective date, the waiting period and the corresponding benefit payment date will not change as a result of a spousal continuation. See SPOUSAL CONTINUATION below.

Important Information

The Capital Protector feature may not guarantee a return of all of your Purchase Payments. If you plan to add subsequent Purchase Payments over the life of your contract, you should know that the Capital Protector would not protect the majority of those payments.

Since the Capital Protector feature may not guarantee a return of all Purchase Payments at the end of the waiting period, it is important to realize that subsequent Purchase Payments made into the contract may decrease the value of the Capital Protector benefit. For example, if near the end of the waiting period your Capital Protector Base is greater than your contract value, and you then make a subsequent Purchase Payment that causes your contract value to be larger than your Capital Protector Base on your benefit date, you will not receive any benefit even though you have paid for the Capital Protector feature throughout the waiting period. You should discuss subsequent Purchase Payments with your financial representative as such activity may reduce the value of this Capital Protector benefit.

We reserve the right to modify, suspend or terminate the Capital Protector feature (in its entirety or any component) at any time for prospectively issued contracts.

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DEATH BENEFITS

If the owner dies during the Accumulation Phase of your contract, we pay a death benefit to the Beneficiary. At the time you purchase your contract, you must select a death benefit option. The Standard Death Benefit is automatically included in your contract for no additional fee. We also offer, for an additional fee, other death benefit options. Death benefit elections must be made at the time you purchase the contract and may not be terminated at a later date, except when your spouse continues the contract. See “Spousal Continuation” below. All optional death benefits may not be available in all states. You should discuss the available options with your financial representative to determine which options are best for you.

We do not pay the death benefit if the owner dies after beginning the Income Phase. However, if the owner dies during the Income Phase, any remaining guaranteed income payments will be made in accordance with the income option selected. See “Income Options” in this prospectus.

You name your Beneficiary. You may change the Beneficiary at any time, unless you previously made an irrevocable Beneficiary designation. If the contract is jointly owned, the surviving joint owner will be the primary Beneficiary and any other Beneficiary will be treated as the contingent Beneficiary unless specifically requested otherwise. Regardless of any reference in the Contract to the contrary, if a contract has two owners and either owner dies during the Accumulation Phase, we will pay the selected death benefit to the Beneficiary, whether or not you have designated a primary owner. All age related benefits and/or restrictions will utilize the age of the older owner.

We calculate and pay the death benefit when we receive all required paperwork and 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.

The Beneficiary may elect one of the following death benefit payment options unless previously chosen by the owner, to be paid as follows:

1. payment of the entire death benefit within 5 years of the date of your death; or

2. payment over the lifetime of the designated Beneficiary with distribution beginning within 1 year of the date of your death; or

3. if the designated Beneficiary is your spouse, he/she can continue this contract in his or her own name. See “Spousal Continuation” below.

The death benefit amount paid remains in the Variable Portfolios until distribution begins. From the time the death benefit is determined until complete distribution is made, any amount in the Separate Account will continue to be subject to investment risks. These risks are borne by the Beneficiary.

If an owner dies on or after the Annuity Date, any payments remaining will be made pursuant to the annuity option in force on the date of the owner’s death. All death benefits will cease to be in effect on the Latest Annuity Date, unless otherwise noted.

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Death of the Annuitant

If the Annuitant is an individual other than the owner, and if the Annuitant dies during the Accumulation Phase, a new Annuitant may be named by the owner. If no new Annuitant is named within sixty (60) days of our receipt of proof of death, the owner will be the new Annuitant. If the owner is a non-natural person, the death of the Annuitant will be treated as the death of the owner. If the Annuitant dies during the Income Phase, the remaining payments, if any, will be as specified in the Income Option elected. We will require proof of the Annuitant’s death. Death benefits, if any, will be paid to the designated Beneficiary at least as rapidly as under the method of distribution in effect at the Annuitant’s death.

Definitions

We define Net Purchase Payments as Purchase Payments less an Adjustment for each withdrawal. If you have not taken any withdrawals from your contract, Net Purchase Payments equals total Purchase Payments into your contract. To calculate the Adjustment amount for the first withdrawal made under the contract, we determine the percentage by which the withdrawal reduced contract value. For example, a $10,000 withdrawal from a $100,000 contract is a 10% reduction in value. This percentage is calculated by dividing the amount of each withdrawal by the contract value immediately before taking that withdrawal. The resulting percentage is then multiplied by the amount of total Purchase Payments and subtracted from the amount of total Purchase Payments on deposit at the time of the withdrawal. The resulting amount is the initial Net Purchase Payment calculation.

To arrive at the Net Purchase Payment calculation for subsequent withdrawals, we determine the percentage by which the contract value is reduced by taking the amount of the withdrawal in relation to the contract value immediately before taking the withdrawal. We then multiply the Net Purchase Payment calculation as determined prior to the withdrawal by this percentage. We subtract that result from the Net Purchase Payment calculation as determined prior to the withdrawal to arrive at all subsequent Net Purchase Payment calculations.

Standard Death Benefit

The Standard Death Benefit is the greater of:

1. contract value less Premium Enhancements paid during 24 months prior to death; or

2. Net Purchase Payments.

Optional Death Benefits

For an additional fee, you may elect one or more Optional Death Benefits. These elections must be made at the time of contract issue and may not be terminated at a later date by you. All optional death benefits may not be available in all states. The maximum issue age for the elections varies as shown below. The fees for the optional death benefits are deducted from your contract value each month.

If you allocate any portion of your contract value to either the AllianceBernstein Money Market Portfolio or available Fixed Account option, your election, if any, of the Equity Assurance Plan and/or the Enhanced Equity Assurance Plan will be terminated. We will notify you in writing before terminating these death benefits. If we terminate the Equity Assurance Plan and/or the Enhanced Equity Assurance Plan, the fee for the death benefit options will no longer be deducted. However, you may continue to allocate new Purchase Payments to either the AllianceBernstein Money Market Portfolio or available Fixed Account option as part of Dollar Cost Averaging, without terminating the Equity Assurance Plan or the Enhanced Equity Assurance Plan.

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Annual Ratchet Plan. (Maximum issue age is 80.) If you elect the Annual Ratchet Plan, we will pay a death benefit equal to the greatest of:

1. contract value less Premium Enhancements paid during 24 months prior to death; or

2. Net Purchase Payments; or

3. the lesser of:

(a) the greatest contract value on any Contract Anniversary, less any Premium Enhancements paid during 24 months prior to death, plus any Net Purchase Payments made subsequent to that Contract Anniversary; or

(b) 200% of Net Purchase Payments.

Equity Assurance Plan. (Maximum issue age is 75.) If you elect the Equity Assurance Plan, we will pay a death benefit equal to the greater of:

1. contract value less Premium Enhancements paid during 24 months prior to death; or

2. an amount equal to (a) plus (b) where:

(a) is equal to the Net Purchase Payments made on or before the first Contract Anniversary following the 80th birthday, accumulated at the compound interest rates shown below for the number of completed years from the date of receipt of each Purchase Payment to the earlier of the date of death or the first Contract Anniversary following the 80th birthday (not to exceed 7 years):

Annual Interest Rate	Period When Death Occurs
0%	1 through 12 months after Purchase Payment receipt;
1%	13 through 24 months after Purchase Payment receipt;
2%	25 through 36 months after Purchase Payment receipt;
3%	37 through 48 months after Purchase Payment receipt;
4%	49 through 60 months after Purchase Payment receipt;
5%	61 through 72 months after Purchase Payment receipt;
6%	73 through 84 months after Purchase Payment receipt;
7%	85 months or more after Purchase Payment receipt, and

(b) is equal to Net Purchase Payments paid after the first Contract Anniversary following the owner’s 80th birthday.

Each Purchase Payment will accumulate interest for a maximum of 7 years from the time is it applied to the contract.

Enhanced Equity Assurance Plan. (Maximum issue age is 75.) If you elect the Enhanced Equity Assurance Plan, we will pay a death benefit equal to the greatest of:

1. contract value less Premium Enhancements paid during 24 months prior to death; or

2. the lesser of:

(a) the greatest contract value on any Contract Anniversary, less any Premium Enhancements paid during 24 months prior to death, plus any Net Purchase Payments made subsequent to that Contract Anniversary; or

(b) 200% of Net Purchase Payments; or

3. an amount equal to (a) plus (b) where:

(a) is equal to the Net Purchase Payments made on or before the first Contract Anniversary following the 80th birthday, accumulated at the compound interest rates shown below

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for the number of completed years from the date of receipt of each Purchase Payment to the earlier of the date of death or the first Contract Anniversary following the 80th birthday (not to exceed 7 years):

Annual Interest Rate	Period When Death Occurs
0%	1 through 12 months after Purchase Payment receipt;
1%	13 through 24 months after Purchase Payment receipt;
2%	25 through 36 months after Purchase Payment receipt;
3%	37 through 48 months after Purchase Payment receipt;
4%	49 through 60 months after Purchase Payment receipt;
5%	61 through 72 months after Purchase Payment receipt;
6%	73 through 84 months after Purchase Payment receipt;
7%	85 months or more after Purchase Payment receipt, and

(b) is equal to Net Purchase Payments paid after the first Contract Anniversary following the 80th birthday.

Each Purchase Payment will accumulate interest for a maximum of 7 years from the time is it applied to the contract.

Estate Benefit Payment. (Maximum issue age is 80.)

If you select the Estate Benefit Payment, we will add to the death benefit otherwise payable upon your death the amount of the estate benefit payment, determined as follows:

If you are age 60 or younger on the effective date of your contract, the estate benefit payment will equal the lesser of (a) 70% of Net Purchase Payments or (b) 70% of the contract value less Net Purchase Payments.

If you are between ages 61 and 70 on the effective date of your contract, the estate benefit payment will equal the lesser of (a) 50% of Net Purchase Payments or (b) 50% of the contract value less Net Purchase Payments.

If you are between ages 71 and 80 on the effective date of your contract, the estate benefit payment will equal the lesser of (a) 30% of Net Purchase Payments or (b) 30% of the contract value less Net Purchase Payments.

Accidental Death Benefit. (Maximum issue age is 75.)

If you select the Accidental Death Benefit at the time of application, we will pay it in addition to any other death benefit in effect at the time of your death. The accidental death benefit is not available if the contract is used in connection with an individual retirement annuity (IRA). The accidental death benefit payable under this option will be equal to the lesser of:

1. contract value as of the date the death benefit is determined; or

2. $250,000.

The Accidental Death Benefit is only payable if you die as a result of injury prior to the Contract Anniversary following your 75th birthday. The death must also occur before the Annuity Date and within 365 days of the date of the accident that caused the injury. The accidental death benefit terminates on the Contract Anniversary following your 75th birthday or upon the death of the original owner, whichever is earlier, and is not available to a continuing spouse.

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The Accidental Death Benefit will not be paid for any death caused by or resulting (in whole or in part) from the following:

• suicide or attempted suicide, while sane or insane, or intentionally self-inflicted injuries;

• sickness, disease or bacterial infection of any kind, except pyogenic infections which occur as a result of an injury or bacterial infections which result from the accidental ingestion of contaminated substances;

• injury sustained as a consequence of riding in, including boarding or alighting from, any vehicle or device used for aerial navigation except if you are a passenger on any aircraft licensed for the transportation of passengers;

• declared or undeclared war or any act thereof; or

• service in the military, naval or air service of any country.

If your contract was issued prior to May 3, 2004, please see the SAI for death benefit information.

Spousal Continuation

If you are the owner of the contract and the Beneficiary is your spouse, your spouse may elect to continue the contract after your death. The spouse becomes the new owner (“Continuing Spouse”) of the contract. Generally, the contract and its fees, charges and/or elected features, if any, remain the same, and the optional death benefit charge may change due to the age of the Continuing Spouse. If the Continuing Spouse makes new Purchase Payments, those Purchase Payments will be subject to withdrawal charges. However, Purchase Payments made by the original owner that were subject to a withdrawal charge will no longer be subject to a withdrawal charge after a spousal continuation. See “Withdrawal Charges” below. A spousal continuation can only take place upon the death of the original owner of the contract and may be elected only one time during the life of the contract.

Upon spousal continuation, we will contribute to the contract value an amount by which the death benefit that would have been paid to the Beneficiary upon the death of the original owner exceeds the contract value (“Continuation Contribution”), if any. We calculate the Continuation Contribution as of the date of the original owner’s death. We will add the Continuation Contribution as of the date we receive both the Continuing Spouse’s written request to continue the contract and proof of death of the original owner in a form satisfactory to us (“Continuation Date”). The Continuation Contribution is not considered a Purchase Payment for the purposes of any other calculations except as explained in Appendix B. See Appendix B for further explanation of the death benefit calculations following a Spousal Continuation.

On the Continuation Date, the Continuing Spouse may terminate the original owner’s election(s) of the optional death benefits. The age of the spouse as of the Continuation Date will be used as the basis for determining the availability, cost, and calculation of future death benefits payable upon death of the spousal Beneficiary. If the attained age of the spousal Beneficiary exceeds the maximum issue age for a continued optional benefit, we will terminate the benefit and the charge will no longer be deducted. See the maximum issue ages shown above for the optional death benefits.

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To the extent that the Continuing Spouse invests in the Variable Portfolios, the spouse will be subject to investment risk as was the original owner. This is because the death benefit amount paid remains invested until withdrawn.

We reserve the right to modify, suspend or terminate the spousal continuation provision (in its entirety or any component) at any time with respect to prospectively issued contracts.

EXPENSES

There are charges and expenses associated with your contract. These charges and expenses reduce your investment return. We will not increase the insurance and withdrawal charges under your contract. However, the investment charges under your contract may increase or decrease.

Separate Account Charges

The Company deducts Separate Account charges based on the age of the contract owner at the time of contract issue. For contract owners under age 66 at the time of purchase, the Separate Account charge equals 1.60% annually of the average daily value of your contract allocated to the Variable Portfolios; and for contract owners age 66 and over at the time of contract purchase, the Separate Account charge equals 1.70% annually of the average daily value of your contract allocated to the Variable Portfolios. We deduct the charge daily. This charge compensates the Company for the mortality and expense risks and the costs of contract administration and distribution assumed by the Company.

Generally, the mortality risks assumed by the Company arise from its contract obligations to make income payments after the Annuity Date and to provide a death benefit. The expense risk assumed by the Company is that the costs of administering the contract and the Separate Account will exceed the amount received from other fees and charges assessed under the contract.

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. The Separate Account charge is expected to result in a profit. Profit may be used for any legitimate cost/expense including the Premium Enhancement and distribution, depending upon market conditions.

Withdrawal Charges

The contract provides for a free withdrawal amount every year. See “Access to Your Money” in this prospectus. If you take money out in excess of the free withdrawal amount, you may incur a withdrawal charge. You may also incur a withdrawal charge upon a full surrender.

We apply a withdrawal charge against each Purchase Payment you put into the contract. After a Purchase Payment has been in the contract for 7 complete years, no withdrawal charge applies. The withdrawal charge equals a percentage of the Purchase Payment you take out of the contract. The withdrawal charge percentage declines over a seven year period for each Purchase Payment in the contract, as follows:

Withdrawal Charge (as a percentage of each Purchase Payment)

Years
1	2	3	4	5	6	7	8+
6%	6%	5%	5%	4%	3%	2%	0%

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

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

We will not assess a withdrawal charge for money withdrawn to pay a death benefit or to pay contract fees or charges. We will not assess a withdrawal charge when you begin the Income Phase. See “Income Options” below.

Withdrawals made prior to age 59 ¹/2 may result in tax penalties. See “Taxes” below.

Underlying Fund Expenses

Investment Management Fees

Charges are deducted from your Variable Portfolios for the advisory and other expenses of the Variable Portfolios. The Fee Tables in this prospectus illustrate these charges and expenses. For more detailed information on these investment charges, refer to the prospectus for the Series Fund, attached.

Service Fees

Shares of certain Variable Portfolios may be subject to fees imposed under a servicing plan adopted by the Series Fund pursuant to Rule 12(b)(1) of the Investment Company Act of 1940. This annualized service fee of 0.25% for the Class B Shares of a Variable Portfolio is also known as a 12(b)(1) fee. Generally, this fee may be paid to financial intermediaries for services provided over the life of the contract. See “Fee Tables” in this prospectus.

Transfer Fee

We permit 12 free transfers between investment options each contract year. We charge you $10 for each additional transfer that contract year. See “Investment Options” and “Transfers” in this prospectus.

Optional Death Benefit Charges

The fee for the optional death benefit charges is deducted monthly as a percentage of your average daily net asset value, as described below:

If age 65 or younger:
Optional Annual Rachet*	0.10	%
Optional Equity Assurance*	0.10	%
Optional Estate Benefit Payment	0.20	%
Optional Accidental Death Benefit	0.05	%
If age 66 or older:
Optional Annual Rachet*	0.15	%
Optional Equity Assurance*	0.15	%
Optional Estate Benefit Payment	0.20	%
Optional Accidental Death Benefit	0.05	%

^* The Enhanced Equity Assurance Plan includes both the Annual Rachet Plan and the Equity Assurance Plan.

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Optional Access Protector Fee

The annualized Access Protector fee will be assessed as a percentage of the Withdrawal Benefit Base. The fee will be deducted quarterly from your contract value starting on the first quarter following the contract issue date and ending upon the termination of the feature. If your contract value falls to zero before the feature has been terminated, the fee will no longer be assessed. We will not assess the quarterly fee if you surrender or annuitize before the end of a quarter. The fee is as follows:

Contract Year	Annualized Fee
0-7 years	0.65% of Withdrawal Benefit Base
8-10 years	0.45% of Withdrawal Benefit Base
11+ years	none

Optional Capital Protector Fee

The annualized fee for the Capital Protector feature is calculated as a percentage of your contract value minus Purchase Payments received after the 90th day since the contract issue date. If you elect the feature, the charge is deducted at the end of the first contract quarter and quarterly thereafter from your contract value. The fee is as follows:

Contract Year	Annualized Fee
0-7	0.50%
8-10	0.25%
11+	none

Premium Tax

Certain states charge the Company a tax on the premiums you pay into the contract ranging from zero to 3 ¹/2%. 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.

Premium taxes are subject to change without notice. In many states, there is no tax at all. For current information, you should consult your tax adviser.

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

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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.

AIG SunAmerica Life may make such a determination regarding sales to its employees, its affiliates’ employees and employees of currently contracted broker-dealers; its registered representatives and immediate family members of all of those described.

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

INCOME OPTIONS

Annuity Date

During the Income Phase, we use the money accumulated in your contract to make regular income payments to you. You may begin the Income Phase any time after your second 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 notify the Annuity Service Office in writing 30 days before the income payments are scheduled to begin. Once you begin receiving income payments, you cannot change your income option. Except as indicated below, once you begin receiving income payments, you cannot otherwise access your money through a withdrawal or surrender.

Income payments must begin on or before the Annuitant’s 90th birthday. 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.

Income Options

The contract offers the three annuity options described below. Other annuity options may be made available, including other guarantee periods and options without life contingencies, subject to our discretion. Contact the Annuity Service Center for more information. If you do not choose an annuity option, we will make annuity payments in accordance with option 2. However, if the annuity payments are for joint lives, we will make payments in accordance with option 3.

We base our calculation of income payments on the life of the Annuitant and the annuity rates set forth in your contract. A natural contract owner 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. The Annuitant may not be changed in a contract owned by a non-natural owner.

Option 1 — Life Income

Under this option, we will make monthly annuity payments as long as the Annuitant is alive. Annuity payments stop when the Annuitant dies. If the Annuitant dies after the first payment, then we will make only one payment.

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Option 2 — Life Income With Minimum 10 Year Guarantee

Under this option, we will make monthly annuity payments as long as the Annuitant is alive with the additional guarantee that payments will be made for a period you select of at least 10 years. If the Annuitant dies before all guaranteed payments have been made, the rest will be paid to the Beneficiary for the remainder of the period.

Option 3 — Joint and Last Survivor Annuity

Under this option, we will make monthly annuity payments as long as either the Annuitant or Joint Annuitant is alive. Upon the death of either of you, we will continue to make annuity payments so long as the survivor is alive. We will stop making payments after the last survivor’s death.

The value of an Annuity Unit, regardless of the option chosen, takes into account the Separate Account Expenses. Please read the 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. Unless otherwise elected, 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, AIG SunAmerica 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 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 $2,000 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 on the Annuity Date, your income payments will depend on the following:

• for life options, your age, when payments begin, and in most states, if a Non-Qualified contract, your gender;

• the value of your contract in the Variable Portfolios;

• the 5.00% 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.

The value of variable income payments, if elected, is based on an assumed interest rate (“AIR”) of 5.0% compounded annually. Variable income payments generally increase or decrease from one income payment date to the next based upon the performance of the applicable Variable Portfolios. If

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the performance of the Variable Portfolios selected is equal to the AIR, the income payments will remain constant. If performance of Variable Portfolios is greater than the AIR, the income payments will increase and if it is less than the AIR, the income payments will decline.

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. See also “Access to Your Money” for a discussion of when payments from the Variable Portfolios may be suspended or postponed.

TAXES

Note: The basic summary below addresses broad federal taxation matters, and generally does not address state taxation issues or questions. 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. We have included an additional discussion regarding taxes in the SAI.

Annuity Contracts in General

The Internal Revenue Code (“IRC”) provides for special rules regarding the tax treatment of annuity contracts. Generally, taxes on the earnings in your annuity contract are deferred until you take the money out. Qualified retirement investments that satisfy specific tax and ERISA requirements automatically provide tax deferral regardless of whether the underlying contract is an annuity, a trust, or a custodial account. 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 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 or arrangements are: Individual Retirement Accounts (“IRAs”), Roth IRAs, Tax-Sheltered Annuities (referred to as 403(b) contracts), plans of self-employed individuals (often referred to as H.R. 10 Plans or Keogh Plans) and pension and profit sharing plans, including 401(k) plans. Typically, for employer plans and tax-deductible IRA contributions, 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. However, you normally will have cost basis in a Roth IRA, and you may have cost basis in a traditional IRA or in another Qualified Contract.

Tax Treatment of Distributions — Non-Qualified Contracts

If you make a partial or total 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. Purchase payments made prior to August 14, 1982, however, are an important exception to this general rule, and for tax purposes are treated as being distributed before the earnings on those contributions. If

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you annuitize your contract, a portion of each income payment will be considered, for tax purposes, to be a return of a portion of your Purchase Payment(s). Any portion of each income 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 periodic payments calculated over your life or for the joint lives of you and your Beneficiary for a period of 5 years or attainment of age 59 ¹/2, whichever is longer; (5) under an immediate annuity; or (6) which are attributable to Purchase Payments made prior to August 14, 1982.

Tax Treatment of Distributions — Qualified Contracts (including governmental 457(b) eligible deferred compensation plans)

Generally, you have not paid any taxes on the Purchase Payments used to buy a Qualified contract. As a result, with certain limited exceptions, any amount of money you take out as a withdrawal or as income payments is taxable income. In the case of certain Qualified contracts, the IRC further provides for a 10% penalty tax on any taxable 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 periodic payments calculated over your life or for the joint lives of you and your Beneficiary, that begins after separation from service with the employer sponsoring the plan and continued for a period of 5 years until you attain age 59 ¹/2, whichever is longer; (5) to the extent such withdrawals do not exceed limitations set by the IRC for deductible amounts paid during the taxable year for medical care; (6) to fund higher education expenses (as defined in the IRC; only from an IRA); (7) to fund certain first-time home purchase expenses (only from an IRA); (8) when you separate from service after attaining age 55 (does not apply to an IRA); (9) when paid for health insurance, if you are unemployed and meet certain requirements; and (10) when paid to an alternate payee pursuant to a qualified domestic relations order (does not apply to IRAs). This 10% penalty tax does not apply to withdrawals or income payments from governmental 457(b) eligible deferred compensation plans, except to the extent that such withdrawals or income payments are attributable to a prior rollover to the plan (or earnings thereon) from another plan or arrangement that was subject to the 10% penalty tax.

The IRC limits the withdrawal of an employee’s voluntary Purchase Payments from a Tax-Sheltered Annuity (TSA). Withdrawals can only be made when an owner (1) reaches age 59 ¹/2; (2) severs employment with the employer; (3) dies; (4) becomes disabled (as defined in the IRC); or (5) experiences a financial hardship (as defined in the IRC). In the case of hardship, the owner can only withdraw Purchase Payments. Additional plan limitations may also apply. Amounts held in a TSA annuity contract as of December 31, 1988 are not subject to these restrictions. Qualifying transfers of amounts from one TSA contract to another TSA contract under section 403(b) or to a custodial account under section 403(b) (7), and qualifying transfers to a state defined benefit plan to purchase service credits, are not considered distributions, and thus are not subject to these withdrawal limitations. If amounts are transferred from a custodial account described in Code section 403(b) (7) to this contract the transferred amount will retain the custodial account withdrawal restrictions.

Withdrawals from other Qualified Contracts are often limited by the IRC and by the employer’s plan.

Minimum Distributions

Generally, the IRC 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

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or (2) the calendar year in which you separate from service from the employer sponsoring the plan. If you own an IRA, you must begin taking distributions when you attain age 70 ¹/2. If you own more than one TSA, you may be permitted to take your annual distributions in any combination from your TSAs. A similar rule applies if you own more than one IRA. However, you cannot satisfy this distribution requirement for your TSA contract by taking a distribution from an IRA, and you cannot satisfy the requirement for your IRA by taking a distribution from a TSA.

You may be subject to a surrender charge on withdrawals taken to meet minimum distribution requirements, if the withdrawals exceed the contract’s maximum penalty free amount.

Failure to satisfy the minimum distribution requirements may result in a tax penalty. You should consult your tax advisor for more information.

You may elect to have the required minimum distribution amount on your contract calculated and withdrawn each year under the automatic withdrawal option. You may select monthly, quarterly, semiannual, or annual withdrawals for this purpose. This service is provided as a courtesy and we do not guarantee the accuracy of our calculations. Accordingly, we recommend you consult your tax advisor concerning your required minimum distribution. You may terminate your election for automated minimum distribution at any time by sending a written request to our Annuity Service Center. We reserve the right to change or discontinue this service at any time.

The IRS issued regulations, effective January 1, 2003, regarding required minimum distributions from qualified annuity contracts. One of the regulations effective January 1, 2006 require that the annuity contract value used to determine required minimum distributions include the actuarial value of other benefits under the contract, such as optional death benefits. This regulation does not apply to required minimum distributions made under an irrevocable annuity income option. Generally, we are currently awaiting further clarification from the IRS on this regulation, including how the value of such benefits is determined. You should discuss the effect of these new regulations with your tax advisor.

Tax Treatment of Death Benefits

Any death benefits paid under the contract are taxable to the Beneficiary. The rules governing the taxation of payments from an annuity contract, as discussed above, generally apply whether the death benefits are paid as lump sum or annuity payments. Estate taxes may also apply.

Certain enhanced death benefits may be purchased under your contract. Although these types of benefits are used as investment protection and should not give rise to any adverse tax effects, the IRS could take the position that some or all of the charges for these death benefits should be treated as a partial withdrawal from the contract. In that case, the amount of the partial withdrawal may be includible in taxable income and subject to the 10% penalty if the owner is under 59 ¹/2.

If you own a Qualified contract and purchase these enhanced death benefits, the IRS may consider these benefits “incidental death benefits.” The IRC imposes limits on the amount of the incidental death benefits allowable for Qualified contracts. If the death benefit(s) selected by you are considered to exceed these limits, the benefit(s) could result in taxable income to the owner of the Qualified contract. Furthermore, the IRC provides that the assets of an IRA (including a Roth IRA) may not be invested in life insurance, but may provide, in the case of death during the Accumulation Phase, for a death benefit payment equal to the greater of Purchase Payments or contract value. This contract offers death benefits, which may exceed the greater of Purchase Payments or contract value. If the IRS determines that these benefits are providing life insurance, the contract may not qualify as an IRA (including Roth IRAs). You should consult your tax advisor regarding these features and benefits prior to purchasing a contract.

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Contracts Owned by a Trust or Corporation

A Trust or Corporation (“Non-Natural owner”) that is considering purchasing this contract should consult a tax advisor. Generally, the IRC does not treat a Non-Qualified contract owned by a non-natural owner as an annuity contract for Federal income tax purposes. The non-natural owner pays tax currently on the contract’s value in excess of the owner’s cost basis. However, this treatment is not applied to a contract held by a trust or other entity as an agent for a natural person nor to contracts held by Qualified Plans. See the SAI for a more detailed discussion of the potential adverse tax consequences associated with non-natural ownership of a non-qualified annuity contract.

Gifts, Pledges and/or Assignments of a Contract

If you transfer ownership of your Non-Qualified contract to a person other than your spouse (or former spouse incident to divorce) as a gift you will pay federal income tax on the contract’s cash value to the extent it exceeds your cost basis. The recipient’s cost basis will be increased by the amount on which you will pay federal taxes. In addition, the IRC treats any assignment or pledge (or agreement to assign or pledge) of any portion of a Non-Qualified contract as a withdrawal. See the SAI for a more detailed discussion regarding potential tax consequences of gifting, assigning, or pledging a Non-Qualified contract.

The IRC prohibits Qualified annuity contracts including IRAs from being transferred, assigned or pledged as security for a loan. This prohibition, however, generally does not apply to loans under an employer-sponsored plan (including loans from the annuity contract) that satisfy certain requirements, provided that: (a) the plan is not an unfunded deferred compensation plan; and (b) the plan funding vehicle is not an IRA.

Diversification and Investor Control

The IRC imposes certain diversification requirements on the underlying investments for a variable annuity. We believe that the management of the Underlying Funds monitors the Funds 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, and not the Company, would be considered the owner of the shares of the Variable Portfolios under your Non-Qualified Contract, because of the degree of control you exercise over the underlying investments. This diversification requirement is sometimes referred to as “investor control.” It is unknown to what extent owners are permitted to select investments, to make transfers 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 should generally be applied prospectively. However, if such guidance is considered not to be a new position, it may be applied retroactively. This would mean that you, as the owner of the Non-qualified 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.

These investor control limitations generally do not apply to Qualified Contracts, which are referred to as “Pension Plan Contracts” for purposes of this rule, although the limitations could be applied to Qualified Contracts in the future.

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OTHER INFORMATION

AIG SunAmerica Life

AIG SunAmerica Life is a stock life insurance company originally organized under the laws of the state of California in April 1965. On January 1, 1996, AIG SunAmerica Life redomesticated 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. AIG SunAmerica Life is an indirect, wholly owned subsidiary of American International Group, Inc. (“AIG”), a Delaware corporation.

The Separate Account

AIG SunAmerica Life established Variable Annuity Account Nine (“Separate Account”), under Arizona law on February 4, 2002. The Separate Account is registered with the SEC as a unit investment trust under the Investment Company Act of 1940, as amended.

AIG SunAmerica Life 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 AIG SunAmerica Life. 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 AIG SunAmerica Life. Assets in the Separate Account are not guaranteed by AIG SunAmerica Life.

The General Account

Money allocated to any Fixed Account options goes into the Company’s general account. The general account consists of all of the company’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 of the Company’s contract holders as well as all of its creditors. The general account funds are invested as permitted under state insurance laws.

The Company has a support agreement in effect between the Company and its ultimate parent company, American International Group, Inc. (“AIG”), and the Company’s insurance policy obligations are guaranteed by American Home Assurance Company, a subsidiary of AIG. See the Statement of Additional Information for more information regarding these arrangements.

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Payments in Connection with Distribution of the Contract

Payments to Broker-Dealers

Registered representatives of broker-dealers sell the contract. We pay commissions to the broker-dealers for the sale of your contract (“Contract Commissions”). There are different structures by which a broker-dealer can choose to have their Contract Commissions paid. For example, as one option, we may pay upfront Contract Commission only, that may be up to a maximum 8% of each Purchase Payment you invest (which may include promotional amounts). Another option may be a lower upfront Contract Commission on each Purchase Payment, with a trail commission of up to a maximum 1.50% of contract value annually. Generally, the higher the upfront commissions, the lower the trail and vice versa. We pay Contract Commissions directly to the broker-dealer with whom your registered representative is affiliated. Registered representatives may receive a portion of these amounts we pay in accordance with any agreement in place between the registered representative and his/her broker-dealer firm.

We may pay broker-dealers support fees in the form of additional cash or non-cash compensation. These payments may be intended to reimburse for specific expenses incurred or may be based on sales, certain assets under management, longevity of assets invested with us or a flat fee. These payments may be consideration for, among other things, product placement/preference, greater access to train and educate the firm’s registered representatives about our products, our participation in sales conferences and educational seminars and allowing broker-dealers to perform due diligence on our products. The amount of these fees may be tied to the anticipated level of our access in that firm. We enter into such arrangements in our discretion and we may negotiate customized arrangements with firms, including affiliated and non-affiliated broker-dealers based on various factors. We do not deduct these amounts directly from your Purchase Payments. We anticipate recovering these amounts from the fees and charges collected under the contract.

Contract commissions and other support fees may influence the way that a broker-dealer and its registered representatives market the contracts and service customers who purchase the contracts and may influence the broker- dealer and its registered representatives to present this contract over others available in the market place. You should discuss with your broker-dealer and/or registered representative how they are compensated for sales of a contract and/or any resulting real or perceived conflicts of interest.

AIG SunAmerica Capital Services, Inc., Harborside Financial Center, 3200 Plaza 5, Jersey City, NJ 07311-4992, distributes the contracts. AIG SunAmerica Capital Services, an affiliate of AIG SunAmerica Life, is a registered broker-dealer under the Exchange Act of 1934 and is a member of the National Association of Securities Dealers, Inc. No underwriting fees are paid in connection with the distribution of the contracts.

Payments We Receive

In addition to amounts received pursuant to established 12b-1 Plans from the Underlying Funds, we receive compensation of up to 0.20% annually based on assets under management from the Series Fund’s investment adviser or its affiliates for services related to the availability of the Underlying Funds in the contract. Furthermore, the Series Fund’s investment adviser or its affiliates may help offset the costs we incur for training to support sales of the Underlying Funds in the contract.

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Administration

We are ultimately responsible for the administrative servicing of your contract, and have engaged an administrator for servicing assistance. Please contact our Annuity Service Center if you have any comment, question or service request:

Delaware Valley Financial Services

P.O. Box 3031

Berwyn, PA 19312-0031

(800) 255-8402

We send out transaction confirmations and quarterly statements. During the Accumulation Phase, you will receive confirmation of transactions within your contract. Transactions made pursuant to contractual or systematic agreements, such as deduction of dollar cost averaging, may be confirmed quarterly. Purchase Payments received through the automatic payment plan or a salary reduction arrangement, may also be confirmed quarterly. For all other transactions, we send confirmations immediately. It is your responsibility to review these documents carefully and notify us of any inaccuracies immediately. We investigate all inquiries. To the extent that we believe we made an error, We retroactively adjust your contract, provided you notify us within 30 days of receiving the transaction confirmation or quarterly statement. Any other adjustments we deem warranted are made as of the time we receive notice of the error.

Legal Proceedings

There are no pending legal proceedings affecting the Separate Account. The Company and its subsidiaries are parties to various kinds of litigation incidental to their respective business operations. In management’s opinion, these matters are not material in relation to the financial position of the Company with the exception of the matter disclosed below.

A purported class action captioned Nitika Mehta, as Trustee of the N.D. Mehta Living Trust vs. AIG SunAmerica Life Assurance Company, Case 04L0199, was filed on April 5, 2004 in the Circuit Court, Twentieth Judicial District in St. Clair County, Illinois. The action has been transferred to and is currently pending in the United States District Court for the District of Maryland, Case No. 04-md-15863, as part of a Multi-District Litigation proceeding. The lawsuit alleges certain improprieties in conjunction with alleged market timing activities. The probability of any particular outcome cannot be reasonably estimated at this time.

AIG has announced that it has delayed filing its Annual Report on Form 10-K for the year ended December 31, 2004 to allow AIG’s Board of Directors and new management adequate time to complete an extensive review of AIG’s books and records. The review includes issues arising from pending investigations into non-traditional insurance products and certain assumed reinsurance transactions by the Office of the Attorney General for the State of New York and the Securities and Exchange Commission and from AIG’s decision to review the accounting treatment of certain additional items. Circumstances affecting AIG can have an impact on the Company. For example, the recent downgrades and ratings actions taken by the major rating agencies with respect to AIG resulted in corresponding downgrades and ratings actions being taken with respect to the Company’s ratings. Accordingly, we can give no assurance that any further changes in circumstances for AIG will not impact us.

Registration Statement

A registration statement has been filed with the SEC under the Securities Act of 1933 relating to the contract. This prospectus does not contain all the information in the registration statement as permitted by SEC regulations. The omitted information can be obtained from the SEC’s principal office in Washington, D.C., upon payment of a prescribed fee.

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TABLE OF CONTENTS OF STATEMENT OF ADDITIONAL INFORMATION

Additional information concerning the operations of the Separate Account is contained in a Statement of Additional Information, which is available without charge upon written request addressed to us at our Annuity Service Center:

Delaware Valley Financial Services

P.O. Box 3031

Berwyn, PA 19312-0031

(800) 255-8402

The contents of the SAI are shown below.

Separate Account	3
General Account	4
Performance Data	4
Death Benefits for Contracts Purchased Before May 3, 2004	7
Income Payments	12
Annuity Unit Values	13
Taxes	15
Distribution of Contracts	21
Financial Statements	21

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APPENDIX A — CONDENSED FINANCIALS

		Inception to 12/31/02		Fiscal Year Ending 12/31/03		Fiscal Year Ending 12/31/04
AllianceBernstein Americas Government Income Portfolio (Inception Date - 12/17/02)
Beginning AUV	(a)	$	17.921	$	18.125	$	19.121
Beginning AUV	(b)		N/A		N/A	$	18.945
Ending AUV	(a)	$	18.125	$	19.121	$	19.697
Ending AUV	(b)		N/A		N/A	$	19.664
Ending Number of AUs	(a)		9		71,175		73,369
Ending Number of AUs	(b)		N/A		N/A		6,365
AllianceBernstein Balanced Wealth Strategy Portfolio (Inception Date - 7/1/04)
Beginning AUV	(a)		N/A		N/A	$	10.000
Beginning AUV	(b)		N/A		N/A	$	10.000
Ending AUV	(a)		N/A		N/A	$	10.569
Ending AUV	(b)		N/A		N/A	$	10.552
Ending Number of AUs	(a)		N/A		N/A		71,763
Ending Number of AUs	(b)		N/A		N/A		17,992
AllianceBernstein Global Bond Portfolio (Inception Date - 12/17/02)
Beginning AUV	(a)	$	15.057	$	15.334	$	16.948
Beginning AUV	(b)		N/A		N/A	$	16.479
Ending AUV	(a)	$	15.334	$	16.948	$	18.236
Ending AUV	(b)		N/A		N/A	$	18.205
Ending Number of AUs	(a)		10		19,445		17,258
Ending Number of AUs	(b)		N/A		N/A		193
AllianceBernstein Global Dollar Government Portfolio (Inception Date - 12/17/02)
Beginning AUV	(a)	$	21.151	$	21.477	$	28.186
Beginning AUV	(b)		N/A		N/A	$	26.874
Ending AUV	(a)	$	21.477	$	28.186	$	30.458
Ending AUV	(b)		N/A		N/A	$	30.367
Ending Number of AUs	(a)		8		16,835		14,419
Ending Number of AUs	(b)		N/A		N/A		16
AllianceBernstein Global Research Growth Portfolio* (Inception Date - N/A)
Beginning AUV	(a)		N/A		N/A		N/A
Beginning AUV	(b)		N/A		N/A		N/A
Ending AUV	(a)		N/A		N/A		N/A
Ending AUV	(b)		N/A		N/A		N/A
Ending Number of AUs	(a)		N/A		N/A		N/A
Ending Number of AUs	(b)		N/A		N/A		N/A
AllianceBernstein Global Technology Portfolio (Inception Date - 12/17/02)
Beginning AUV	(a)	$	10.920	$	10.336	$	14.621
Beginning AUV	(b)		N/A		N/A	$	13.772
Ending AUV	(a)	$	10.336	$	14.621	$	15.122
Ending AUV	(b)		N/A		N/A	$	15.078
Ending Number of AUs	(a)		13		59,403		99,080
Ending Number of AUs	(b)		N/A		N/A		942
AllianceBernstein Growth Portfolio (Inception Date - 12/17/02)
Beginning AUV	(a)	$	16.803	$	16.386	$	21.728
Beginning AUV	(b)		N/A		N/A	$	22.749
Ending AUV	(a)	$	16.386	$	21.728	$	24.491
Ending AUV	(b)		N/A		N/A	$	24.441
Ending Number of AUs	(a)		9		33,721		57,502
Ending Number of AUs	(b)		N/A		N/A		770

* Available on or about June 1, 2005.

(a) With total expense of 1.60%

(b) With total expense of 1.70%

AUV - Accumulation Unit Value

AU - Accumulation Units

A-1

		Inception to 12/31/02		Fiscal Year Ending 12/31/03		Fiscal Year Ending 12/31/04
AllianceBernstein Growth and Income Portfolio (Inception Date - 12/17/02)
Beginning AUV	(a)	$	27.737	$	26.778	$	34.843
Beginning AUV	(b)		N/A		N/A	$	35.473
Ending AUV	(a)	$	26.778	$	34.843	$	38.139
Ending AUV	(b)		N/A		N/A	$	38.094
Ending Number of AUs	(a)		6		120,270		129,656
Ending Number of AUs	(b)		N/A		N/A		2,116
AllianceBernstein High-Yield Portfolio (Inception Date - 12/17/02)
Beginning AUV	(a)	$	8.463	$	8.496	$	10.204
Beginning AUV	(b)		N/A		N/A	$	10.226
Ending AUV	(a)	$	8.496	$	10.204	$	10.808
Ending AUV	(b)		N/A		N/A	$	10.791
Ending Number of AUs	(a)		18		123,333		143,727
Ending Number of AUs	(b)		N/A		N/A		8,555
AllianceBernstein International Portfolio (Inception Date - 12/17/02)
Beginning AUV	(a)	$	9.585	$	9.637	$	12.335
Beginning AUV	(b)		N/A		N/A	$	12.211
Ending AUV	(a)	$	9.637	$	12.335	$	14.252
Ending AUV	(b)		N/A		N/A	$	14.222
Ending Number of AUs	(a)		15		28,593		56,557
Ending Number of AUs	(b)		N/A		N/A		1,184
AllianceBernstein International Value Portfolio (Inception Date - 12/17/02)
Beginning AUV	(a)	$	9.117	$	9.091	$	12.848
Beginning AUV	(b)		N/A		N/A	$	13.169
Ending AUV	(a)	$	9.091	$	12.848	$	15.790
Ending AUV	(b)		N/A		N/A	$	15.767
Ending Number of AUs	(a)		19		206,547		268,221
Ending Number of AUs	(b)		N/A		N/A		5,737
AllianceBernstein Large Cap Growth Portfolio (Inception Date - 12/17/02)
Beginning AUV	(a)	$	20.994	$	20.055	$	24.353
Beginning AUV	(b)		N/A		N/A	$	23.949
Ending AUV	(a)	$	20.055	$	24.353	$	25.966
Ending AUV	(b)		N/A		N/A	$	25.896
Ending Number of AUs	(a)		8		120,642		134,966
Ending Number of AUs	(b)		N/A		N/A		450
AllianceBernstein Money Market Portfolio (Inception Date - 12/17/02)
Beginning AUV	(a)	$	12.756	$	12.752	$	12.553
Beginning AUV	(b)		N/A		N/A	$	12.492
Ending AUV	(a)	$	12.752	$	12.553	$	12.406
Ending AUV	(b)		N/A		N/A	$	12.390
Ending Number of AUs	(a)		12		74,436		94,929
Ending Number of AUs	(b)		N/A		N/A		249
AllianceBernstein Real Estate Investment Portfolio (Inception Date - 12/17/02)
Beginning AUV	(a)	$	12.302	$	12.480	$	17.077
Beginning AUV	(b)		N/A		N/A	$	16.603
Ending AUV	(a)	$	12.480	$	17.077	$	22.736
Ending AUV	(b)		N/A		N/A	$	22.693
Ending Number of AUs	(a)		15		72,554		72,143
Ending Number of AUs	(b)		N/A		N/A		3,085

(a) With total expense of 1.60%

(b) With total expense of 1.70%

AUV - Accumulation Unit Value

AU - Accumulation Units

A-2

		Inception to 12/31/02		Fiscal Year Ending 12/31/03		Fiscal Year Ending 12/31/04
AllianceBernstein Small Cap Growth Portfolio (Inception Date - 12/17/02)
Beginning AUV	(a)	$	7.256	$	7.147	$	10.454
Beginning AUV	(b)		N/A		N/A	$	10.470
Ending AUV	(a)	$	7.147	$	10.454	$	11.768
Ending AUV	(b)		N/A		N/A	$	11.747
Ending Number of AUs	(a)		21		119,625		153,253
Ending Number of AUs	(b)		N/A		N/A		1,033
AllianceBernstein Small/Mid Cap Value Portfolio (Inception Date - 12/17/02)
Beginning AUV	(a)	$	10.276	$	10.173	$	14.109
Beginning AUV	(b)		N/A		N/A	$	14.295
Ending AUV	(a)	$	10.173	$	14.109	$	16.534
Ending AUV	(b)		N/A		N/A	$	16.514
Ending Number of AUs	(a)		19		118,740		157,103
Ending Number of AUs	(b)		N/A		N/A		1,202
AllianceBernstein Total Return Portfolio (Inception Date - 12/17/02)
Beginning AUV	(a)	$	19.162	$	18.977	$	22.186
Beginning AUV	(b)		N/A		N/A	$	22.341
Ending AUV	(a)	$	18.977	$	22.186	$	23.755
Ending AUV	(b)		N/A		N/A	$	23.716
Ending Number of AUs	(a)		8		141,233		306,929
Ending Number of AUs	(b)		N/A		N/A		3,203
AllianceBernstein U.S. Government/High Grade Securities Portfolio (Inception Date -12/17/02)
Beginning AUV	(a)	$	14.975	$	15.147	$	15.441
Beginning AUV	(b)		N/A		N/A	$	15.345
Ending AUV	(a)	$	15.147	$	15.441	$	15.731
Ending AUV	(b)		N/A		N/A	$	15.668
Ending Number of AUs	(a)		10		144,181		156,454
Ending Number of AUs	(b)		N/A		N/A		1,566
AllianceBernstein U.S. Large Cap Blended Style Series Portfolio (Inception Date - 5/1/03)
Beginning AUV	(a)		N/A	$	10.000	$	10.791
Beginning AUV	(b)		N/A		N/A	$	10.625
Ending AUV	(a)		N/A	$	10.791	$	11.594
Ending AUV	(b)		N/A		N/A	$	11.570
Ending Number of AUs	(a)		N/A		144,815		323,253
Ending Number of AUs	(b)		N/A		N/A		1,107
AllianceBernstein Utility Income Portfolio (Inception Date - 12/17/02)
Beginning AUV	(a)	$	14.446	$	14.359	$	16.909
Beginning AUV	(b)		N/A		N/A	$	17.213
Ending AUV	(a)	$	14.359	$	16.909	$	20.638
Ending AUV	(b)		N/A		N/A	$	20.604
Ending Number of AUs	(a)		14		18,288		45,946
Ending Number of AUs	(b)		N/A		N/A		6,093
AllianceBernstein Value Portfolio (Inception Date - 12/17/02)
Beginning AUV	(a)	$	8.718	$	8.538	$	10.796
Beginning AUV	(b)		N/A		N/A	$	10.853
Ending AUV	(a)	$	8.538	$	10.796	$	12.046
Ending AUV	(b)		N/A		N/A	$	12.029
Ending Number of AUs	(a)		23		229,002		282,362
Ending Number of AUs	(b)		N/A		N/A		1,646

(a) With total expense of 1.60%

(b) With total expense of 1.70%

AUV - Accumulation Unit Value

AU - Accumulation Units

A-3

		Inception to 12/31/02		Fiscal Year Ending 12/31/03		Fiscal Year Ending 12/31/04
AllianceBernstein Wealth Appreciation Strategy Portfolio (Inception Date - 7/1/04)
Beginning AUV	(a)		N/A		N/A	$	10.000
Beginning AUV	(b)		N/A		N/A	$	10.000
Ending AUV	(a)		N/A		N/A	$	10.584
Ending AUV	(b)		N/A		N/A	$	10.556
Ending Number of AUs	(a)		N/A		N/A		2,787
Ending Number of AUs	(b)		N/A		N/A		10,375
AllianceBernstein Worldwide Privatization Portfolio (Inception Date - 12/17/02)
Beginning AUV	(a)	$	13.887	$	13.890	$	19.351
Beginning AUV	(b)		N/A		N/A	$	19.651
Ending AUV	(a)	$	13.890	$	19.351	$	23.611
Ending AUV	(b)		N/A		N/A	$	23.574
Ending Number of AUs	(a)		10		9,462		27,878
Ending Number of AUs	(b)		N/A		N/A		1,803

(a) With total expense of 1.60%

(b) With total expense of 1.70%

AUV - Accumulation Unit Value

AU - Accumulation Units

A-4

APPENDIX B — DEATH BENEFITS FOLLOWING SPOUSAL CONTINUATION

If the spousal Beneficiary elects to continue the contract (the “Continuing Spouse”) and the contract death benefit exceeded the contract value, we will add a “Continuation Contribution” to the contract. The Continuation Contribution will be an amount equal to the positive differences between the death benefit otherwise payable and the contract value. If applicable, the Continuation Contribution amount will be added to the contract value as of the Continuation Date. The Continuation Date is the date we receive all required paperwork to otherwise process a death claim, as well as the spousal Beneficiary’s written election to continue the contract.

Death benefit calculations upon a Continuing Spouse’s death include a value we call “Continuation Net Purchase Payments.” Continuation Net Purchase Payments is an amount equal to: (1) the contract value on the Continuation Date, including any applicable Continuation Contribution, plus (2) any Purchase Payments made after the Continuation Date, less (3) adjustments for withdrawals made after the Continuation Date. Each adjustment is in the same proportion that the contract value was reduced on the date of each such withdrawal. If the Continuing Spouse makes no additional Purchase Payments or withdrawals, Continuation Net Purchase Payments equals the contract value on the Continuation Date, including any applicable Continuation Contribution.

We calculate and pay the death benefit upon a Continuing Spouse’s death when we receive all required paperwork and satisfactory proof of death. The term “withdrawals” as used below refers to withdrawals and any fees and charges applicable to those withdrawals. The term “maximum continuation age” refers to the attained age of the Continuing Spouse as of the Continuation Date; if the Continuing Spouse is over the maximum continuation age, the benefit may not be continued and the corresponding charge will no longer be deducted.

Standard Death Benefit:

The death benefit is the greater of:

1. contract value less Premium Enhancements paid during 24 months prior to death; or

2. Continuation Net Purchase Payments.

Annual Ratchet Plan. (Maximum continuation age is 80.) We will pay a death benefit equal to the greatest of:

1. contract value less Premium Enhancements paid during 24 months prior to death; or

2. Continuation Net Purchase Payments; or

3. the lesser of:

(a) the greatest contract value on any Contract Anniversary occurring after the Continuation Date, reduced proportionately by any withdrawals subsequent to that Contract Anniversary in the same proportion that the contract value was reduced on the date of each withdrawal, less any Premium Enhancements paid during 24 months prior to death, plus any Purchase Payments made subsequent to that Contract Anniversary; or

(b) 200% of Continuation Net Purchase Payments.

Equity Assurance Plan. (Maximum continuation age is 75.) We will pay a death benefit equal to the greater of:

1. contract value less Premium Enhancements paid during 24 months prior to death; or

B-1

2. an amount equal to (a) plus (b) where:

(a) is equal to the Net Purchase Payments made on or before the first Contract Anniversary following the 80th birthday, accumulated at the compound interest rates shown below for the number of completed years from the date of receipt of each Purchase Payment to the earlier of the date of death or the first Contract Anniversary following the 80th birthday (not to exceed 7 years):

Annual Interest Rate	Period When Death Occurred
0%	1 through 12 months after Purchase Payment receipt;
1%	13 through 24 months after Purchase Payment receipt;
2%	25 through 36 months after Purchase Payment receipt;
3%	37 through 48 months after Purchase Payment receipt;
4%	49 through 60 months after Purchase Payment receipt;
5%	61 through 72 months after Purchase Payment receipt;
6%	73 through 84 months after Purchase Payment receipt;
7%	85 months or more after Purchase Payment receipt, and

(b) is equal to all Continuation Net Purchase Payments paid after the first Contract Anniversary following the Continuing Spouse’s 80th birthday.

Enhanced Equity Assurance Plan. (Maximum continuation age is 75.) We will pay a death benefit equal to the greatest of:

1. contract value less Premium Enhancements paid during 24 months prior to death; or

2. the lesser of:

(a) the greatest contract value on any Contract Anniversary occurring after the Continuation Date, reduced proportionately by any withdrawals subsequent to that Contract Anniversary in the same proportion that the contract value was reduced on the date of each withdrawal, less any Premium Enhancements paid during 24 months prior to death, plus any Purchase Payments made subsequent to that Contract Anniversary; or

(b) 200% of Continuation Net Purchase Payments; or

3. an amount equal to (a) plus (b) where:

(a) is equal to the Net Purchase Payments made on or before the first Contract Anniversary following the 80th birthday, accumulated at the compound interest rates shown below for the number of completed years from the date of receipt of each Purchase Payment to the earlier of the date of death or the first Contract Anniversary following the 80th birthday (not to exceed 7 years):

Annual Interest Rate	Period When Death Occurred
0%	1 through 12 months after Purchase Payment receipt;
1%	13 through 24 months after Purchase Payment receipt;
2%	25 through 36 months after Purchase Payment receipt;
3%	37 through 48 months after Purchase Payment receipt;
4%	49 through 60 months after Purchase Payment receipt;
5%	61 through 72 months after Purchase Payment receipt;
6%	73 through 84 months after Purchase Payment receipt;
7%	85 months or more after Purchase Payment receipt, and

B-2

(b) is equal to all Continuation Net Purchase Payments paid after the first Contract Anniversary following the Continuing Spouse’s 80th birthday.

Enhanced Death Benefit Rider (Estate Benefit Payment). (Maximum continuation age is 80.)

If the original owner selected the estate benefit payment and the Continuing Spouse continues the benefit, we will add to any death benefit otherwise payable the amount of the Estate Benefit Payment, determined as follows:

If the Continuing Spouse is age 60 or younger as of the Continuation Date, the estate benefit payment will equal the lesser of (a) 70% of Continuation Net Purchase Payments or (b) 70% of the contract value less Continuation Net Purchase Payments.

If the Continuing Spouse is between ages 61 and 70 as of the Continuation Date, the estate benefit payment will equal the lesser of (a) 50% of Continuation Net Purchase Payments or (b) 50% of the contract value less Continuation Net Purchase Payments.

If the Continuing Spouse is between ages 71 and 80 as of the date of the Continuation Date, the estate benefit payment will equal the lesser of (a) 30% of Continuation Net Purchase Payments or (b) 30% of the contract value less Continuation Net Purchase Payments.

For information about death benefits for contracts issued before May 3, 2004 see the Statement of Additional Information.

B-3

APPENDIX C — ACCESS PROTECTOR EXAMPLES

The following examples demonstrate the operation of the Access Protector feature:

Example 1:

Assume you elect Access Protector Option 2 and you invest a single Purchase Payment of $100,000. If you make no additional Purchase Payments and no withdrawals, your Withdrawal Benefit Base is $100,000 on the Benefit Availability Date.

Your Stepped-Up Benefit Base equals Withdrawal Benefit Base plus the Step-Up Amount ($100,000 + (20% × $100,000) = $120,000). Your Maximum Annual Withdrawal Amount as of the Benefit Availability Date is 10% of your Withdrawal Benefit Base ($100,000 × 10% = $10,000). The Minimum Withdrawal Period is equal to the Stepped-Up Benefit Base divided by the Maximum Annual Withdrawal Amount, which is 12 years ($120,000/$10,000). Therefore, you may take $120,000 in withdrawals of up to $10,000 annually over a minimum of 12 years beginning on or after the Benefit Availability Date.

Example 2 — Impact of Withdrawals prior to the Benefit Availability Date for Options 1 and 2:

Assume you elect Access Protector Option 2 and you invest a single Purchase Payment of $100,000. You make a withdrawal of $11,000 prior to the Benefit Availability Date. Prior to the withdrawal, your contract value is $110,000. You make no other withdrawals before the Benefit Availability Date.

Immediately following the withdrawal, your Withdrawal Benefit Base is recalculated by first determining the proportion by which your contract value was reduced by the withdrawal ($11,000/$110,000 = 10%). Next, we reduce your Withdrawal Benefit Base by the percentage by which the contract value was reduced by the withdrawal ($100,000 - (10% × 100,000) = $90,000). Since the Step-Up Amount is zero because a withdrawal was made prior to the Benefit Availability Date, your Stepped-Up Benefit Base on the Benefit Availability Date equals your Withdrawal Benefit Base. Therefore, the Stepped-Up Benefit Base also equals $90,000. Your Maximum Annual Withdrawal Amount is 10% of the Withdrawal Benefit Base on the Benefit Availability Date ($90,000). This equals $9,000. Therefore, you may take withdrawals of up to $9,000 annually over a minimum of 10 years ($90,000/$9,000 = 10).

Example 3 — Impact of Withdrawals prior to the Benefit Availability Date for Option 3:

Assume you elect Access Protector Option 3 and you invest a single Purchase Payment of $100,000. You make a withdrawal of $11,000 prior to the Benefit Availability Date. Prior to the withdrawal, your contract value is $110,000. You make no other withdrawals before the Benefit Availability Date.

Immediately following the withdrawal, your Withdrawal Benefit Base is recalculated by first determining the proportion by which your contract value was reduced by the withdrawal ($11,000/$110,000 = 10%). Next, we reduce your Withdrawal Benefit Base by the percentage by which the contract value was reduced by the withdrawal ($100,000 - (10% × 100,000) = $90,000). Since the withdrawal occurred prior to the Benefit Availability Date, your Step-Up Amount will be reduced to 30% of your Withdrawal Benefit Base ((30% × $90,000) = $27,000). Therefore, your Stepped-Up Benefit Base on the Benefit Availability Date equals the Withdrawal Benefit Base plus the Step-Up Amount (($90,000 + $27,000) = $117,000). Your Maximum Annual Withdrawal Amount is 10% of the Withdrawal Benefit Base on the Benefit Availability Date

C-1

($90,000). This equals $9,000. Therefore, you may take withdrawals of up to $9,000 annually over a minimum of 13 years ($117,000/$9,000 = 13).

Example 4 — Impact of Withdrawals less than or equal to Maximum Annual Withdrawal Amount after the Benefit Availability Date:

Assume you elect Access Protector Option 2 and you invest a single Purchase Payment of $100,000. You make a withdrawal of $7,500 during the first year after the Benefit Availability Date.

Because the withdrawal is less than or equal to your Maximum Annual Withdrawal Amount ($10,000), your Stepped-Up Benefit Base ($120,000) is reduced by the total dollar amount of the withdrawal ($7,500). Your new Stepped-Up Benefit Base equals $112,500. Your Maximum Annual Withdrawal Amount remains $10,000. Your new Minimum Withdrawal Period following the withdrawal is equal to the new Stepped-Up Benefit Base divided by your current Maximum Annual Withdrawal Amount, ($112,500/$10,000). Therefore, you may take withdrawals of up to $10,000 over a minimum of 11 years and 3 months.

Example 5 — Impact of Withdrawals in excess of Maximum Annual Withdrawal Amount after the Benefit Availability Date:

Assume you elect Access Protector Option 2 and you invest a single Purchase Payment of $100,000. Your Withdrawal Benefit Base is $100,000 and your Stepped-Up Benefit Base is $120,000. You make a withdrawal of $15,000 during the first year after the Benefit Availability Date. Your contract value is $125,000 at the time of the withdrawal.

Because the withdrawal is greater than your Maximum Annual Withdrawal Amount ($10,000), we recalculate your Stepped-Up Benefit Base ($120,000) by taking the lesser of two calculations. For the first calculation, we deduct the amount of the withdrawal from the Stepped-Up Benefit Base ($120,000 - $15,000 = $105,000). For the second calculation, we deduct the amount of the Maximum Annual Withdrawal Amount from the Stepped-Up Benefit Base ($120,000 - $10,000 = $110,000). Next, we calculate the excess portion of the withdrawal ($5,000) and determine the proportion by which the contract value was reduced by the excess portion of the withdrawal ($5,000 /$125,000 = 4%). Finally we reduce $110,000 by that proportion (4%) which equals $105,600. Your Stepped-Up Benefit Base is the lesser of these two calculations or $105,000. The Minimum Withdrawal Period following the withdrawal is equal to the Minimum Withdrawal Period at the end of the prior year (12 years) reduced by one year (11 years). Your Maximum Annual Withdrawal Amount is your Stepped-Up Benefit Base divided by your Minimum Withdrawal Period ($105,000/11), which equals $9,545.45.

C-2

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

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

Name

Address

City/State/Zip

Date

Signed

Return to:	Annuity Service Center
	Delaware Valley Financial Services
	P.O. Box 3031
	Berwyn, PA 19312-0031

PROSPECTUS

ALLIANCEBERNSTEIN OVATION PLUS VARIABLE ANNUITY

FLEXIBLE PAYMENT DEFERRED ANNUITY CONTRACTS

issued by

AIG SUNAMERICA LIFE ASSURANCE COMPANY

in connection with

VARIABLE ANNUITY ACCOUNT NINE

Please read this prospectus carefully before investing and keep it for future reference. It contains important information about the AllianceBernstein Ovation Plus Variable Annuity.

The annuity has several investment choices — Variable Portfolios listed below and certain Fixed Account options. The Variable Portfolios are part of the AllianceBernstein Variable Products Series Fund, Inc. (“Series Fund”), managed by Alliance Capital Management L.P. Only Class B shares are offered in this contract.

AllianceBernstein Americas Government Income Portfolio AllianceBernstein Balanced Wealth Strategy Portfolio AllianceBernstein Global Bond Portfolio AllianceBernstein Global Dollar Government Portfolio AllianceBernstein Global Research Growth Portfolio** AllianceBernstein Global Technology Portfolio AllianceBernstein Growth Portfolio AllianceBernstein Growth and Income Portfolio AllianceBernstein High-Yield Portfolio AllianceBernstein International Portfolio AllianceBernstein International Value Portfolio AllianceBernstein Large Cap Growth Portfolio AllianceBernstein Money Market Portfolio AllianceBernstein Real Estate Investment Portfolio AllianceBernstein Small Cap Growth Portfolio AllianceBernstein Small/Mid Cap Value Portfolio AllianceBernstein Total Return Portfolio AllianceBernstein U.S. Government/High Grade Securities Portfolio AllianceBernstein U.S. Large Cap Blended Style Portfolio AllianceBernstein Utility Income Portfolio AllianceBernstein Value Portfolio AllianceBernstein Wealth Appreciation Strategy Portfolio AllianceBernstein Worldwide Privatization Portfolio*

* An equity fund seeking long-term capital appreciation.

** Available on or about June 1, 2005.

We will add a credit to your contract value for each Purchase Payment you make equal to a maximum of 4% of that premium payment. We call this a Premium Enhancement and fund it from our general account. Charges for a contract with a Premium Enhancement may be higher than those for a contract without a Premium Enhancement. Over time, the amount of a Premium Enhancement may be more than offset by the charges associated with the Premium Enhancement. We may, at our sole discretion, discontinue offering the Premium Enhancement on additional purchase payments, and if such Premium Enhancements are discontinued, charges under the contract will remain the same.

To learn more about the annuity offered by this prospectus, you can obtain a copy of the Statement of Additional Information (“SAI”) dated May 2, 2005. The SAI has been filed with the Securities and Exchange Commission (“SEC”) and is incorporated by reference into this prospectus. For a free copy of the SAI, call us at (800) 255-8402 or write to us at Delaware Valley Financial Services, P.O. Box 3031, Berwyn, PA 19312-0031. In addition, the SEC maintains a website (http://www.sec.gov) that contains the SAI, materials incorporated by reference and other information filed electronically with the SEC.

The Contracts

• are not bank deposits

• are not federally insured

• are not endorsed by any bank or government agency

• are not guaranteed and may be subject to loss of principal

The Securities and Exchange Commission has not approved or disapproved these securities or determined if this prospectus is accurate or complete. Any representation to the contrary is a criminal offense.

May 2, 2005

TABLE OF CONTENTS

GLOSSARY	4
HIGHLIGHTS	5
FEE TABLES	7
UNDERLYING FUND EXPENSES	8
MAXIMUM AND MINIMUM EXPENSE EXAMPLES	9
THE ALLIANCEBERNSTEIN OVATION PLUS VARIABLE ANNUITY	11
PURCHASING AN ALLIANCEBERNSTEIN OVATION PLUS VARIABLE ANNUITY	12
Allocation of Purchase Payments	12
Premium Enhancement	13
Right to Cancel	13
Exchange Offers	13
INVESTMENT OPTIONS	14
Variable Portfolios	14
Accumulation Units	15
Fixed Account Options	15
Dollar Cost Averaging Fixed Accounts	16
Transfers During the Accumulation Phase	16
Dollar Cost Averaging Program	19
Automatic Asset Rebalancing Program	19
Voting Rights	20
Substitution	20
ACCESS TO YOUR MONEY	20
Systematic Withdrawal Program	21
Minimum Contract Value	21
OPTIONAL LIVING BENEFITS	22
Access Protector Feature	22
Capital Protector Feature	27
DEATH BENEFITS	29
Standard Death Benefit	31
Optional Death Benefits	31
Spousal Continuation	34
EXPENSES	34
Separate Account Charges	34
Withdrawal Charges	35
Underlying Fund Expenses	35
Transfer Fee	36
Optional Death Benefit Charges	36
Optional Access Protector Fee	36
Optional Capital Protector Fee	37
Premium Tax	37
Income Taxes	37
Reduction or Elimination of Charges and Expenses, and Additional Amounts Credited	37

2

INCOME OPTIONS	37
Annuity Date	37
Income Options	38
Fixed or Variable Income Payments	38
Income Payments	39
Deferment of Payments	39
TAXES	39
Annuity Contracts in General	40
Tax Treatment of Distributions — Non-Qualified Contracts	40
Tax Treatment of Distributions — Qualified Contracts (including governmental 457(b) eligible deferred compensation plans)	40
Minimum Distributions	41
Tax Treatment of Death Benefits	42
Contracts Owned by a Trust or Corporation	42
Gifts, Pledges and/or Assignments of a Contract	42
Diversification and Investor Control	43
OTHER INFORMATION	43
AIG SunAmerica Life	43
The Separate Account	44
The General Account	44
Payments in Connection with Distribution of the Contract	44
Administration	45
Legal Proceedings	45
Registration Statement	46
TABLE OF CONTENTS OF STATEMENT OF ADDITIONAL INFORMATION	47
APPENDIX A — CONDENSED FINANCIALS	A-1
APPENDIX B — DEATH BENEFITS FOLLOWING SPOUSAL CONTINUATION	B-1
APPENDIX C — ACCESS PROTECTOR EXAMPLES	C-1

3

GLOSSARY

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

Accumulation Phase — The period during which you invest money in your contract.

Accumulation Units — A measurement we use to calculate the value of the variable portion of your contract during the Accumulation Phase.

Annuitant(s) — The person(s) on whose life (lives) we base 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(ies) — The person(s) designated to receive any benefits under the contract if you or the Annuitant dies.

Company — Refers to AIG SunAmerica Life Assurance Company, the insurer that issues this contract. The term “we,” “us,” “our” and “AIG SunAmerica Life” are also used to identify the Company.

Fixed Account — An account, if available, that we may offer in which you may invest money and earn a fixed rate of interest.

Income Phase — The period during which we make income payments to you.

IRS — The Internal Revenue Service.

Latest Annuity Date — The first day of the calendar month following the Annuitant’s 90th birthday or such earlier date as may be set by applicable law.

Market Close — The close of the New York Stock Exchange, usually 4:00 p.m. Eastern Time.

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 pre-tax dollars. These contracts are generally purchased under a pension plan, specially sponsored program or IRA.

Separate Account — A segregated Asset Account maintained separately from the Company’s regular portfolio of investments and general accounts. The Separate Account is established by the Company to purchase and hold the Variable Portfolios.

Series Fund — Refers to AllianceBernstein Variable Products Series Fund, Inc.

Underlying Funds — The underlying investment portfolios of the Series Fund in which the Variable Portfolios invest.

Variable Portfolios — A variable investment option available under the contract. Each Variable Portfolio has its own investment objective and is invested in the Underlying Funds of the Series Fund.

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HIGHLIGHTS

The AllianceBernstein Ovation Plus Variable Annuity is a contract between you and the Company. It is designed to help you invest on a tax-deferred basis and meet long-term financial goals. There are minimum Purchase Payment amounts required to purchase a contract. Purchase Payments may be invested in a variety of Variable Portfolios and Fixed Account options. Like all deferred annuities, the contract has an Accumulation Phase and an Income Phase. During the Accumulation Phase, you invest money in your contract. The Income Phase begins when you start receiving income payments from your annuity to provide for your retirement. We will issue the contract as an individual contract in most states, and as a certificate under a group annuity contract in other states.

Right to Cancel: You may cancel your contract within 10 days after receiving it (or whatever period is required in your state). You will receive whatever your contract is worth on the day that we receive your request. The amount refunded may be more or less than your original Purchase Payment. We will return your original Purchase Payment if required by law. See “Purchasing an AllianceBernstein Ovation Plus Variable Annuity” in this prospectus.

Purchasing a Contract: The minimum initial Purchase Payment we will accept is $2,000. For more information on purchasing a contract, see “Purchasing an AllianceBernstein Ovation Plus Variable Annuity” in this prospectus.

We will add a credit to your contract value for each purchase payment you make equal to a maximum of 4% of that purchase payment. We call this a Premium Enhancement and fund it from our general account. A Premium Enhancement is not a Purchase Payment under the contract. At our discretion we may discontinue offering Premium Enhancements on additional purchase payments.

Expenses: There are fees and charges associated with the contract. We deduct a Separate Account charge based on the age of the contract owner at the time of contract issue. For contract owners under age 66 at the time of purchase, the Separate Account charge, deducted daily, equals 1.60% annually of the average daily value of your contract allocated to the Variable Portfolios; and for contract owners age 66 and over at the time of contract purchase, the Separate Account charge, deducted daily, equals 1.70% annually of the average daily value of your contract allocated to the Variable Portfolios. Optional death benefit features are available under the contract for additional fees. For contract owners under age 66 at the time the fee is charged, the optional death benefit fees ranges from 0.05% to 0.40%; and for contract owners age 66 and older at the time the fee is charged, the optional death benefit fee ranges from 0.05% to 0.45%. There are investment charges on amounts invested in the Variable Portfolios. If you elect any optional features available under the contract we may charge additional fees for these features. A withdrawal charge schedule applies to each Purchase Payment. The amount of the withdrawal charge declines over time. After a Purchase Payment has been in the contract for seven complete years, withdrawal charges will no longer apply to that Purchase Payment. See the “Fee Table,” “Purchasing an AllianceBernstein Ovation Plus Variable Annuity” and “Expenses” in this prospectus.

Access to Your Money: You may withdraw money from your contract during the Accumulation Phase. If you do so, earnings are deemed to be withdrawn first. You will pay income taxes on earnings and untaxed contributions when you withdraw them. Payments received during the Income Phase are considered partly a return of your original investment. A federal tax penalty may apply if you make withdrawals before age 59 ¹/2. As noted above, a withdrawal charge may apply. See “Access to Your Money” and “Taxes” in this prospectus.

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Optional Living Benefits: You may elect one of the optional living benefits available under your contract. For an additional fee, these features are designed to protect a portion of your investment in the event your contract value declines due to unfavorable investment performance during the Accumulation Phase and before a death benefit is payable. See “Optional Living Benefits” in this prospectus.

Death Benefit: A death benefit feature is available under the contract to protect your Beneficiaries in the event of your death during the Accumulation Phase. This contract provides five death benefit options. The Standard Death Benefit is automatically included in your contract for no additional charge. We also offer, for an additional charge, the selection of one or more optional death benefits. See “Death Benefits” in this prospectus.

Income Options: When you are ready to begin taking income, you can choose to receive income payments on a variable basis, fixed basis or a combination of both. You may also choose from three different income options, including an option for income that you cannot outlive. See “Income Options” in this prospectus.

Inquiries: If you have questions about your contract call your financial representative or contact us at our Annuity Service Center:

Delaware Valley Financial Services

P.O. Box 3031

Berwyn, PA 19312-0031

(800) 255-8402

The Company offers several different variable annuity contracts to meet the diverse needs of our investors. Our contracts may provide different features and benefits offered at different fees, charges and expenses. When working with your financial representative to determine the best product to meet your needs, you should consider among other things, whether the features of this contract and the related fees provide the most appropriate package to help you meet your long-term retirement savings goals.

If you would like more information regarding how money is shared amongst our business partners, including broker-dealers through which you may purchase a variable annuity, see the “Payments in Connection with Distribution of the Contract” in the prospectus.

Please read the prospectus carefully for more detailed information regarding these and other features and benefits of the contract, as well as the risks of investing.

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FEE TABLES

The following describes the fees and expenses that you will pay at the time that you buy the contract, transfer cash value between investment options, or surrender the contract. If applicable, you may also be subject to state premium taxes.

MAXIMUM OWNER TRANSACTION EXPENSES

Maximum Withdrawal Charges (as a percentage of each
Purchase Payment)¹ 6.0%

Transfer Fee $
10 per transfer after the first 12
transfers in any contract year.²

The following describes the fees and expenses that you may pay periodically during the time that you own the contract, not including the Underlying Fund fees and expenses which are outlined in the next section.

CONTRACT MAINTENANCE FEE none

SEPARATE ACCOUNT ANNUAL EXPENSES

(Separate Account Annual Expenses are deducted daily as a percentage of your average daily net asset value and the optional death benefit fees are deducted monthly as a percentage of your average daily net asset value.)

If age 65 or younger:
Separate Account Annual charge3	1.60	%
Optional Annual Rachet4,5	0.05	%
Optional Equity Assurance4,5	0.10	%
Optional Estate Benefit Payment5	0.20	%
Optional Accidental Death Benefit5	0.05	%
Total Separate Account Annual Expense	2.00	%
If age 66 or older:
Separate Account Annual charge3	1.70	%
Optional Annual Rachet4,5	0.05	%
Optional Equity Assurance4,5	0.15	%
Optional Estate Benefit Payment5	0.20	%
Optional Accidental Death Benefit5	0.05	%
Total Separate Account Annual Expense	2.15	%

ADDITIONAL OPTIONAL FEATURE FEES

You may elect either Access Protector or Capital Protector described below.

Optional Access Protector Fee

(calculated as a percentage of your Purchase Payments received in the first 90 days adjusted for withdrawals)

Contract Year	Annualized Fee6
0-7	0.65	%
8-10	0.45	%
11+	none

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Optional Capital Protector Fee

(calculated as a percentage of your contract value minus Purchase Payments received after the 90th day since you purchased your contract)

Contract Year	Annualized Fee7
0-7	0.50	%
8-10	0.25	%
11+	none

UNDERLYING FUND EXPENSES

The following shows the minimum and maximum total operating expenses charged by the Underlying Funds of the Series Fund, before any waivers or reimbursements, that you may pay periodically during the time you own the contract. More detail concerning the Series Fund’s fees and expenses is contained in the prospectus for the Series Fund. Please read the Series Fund prospectus carefully before investing.

Total Annual Underlying Fund Expenses	Minimum	Maximum
(expenses that are deducted from Underlying Funds of the Series Fund, including management fees, other expenses and 12b-1 fees if applicable)8	0.85%	4.78%9

Footnotes to the Fee Table:

¹ Withdrawal Charge Schedule (as a percentage of each Purchase Payment) declines over 7 years:

Years
1	2	3	4	5	6	7	8+
6%	6%	5%	5%	4%	3%	2%	0%

² Transfers for dollar cost averaging or asset rebalancing are not counted against your 12 free transfers.

³ The Separate Account Annual Expenses are based on the age of the owner at contract issue.

⁴ The Enhanced Equity Assurance Plan includes both the Annual Ratchet Plan and the Equity Assurance Plan.

⁵ The optional death benefits/fees are based on the attained age of the owner at the time the fee is charged.

⁶ The Access Protector is an optional guaranteed minimum withdrawal benefit. The fee is deducted from your contract at the end of the first quarter following election and quarterly thereafter.

⁷ The Capital Protector is an optional guaranteed minimum accumulation benefit. The fee is deducted from your contract value at the end of the first contract quarter and quarterly thereafter.

⁸ For individual expenses of each of the Variable Portfolios available in your contract, please refer to the Series Fund prospectus.

⁹ Alliance Capital contractually waives a portion of its advisory fee and reimburses certain other expenses of the AllianceBernstein Wealth Appreciation Strategy Portfolio, which is the maximum charge represented. The contractual waiver for the AllianceBernstein Wealth Appreciation Strategy Portfolio extends through May 1, 2006 and may be extended by Alliance Capital for additional one-year terms. When the waivers are taken into account the maximum Underlying Fund expense is 1.45%. The waivers do not affect the minimum Underlying Fund expense.

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MAXIMUM AND MINIMUM EXPENSE EXAMPLES

These Examples are intended to help you compare the cost of investing in the contract with the cost of investing in other variable annuity contracts. These costs include owner transaction expenses, Separate Account Annual Expenses and expenses of the Underlying Funds of the Series Fund.

The Examples assumes that you invest $10,000 in the contract for the time periods indicated; that your investment has a 5% return each year; and that the maximum and minimum fees and expenses of the Series Fund are reflected. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:

MAXIMUM EXPENSE EXAMPLES

(assuming maximum Separate Account Annual Expenses of 2.15% and investment in an Underlying Fund with total expenses of 4.78%).

(1) If you surrender your contract at the end of the applicable time period and you elect the optional benefits at the maximum charges offered (Annual Ratchet Plan, Ages 66+, 0.05%; Equity Assurance Plan, Ages 66+, 0.15%; Estate Benefit Payment, 0.20%, the Accidental Death Benefit, 0.05%; and Access Protector, 0.65% for years 0-7 or 0.45% for years 8-10):

1 Year	3 Years	5 Years	10 Years
$1,288	$2,637	$3,913	$6,628

(2) If you annuitize your contract at the end of the applicable time period:

1 Year	3 Years	5 Years	10 Years
$643	$1,901	$3,122	$6,020

(3) If you do not surrender your contract and you elect the optional benefits at the maximum charges offered (Annual Ratchet Plan, Ages 66+, 0.05%; Equity Assurance Plan, Ages 66+, 0.15%; Estate Benefit Payment, 0.20%, the Accidental Death Benefit, 0.05%; and Access Protector, 0.65% for years 0-7 or 0.45% for years 8-10):

1 Year	3 Years	5 Years	10 Years
$748	$2,187	$3,553	$6,628

MINIMUM EXPENSE EXAMPLES

(assuming minimum Separate Account Annual Expenses of 1.70% and investment in an Underlying Fund with total expenses of 0.85%).

(1) If you surrender your contract at the end of the applicable time period and you do not elect any optional features:

1 Year	3 Years	5 Years	10 Years
$798	$1,243	$1,715	$2,885

(2) If you annuitize your contract at the end of the applicable time period:

1 Year	3 Years	5 Years	10 Years
$258	$793	$1,355	$2,885

(3) If you do not surrender your contract and you do not elect any optional features:

1 Year	3 Years	5 Years	10 Years
$258	$793	$1,355	$2,885

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Explanation of Fee Table and Example

1. The purpose of the Fee Tables and Expense Examples is to show you the various expenses you would incur directly and indirectly by investing in the contract. The Fee Tables and Expense Examples represent both the Separate Account expenses as well as the Variable Portfolio expenses. The Expense Examples reflect a 10% free withdrawal amount available upon a full surrender. Please see Access to Your Money below. Additional information on the Variable Portfolios’ fees and expenses can be found in the Series Fund prospectus located behind this prospectus.

2. In addition to the stated assumptions, the Expense Examples also assume Maximum Separate Account Annual Expenses as indicated and that no transfer fees were imposed. Although premium taxes may apply in certain states, they are not reflected in the Expense Examples.

3. Expense Examples reflecting application of optional features and benefits use the highest fees and charges being offered for those features. If you are age 65 or younger at the time you purchased your contract, expenses will be lower than those shown in these tables. If your attained age is 65 or younger at the time the fee for the Optional Annual Rachet, Optional Equity Assurance, or Optional Enhanced Equity Assurance benefits is assessed, or you did not elect those benefits, your expenses would be lower than those shown in these tables. If you elected Capital Protector, instead of Access Protector, your expenses would be lower than those shown in the tables. The fee for the Capital Protector and Access Protector features are not calculated as a percentage of your daily net asset value, but on other calculations more fully described in the prospectus.

4. These examples should not be considered a representation of past or future expenses. Actual expenses may be more or less than those shown.

CONDENSED FINANCIAL INFORMATION APPEARS IN APPENDIX A OF THIS PROSPECTUS.

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THE ALLIANCEBERNSTEIN OVATION PLUS VARIABLE ANNUITY

When you purchase an AllianceBernstein Ovation Plus Variable Annuity, a contract exists between you and AIG SunAmerica Life. You are the owner of the contract. The contract provides three main benefits:

1. Tax Deferral: This means that you do not pay taxes on your earnings from the annuity until you withdraw them.

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

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

Tax-qualified retirement plans (e.g., IRAs, 401(k) or 403(b) plans) defer payment of taxes on earnings until withdrawal. If you are considering funding a tax-qualified retirement plan with an annuity, you should know that an annuity does not provide any additional tax deferral treatment of earnings beyond the treatment provided by the tax-qualified retirement plan itself. However, annuities do provide other features and benefits which may be valuable to you. You should fully discuss this decision with your financial representative.

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 start receiving income payments 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.

The Fixed Account options earn interest at a rate set and guaranteed by AIG SunAmerica Life. 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 particular Fixed Account option in which you invest.

For more information on investment options available under this contract please see “Investment Options” in this prospectus.

This annuity is designed for long-term investors who desire to save for retirement. Under certain circumstances, you may be assessed a 10% federal tax penalty on any withdrawal made prior to your reaching age 59 ¹/2. Additionally, this contract provides that you will be charged a withdrawal charge on each Purchase Payment withdrawn if that Purchase Payment has not been invested in this contract for at least 7 years. Because of these potential penalties, you should fully discuss all of the benefits and risks of this contract with your financial representative prior to purchase.

11

PURCHASING AN ALLIANCEBERNSTEIN

OVATION PLUS VARIABLE ANNUITY

An initial Purchase Payment is the money you give us to buy a contract. Any additional money you give us to invest in the contract after purchase is a subsequent Purchase Payment.

The minimum initial Purchase Payment permitted under your contract is $2,000. Subsequent payments must be at least $1,000 except that automated subsequent payments may be $100 or more. Prior Company approval is required to accept Purchase Payments greater than $1,000,000. The Company reserves the right to refuse Purchase Payments, including one which would cause total Purchase Payments to exceed $1,000,000 at the time of the Purchase Payment. Subsequent Purchase Payments which would cause total Purchase Payments in the contract to exceed this limit are also subject to prior Company approval. Further, we reserve the right to aggregate all contracts having the same owner and/or Annuitants’ social security or federal tax identification number for purposes of determining which contracts and/or Purchase Payments require Company pre-approval. We also reserve the right to change the amount at which pre-approval is required, at any time.

We may not issue a contract to anyone over age 80 on the contract issue date (effective date of the contract). In general, we will issue a Qualified contract to anyone who is age 70 ¹/2 or older, but it is your responsibility to ensure that the minimum distribution required by the IRS is being made.

We allow spouses to jointly own this contract. However, the age of the older spouse is used to determine the availability of any age driven benefits. The addition of a joint owner after the contract has been issued is contingent upon prior review and approval by the Company. If we learn of a mistatement of age, we reserve the right to fully pursue our remedies including termination of the contract and/or revocation of any age-driven benefits.

You may assign this contract before beginning the Income Phase by sending us a written request for an assignment. Your rights and those of any other person with rights under this contract will be subject to the assignment. We reserve the right to not recognize assignments if it changes the risk profile of the owner of the contract, as determined in our sole discretion. Please see the Statement of Additional Information for details on the tax consequences of an assignment.

Allocation of Purchase Payments

We invest your Purchase Payments in the Variable Portfolios and available Fixed Accounts according to your instructions. If we receive a Purchase Payment without allocation instructions, we will invest the money according to your last allocation instructions.

In order to issue your contract, we must receive your completed application and/or Purchase Payment allocation instructions and any other required paperwork at our Annuity Service Center. We allocate your initial Purchase Payment within two days of receiving it. If we do not have complete information necessary to issue your contract, we will contact you. If we do not have the information necessary to issue your contract within 5 business days we will:

• send your money back to you, or;

• ask your permission to keep your money until we get the information necessary to issue the contract.

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Premium Enhancement

For each Purchase Payment you make, we will add a Premium Enhancement to your contract equal to a maximum of 4% of that Purchase Payment. We will allocate the Premium Enhancement pro rata among the investment options in the same proportion as the corresponding Purchase Payment. We may discontinue offering a Premium Enhancement on additional Purchase Payments at our discretion. We intend to recoup the cost of the Premium Enhancement from the Separate Account Charge. (See “Expenses — Separate Account Charge”) Premium Enhancements are not part of the amount refunded to you if you cancel your contract during the Right to Cancel period. Premium Enhancements are not included in amounts payable as a death benefit or upon surrender during the first twenty-four month period following receipt of a Premium Enhancement, except as part of your systematic withdrawal program. We will reduce the Premium Enhancement in the same proportion and deduct it from your contract value. Under certain circumstances, receipt of the Premium Enhancement may have a negative effect on the investment performance of the portion of your contract allocated to the variable investment options. For example, if your contract value decreases due to market conditions during the twenty-four months after receipt of a Premium Enhancement and, during that time, you surrender your contract or you die, the amount payable will be lower than it would have been had you not received a Premium Enhancement. In the case of a partial surrender under those conditions and during that time, the contract value that remains after the partial surrender will be lower than it would have been had you not received a Premium Enhancement. There may be other instances in which you may be worse off for having the bonus. For income tax purposes, the Premium Enhancement is treated as income on the contract and will be includible in taxable income.

Right to Cancel

You may cancel your contract within ten days after receiving it (or longer if required by state law). To cancel, you must mail the contract along with your written request to our Annuity Service Center:

Delaware Valley Financial Services

P.O. Box 3031

Berwyn, PA 19312-0031

If you decide to cancel your contract during this examination period, we will refund to you the value of your contract less any Premium Enhancement on the day we receive your request.

Certain states require us to return your Purchase Payments upon a written request mailed during the examination period as described above and in the contract. Additionally, all contracts issued as an IRA require the full return of Purchase Payments upon a written request as described above. With respect to those contracts, we reserve the right to put your money in the Money Market Portfolio during the examination period and will allocate your money according to your instructions at the end of the applicable examination period. Currently, we do not put your money in the Money Market Portfolio during the examination period unless you allocate your money to it. If your contract was issued in a state requiring return of Purchase Payments or as an IRA and you cancel your contract during the examination period, we return the greater of (1) your Purchase Payments; or (2) the value of your contract, less any Premium Enhancement. A Premium Enhancement is not considered part of your Purchase Payment.

Exchange Offers

From time to time, we may offer to allow you to exchange an older variable annuity, issued by AIG SunAmerica Life or one of its affiliates, for a newer product with more current features and benefits, also issued by AIG SunAmerica Life or one of its affiliates. Such an exchange offer will be made in accordance with applicable state and federal securities and insurance rules and regulations. we will explain the specific terms and conditions of any such exchange offer at the time the offer is made.

13

INVESTMENT OPTIONS

Variable Portfolios

The Variable Portfolios invest in shares of the AllianceBernstein Variable Products Series Fund, Inc. (“Series Fund”). The Variable Portfolios are only available through the purchase of certain insurance contracts.

Alliance Capital Management L.P. is the investment adviser to the Series Fund. The Trust also serves as the current underlying investment vehicle for other variable contracts issued by our affiliates, AIG Life Insurance Company and American International Life Assurance Company of New York, and other affiliated/unaffiliated insurance companies. Neither AIG SunAmerica Life nor the Series Fund believes that offering shares of the Series Fund in this manner disadvantages you. The adviser monitors the Series Fund for potential conflicts.

The Variable Portfolios are listed below. Only Class B is offered for this contract.

AllianceBernstein Americas Government Income Portfolio

AllianceBernstein Balanced Wealth Strategy Portfolio

AllianceBernstein Global Bond Portfolio

AllianceBernstein Global Dollar Government Portfolio

AllianceBernstein Global Research Growth Portfolio**

AllianceBernstein Global Technology Portfolio⁺

AllianceBernstein Growth Portfolio

AllianceBernstein Growth and Income Portfolio

AllianceBernstein High-Yield Portfolio

AllianceBernstein International Portfolio

AllianceBernstein International Value Portfolio

AllianceBernstein Large Cap Growth Portfolio⁺⁺

AllianceBernstein Money Market Portfolio

AllianceBernstein Real Estate Investment Portfolio

AllianceBernstein Small Cap Growth Portfolio

AllianceBernstein Small/Mid Cap Value Portfolio⁺⁺⁺

AllianceBernstein Total Return Portfolio

AllianceBernstein U.S. Government/High Grade Securities Portfolio

AllianceBernstein U.S. Large Cap Blended Style Portfolio

AllianceBernstein Utility Income Portfolio

AllianceBernstein Value Portfolio

AllianceBernstein Wealth Appreciation Strategy Portfolio

AllianceBernstein Worldwide Privatization Portfolio*

* An equity fund seeking long-term capital appreciation.

** Available on or about June 1, 2005.

+ Previously known as the AllianceBernstein Technology Portfolio.

++ Previously known as the AllianceBernstein Premier Growth Portfolio.

+++  Previously known as the AllianceBernstein Small Cap Value Portfolio.

You should read the attached prospectus for the Series Fund carefully. This prospectus contains detailed information about the Variable Portfolios, including each Variable Portfolio’s investment objective and risk factors.

14

Accumulation Units

When you allocate a Purchase Payment to the Variable Portfolios, we credit your contract with Accumulation Units of the Separate Account. We base the number of Accumulation Units you receive on the unit value of the Variable Portfolio as of the day we receive your money if we receive it before Market Close, or on the next business day’s unit value if we receive your money after Market Close. 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.

Accumulation Units are credited to your contract when Purchase Payments are allocated or amounts are transferred into a Variable Portfolio. Accumulation Units are deducted when the charge, if any, for an Optional Death Benefit is deducted. Accumulation Units are also deducted when you make a withdrawal or a transfer out of a 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 2,252.2523 Accumulation Units for the Global Bond Portfolio.

Performance of the Variable Portfolios and expenses of the Separate Account affect Accumulation Unit values. These factors cause the value of your contract to go up and down.

Fixed Account Options

Your contract may offer Fixed Account options for varying guarantee periods. Available guarantee periods may be for different lengths of time and may have different guaranteed interest rates, as noted below. We guarantee the interest rate credited to amounts allocated to any available Fixed Account and that the rate will never be less than the minimum guaranteed interest rate as specified in your contract. Once established, the rates for specified payments do not change during the guarantee period. We determine the Fixed Accounts offered at any time in our sole discretion and we reserve the right to change the Fixed Accounts that we make available at any time, unless state law requires us to do otherwise. Please check with your financial representative to learn if any Fixed Accounts are currently offered.

There are three interest rate scenarios for money allocated to the Fixed Accounts. Each of these rates may differ from one another. Once declared, the applicable rate is guaranteed until the corresponding guarantee period expires. Under each scenario your money may be credited a different rate of interest as follows:

Initial Rate: The rate credited to any portion of the initial Purchase Payment allocated to a Fixed Account.

Current Rate: The rate credited to any portion of the subsequent Purchase Payments allocated to a Fixed Account.

15

Renewal Rate: The rate credited to money transferred from a Fixed Account or a Variable Portfolio into a Fixed Account and to money remaining in a Fixed Account after expiration of a guarantee period.

When a Fixed Account guarantee period ends, you may leave your money in the same Fixed Account or you may reallocate your money to another Fixed Account or to the Variable Portfolios. If you want to reallocate your money, you must contact us within 30 days after the end of the current interest guarantee period and instruct us as to where you would like the money invested. We do not contact you. If we do not hear from you, your money will remain in the same Fixed Account where it will earn interest at the renewal rate then in effect for that Fixed Account.

If available, you may systematically transfer interest in available Fixed Accounts into any of the Variable Portfolios on certain periodic schedules offered by us. Systematic transfers may be started, changed or terminated at any time by contacting our Annuity Service Center. Check with your financial representative about the current availability of this service.

All Fixed Accounts may not be available in all states. At any time that we are crediting the guaranteed minimum interest rate specified in your contract to the Fixed Accounts, we reserve the right to restrict transfers and Purchase Payments into the Fixed Accounts. We may also offer the specific dollar cost averaging Fixed Accounts. The rules, restrictions and operation of the dollar cost averaging Fixed Accounts may differ from the standard Fixed Accounts described above, please see “Dollar Cost Averaging Program” below for more details.

Dollar Cost Averaging Fixed Accounts

You may invest initial and/or subsequent Purchase Payments in the dollar cost averaging Fixed Accounts (“DCA Fixed Accounts”), if available. DCA Fixed Accounts also credit a fixed rate of interest but are specifically designed to facilitate a dollar cost averaging program. Interest is credited to amounts allocated to the DCA Fixed Accounts while your investment is transferred to the Variable Portfolios over certain specified time frames. The interest rates applicable to the DCA Fixed Account may differ from those applicable to any available Fixed Accounts but will never be less than the minimum annual guaranteed interest rate as specified in your contract. However, when using a DCA Fixed Account the annual interest rate is paid on a declining balance as you systematically transfer your investment to the Variable Portfolios. Therefore, the actual effective yield will be less than the annual crediting rate. We determine the DCA Fixed Accounts offered at any time in our sole discretion and we reserve the right to change to DCA Fixed Accounts that we make available at any time, unless state law requires us to do otherwise. See “Dollar Cost Averaging Program” below for more information.

Transfers During the Accumulation Phase

Subject to our rules, restrictions and policies, during the Accumulation Phase you may transfer funds between the Variable Portfolios and/or any available Fixed Account options by telephone or through the Company’s website (http://www.aigsunamerica.com) or in writing by mail or facsimile. We may accept transfers by telephone or the Internet unless you tell us not to on your contract application. When receiving instructions over the telephone or the Internet, we follow procedures we have adopted 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 or the Internet. If we fail to follow our procedures, we may be liable for any losses due to unauthorized or fraudulent instructions.

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Any transfer request will be priced as of the day it is confirmed in good order by us if the request is processed before Market Close. If the transfer request is processed after Market Close, the request will be priced as of the next business day.

Funds already in your contract cannot be transferred into the DCA Fixed Accounts. You must transfer at least $1,000 per transfer. If less than $1,000 remains in any Variable Portfolio after a transfer, that amount must be transferred as well.

Transfer Policies

We do not want to issue this variable annuity contract to contract owners engaged in trading strategies that seek to benefit from short-term price fluctuations or price inefficiencies in the Variable Portfolios of this product (“Short-Term Trading”) and we discourage Short-Term Trading as more fully described below. However, we cannot always anticipate if a potential contract owner intends to engage in Short-Term Trading. Short-Term Trading may create risks that may result in adverse effects on investment return of an Underlying Fund. Such risks may include, but are not limited to: (1) interference with the management and planned investment strategies of an Underlying Fund and/or (2) increased brokerage and administrative costs due to forced and unplanned fund turnover; both of which may dilute the value of the shares in the Underlying Fund and reduce value for all investors in the Variable Portfolio. In addition to negatively impacting the contract owner, a reduction in contract value may also be harmful to annuitants and/or beneficiaries.

We have adopted the following administrative procedures to discourage Short-Term Trading.

We charge for transfers in excess of 12 in any contract year. Currently, the fee is $10 for each transfer exceeding this limit. Transfers resulting from your participation in the DCA or Asset Rebalancing programs are not counted towards the number of free transfers per contract year.

In addition to charging a fee when you exceed 12 transfers as described in the preceding paragraph, all transfer request in excess of 15 transfers per contract year must be submitted in writing by United States Postal Service first-class mail (“U.S. Mail”) until your next contract anniversary (“Standard U.S. Mail Policy”). We will not accept transfer requests sent by any other medium except U.S. Mail until your next contract anniversary. Transfer requests required to be submitted by U.S. Mail can only be cancelled by a written request sent by U.S. Mail with the appropriate paperwork received prior to the execution of the transfer. All transfers made on the same day prior to Market Close are considered one transfer request. Transfers resulting from your participation in the DCA or Asset Rebalancing programs are not included for the purposes of determining the number of transfers before applying the Standard U.S. Mail Policy. We apply the Standard U.S. Mail Policy uniformly and consistently to all contract owners except for omnibus group contracts and contracts utilizing third party asset allocation services as described below.

We believe that the Standard U.S. Mail Policy is a sufficient deterrent to Short-Term Trading and we do not conduct any additional routine monitoring. However, we may become aware of transfer patterns among the Variable Portfolios and/or available Fixed Accounts which reflect what we consider to be Short-Term Trading or otherwise detrimental to the Variable Portfolios but have not yet triggered the limitations of the Standard U.S. Mail Policy described above. If such transfer activity cannot be controlled by the Standard U.S. Mail Policy, we may require you to adhere to our Standard U.S. Mail Policy prior to reaching the specified number of transfers (“Accelerated U.S. Mail Policy”). To the extent we become aware of Short-Term Trading activities which cannot be reasonably controlled by the Standard U.S. Mail Policy or the Accelerated U.S. Mail Policy, we also reserve the right to evaluate, in our sole discretion, whether to impose further limits on the number and frequency of

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transfers you can make, impose minimum holding periods and/or reject any transfer request or terminate your transfer privileges. We will notify you in writing if your transfer privileges are terminated. In addition, we reserve the right to not accept transfers from a third party acting for you and not to accept preauthorized transfer forms.

Some of the factors we may consider when determining whether to accelerate the Standard U.S. Mail Policy, reject or impose other conditions on transfer privileges include:

(1) the number of transfers made in a defined period;

(2) the dollar amount of the transfer;

(3) the total assets of the Variable Portfolio involved in the transfer and/or transfer requests that represent a significant portion of the total assets of the Variable Portfolio;

(4) the investment objectives and/or asset classes of the particular Variable Portfolio involved in your transfers;

(5) whether the transfer appears to be part of a pattern of transfers to take advantage of short-term market fluctuations or market inefficiencies; and/or

(6) other activity, as determined by us, that creates an appearance, real or perceived, of Short-Term Trading.

Notwithstanding the administrative procedures above, there are limitations on the effectiveness of these procedures. Our ability to detect and/or deter Short-Term Trading is limited by operational systems and technological limitations. We cannot guarantee that we will detect and/or deter all Short-Term Trading. To the extent that we are unable to detect and/or deter Short-Term Trading, the Variable Portfolios may be negatively impacted as described above. Additionally, the Variable Portfolios may be harmed by transfer activity related to other insurance companies and/or retirement plans or other investors that invest in shares of the Underlying Fund. You should be aware that the design of our administrative procedures involves inherently subjective decisions, which we attempt to make in a fair and reasonable manner consistent with the interests of all owners of this contract. We do not enter into agreements with contract owners whereby we permit or intentionally disregard Short-Term Trading.

The Standard and Accelerated U.S. Mail Policies are applied uniformly and consistently to contract owners utilizing third party trading services/strategies performing asset allocation services for a number of contract owners at the same time except for purposes of calculating the number of transfers for the Standard U.S. Mail Policy. A calendar year will be used (instead of a contract year) for these contracts. You should be aware that such third party trading services may engage in transfer activities that can also be detrimental to the Variable Portfolios. These transfer activities may not be intended to take advantage of short-term price fluctuations or price inefficiencies. However, such activities can create the same or similar risks to Short-Term Trading and negatively impact the Variable Portfolios as described above.

Omnibus group contracts may invest in the same Underlying Funds available in your contract but on an aggregate, not individual basis. Thus, we have limited ability to detect Short-Term Trading in omnibus group contracts and the Standard U.S. Mail Policy does not apply to these contracts. Our inability to detect Short-Term Trading may negatively impact the Variable Portfolios as described above.

We reserve the right to modify the policies and procedures described in this section at any time. To the extent that we exercise this reservation of rights, we will do so uniformly and consistently unless we disclose otherwise.

For information regarding transfers during the Income Phase, see INCOME OPTIONS below.

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Dollar Cost Averaging Program

The Dollar Cost Averaging (“DCA”) program allows you to invest gradually in the Variable Portfolios. There is no fee to participate in this program. Under the program you systematically transfer a set dollar amount or percentage of the available Fixed Accounts or the Money Market Portfolio (source account) to any other Variable Portfolio. Transfers may occur on certain periodic schedules such as monthly or weekly and do not count against your 12 free transfers per contract year. The minimum transfer amount under the DCA program is $1,000 per transaction. Fixed Account options are not available as target accounts for the DCA program.

We may also offer DCA Fixed Accounts for a specified time period exclusively to facilitate this program. The DCA Fixed Accounts only accept new Purchase Payments of at least $12,000. You cannot transfer money already in your contract into these options. If you allocate new Purchase Payments into a DCA Fixed Account, we transfer all your money allocated to that account into the Variable Portfolios over the selected time period at an offered frequency of your choosing.

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.

Money Market Portfolio Example:

Assume that you want to gradually move $12,000 from the Money Market Portfolio to the Growth Portfolio over six months. You set up dollar cost averaging for $2,000 each month and purchase Accumulation Units at the following values:

Month	Accumulation Unit		Units Purchased
1	$	7.50	266.667
2	$	5.00	400
3	$	10.00	200
4	$	7.50	266.667
5	$	5.00	400
6	$	7.50	266.667

You paid an average price of only $6.67 per Accumulation Unit over six months, 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.

Automatic Asset Rebalancing Program

Earnings in your contract may cause the percentage of your investment in each Variable Portfolio to differ from your original allocations. The Automatic Asset Rebalancing Program addresses this situation. There is no fee to participate in this program. At your election, we periodically rebalance your investments in the Variable Portfolios to return your allocations to their original percentages. There is no fee to participate in this program. Asset rebalancing typically involves shifting a portion of your money out of a Variable Portfolio which experienced a higher return into a Variable Portfolio which experienced a lower return.

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At your request, rebalancing occurs on a monthly, quarterly, semiannual or annual basis. Transfers made as a result of rebalancing do not count against your 12 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 Global 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 Global 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 Global Bond Portfolio to bring its holdings back to 50% and use the money to buy more units in the Growth Portfolio to increase those holdings to 50%.

Voting Rights

AIG SunAmerica Life is the legal owner of the Series Fund’s shares. However, when a Variable Portfolio solicits proxies in conjunction with a vote of shareholders, you have the right to instruct us on how to vote the Variable Portfolio shares that are attributable to your contract. We vote all of the shares we own in the same proportion as the voting instructions we receive. 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

We may move assets and re-direct future Purchase Payment allocations from one Variable Portfolio to another if we receive contract owner approval through a proxy vote or SEC approval for a fund substitution. This would occur if a Variable Portfolio is no longer an appropriate investment for the contract, for reasons such as continuing substandard performance, or for changes to the portfolio manager, investment objectives, risks and strategies, or federal or state laws. The new Variable Portfolio offered may have different fees and expenses. You will be notified of any upcoming proxies or substitutions that affect your Variable Portfolio choices.

ACCESS TO YOUR MONEY

You can access money in your contract in two ways:

• by making a partial or total withdrawal, and/or;

• by receiving income payments during the Income Phase. See “Income Options” below.

Generally, we deduct a withdrawal charge applicable to any total or partial withdrawal. See “Expenses” below.

Purchase payments that are withdrawn prior to the end of the seventh year will result in your paying a penalty in the form of a withdrawal charge. The amount of the charge and how it applies are discussed more fully below. See “Expenses” below. You should consider, before purchasing this contract, the effect this charge will have on your investment if you need to withdraw money during a withdrawal charge period. You should fully discuss this decision with your financial representative.

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You may request a partial surrender for a minimum of $500. Your contract value must be at least $2,000 after the partial surrender, or we may cancel the contract. You must send a written withdrawal request. For withdrawals of $500,000 and more, you must submit a signature guarantee at the time of your request. Unless you provide us with different instructions, partial withdrawals will be made pro rata from each Variable Portfolio and the Fixed Account options in which your contract is invested.

You may withdraw free of a withdrawal charge an amount that is equal to the free withdrawal amount in your contract as of the date you make the withdrawal. Your free withdrawal amount is equal to the greater of (1) the contract value less Purchase Payments paid and not previously surrendered or (2) 10% of remaining unsurrendered Purchase Payments paid less the amount of any prior surrender since the last contract anniversary. Withdrawals in excess of the free withdrawal amount will be assessed a withdrawal charge. When you make a withdrawal, we assume that it is taken from earnings first, then from Purchase Payments on a first-in, first-out basis. This means that you can also access your Purchase Payments which are no longer subject to a withdrawal charge before those Purchase Payments which are still subject to the withdrawal charge.

The withdrawal charge percentage is determined by the age of the Purchase Payment remaining in the contract at the time of the withdrawal. If you make a partial withdrawal in an amount greater than your free withdrawal amount during the twenty-four month period following receipt of a Premium Enhancement, we will reduce the Premium Enhancement in the same proportion and deduct it from your contract value. This reduction does not apply to withdrawals you make as part of our systematic withdrawal program. See “Systematic Withdrawal Program” below. The Premium Enhancement is not considered a purchase payment.

We may be required to suspend or postpone any type of payment 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 option. Such deferrals are limited to no longer than six months.

Systematic Withdrawal Program

During the Accumulation Phase, provided you have a minimum contract value of $24,000, you may elect to receive periodic income payments under the systematic withdrawal program, up to a maximum of 10% of your contract value each year. 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 $200. Withdrawals may be taxable and a 10% federal penalty tax may apply if you are under age 59 ¹/2. There is no additional charge for participating in this program, although a withdrawal charge may apply. You may not elect this program if you have made a partial surrender earlier in the same contract year.

The Annuity Service Center can provide the necessary 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 your contract is less than $2,000 as a result of partial withdrawals. 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.

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OPTIONAL LIVING BENEFITS

You may elect one of the Optional Living Benefits described below. These features are designed to protect a portion of your investment in the event your contract value declines due to unfavorable investment performance during the Accumulation Phase and before a death benefit is payable. Please see the descriptions below for detailed information.

Access Protector Feature

What is Access Protector?

Access Protector is an optional living benefit feature. If you elect this feature, for which you will be charged an annualized fee, after a specified waiting period, you are guaranteed to receive withdrawals, over a minimum number of years that in total equal Purchase Payments made in the first 90 days adjusted for withdrawals during that period (the “Benefit”), even if the contract value falls to zero. Access Protector may offer protection in the event your contract value declines due to unfavorable investment performance. Access Protector has rules and restrictions that are discussed more fully below.

What options are currently available?

Three options are currently available under this feature. The available options, referred to as the Step-Up Options, provide a guaranteed minimum withdrawal amount over a minimum number of years equal to at least your initial Purchase Payment (adjusted for withdrawals) with an opportunity to receive a 10%, 20% or 50% step-up amount. If you take withdrawals prior to the Benefit Availability Date (as defined in the table below), the Benefit will be reduced and you may not receive a step-up amount depending on the option selected.

Each option and its components are fully described below. You should read each option carefully and discuss the feature with your financial representative before electing an option.

How and when can I elect the feature?

You may only elect the feature at the time of contract issue and must choose one of the options discussed below. You may not change the option after election. You cannot elect the feature if you are age 81 or older on the contract issue date. Generally, once you elect the feature, it cannot be cancelled.

Access Protector cannot be elected if you elect the Capital Protector feature. See CAPITAL PROTECTOR below. Access Protector may not be available in your state or through the broker-dealer with which your financial representative is affiliated. Please check with your financial representative for availability.

How is the Benefit calculated?

In order to determine the Benefit’s value, we calculate each of the components as described below. The Benefit’s components and value may vary depending on the option you choose. The earliest date you may begin taking withdrawals under the Benefit is the Benefit Availability Date. Each one-year period beginning on the contract issue date and ending on the day before the contract anniversary date is considered a Benefit Year.

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The table below is a summary of the three Step-Up Options we are currently offering:

Option	Benefit Availability Date	Step-Up Amount	Maximum Annual Withdrawal Amount+ Percentage	Minimum Withdrawal Period* (if Maximum Annual Withdrawal Amount taken each year)
1	3 years following contract issue date	10%* of Withdrawal Benefit Base	10% of Withdrawal Benefit Base	11 years
2	5 years following contract issue date	20%* of Withdrawal Benefit Base	10% of Withdrawal Benefit Base	12 years
3	10 years following contract issue date	50%** of Withdrawal Benefit Base	10% of Withdrawal Benefit Base	15 years

* You will not receive a Step-Up Amount if you elect Options 1 or 2 and take a withdrawal prior to the Benefit Availability Date. The Minimum Withdrawal Period for Options 1 and 2 will be 10 years if you do not receive a Step-Up Amount.

** If you elect Option 3 and take a withdrawal prior to the Benefit Availability Date, you will receive a reduced Step-Up Amount of 30% of the Withdrawal Benefit Base. The Minimum Withdrawal Period will be 13 years if you receive a reduced Step-Up Amount.

+ For contract holders subject to annual required minimum distributions, the Maximum Annual Withdrawal Amount for this contract will be the greater of: (1) the amount indicated in the table above; or (2) the annual required minimum distribution amount. Required minimum distributions may reduce your Minimum Withdrawal Period.

How are the components for the Step-Up Options calculated?

First, we determine the Eligible Purchase Payments, which include the amount of Purchase Payments made to the contract up to and including the 90th day after your contract issue date, adjusted for any withdrawals in the same proportion that the withdrawal reduced the contract value on the date of the withdrawal.

Second, we determine the Withdrawal Benefit Base, on the Benefit Availability Date. The Withdrawal Benefit Base equals the sum of all Eligible Purchase Payments.

Third, we determine a Step-Up Amount, if any, which is calculated as a specified percentage (listed in the table above) of the Withdrawal Benefit Base on the Benefit Availability Date. If you elect Option 1 or 2, you will not receive a Step-Up Amount if you take any withdrawals prior to the Benefit Availability Date. If you elect Option 3, the Step-Up Amount will be reduced to 30% of the Withdrawal Benefit Base if you take any withdrawals prior to the Benefit Availability Date. The Step-Up Amount is not considered a Purchase Payment and cannot be used in calculating any other benefits, such as death benefits, contract values or annuitization value.

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Fourth, we determine a Stepped-Up Benefit Base, which is the total amount available for withdrawal under the feature and is used to calculate the minimum time period over which you may take withdrawals under the feature. The Stepped-Up Benefit Base equals the Withdrawal Benefit Base plus the Step-Up Amount, if any.

Fifth, we determine the Maximum Annual Withdrawal Amount, which is a stated percentage (listed in the table above) of the Withdrawal Benefit Base and represents the maximum amount of withdrawals that are available under this feature each Benefit Year after the Benefit Availability Date.

Finally, we determine the Minimum Withdrawal Period, which is the minimum period over which you may take withdrawals under the feature. The Minimum Withdrawal Period is calculated by dividing the Stepped-Up Benefit Base by the Maximum Annual Withdrawal Amount.

What is the fee for Access Protector?

The annualized Access Protector fee will be assessed as a percentage of the Withdrawal Benefit Base. The fee will be deducted quarterly from your contract value starting on the first quarter following the contract issue date and ending upon the termination of the feature. If your contract value falls to zero before the feature has been terminated, the fee will no longer be assessed. We will not assess the quarterly fee if you surrender or annuitize before the end of a quarter.

Contract Year	Annualized Fee
0-7 years	0.65% of Withdrawal Benefit Base
8-10 years	0.45% of Withdrawal Benefit Base
11+ years	none

What are the effects of withdrawals on the Step-Up Options?

The Benefit amount, Maximum Annual Withdrawal Amount and Minimum Withdrawal Period may change over time as a result of withdrawal activity. Withdrawals after the Benefit Availability Date equal to or less than the Maximum Annual Withdrawal Amount generally reduce the Benefit by the amount of the withdrawal. Withdrawals in excess of the Maximum Annual Withdrawal Amount will reduce the Benefit in the same proportion that the contract value was reduced at the time of the withdrawal. This means if investment performance is down and contract value is reduced, withdrawals greater than the Maximum Annual Withdrawal Amount will result in a greater reduction of the Benefit. The impact of withdrawals and the effect on each component of Access Protector are further explained through the calculations below:

Withdrawal Benefit Base: Withdrawals prior to the Benefit Availability Date reduce the Withdrawal Benefit Base in the same proportion that the contract value was reduced at the time of the withdrawal. Withdrawals prior to the Benefit Availability Date also eliminate any Step-Up Amount for Options 1 and 2 and reduce the Step-Up Amount to 30% of the Withdrawal Benefit Base for Option 3.

Withdrawals after the Benefit Availability Date will not reduce the Withdrawal Benefit Base until the sum of withdrawals after the Benefit Availability Date exceeds the Step-Up Amount. Thereafter, any withdrawal or portion of a withdrawal that exceeds the Step-Up Amount will reduce the Withdrawal Benefit Base as follows: (1) If the withdrawal does not cause total withdrawals in the Benefit Year to exceed the Maximum Annual Withdrawal Amount, the Withdrawal Benefit Base will be reduced by the amount of the withdrawal,

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or (2) If the withdrawal causes total withdrawals in the Benefit Year to exceed the Maximum Annual Withdrawal Amount, the Withdrawal Benefit Base is reduced to the lesser of (a) or (b), where:

a. is the Withdrawal Benefit Base immediately prior to the withdrawal minus the amount of the withdrawal, or;

b. is the Withdrawal Benefit Base immediately prior to the withdrawal minus the amount of the withdrawal that makes total withdrawals for the Benefit Year equal to the current Maximum Annual Withdrawal Amount, and further reduced in the same proportion that the contract value was reduced by the amount of the withdrawal that exceeds the Maximum Annual Withdrawal Amount.

Stepped-Up Benefit Base: Since withdrawals prior to the Benefit Availability Date eliminate any Step-Up Amount for Options 1 and 2, the Stepped-Up Benefit Base will be equal to the Withdrawal Benefit Base if you take withdrawals prior to the Benefit Availability Date. For Option 3, if you take withdrawals prior to the Benefit Availability Date, the Stepped-Up Benefit Base will be equal to the Withdrawal Benefit Base plus the reduced Step-Up Amount which will be 30% of the Withdrawal Benefit Base, adjusted for such withdrawals.

If you do not take withdrawals prior to the Benefit Availability Date, you will receive the entire Step-Up Amount and the Stepped-Up Benefit Base will equal the Withdrawal Benefit Base plus the Step-Up Amount.

After the Benefit Availability Date, any withdrawal that does not cause total withdrawals in a Benefit Year to exceed the Maximum Annual Withdrawal Amount will reduce the Stepped-Up Benefit Base by the amount of the withdrawal. After the Benefit Availability Date, any withdrawal that causes total withdrawals in a Benefit Year to exceed the Maximum Annual Withdrawal Amount (in that Benefit Year) reduces the Stepped-Up Benefit Base to the lesser of (a) or (b), where:

a. is the Stepped-Up Benefit Base immediately prior to the withdrawal minus the amount of the withdrawal, or;

b. is the Stepped-Up Benefit Base immediately prior to the withdrawal minus the amount of the withdrawal that makes total withdrawals for the Benefit Year equal to the current Maximum Annual Withdrawal Amount, and further reduced in the same proportion that the contract value was reduced by the amount of the withdrawal that exceeds the Maximum Annual Withdrawal Amount.

Maximum Annual Withdrawal Amount: If the sum of withdrawals in a Benefit Year does not exceed the Maximum Annual Withdrawal Amount for that Benefit Year, the Maximum Annual Withdrawal Amount does not change for the next Benefit Year. If total withdrawals in a Benefit Year exceed the Maximum Annual Withdrawal Amount, the Maximum Annual Withdrawal Amount will be recalculated at the start of the next Benefit Year. The new Maximum Annual Withdrawal Amount will equal the Stepped-Up Benefit Base on that Benefit Year anniversary divided by the Minimum Withdrawal Period on that Benefit Year anniversary. The new Maximum Annual Withdrawal Amount may be lower than your previous Maximum Annual Withdrawal Amounts.

Minimum Withdrawal Period: After each withdrawal, a new Minimum Withdrawal Period is calculated. If total withdrawals in a Benefit Year are less than or equal to the current Maximum Annual Withdrawal Amount, the new Minimum Withdrawal Period equals the Stepped-Up Benefit Base after the withdrawal, divided by the current Maximum Annual Withdrawal Amount.

During any Benefit Year in which the sum of withdrawals exceeds the Maximum Annual Withdrawal Amount, the new Minimum Withdrawal Period equals the Minimum Withdrawal Period calculated at the end of the prior Benefit Year reduced by one year.

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Contract Value: Any withdrawal under the Benefit reduces the contract value by the amount of the withdrawal.

The ACCESS PROTECTOR EXAMPLES APPENDIX provides examples of the effects of withdrawals on the Access Protector feature.

What happens if my contract value is reduced to zero?

If the contract value is zero but the Stepped-Up Benefit Base is greater than zero, a Benefit remains payable under the feature. However, the contract and its other features and benefits will be terminated once the contract value equals zero. Once the contract is terminated, you may not make subsequent Purchase Payments and no death benefit or future annuitization payments are available. Therefore, under adverse market conditions, withdrawals taken under the Benefit may reduce the contract value to zero eliminating any other benefits of the contract.

To receive your remaining Benefit, you may select one of the following options:

1. Lump sum distribution of the actuarial present value as determined by us, of the total remaining guaranteed withdrawals; or

2. the current Maximum Annual Withdrawal Amount, paid equally on a quarterly, semi-annual or annual frequency as selected by you until the Stepped-Up Benefit Base equals zero; or

3. any payment option mutually agreeable between you and us.

If you do not select a payment option, the remaining Benefit will be paid as the current Maximum Annual Withdrawal Amount on a quarterly basis.

What happens to Access Protector upon a spousal continuation?

A Continuing Spouse may elect to continue or cancel the feature and its accompanying fee. The components of the feature will not change as a result of a spousal continuation. See SPOUSAL CONTINUATION below.

Can my non-spousal Beneficiary elect to receive any remaining withdrawals under Access Protector upon my death?

If the Stepped-Up Benefit Base is greater than zero when the original owner dies, and the contract value equals zero and therefore no death benefit is payable, a non-spousal Beneficiary may elect to continue receiving any remaining withdrawals under the feature. The components of the feature will not change. If the Stepped-Up Benefit Base and the contract value are greater than zero, a non-spousal Beneficiary must make a death claim under the contract provisions which terminates the Benefit. See DEATH BENEFITS below.

Can Access Protector be cancelled?

Once you elect the feature, you may not cancel it. The feature automatically terminates upon the occurrence of one of the following:

1. Stepped-Up Benefit Base is equal to zero; or

2. Annuitization of the contract; or

3. Full surrender of the contract; or

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4. Death benefit is paid; or

5. Upon a spousal continuation, the Continuing Spouse elects not to continue the contract with the feature.

We reserve the right to terminate the feature if withdrawals in excess of Maximum Annual Withdrawal Amount in any Benefit Year reduce the Stepped-Up Benefit Base by 50% or more.

Important Information

Access Protector is designed to offer protection of your initial investment in the event of a significant market down turn. Access Protector may not guarantee an income stream based on all Purchase Payments made into your contract nor does it guarantee any investment gains. Access Protector does not guarantee a withdrawal of any subsequent Purchase Payments made after the 90th day following the contract issue date. This feature also does not guarantee lifetime income payments. You may never need to rely on Access Protector if your contract performs within a historically anticipated range. However, past performance is no guarantee of future results.

Withdrawals under the feature are treated like any other withdrawal for the purpose of reducing the contract value, free withdrawal amounts and all other benefits, features and conditions of your contract.

If you need to take withdrawals or are required to take required minimum distributions (“RMD”) under the Internal Revenue Code (“IRC”) from this contract prior to the Benefit Availability Date, you should know that such withdrawals may negatively impact the value of the Benefit. As noted above, your Stepped-Up Benefit Base will be reduced if you take withdrawals before the Benefit Availability Date. Any withdrawals taken under this feature or under the contract may be subject to a 10% IRS tax penalty if you are under age 59 1/2 at the time of the withdrawal. For information about how the feature is treated for income tax purposes, you should consult a qualified tax advisor concerning your particular circumstances. If you set up RMDs and have elected this feature, your distributions must be automated and will not be recalculated on an annual basis.

We reserve the right at the time your contract is issued to limit the maximum Eligible Purchase Payments to $1 million. For prospectively issued contracts, we reserve the right to limit the investment options available under the contract if you elect this Access Protector feature.

We reserve the right to modify, suspend or terminate the Access Protector feature (in its entirety or any component) at any time for prospectively issued contracts.

Capital Protector Feature

What is Capital Protector?

The Capital Protector is an optional feature of your variable annuity. If you elect this feature, for which you will be charged an annualized fee, at the end of applicable waiting period your contract will be worth at least the amount of your initial Purchase Payment (less adjustments for withdrawals). The Capital Protector may offer protection in the event that your contract value declines due to unfavorable investment performance in your contract.

If you elect the Capital Protector, at the end of the applicable waiting period we will evaluate your contract to determine if a Capital Protector benefit is payable to you. The applicable waiting period is ten full contract years from your contract issue date. The last day in the waiting period is your benefit date, the date on which we will calculate any Capital Protector benefit payable to you.

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How and when can I elect the feature?

You may only elect this feature at the time your contract is issued, so long as the applicable waiting period prior to receiving the benefit ends before your latest Annuity Date. You cannot elect the feature if you are age 81 or older on the contract issue date. The effective date for this feature will be your contract issue date. Capital Protector is not available if you elect the Access Protector. See Access Protector above.

The Capital Protector feature may not be available in your state or through the broker-dealer with which your financial representative is affiliated. Please check with your financial representative for availability.

Can Capital Protector be cancelled?

Generally, this feature and its corresponding charge cannot be cancelled or terminated prior to the end of the waiting period. The feature terminates automatically following the end of the waiting period. In addition, the Capital Protector will no longer be available and no benefit will be paid if a death benefit is paid or if the contract is fully surrendered or annuitized before the end of the waiting period.

How is the benefit calculated?

The Capital Protector is a one-time adjustment to your contract value in the event that your contract value at the end of the waiting period is less than the guaranteed amount. The amount of the benefit payable to you, if any, at the end of the waiting period will be based upon the amount of your initial Purchase Payment and may also include certain portions of subsequent Purchase Payments contributed to your contract over specified periods of time, as follows:

Time Elapsed Since Effective Date	Percentage of Purchase Payments included in the Capital Protector Benefit Calculation
0-90 days	100%
91+ days	0%

The Capital Protector benefit calculation is equal to your Capital Protector Base, as defined below, minus your contract value on the benefit date. If the resulting amount is positive, you will receive a benefit under the feature. If the resulting amount is negative, you will not receive a benefit. Your Capital Protector Base is equal to (a) minus (b) where:

(a) is the Purchase Payments received on or after the effective date multiplied by the applicable percentages in the table above, and;

(b) is an adjustment for all withdrawals and applicable fees and charges made subsequent to the effective date, in an amount proportionate to the amount by which the withdrawal decreased the contract value at the time of the withdrawal.

We will allocate any benefit amount contributed to the contract value on the benefit date to the Cash Management portfolio. Any Capital Protector benefit paid is not considered a Purchase Payment for purposes of calculating other benefits. Benefits based on earnings, such as the Annual Rachet Plan, will continue to define earnings as the difference between contract value and Purchase Payments adjusted for withdrawals. For information about how the benefit is treated for income tax purposes, you should consult a qualified tax advisor for information concerning your particular circumstances.

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What is the fee for Capital Protector?

Capital Protector is an optional feature. If elected, you will incur an additional charge for this feature. The annualized charge will be deducted from your contract value on a quarterly basis throughout the waiting period, beginning at the end of the first contract quarter following the effective date of the feature and up to and including on the benefit date. Once the feature is terminated, as discussed above, the charge will no longer be deducted. We will also not assess the quarterly fee if you surrender or annuitize before the end of the quarter.

Contract Year	Annualized Fee *
0-7	0.50%
8-10	0.25%
11+	none

* As a percentage of your contract value minus Purchase Payments received after the 90th day since the purchase of your contract. The amount of this charge is subject to change at any time for prospectively issued contracts.

What happens to Capital Protector upon a Spousal Continuation?

If your qualified spouse chooses to continue this contract upon your death, this benefit cannot be terminated. The effective date, the waiting period and the corresponding benefit payment date will not change as a result of a spousal continuation. See SPOUSAL CONTINUATION below.

Important Information

The Capital Protector feature may not guarantee a return of all of your Purchase Payments. If you plan to add subsequent Purchase Payments over the life of your contract, you should know that the Capital Protector would not protect the majority of those payments.

Since the Capital Protector feature may not guarantee a return of all Purchase Payments at the end of the waiting period, it is important to realize that subsequent Purchase Payments made into the contract may decrease the value of the Capital Protector benefit. For example, if near the end of the waiting period your Capital Protector Base is greater than your contract value, and you then make a subsequent Purchase Payment that causes your contract value to be larger than your Capital Protector Base on your benefit date, you will not receive any benefit even though you have paid for the Capital Protector feature throughout the waiting period. You should discuss subsequent Purchase Payments with your financial representative as such activity may reduce the value of this Capital Protector benefit.

We reserve the right to modify, suspend or terminate the Capital Protector feature (in its entirety or any component) at any time for prospectively issued contracts.

DEATH BENEFITS

If the owner dies during the Accumulation Phase of your contract, we pay a death benefit to the Beneficiary. At the time you purchase your contract, you must select a death benefit option. The Standard Death Benefit is automatically included in your contract for no additional fee. We also offer, for an additional fee, other death benefit options. Death benefit elections must be made at the time you purchase the contract and may not be terminated at a later date, except when your spouse continues the

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contract. See “Spousal Continuation” below. All optional death benefits may not be available in all states. You should discuss the available options with your financial representative to determine which options are best for you.

We do not pay the death benefit if the owner dies after beginning the Income Phase. However, if the owner dies during the Income Phase, any remaining guaranteed income payments will be made in accordance with the income option selected. See “Income Options” in this prospectus.

You name your Beneficiary. You may change the Beneficiary at any time, unless you previously made an irrevocable Beneficiary designation. If the contract is jointly owned, the surviving joint owner will be the primary Beneficiary and any other Beneficiary will be treated as the contingent Beneficiary unless specifically requested otherwise. Regardless of any reference in the Contract to the contrary, if a contract has two owners and either owner dies during the Accumulation Phase, we will pay the selected death benefit to the Beneficiary, whether or not you have designated a primary owner. All age related benefits and/or restrictions will utilize the age of the older owner.

We calculate and pay the death benefit when we receive all required paperwork and 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.

The Beneficiary may elect one of the following death benefit payment options unless previously chosen by the owner, to be paid as follows:

1. payment of the entire death benefit within 5 years of the date of your death; or

2. payment over the lifetime of the designated Beneficiary with distribution beginning within 1 year of the date of your death; or

3. if the designated Beneficiary is your spouse, he/she can continue this contract in his or her own name. See “Spousal Continuation” below.

The death benefit amount paid remains in the Variable Portfolios until distribution begins. From the time the death benefit is determined until complete distribution is made, any amount in the Separate Account will continue to be subject to investment risks. These risks are borne by the Beneficiary.

If an owner dies on or after the Annuity Date, any payments remaining will be made pursuant to the annuity option in force on the date of the owner’s death. All death benefits will cease to be in effect on the Latest Annuity Date, unless otherwise noted.

Death of the Annuitant

If the Annuitant is an individual other than the owner, and if the Annuitant dies during the Accumulation Phase, a new Annuitant may be named by the owner. If no new Annuitant is named within sixty (60) days of our receipt of proof of death, the owner will be the new Annuitant. If the owner is a non-natural person, the death of the Annuitant will be treated as the death of the owner. If the Annuitant dies during the Income Phase, the remaining payments, if any, will be as specified in the Income Option elected. We will require proof of the Annuitant’s death. Death benefits, if any, will be paid to the designated Beneficiary at least as rapidly as under the method of distribution in effect at the Annuitant’s death.

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Definitions

We define Net Purchase Payments as Purchase Payments less an Adjustment for each withdrawal. If you have not taken any withdrawals from your contract, Net Purchase Payments equals total Purchase Payments into your contract. To calculate the Adjustment amount for the first withdrawal made under the contract, we determine the percentage by which the withdrawal reduced contract value. For example, a $10,000 withdrawal from a $100,000 contract is a 10% reduction in value. This percentage is calculated by dividing the amount of each withdrawal by the contract value immediately before taking that withdrawal. The resulting percentage is then multiplied by the amount of total Purchase Payments and subtracted from the amount of total Purchase Payments on deposit at the time of the withdrawal. The resulting amount is the initial Net Purchase Payment calculation.

To arrive at the Net Purchase Payment calculation for subsequent withdrawals, we determine the percentage by which the contract value is reduced by taking the amount of the withdrawal in relation to the contract value immediately before taking the withdrawal. We then multiply the Net Purchase Payment calculation as determined prior to the withdrawal by this percentage. We subtract that result from the Net Purchase Payment calculation as determined prior to the withdrawal to arrive at all subsequent Net Purchase Payment calculations.

Standard Death Benefit

The Standard Death Benefit is the greater of:

1. contract value less Premium Enhancements paid during 24 months prior to death; or

2. Net Purchase Payments.

Optional Death Benefits

For an additional fee, you may elect one or more Optional Death Benefits. These elections must be made at the time of contract issue and may not be terminated at a later date by you. All optional death benefits may not be available in all states. The maximum issue age for the elections varies as shown below. The fees for the optional death benefits are deducted from your contract value each month.

If you allocate any portion of your contract value to either the AllianceBernstein Money Market Portfolio or available Fixed Account option, your election, if any, of the Equity Assurance Plan and/or the Enhanced Equity Assurance Plan will be terminated. We will notify you in writing before terminating these death benefits. If we terminate the Equity Assurance Plan and/or the Enhanced Equity Assurance Plan, the fee for these death benefit options will no longer be deducted. However, you may continue to allocate new Purchase Payments to either the AllianceBernstein Money Market Portfolio or available Fixed Account option as part of Dollar Cost Averaging, without terminating the Equity Assurance Plan or the Enhanced Equity Assurance Plan.

Annual Ratchet Plan. (Maximum issue age is 80.) If you elect the Annual Ratchet Plan, we will pay a death benefit equal to the greatest of:

1. contract value less Premium Enhancements paid during 24 months prior to death; or

2. Net Purchase Payments; or

3. the lesser of:

(a) the greatest contract value on any Contract Anniversary, less any Premium Enhancements paid during 24 months prior to death, plus any Net Purchase Payments made subsequent to that Contract Anniversary; or

(b) 200% of Net Purchase Payments.

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Equity Assurance Plan. (Maximum issue age is 75.) If you elect the Equity Assurance Plan, we will pay a death benefit equal to the greater of:

1. contract value less Premium Enhancements paid during 24 months prior to death; or

2. an amount equal to (a) plus (b) where:

(a) is equal to the Net Purchase Payments made on or before the first Contract Anniversary following the 80th birthday, accumulated at the compound interest rates shown below for the number of completed years from the date of receipt of each Purchase Payment to the earlier of the date of death or the first Contract Anniversary following the 80th birthday (not to exceed 7 years):

Annual Interest Rate	Period When Death Occurs
0%	1 through 12 months after Purchase Payment receipt;
1%	13 through 24 months after Purchase Payment receipt;
2%	25 through 36 months after Purchase Payment receipt;
3%	37 through 48 months after Purchase Payment receipt;
4%	49 through 60 months after Purchase Payment receipt;
5%	61 through 72 months after Purchase Payment receipt;
6%	73 through 84 months after Purchase Payment receipt;
7%	85 months or more after Purchase Payment receipt, and

(b) is equal to Net Purchase Payments paid after the first Contract Anniversary following the owner’s 80th birthday.

Each Purchase Payment will accumulate interest for a maximum of 7 years from the time is it applied to the contract.

Enhanced Equity Assurance Plan. (Maximum issue age is 75.) If you elect the Enhanced Equity Assurance Plan, we will pay a death benefit equal to the greatest of:

1. contract value less Premium Enhancements paid during 24 months prior to death; or

2. the lesser of:

(a) the greatest contract value on any Contract Anniversary, less any Premium Enhancements paid during 24 months prior to death, plus any Net Purchase Payments made subsequent to that Contract Anniversary; or

(b) 200% of Net Purchase Payments; or

3. an amount equal to (a) plus (b) where:

(a) is equal to the Net Purchase Payments made on or before the first Contract Anniversary following the 80th birthday, accumulated at the compound interest rates shown below for the number of completed years from the date of receipt of each Purchase Payment to the earlier of the date of death or the first Contract Anniversary following the 80th birthday (not to exceed 7 years):

Annual Interest Rate	Period When Death Occurs
0%	1 through 12 months after Purchase Payment receipt;
1%	13 through 24 months after Purchase Payment receipt;
2%	25 through 36 months after Purchase Payment receipt;
3%	37 through 48 months after Purchase Payment receipt;
4%	49 through 60 months after Purchase Payment receipt;
5%	61 through 72 months after Purchase Payment receipt;
6%	73 through 84 months after Purchase Payment receipt;
7%	85 months or more after Purchase Payment receipt, and

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(b) is equal to Net Purchase Payments paid after the first Contract Anniversary following the 80th birthday.

Each Purchase Payment will accumulate interest for a maximum of 7 years from the time is it applied to the contract.

Estate Benefit Payment. (Maximum issue age is 80.)

If you select the Estate Benefit Payment, we will add to the death benefit otherwise payable upon your death the amount of the estate benefit payment, determined as follows:

If you are age 60 or younger on the effective date of your contract, the estate benefit payment will equal the lesser of (a) 70% of Net Purchase Payments or (b) 70% of the contract value less Net Purchase Payments.

If you are between ages 61 and 70 on the effective date of your contract, the estate benefit payment will equal the lesser of (a) 50% of Net Purchase Payments or (b) 50% of the contract value less Net Purchase Payments.

If you are between ages 71 and 80 on the effective date of your contract, the estate benefit payment will equal the lesser of (a) 30% of Net Purchase Payments or (b) 30% of the contract value less Net Purchase Payments.

Accidental Death Benefit. (Maximum issue age is 75.)

If you select the Accidental Death Benefit at the time of application, we will pay it in addition to any other death benefit in effect at the time of your death. The accidental death benefit is not available if the contract is used in connection with an individual retirement annuity (IRA). The accidental death benefit payable under this option will be equal to the lesser of:

1. contract value as of the date the death benefit is determined; or

2. $250,000.

The Accidental Death Benefit is only payable if you die as a result of injury prior to the Contract Anniversary following your 75th birthday. The death must also occur before the Annuity Date and within 365 days of the date of the accident that caused the injury. The accidental death benefit terminates on the Contract Anniversary following your 75th birthday or upon the death of the original owner, whichever is earlier, and is not available to a continuing spouse.

The Accidental Death Benefit will not be paid for any death caused by or resulting (in whole or in part) from the following:

• suicide or attempted suicide, while sane or insane, or intentionally self-inflicted injuries;

• sickness, disease or bacterial infection of any kind, except pyogenic infections which occur as a result of an injury or bacterial infections which result from the accidental ingestion of contaminated substances;

• injury sustained as a consequence of riding in, including boarding or alighting from, any vehicle or device used for aerial navigation except if you are a passenger on any aircraft licensed for the transportation of passengers;

• declared or undeclared war or any act thereof; or

• service in the military, naval or air service of any country.

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If your contract was issued prior to May 3, 2004, please see the SAI for death benefit information.

Spousal Continuation

If you are the owner of the contract and the Beneficiary is your spouse, your spouse may elect to continue the contract after your death. The spouse becomes the new owner (“Continuing Spouse”) of the contract. Generally, the contract and its fees, charges and/or elected features, if any, remain the same, and the optional death benefit charge may change due to the age of the Continuing Spouse. If the Continuing Spouse makes new Purchase Payments, those Purchase Payments will be subject to withdrawal charges. However, Purchase Payments made by the original owner that were subject to a withdrawal charge will no longer be subject to a withdrawal charge after a spousal continuation. See “Withdrawal Charges” below. A spousal continuation can only take place upon the death of the original owner of the contract and may be elected only one time during the life of the contract.

Upon spousal continuation, we will contribute to the contract value an amount by which the death benefit that would have been paid to the Beneficiary upon the death of the original owner exceeds the contract value (“Continuation Contribution”), if any. We calculate the Continuation Contribution as of the date of the original owner’s death. We will add the Continuation Contribution as of the date we receive both the Continuing Spouse’s written request to continue the contract and proof of death of the original owner in a form satisfactory to us (“Continuation Date”). The Continuation Contribution is not considered a Purchase Payment for the purposes of any other calculations except as explained in Appendix B. See Appendix B for further explanation of the death benefit calculations following a Spousal Continuation.

On the Continuation Date, the Continuing Spouse may terminate the original owner’s election(s) of the optional death benefits. The age of the spouse as of the Continuation Date will be used as the basis for determining the availability, cost, and calculation of future death benefits payable upon death of the spousal Beneficiary. If the attained age of the spousal Beneficiary exceeds the maximum issue age for a continued optional benefit, we will terminate the benefit and the charge will no longer be deducted. See the maximum issue ages shown above for the optional death benefits.

To the extent that the Continuing Spouse invests in the Variable Portfolios, the spouse will be subject to investment risk as was the original owner. This is because the death benefit amount paid remains invested until withdrawn.

We reserve the right to modify, suspend or terminate the spousal continuation provision (in its entirety or any component) at any time with respect to prospectively issued contracts.

EXPENSES

There are charges and expenses associated with your contract. These charges and expenses reduce your investment return. We will not increase the insurance and withdrawal charges under your contract. However, the investment charges under your contract may increase or decrease.

Separate Account Charges

The Company deducts Separate Account charges based on the age of the contract owner at the time of contract issue. For contract owners under age 66 at the time of purchase, the Separate Account charge equals 1.60% annually of the average daily value of your contract allocated to the Variable Portfolios;

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and for contract owners age 66 and over at the time of contract purchase, the Separate Account charge equals 1.70% annually of the average daily value of your contract allocated to the Variable Portfolios. We deduct the charge daily. This charge compensates the Company for the mortality and expense risks and the costs of contract administration and distribution assumed by the Company.

Generally, the mortality risks assumed by the Company arise from its contract obligations to make income payments after the Annuity Date and to provide a death benefit. The expense risk assumed by the Company is that the costs of administering the contract and the Separate Account will exceed the amount received from other fees and charges assessed under the contract.

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. The Separate Account charge is expected to result in a profit. Profit may be used for any legitimate cost/expense including the Premium Enhancement and distribution, depending upon market conditions.

Withdrawal Charges

The contract provides for a free withdrawal amount every year. See “Access to Your Money” in this prospectus. If you take money out in excess of the free withdrawal amount, you may incur a withdrawal charge. You may also incur a withdrawal charge upon a full surrender.

We apply a withdrawal charge against each Purchase Payment you put into the contract. After a Purchase Payment has been in the contract for 7 complete years, no withdrawal charge applies. The withdrawal charge equals a percentage of the Purchase Payment you take out of the contract. The withdrawal charge percentage declines over a seven year period for each Purchase Payment in the contract, as follows:

Withdrawal Charge (as a percentage of each Purchase Payment)

Years
1	2	3	4	5	6	7	8+
6%	6%	5%	5%	4%	3%	2%	0%

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

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

We will not assess a withdrawal charge for money withdrawn to pay a death benefit or to pay contract fees or charges. We will not assess a withdrawal charge when you begin the Income Phase. See “Income Options” below.

Withdrawals made prior to age 59 ¹/2 may result in tax penalties. See “Taxes” below.

Underlying Fund Expenses

Investment Management Fees

Charges are deducted from your Variable Portfolios for the advisory and other expenses of the Variable Portfolios. The Fee Tables in this prospectus illustrate these charges and expenses. For more detailed information on these investment charges, refer to the prospectus for the Series Fund, attached.

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Service Fees

Shares of certain Variable Portfolios may be subject to fees imposed under a servicing plan adopted by the Series Fund pursuant to Rule 12(b)(1) of the Investment Company Act of 1940. This annualized service fee of 0.25% for the Class B Shares of a Variable Portfolio is also known as a 12(b)(1) fee. Generally, this fee may be paid to financial intermediaries for services provided over the life of the contract. See “Fee Tables” in this prospectus.

Transfer Fee

We permit 12 free transfers between investment options each contract year. We charge you $10 for each additional transfer that contract year. See “Investment Options” and “Transfers” in this prospectus.

Optional Death Benefit Charges

The fee for the optional death benefit charges is deducted monthly as a percentage of your average daily net asset value, as described below:

If age 65 or younger:
Optional Annual Rachet*	0.05	%
Optional Equity Assurance*	0.10	%
Optional Estate Benefit Payment	0.20	%
Optional Accidental Death Benefit	0.05	%
If age 66 or older:
Optional Annual Rachet*	0.05	%
Optional Equity Assurance*	0.15	%
Optional Estate Benefit Payment	0.20	%
Optional Accidental Death Benefit	0.05	%

^* The Enhanced Equity Assurance Plan includes both the Annual Rachet Plan and the Equity Assurance Plan.

Optional Access Protector Fee

The annualized Access Protector fee will be assessed as a percentage of the Withdrawal Benefit Base. The fee will be deducted quarterly from your contract value starting on the first quarter following the contract issue date and ending upon the termination of the feature. If your contract value falls to zero before the feature has been terminated, the fee will no longer be assessed. We will not assess the quarterly fee if you surrender or annuitize before the end of a quarter. The fee is as follows:

Contract Year	Annualized Fee
0-7 years	0.65% of Withdrawal Benefit Base
8-10 years	0.45% of Withdrawal Benefit Base
11+ years	none

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Optional Capital Protector Fee

The annualized fee for the Capital Protector feature is calculated as a percentage of your contract value minus Purchase Payments received after the 90th day since the contract issue date. If you elect the feature, the charge is deducted at the end of the first contract quarter and quarterly thereafter from your contract value. The fee is as follows:

Contract Year	Annualized Fee
0-7	0.50%
8-10	0.25%
11+	none

Premium Tax

Certain states charge the Company a tax on the premiums you pay into the contract ranging from zero to 3 ¹/2%. 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.

Premium taxes are subject to change without notice. In many states, there is no tax at all. For current information, you should consult your tax adviser.

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.

AIG SunAmerica Life may make such a determination regarding sales to its employees, its affiliates’ employees and employees of currently contracted broker-dealers; its registered representatives and immediate family members of all of those described.

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

INCOME OPTIONS

Annuity Date

During the Income Phase, we use the money accumulated in your contract to make regular income payments to you. You may begin the Income Phase any time after your second contract anniversary.

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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 notify the Annuity Service Office in writing 30 days before the income payments are scheduled to begin. Once you begin receiving income payments, you cannot change your income option. Except as indicated below, once you begin receiving income payments, you cannot otherwise access your money through a withdrawal or surrender.

Income payments must begin on or before the Annuitant’s 90th birthday. 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.

Income Options

The contract offers the three annuity options described below. Other annuity options may be made available, including other guarantee periods and options without life contingencies, subject to our discretion. Contact the Annuity Service Center for more information. If you do not choose an annuity option, we will make annuity payments in accordance with option 2. However, if the annuity payments are for joint lives, we will make payments in accordance with option 3.

We base our calculation of income payments on the life of the Annuitant and the annuity rates set forth in your contract. A natural contract owner 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. The Annuitant may not be changed in a contract owned by a non-natural owner.

Option 1 — Life Income

Under this option, we will make monthly annuity payments as long as the Annuitant is alive. Annuity payments stop when the Annuitant dies. If the Annuitant dies after the first payment, then we will make only one payment.

Option 2 — Life Income With Minimum 10 Year Guarantee

Under this option, we will make monthly annuity payments as long as the Annuitant is alive with the additional guarantee that payments will be made for a period you select of at least 10 years. If the Annuitant dies before all guaranteed payments have been made, the rest will be paid to the Beneficiary for the remainder of the period.

Option 3 — Joint and Last Survivor Annuity

Under this option, we will make monthly annuity payments as long as either the Annuitant or Joint Annuitant is alive. Upon the death of either of you, we will continue to make annuity payments so long as the survivor is alive. We will stop making payments after the last survivor’s death.

The value of an Annuity Unit, regardless of the option chosen, takes into account the Separate Account Expenses. Please read the 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. Unless otherwise elected, if at the date when income payments begin you are invested in the Variable Portfolios only, your income

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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, AIG SunAmerica 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 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 $2,000 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 on the Annuity Date, your income payments will depend on the following:

• for life options, your age, when payments begin, and in most states, if a Non-Qualified contract, your gender;

• the value of your contract in the Variable Portfolios;

• the 5.00% 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.

The value of variable income payments, if elected, is based on an assumed interest rate (“AIR”) of 5.0% compounded annually. Variable income payments generally increase or decrease from one income payment date to the next based upon the performance of the applicable Variable Portfolios. If the performance of the Variable Portfolios selected is equal to the AIR, the income payments will remain constant. If performance of Variable Portfolios is greater than the AIR, the income payments will increase and if it is less than the AIR, the income payments will decline.

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. See also “Access to Your Money” for a discussion of when payments from the Variable Portfolios may be suspended or postponed.

TAXES

Note: The basic summary below addresses broad federal taxation matters, and generally does not address state taxation issues or questions. 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. We have included an additional discussion regarding taxes in the SAI.

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Annuity Contracts in General

The Internal Revenue Code (“IRC”) provides for special rules regarding the tax treatment of annuity contracts. Generally, taxes on the earnings in your annuity contract are deferred until you take the money out. Qualified retirement investments that satisfy specific tax and ERISA requirements automatically provide tax deferral regardless of whether the underlying contract is an annuity, a trust, or a custodial account. 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 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 or arrangements are: Individual Retirement Accounts (“IRAs”), Roth IRAs, Tax-Sheltered Annuities (referred to as 403(b) contracts), plans of self-employed individuals (often referred to as H.R. 10 Plans or Keogh Plans) and pension and profit sharing plans, including 401(k) plans. Typically, for employer plans and tax-deductible IRA contributions, 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. However, you normally will have cost basis in a Roth IRA, and you may have cost basis in a traditional IRA or in another Qualified Contract.

Tax Treatment of Distributions — Non-Qualified Contracts

If you make a partial or total 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. Purchase payments made prior to August 14, 1982, however, are an important exception to this general rule, and for tax purposes are treated as being distributed before the earnings on those contributions. If you annuitize your contract, a portion of each income payment will be considered, for tax purposes, to be a return of a portion of your Purchase Payment(s). Any portion of each income 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 periodic payments calculated over your life or for the joint lives of you and your Beneficiary for a period of 5 years or attainment of age 59 ¹/2, whichever is longer; (5) under an immediate annuity; or (6) which are attributable to Purchase Payments made prior to August 14, 1982.

Tax Treatment of Distributions — Qualified Contracts (including governmental 457(b) eligible deferred compensation plans)

Generally, you have not paid any taxes on the Purchase Payments used to buy a Qualified contract. As a result, with certain limited exceptions, any amount of money you take out as a withdrawal or as income payments is taxable income. In the case of certain Qualified contracts, the IRC further provides for a 10% penalty tax on any taxable 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

40

substantially equal periodic payments calculated over your life or for the joint lives of you and your Beneficiary, that begins after separation from service with the employer sponsoring the plan and continued for a period of 5 years until you attain age 59 ¹/2, whichever is longer; (5) to the extent such withdrawals do not exceed limitations set by the IRC for deductible amounts paid during the taxable year for medical care; (6) to fund higher education expenses (as defined in the IRC; only from an IRA); (7) to fund certain first-time home purchase expenses (only from an IRA); (8) when you separate from service after attaining age 55 (does not apply to an IRA); (9) when paid for health insurance, if you are unemployed and meet certain requirements; and (10) when paid to an alternate payee pursuant to a qualified domestic relations order (does not apply to IRAs). This 10% penalty tax does not apply to withdrawals or income payments from governmental 457(b) eligible deferred compensation plans, except to the extent that such withdrawals or income payments are attributable to a prior rollover to the plan (or earnings thereon) from another plan or arrangement that was subject to the 10% penalty tax.

The IRC limits the withdrawal of an employee’s voluntary Purchase Payments from a Tax-Sheltered Annuity (TSA). Withdrawals can only be made when an owner (1) reaches age 59 ¹/2; (2) severs employment with the employer; (3) dies; (4) becomes disabled (as defined in the IRC); or (5) experiences a financial hardship (as defined in the IRC). In the case of hardship, the owner can only withdraw Purchase Payments. Additional plan limitations may also apply. Amounts held in a TSA annuity contract as of December 31, 1988 are not subject to these restrictions. Qualifying transfers of amounts from one TSA contract to another TSA contract under section 403(b) or to a custodial account under section 403(b) (7), and qualifying transfers to a state defined benefit plan to purchase service credits, are not considered distributions, and thus are not subject to these withdrawal limitations. If amounts are transferred from a custodial account described in Code section 403(b) (7) to this contract the transferred amount will retain the custodial account withdrawal restrictions.

Withdrawals from other Qualified Contracts are often limited by the IRC and by the employer’s plan.

Minimum Distributions

Generally, the IRC 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 separate from service from the employer sponsoring the plan. If you own an IRA, you must begin taking distributions when you attain age 70 ¹/2. If you own more than one TSA, you may be permitted to take your annual distributions in any combination from your TSAs. A similar rule applies if you own more than one IRA. However, you cannot satisfy this distribution requirement for your TSA contract by taking a distribution from an IRA, and you cannot satisfy the requirement for your IRA by taking a distribution from a TSA.

You may be subject to a surrender charge on withdrawals taken to meet minimum distribution requirements, if the withdrawals exceed the contract’s maximum penalty free amount.

Failure to satisfy the minimum distribution requirements may result in a tax penalty. You should consult your tax advisor for more information.

You may elect to have the required minimum distribution amount on your contract calculated and withdrawn each year under the automatic withdrawal option. You may select monthly, quarterly, semiannual, or annual withdrawals for this purpose. This service is provided as a courtesy and we do not guarantee the accuracy of our calculations. Accordingly, we recommend you consult your tax advisor concerning your required minimum distribution. You may terminate your election for automated minimum distribution at any time by sending a written request to our Annuity Service Center. We reserve the right to change or discontinue this service at any time.

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The IRS issued regulations, effective January 1, 2003, regarding required minimum distributions from qualified annuity contracts. One of the regulations effective January 1, 2006 require that the annuity contract value used to determine required minimum distributions include the actuarial value of other benefits under the contract, such as optional death benefits. This regulation does not apply to required minimum distributions made under an irrevocable annuity income option. Generally, we are currently awaiting further clarification from the IRS on this regulation, including how the value of such benefits is determined. You should discuss the effect of these new regulations with your tax advisor.

Tax Treatment of Death Benefits

Any death benefits paid under the contract are taxable to the Beneficiary. The rules governing the taxation of payments from an annuity contract, as discussed above, generally apply whether the death benefits are paid as lump sum or annuity payments. Estate taxes may also apply.

Certain enhanced death benefits may be purchased under your contract. Although these types of benefits are used as investment protection and should not give rise to any adverse tax effects, the IRS could take the position that some or all of the charges for these death benefits should be treated as a partial withdrawal from the contract. In that case, the amount of the partial withdrawal may be includible in taxable income and subject to the 10% penalty if the owner is under 59 ¹/2.

If you own a Qualified contract and purchase these enhanced death benefits, the IRS may consider these benefits “incidental death benefits.” The IRC imposes limits on the amount of the incidental death benefits allowable for Qualified contracts. If the death benefit(s) selected by you are considered to exceed these limits, the benefit(s) could result in taxable income to the owner of the Qualified contract. Furthermore, the IRC provides that the assets of an IRA (including a Roth IRA) may not be invested in life insurance, but may provide, in the case of death during the Accumulation Phase, for a death benefit payment equal to the greater of Purchase Payments or contract value. This contract offers death benefits, which may exceed the greater of Purchase Payments or contract value. If the IRS determines that these benefits are providing life insurance, the contract may not qualify as an IRA (including Roth IRAs). You should consult your tax advisor regarding these features and benefits prior to purchasing a contract.

Contracts Owned by a Trust or Corporation

A Trust or Corporation (“Non-Natural owner”) that is considering purchasing this contract should consult a tax advisor. Generally, the IRC does not treat a Non-Qualified contract owned by a non-natural owner as an annuity contract for Federal income tax purposes. The non-natural owner pays tax currently on the contract’s value in excess of the owner’s cost basis. However, this treatment is not applied to a contract held by a trust or other entity as an agent for a natural person nor to contracts held by Qualified Plans. See the SAI for a more detailed discussion of the potential adverse tax consequences associated with non-natural ownership of a non-qualified annuity contract.

Gifts, Pledges and/or Assignments of a Contract

If you transfer ownership of your Non-Qualified contract to a person other than your spouse (or former spouse incident to divorce) as a gift you will pay federal income tax on the contract’s cash value to the extent it exceeds your cost basis. The recipient’s cost basis will be increased by the amount on which you will pay federal taxes. In addition, the IRC treats any assignment or pledge (or agreement to assign or pledge) of any portion of a Non-Qualified contract as a withdrawal. See the SAI for a more detailed discussion regarding potential tax consequences of gifting, assigning, or pledging a Non-Qualified contract.

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The IRC prohibits Qualified annuity contracts including IRAs from being transferred, assigned or pledged as security for a loan. This prohibition, however, generally does not apply to loans under an employer-sponsored plan (including loans from the annuity contract) that satisfy certain requirements, provided that: (a) the plan is not an unfunded deferred compensation plan; and (b) the plan funding vehicle is not an IRA.

Diversification and Investor Control

The IRC imposes certain diversification requirements on the underlying investments for a variable annuity. We believe that the management of the Underlying Funds monitors the Funds 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, and not the Company, would be considered the owner of the shares of the Variable Portfolios under your Non-Qualified Contract, because of the degree of control you exercise over the underlying investments. This diversification requirement is sometimes referred to as “investor control.” It is unknown to what extent owners are permitted to select investments, to make transfers 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 should generally be applied prospectively. However, if such guidance is considered not to be a new position, it may be applied retroactively. This would mean that you, as the owner of the Non-qualified 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.

These investor control limitations generally do not apply to Qualified Contracts, which are referred to as “Pension Plan Contracts” for purposes of this rule, although the limitations could be applied to Qualified Contracts in the future.

OTHER INFORMATION

AIG SunAmerica Life

AIG SunAmerica Life is a stock life insurance company originally organized under the laws of the state of California in April 1965. On January 1, 1996, AIG SunAmerica Life redomesticated 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. AIG SunAmerica Life is an indirect, wholly owned subsidiary of American International Group, Inc. (“AIG”), a Delaware corporation.

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The Separate Account

AIG SunAmerica Life established Variable Annuity Account Nine (“Separate Account”), under Arizona law on February 4, 2002. The Separate Account is registered with the SEC as a unit investment trust under the Investment Company Act of 1940, as amended.

AIG SunAmerica Life 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 AIG SunAmerica Life. 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 AIG SunAmerica Life. Assets in the Separate Account are not guaranteed by AIG SunAmerica Life.

The General Account

Money allocated to any Fixed Account options goes into the Company’s general account. The general account consists of all of the company’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 of the Company’s contract holders as well as all of its creditors. The general account funds are invested as permitted under state insurance laws.

The Company has a support agreement in effect between the Company and its ultimate parent company, American International Group, Inc. (“AIG”), and the Company’s insurance policy obligations are guaranteed by American Home Assurance Company, a subsidiary of AIG. See the Statement of Additional Information for more information regarding these arrangements.

Payments in Connection with Distribution of the Contract

Payments to Broker-Dealers

Registered representatives of broker-dealers sell the contract. We pay commissions to the broker-dealers for the sale of your contract (“Contract Commissions”). There are different structures by which a broker-dealer can choose to have their Contract Commissions paid. For example, as one option, we may pay upfront Contract Commission only, that may be up to a maximum 8% of each Purchase Payment you invest (which may include promotional amounts). Another option may be a lower upfront Contract Commission on each Purchase Payment, with a trail commission of up to a maximum 1.50% of contract value annually. Generally, the higher the upfront commissions, the lower the trail and vice versa. We pay Contract Commissions directly to the broker-dealer with whom your registered representative is affiliated. Registered representatives may receive a portion of these amounts we pay in accordance with any agreement in place between the registered representative and his/her broker-dealer firm.

We may pay broker-dealers support fees in the form of additional cash or non-cash compensation. These payments may be intended to reimburse for specific expenses incurred or may be based on sales, certain assets under management, longevity of assets invested with us or a flat fee. These payments may be consideration for, among other things, product placement/preference, greater access to train and educate the firm’s registered representatives about our products, our participation in sales conferences and educational seminars and allowing broker-dealers to perform due diligence on our products. The amount of these fees may be tied to the anticipated level of our access in that firm. We enter into such arrangements in our discretion and we may negotiate customized arrangements with firms, including affiliated and non-affiliated broker-dealers based on various factors. We do not deduct

44

these amounts directly from your Purchase Payments. We anticipate recovering these amounts from the fees and charges collected under the contract.

Contract commissions and other support fees may influence the way that a broker-dealer and its registered representatives market the contracts and service customers who purchase the contracts and may influence the broker-dealer and its registered representatives to present this contract over others available in the market place. You should discuss with your broker-dealer and/or registered representative how they are compensated for sales of a contract and/or any resulting real or perceived conflicts of interest.

AIG SunAmerica Capital Services, Inc., Harborside Financial Center, 3200 Plaza 5, Jersey City, NJ 07311-4992, distributes the contracts. AIG SunAmerica Capital Services, an affiliate of AIG SunAmerica Life, is a registered broker-dealer under the Exchange Act of 1934 and is a member of the National Association of Securities Dealers, Inc. No underwriting fees are paid in connection with the distribution of the contracts.

Payments We Receive

In addition to amounts received pursuant to established 12b-1 Plans from the Underlying Funds, we receive compensation of up to 0.20% annually based on assets under management from the Series Fund’s investment adviser or its affiliates for services related to the availability of the Underlying Funds in the contract. Furthermore, the Series Fund’s investment adviser or its affiliates may help offset the costs we incur for training to support sales of the Underlying Funds in the contract.

Administration

We are ultimately responsible for the administrative servicing of your contract, and have engaged an administrator for servicing assistance. Please contact our Annuity Service Center if you have any comment, question or service request:

Delaware Valley Financial Services

P.O. Box 3031

Berwyn, PA 19312-0031

(800) 255-8402

We send out transaction confirmations and quarterly statements. During the Accumulation Phase, you will receive confirmation of transactions within your contract. Transactions made pursuant to contractual or systematic agreements, such as deduction of dollar cost averaging, may be confirmed quarterly. Purchase Payments received through the automatic payment plan or a salary reduction arrangement, may also be confirmed quarterly. For all other transactions, we send confirmations immediately. It is your responsibility to review these documents carefully and notify us of any inaccuracies immediately. We investigate all inquiries. To the extent that we believe we made an error, We retroactively adjust your contract, provided you notify us within 30 days of receiving the transaction confirmation or quarterly statement. Any other adjustments we deem warranted are made as of the time we receive notice of the error.

Legal Proceedings

There are no pending legal proceedings affecting the Separate Account. The Company and its subsidiaries are parties to various kinds of litigation incidental to their respective business operations.

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In management’s opinion, these matters are not material in relation to the financial position of the Company with the exception of the matter disclosed below.

A purported class action captioned Nitika Mehta, as Trustee of the N.D. Mehta Living Trust vs. AIG SunAmerica Life Assurance Company, Case 04L0199, was filed on April 5, 2004 in the Circuit Court, Twentieth Judicial District in St. Clair County, Illinois. The action has been transferred to and is currently pending in the United States District Court for the District of Maryland, Case No. 04-md-15863, as part of a Multi-District Litigation proceeding. The lawsuit alleges certain improprieties in conjunction with alleged market timing activities. The probability of any particular outcome cannot be reasonably estimated at this time.

AIG has announced that it has delayed filing its Annual Report on Form 10-K for the year ended December 31, 2004 to allow AIG’s Board of Directors and new management adequate time to complete an extensive review of AIG’s books and records. The review includes issues arising from pending investigations into non-traditional insurance products and certain assumed reinsurance transactions by the Office of the Attorney General for the State of New York and the Securities and Exchange Commission and from AIG’s decision to review the accounting treatment of certain additional items. Circumstances affecting AIG can have an impact on the Company. For example, the recent downgrades and ratings actions taken by the major rating agencies with respect to AIG resulted in corresponding downgrades and ratings actions being taken with respect to the Company’s ratings. Accordingly, we can give no assurance that any further changes in circumstances for AIG will not impact us.

Registration Statement

A registration statement has been filed with the SEC under the Securities Act of 1933 relating to the contract. This prospectus does not contain all the information in the registration statement as permitted by SEC regulations. The omitted information can be obtained from the SEC’s principal office in Washington, D.C., upon payment of a prescribed fee.

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TABLE OF CONTENTS OF STATEMENT OF ADDITIONAL INFORMATION

Additional information concerning the operations of the Separate Account is contained in a Statement of Additional Information, which is available without charge upon written request addressed to us at our Annuity Service Center:

Delaware Valley Financial Services

P.O. Box 3031

Berwyn, PA 19312-0031

(800) 255-8402

The contents of the SAI are shown below.

Separate Account	3
General Account	4
Performance Data	4
Death Benefits for Contracts Purchased Before May 3, 2004	7
Income Payments	12
Annuity Unit Values	13
Taxes	15
Distribution of Contracts	21
Financial Statements	21

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APPENDIX A — CONDENSED FINANCIALS

		Inception to 12/31/02		Fiscal Year Ending 12/31/03		Fiscal Year Ending 12/31/04
AllianceBernstein Americas Government Income Portfolio (Inception Date - 12/17/02)
Beginning AUV	(a)	$	17.921	$	18.125	$	19.121
Beginning AUV	(b)		N/A		N/A	$	18.945
Ending AUV	(a)	$	18.125	$	19.121	$	19.697
Ending AUV	(b)		N/A		N/A	$	19.664
Ending Number of AUs	(a)		9		71,175		73,369
Ending Number of AUs	(b)		N/A		N/A		6,365
AllianceBernstein Balanced Wealth Strategy Portfolio (Inception Date - 7/1/04)
Beginning AUV	(a)		N/A		N/A	$	10.000
Beginning AUV	(b)		N/A		N/A	$	10.000
Ending AUV	(a)		N/A		N/A	$	10.569
Ending AUV	(b)		N/A		N/A	$	10.552
Ending Number of AUs	(a)		N/A		N/A		71,763
Ending Number of AUs	(b)		N/A		N/A		17,992
AllianceBernstein Global Bond Portfolio (Inception Date - 12/17/02)
Beginning AUV	(a)	$	15.057	$	15.334	$	16.948
Beginning AUV	(b)		N/A		N/A	$	16.479
Ending AUV	(a)	$	15.334	$	16.948	$	18.236
Ending AUV	(b)		N/A		N/A	$	18.205
Ending Number of AUs	(a)		10		19,445		17,258
Ending Number of AUs	(b)		N/A		N/A		193
AllianceBernstein Global Dollar Government Portfolio (Inception Date - 12/17/02)
Beginning AUV	(a)	$	21.151	$	21.477	$	28.186
Beginning AUV	(b)		N/A		N/A	$	26.874
Ending AUV	(a)	$	21.477	$	28.186	$	30.458
Ending AUV	(b)		N/A		N/A	$	30.367
Ending Number of AUs	(a)		8		16,835		14,419
Ending Number of AUs	(b)		N/A		N/A		16
AllianceBernstein Global Research Growth Portfolio* (Inception Date - N/A)
Beginning AUV	(a)		N/A		N/A		N/A
Beginning AUV	(b)		N/A		N/A		N/A
Ending AUV	(a)		N/A		N/A		N/A
Ending AUV	(b)		N/A		N/A		N/A
Ending Number of AUs	(a)		N/A		N/A		N/A
Ending Number of AUs	(b)		N/A		N/A		N/A
AllianceBernstein Global Technology Portfolio (Inception Date - 12/17/02)
Beginning AUV	(a)	$	10.920	$	10.336	$	14.621
Beginning AUV	(b)		N/A		N/A	$	13.772
Ending AUV	(a)	$	10.336	$	14.621	$	15.122
Ending AUV	(b)		N/A		N/A	$	15.078
Ending Number of AUs	(a)		13		59,403		99,080
Ending Number of AUs	(b)		N/A		N/A		942

* Available on or about June 1, 2005.

(a) With total expense of 1.60%

(b) With total expense of 1.70%

AUV - Accumulation Unit Value

AU - Accumulation Units

A-1

		Inception to 12/31/02		Fiscal Year Ending 12/31/03		Fiscal Year Ending 12/31/04
AllianceBernstein Growth Portfolio (Inception Date - 12/17/02)
Beginning AUV	(a)	$	16.803	$	16.386	$	21.728
Beginning AUV	(b)		N/A		N/A	$	22.749
Ending AUV	(a)	$	16.386	$	21.728	$	24.491
Ending AUV	(b)		N/A		N/A	$	24.441
Ending Number of AUs	(a)		9		33,721		57,502
Ending Number of AUs	(b)		N/A		N/A		770
AllianceBernstein Growth and Income Portfolio (Inception Date - 12/17/02)
Beginning AUV	(a)	$	27.737	$	26.778	$	34.843
Beginning AUV	(b)		N/A		N/A	$	35.473
Ending AUV	(a)	$	26.778	$	34.843	$	38.139
Ending AUV	(b)		N/A		N/A	$	38.094
Ending Number of AUs	(a)		6		120,270		129,656
Ending Number of AUs	(b)		N/A		N/A		2,116
AllianceBernstein High-Yield Portfolio (Inception Date - 12/17/02)
Beginning AUV	(a)	$	8.463	$	8.496	$	10.204
Beginning AUV	(b)		N/A		N/A	$	10.226
Ending AUV	(a)	$	8.496	$	10.204	$	10.808
Ending AUV	(b)		N/A		N/A	$	10.791
Ending Number of AUs	(a)		18		123,333		143,727
Ending Number of AUs	(b)		N/A		N/A		8,555
AllianceBernstein International Portfolio (Inception Date - 12/17/02)
Beginning AUV	(a)	$	9.585	$	9.637	$	12.335
Beginning AUV	(b)		N/A		N/A	$	12.211
Ending AUV	(a)	$	9.637	$	12.335	$	14.252
Ending AUV	(b)		N/A		N/A	$	14.222
Ending Number of AUs	(a)		15		28,593		56,557
Ending Number of AUs	(b)		N/A		N/A		1,184
AllianceBernstein International Value Portfolio (Inception Date - 12/17/02)
Beginning AUV	(a)	$	9.117	$	9.091	$	12.848
Beginning AUV	(b)		N/A		N/A	$	13.169
Ending AUV	(a)	$	9.091	$	12.848	$	15.790
Ending AUV	(b)		N/A		N/A	$	15.767
Ending Number of AUs	(a)		19		206,547		268,221
Ending Number of AUs	(b)		N/A		N/A		5,737
AllianceBernstein Large Cap Growth Portfolio (Inception Date - 12/17/02)
Beginning AUV	(a)	$	20.994	$	20.055	$	24.353
Beginning AUV	(b)		N/A		N/A	$	23.949
Ending AUV	(a)	$	20.055	$	24.353	$	25.966
Ending AUV	(b)		N/A		N/A	$	25.896
Ending Number of AUs	(a)		8		120,642		134,966
Ending Number of AUs	(b)		N/A		N/A		450
AllianceBernstein Money Market Portfolio (Inception Date - 12/17/02)
Beginning AUV	(a)	$	12.756	$	12.752	$	12.553
Beginning AUV	(b)		N/A		N/A	$	12.492
Ending AUV	(a)	$	12.752	$	12.553	$	12.406
Ending AUV	(b)		N/A		N/A	$	12.390
Ending Number of AUs	(a)		12		74,436		94,929
Ending Number of AUs	(b)		N/A		N/A		249

(a) With total expense of 1.60%

(b) With total expense of 1.70%

AUV - Accumulation Unit Value

AU - Accumulation Units

A-2

		Inception to 12/31/02		Fiscal Year Ending 12/31/03		Fiscal Year Ending 12/31/04
AllianceBernstein Real Estate Investment Portfolio (Inception Date - 12/17/02)
Beginning AUV	(a)	$	12.302	$	12.480	$	17.077
Beginning AUV	(b)		N/A		N/A	$	16.603
Ending AUV	(a)	$	12.480	$	17.077	$	22.736
Ending AUV	(b)		N/A		N/A	$	22.693
Ending Number of AUs	(a)		15		72,554		72,143
Ending Number of AUs	(b)		N/A		N/A		3,085
AllianceBernstein Small Cap Growth Portfolio (Inception Date - 12/17/02)
Beginning AUV	(a)	$	7.256	$	7.147	$	10.454
Beginning AUV	(b)		N/A		N/A	$	10.470
Ending AUV	(a)	$	7.147	$	10.454	$	11.768
Ending AUV	(b)		N/A		N/A	$	11.747
Ending Number of AUs	(a)		21		119,625		153,253
Ending Number of AUs	(b)		N/A		N/A		1,033
AllianceBernstein Small/Mid Cap Value Portfolio (Inception Date - 12/17/02)
Beginning AUV	(a)	$	10.276	$	10.173	$	14.109
Beginning AUV	(b)		N/A		N/A	$	14.295
Ending AUV	(a)	$	10.173	$	14.109	$	16.534
Ending AUV	(b)		N/A		N/A	$	16.514
Ending Number of AUs	(a)		19		118,740		157,103
Ending Number of AUs	(b)		N/A		N/A		1,202
AllianceBernstein Total Return Portfolio (Inception Date - 12/17/02)
Beginning AUV	(a)	$	19.162	$	18.977	$	22.186
Beginning AUV	(b)		N/A		N/A	$	22.341
Ending AUV	(a)	$	18.977	$	22.186	$	23.755
Ending AUV	(b)		N/A		N/A	$	23.716
Ending Number of AUs	(a)		8		141,233		306,929
Ending Number of AUs	(b)		N/A		N/A		3,203
AllianceBernstein U.S. Government/High Grade Securities Portfolio (Inception Date - 12/17/02)
Beginning AUV	(a)	$	14.975	$	15.147	$	15.441
Beginning AUV	(b)		N/A		N/A	$	15.345
Ending AUV	(a)	$	15.147	$	15.441	$	15.731
Ending AUV	(b)		N/A		N/A	$	15.668
Ending Number of AUs	(a)		10		144,181		156,454
Ending Number of AUs	(b)		N/A		N/A		1,566
AllianceBernstein U.S. Large Cap Blended Style Series Portfolio (Inception Date - 5/1/03)
Beginning AUV	(a)		N/A	$	10.000	$	10.791
Beginning AUV	(b)		N/A		N/A	$	10.625
Ending AUV	(a)		N/A	$	10.791	$	11.594
Ending AUV	(b)		N/A		N/A	$	11.570
Ending Number of AUs	(a)		N/A		144,815		323,253
Ending Number of AUs	(b)		N/A		N/A		1,107
AllianceBernstein Utility Income Portfolio (Inception Date - 12/17/02)
Beginning AUV	(a)	$	14.446	$	14.359	$	16.909
Beginning AUV	(b)		N/A		N/A	$	17.213
Ending AUV	(a)	$	14.359	$	16.909	$	20.638
Ending AUV	(b)		N/A		N/A	$	20.604
Ending Number of AUs	(a)		14		18,288		45,946
Ending Number of AUs	(b)		N/A		N/A		6,093

(a) With total expense of 1.60%

(b) With total expense of 1.70%

AUV - Accumulation Unit Value

AU - Accumulation Units

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		Inception to 12/31/02		Fiscal Year Ending 12/31/03		Fiscal Year Ending 12/31/04
AllianceBernstein Value Portfolio (Inception Date - 12/17/02)
Beginning AUV	(a)	$	8.718	$	8.538	$	10.796
Beginning AUV	(b)		N/A		N/A	$	10.853
Ending AUV	(a)	$	8.538	$	10.796	$	12.046
Ending AUV	(b)		N/A		N/A	$	12.029
Ending Number of AUs	(a)		23		229,002		282,362
Ending Number of AUs	(b)		N/A		N/A		1,646
AllianceBernstein Wealth Appreciation Strategy Portfolio (Inception Date - 7/1/04)
Beginning AUV	(a)		N/A		N/A	$	10.000
Beginning AUV	(b)		N/A		N/A	$	10.000
Ending AUV	(a)		N/A		N/A	$	10.584
Ending AUV	(b)		N/A		N/A	$	10.556
Ending Number of AUs	(a)		N/A		N/A		2,787
Ending Number of AUs	(b)		N/A		N/A		10,375
AllianceBernstein Worldwide Privatization Portfolio (Inception Date - 12/17/02)
Beginning AUV	(a)	$	13.887	$	13.890	$	19.351
Beginning AUV	(b)		N/A		N/A	$	19.651
Ending AUV	(a)	$	13.890	$	19.351	$	23.611
Ending AUV	(b)		N/A		N/A	$	23.574
Ending Number of AUs	(a)		10		9,462		27,878
Ending Number of AUs	(b)		N/A		N/A		1,803

(a) With total expense of 1.60%

(b) With total expense of 1.70%

AUV - Accumulation Unit Value

AU - Accumulation Units

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APPENDIX B — DEATH BENEFITS FOLLOWING SPOUSAL CONTINUATION

If the spousal Beneficiary elects to continue the contract (the “Continuing Spouse”) and the contract death benefit exceeded the contract value, we will add a “Continuation Contribution” to the contract. The Continuation Contribution will be an amount equal to the positive differences between the death benefit otherwise payable and the contract value. If applicable, the Continuation Contribution amount will be added to the contract value as of the Continuation Date. The Continuation Date is the date we receive all required paperwork to otherwise process a death claim, as well as the spousal Beneficiary’s written election to continue the contract.

Death benefit calculations upon a Continuing Spouse’s death include a value we call “Continuation Net Purchase Payments.” Continuation Net Purchase Payments is an amount equal to: (1) the contract value on the Continuation Date, including any applicable Continuation Contribution, plus (2) any Purchase Payments made after the Continuation Date, less (3) adjustments for withdrawals made after the Continuation Date. Each adjustment is in the same proportion that the contract value was reduced on the date of each such withdrawal. If the Continuing Spouse makes no additional Purchase Payments or withdrawals, Continuation Net Purchase Payments equals the contract value on the Continuation Date, including any applicable Continuation Contribution.

We calculate and pay the death benefit upon a Continuing Spouse’s death when we receive all required paperwork and satisfactory proof of death. The term “withdrawals” as used below refers to withdrawals and any fees and charges applicable to those withdrawals. The term “maximum continuation age” refers to the attained age of the Continuing Spouse as of the Continuation Date; if the Continuing Spouse is over the maximum continuation age, the benefit may not be continued and the corresponding charge will no longer be deducted.

Standard Death Benefit:

The death benefit is the greater of:

1. contract value less Premium Enhancements paid during 24 months prior to death; or

2. Continuation Net Purchase Payments.

Annual Ratchet Plan. (Maximum continuation age is 80.) We will pay a death benefit equal to the greatest of:

1. contract value less Premium Enhancements paid during 24 months prior to death; or

2. Continuation Net Purchase Payments; or

3. the lesser of:

(a) the greatest contract value on any Contract Anniversary occurring after the Continuation Date, reduced proportionately by any withdrawals subsequent to that Contract Anniversary in the same proportion that the contract value was reduced on the date of each withdrawal, less any Premium Enhancements paid during 24 months prior to death, plus any Purchase Payments made subsequent to that Contract Anniversary; or

(b) 200% of Continuation Net Purchase Payments.

Equity Assurance Plan. (Maximum continuation age is 75.) We will pay a death benefit equal to the greater of:

1. contract value less Premium Enhancements paid during 24 months prior to death; or

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2. an amount equal to (a) plus (b) where:

(a) is equal to the Net Purchase Payments made on or before the first Contract Anniversary following the 80th birthday, accumulated at the compound interest rates shown below for the number of completed years from the date of receipt of each Purchase Payment to the earlier of the date of death or the first Contract Anniversary following the 80th birthday (not to exceed 7 years):

Annual Interest Rate	Period When Death Occurred
0%	1 through 12 months after Purchase Payment receipt;
1%	13 through 24 months after Purchase Payment receipt;
2%	25 through 36 months after Purchase Payment receipt;
3%	37 through 48 months after Purchase Payment receipt;
4%	49 through 60 months after Purchase Payment receipt;
5%	61 through 72 months after Purchase Payment receipt;
6%	73 through 84 months after Purchase Payment receipt;
7%	85 months or more after Purchase Payment receipt, and

(b) is equal to all Continuation Net Purchase Payments paid after the first Contract Anniversary following the Continuing Spouse’s 80th birthday.

Enhanced Equity Assurance Plan. (Maximum continuation age is 75.) We will pay a death benefit equal to the greatest of:

1. contract value less Premium Enhancements paid during 24 months prior to death; or

2. the lesser of:

(a) the greatest contract value on any Contract Anniversary occurring after the Continuation Date, reduced proportionately by any withdrawals subsequent to that Contract Anniversary in the same proportion that the contract value was reduced on the date of each withdrawal, less any Premium Enhancements paid during 24 months prior to death, plus any Purchase Payments made subsequent to that Contract Anniversary; or

(b) 200% of Continuation Net Purchase Payments; or

3. an amount equal to (a) plus (b) where:

(a) is equal to the Net Purchase Payments made on or before the first Contract Anniversary following the 80th birthday, accumulated at the compound interest rates shown below for the number of completed years from the date of receipt of each Purchase Payment to the earlier of the date of death or the first Contract Anniversary following the 80th birthday (not to exceed 7 years):

Annual Interest Rate	Period When Death Occurred
0%	1 through 12 months after Purchase Payment receipt;
1%	13 through 24 months after Purchase Payment receipt;
2%	25 through 36 months after Purchase Payment receipt;
3%	37 through 48 months after Purchase Payment receipt;
4%	49 through 60 months after Purchase Payment receipt;
5%	61 through 72 months after Purchase Payment receipt;
6%	73 through 84 months after Purchase Payment receipt;
7%	85 months or more after Purchase Payment receipt, and

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(b) is equal to all Continuation Net Purchase Payments paid after the first Contract Anniversary following the Continuing Spouse’s 80th birthday.

Enhanced Death Benefit Rider (Estate Benefit Payment). (Maximum continuation age is 80.)

If the original owner selected the estate benefit payment and the Continuing Spouse continues the benefit, we will add to any death benefit otherwise payable the amount of the Estate Benefit Payment, determined as follows:

If the Continuing Spouse is age 60 or younger as of the Continuation Date, the estate benefit payment will equal the lesser of (a) 70% of Continuation Net Purchase Payments or (b) 70% of the contract value less Continuation Net Purchase Payments.

If the Continuing Spouse is between ages 61 and 70 as of the Continuation Date, the estate benefit payment will equal the lesser of (a) 50% of Continuation Net Purchase Payments or (b) 50% of the contract value less Continuation Net Purchase Payments.

If the Continuing Spouse is between ages 71 and 80 as of the date of the Continuation Date, the estate benefit payment will equal the lesser of (a) 30% of Continuation Net Purchase Payments or (b) 30% of the contract value less Continuation Net Purchase Payments.

For information about death benefits for contracts issued before May 3, 2004 see the Statement of Additional Information.

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APPENDIX C — ACCESS PROTECTOR EXAMPLES

The following examples demonstrate the operation of the Access Protector feature:

Example 1:

Assume you elect Access Protector Option 2 and you invest a single Purchase Payment of $100,000. If you make no additional Purchase Payments and no withdrawals, your Withdrawal Benefit Base is $100,000 on the Benefit Availability Date.

Your Stepped-Up Benefit Base equals Withdrawal Benefit Base plus the Step-Up Amount ($100,000 + (20% × $100,000) = $120,000). Your Maximum Annual Withdrawal Amount as of the Benefit Availability Date is 10% of your Withdrawal Benefit Base ($100,000 × 10% = $10,000). The Minimum Withdrawal Period is equal to the Stepped-Up Benefit Base divided by the Maximum Annual Withdrawal Amount, which is 12 years ($120,000/$10,000). Therefore, you may take $120,000 in withdrawals of up to $10,000 annually over a minimum of 12 years beginning on or after the Benefit Availability Date.

Example 2 — Impact of Withdrawals prior to the Benefit Availability Date for Options 1 and 2:

Assume you elect Access Protector Option 2 and you invest a single Purchase Payment of $100,000. You make a withdrawal of $11,000 prior to the Benefit Availability Date. Prior to the withdrawal, your contract value is $110,000. You make no other withdrawals before the Benefit Availability Date.

Immediately following the withdrawal, your Withdrawal Benefit Base is recalculated by first determining the proportion by which your contract value was reduced by the withdrawal ($11,000/$110,000 = 10%). Next, we reduce your Withdrawal Benefit Base by the percentage by which the contract value was reduced by the withdrawal ($100,000 - (10% × 100,000) = $90,000). Since the Step-Up Amount is zero because a withdrawal was made prior to the Benefit Availability Date, your Stepped-Up Benefit Base on the Benefit Availability Date equals your Withdrawal Benefit Base. Therefore, the Stepped-Up Benefit Base also equals $90,000. Your Maximum Annual Withdrawal Amount is 10% of the Withdrawal Benefit Base on the Benefit Availability Date ($90,000). This equals $9,000. Therefore, you may take withdrawals of up to $9,000 annually over a minimum of 10 years ($90,000/$9,000 = 10).

Example 3 — Impact of Withdrawals prior to the Benefit Availability Date for Option 3:

Assume you elect Access Protector Option 3 and you invest a single Purchase Payment of $100,000. You make a withdrawal of $11,000 prior to the Benefit Availability Date. Prior to the withdrawal, your contract value is $110,000. You make no other withdrawals before the Benefit Availability Date.

Immediately following the withdrawal, your Withdrawal Benefit Base is recalculated by first determining the proportion by which your contract value was reduced by the withdrawal ($11,000/$110,000 = 10%). Next, we reduce your Withdrawal Benefit Base by the percentage by which the contract value was reduced by the withdrawal ($100,000 - (10% × 100,000) = $90,000). Since the withdrawal occurred prior to the Benefit Availability Date, your Step-Up Amount will be reduced to 30% of your Withdrawal Benefit Base ((30% × $90,000) = $27,000). Therefore, your Stepped-Up Benefit Base on the Benefit Availability Date equals the Withdrawal Benefit Base plus the Step-Up Amount (($90,000 + $27,000) = $117,000). Your Maximum Annual Withdrawal Amount is 10% of the Withdrawal Benefit Base on the Benefit Availability Date

C-1

($90,000). This equals $9,000. Therefore, you may take withdrawals of up to $9,000 annually over a minimum of 13 years ($117,000/$9,000 = 13).

Example 4 — Impact of Withdrawals less than or equal to Maximum Annual Withdrawal Amount after the Benefit Availability Date:

Assume you elect Access Protector Option 2 and you invest a single Purchase Payment of $100,000. You make a withdrawal of $7,500 during the first year after the Benefit Availability Date.

Because the withdrawal is less than or equal to your Maximum Annual Withdrawal Amount ($10,000), your Stepped-Up Benefit Base ($120,000) is reduced by the total dollar amount of the withdrawal ($7,500). Your new Stepped-Up Benefit Base equals $112,500. Your Maximum Annual Withdrawal Amount remains $10,000. Your new Minimum Withdrawal Period following the withdrawal is equal to the new Stepped-Up Benefit Base divided by your current Maximum Annual Withdrawal Amount, ($112,500/$10,000). Therefore, you may take withdrawals of up to $10,000 over a minimum of 11 years and 3 months.

Example 5 — Impact of Withdrawals in excess of Maximum Annual Withdrawal Amount after the Benefit Availability Date:

Assume you elect Access Protector Option 2 and you invest a single Purchase Payment of $100,000. Your Withdrawal Benefit Base is $100,000 and your Stepped-Up Benefit Base is $120,000. You make a withdrawal of $15,000 during the first year after the Benefit Availability Date. Your contract value is $125,000 at the time of the withdrawal.

Because the withdrawal is greater than your Maximum Annual Withdrawal Amount ($10,000), we recalculate your Stepped-Up Benefit Base ($120,000) by taking the lesser of two calculations. For the first calculation, we deduct the amount of the withdrawal from the Stepped-Up Benefit Base ($120,000 - $15,000 = $105,000). For the second calculation, we deduct the amount of the Maximum Annual Withdrawal Amount from the Stepped-Up Benefit Base ($120,000 - $10,000 = $110,000). Next, we calculate the excess portion of the withdrawal ($5,000) and determine the proportion by which the contract value was reduced by the excess portion of the withdrawal ($5,000 /$125,000 = 4%). Finally we reduce $110,000 by that proportion (4%) which equals $105,600. Your Stepped-Up Benefit Base is the lesser of these two calculations or $105,000. The Minimum Withdrawal Period following the withdrawal is equal to the Minimum Withdrawal Period at the end of the prior year (12 years) reduced by one year (11 years). Your Maximum Annual Withdrawal Amount is your Stepped-Up Benefit Base divided by your Minimum Withdrawal Period ($105,000/11), which equals $9,545.45.

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

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

Name

Address

City/State/Zip

Date

Signed

Return to:	Annuity Service Center
	Delaware Valley Financial Services
	P.O. Box 3031
	Berwyn, PA 19312-0031

STATEMENT OF ADDITIONAL INFORMATION

FLEXIBLE PAYMENT DEFERRED ANNUITY CONTRACTS

ISSUED BY

AIG SUNAMERICA LIFE ASSURANCE COMPANY

IN CONNECTION WITH

VARIABLE ANNUITY ACCOUNT NINE

(AllianceBernstein Ovation Plus Variable Annuity)

May 2, 2005

This Statement of Additional Information is not a prospectus; it should be read with the prospectus, dated May 2, 2005, relating to the annuity contracts described above. A copy of the prospectus may be obtained without charge by calling (800) 255-8402 or writing our Annuity Service Center:

Delaware Valley Financial Services

P.O. Box 3031

Berwyn, PA 19312-0031

TABLE OF CONTENTS

	PAGE
Separate Account	3
General Account	4
Performance Data	4
Death Benefits for contracts purchased before May 3, 2004	7
Income Payments	12
Annuity Unit Values	13
Taxes	15
Distribution of Contracts	21
Financial Statements	21

2

SEPARATE ACCOUNT

Variable Annuity Account Nine (“Separate Account”) was established under Arizona law on February 4, 2002, by Anchor National Life Insurance Company (“Anchor National”). Anchor National has since redomesticated to Arizona Effective March 1, 2003, Anchor National changed its name to AIG SunAmerica Life Assurance Company (the “Company”). This was a name change only and did not affect the substance of any contract. 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 invests in the shares of mutual funds (“Variable Portfolios”) offered by Alliance Variable Products Series Fund, Inc. (the “Series Fund”). The Company does not guarantee the investment performance of the Separate Account, the Variable Portfolios or the Series Fund. Values allocated to the Separate Account and the amount of variable income payments will vary with the values of shares of the Variable Portfolios, 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 Variable Portfolios, 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 management of each Variable Portfolio to make necessary changes in the fund to anticipate changes in economic conditions. Therefore, the owner bears the entire investment risk that the basic objectives of the contract may not be realized, and that the adverse effects of inflation may not be lessened. There can be no assurance that the aggregate amount of variable income payments will equal or exceed the Purchase Payments made with respect to a particular account for the reasons described above, or because of the premature death of an Annuitant.

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

3

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 DCA accounts for various available periods available in connection with the general account, as elected by the owner at the time of purchasing a contract or when making a subsequent Purchase Payment. Other options may be available to you. Please refer to your contract for additional information. Assets supporting amounts allocated to Fixed Account options become part of the Company’s general account assets and are available to fund the claims of all classes of customers of the Company, as well as of its creditors. Accordingly, all of the Company’s assets held in the general account will be available to fund the Company’s obligations under the contracts as well as such other claims.

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

SUPPORT AGREEMENT BETWEEN THE COMPANY AND AIG

The Company has a support agreement in effect between the Company and AIG (the “Support Agreement”), pursuant to which AIG has agreed that AIG will cause the Company to maintain a policyholder’s surplus of not less than $1,000,000 or such greater amount as shall be sufficient to enable the Company to perform its obligations under any policy issued by it. The Support Agreement also provides that if the Company needs funds not otherwise available to it to make timely payment of its obligations under policies issued by it, AIG will provide such funds at the request of the Company. The Support Agreement is not a direct or indirect guarantee by AIG to any person of any obligations of the Company. AIG may terminate the Support Agreement with respect to outstanding obligations of the Company only under circumstances where the Company attains, without the benefit of the Support Agreement, a financial strength rating equivalent to that held by the Company with the benefit of the Support Agreement. Policyholders have the right to cause the Company to enforce its rights against AIG and, if the Company fails or refuses to take timely action to enforce the Support Agreement or if the Company defaults in any claim or payment owed to such policyholder when due, have the right to enforce the Support Agreement directly against AIG.

The Company’s insurance policy obligations are guaranteed by American Home Assurance Company (“American Home”), a subsidiary of AIG, and a member of an AIG intercompany pool. This guarantee is unconditional and irrevocable, and the Company’s policyholders have the right to enforce the guarantee directly against American Home.

PERFORMANCE DATA

From time to time the Separate Account may advertise the Money Market 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 Money Market Portfolio refers to the net income generated for a contract funded by an investment in the Money Market Portfolio 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 Money Market Portfolio is assumed to be reinvested at the end of each seven day period. The “effective yield” will be slightly higher than the “yield” because of the compounding effect of this assumed reinvestment. Neither the yield nor the effective yield takes into consideration the effect of any capital changes that might have occurred during the seven day period, nor do they reflect the impact of premium taxes or any withdrawal charges. The impact of other recurring charges (including the Separate Account Expenses) on both yield figures is, however, reflected in them to the same extent it would affect the yield (or effective yield) for a contract of average size.

In addition, the Separate Account may advertise “total return” data for its other Variable Portfolios (including the Money Market Portfolio). A Variable Portfolio is a sub-account of the Separate Account which provides for the variable investment options available under the contract. 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 Money Market Portfolio.

4

For periods starting prior to the date the Variable Portfolios first became available through the Separate Account, the total return data for the Variable Portfolios of the Separate Account will be derived from the performance of the corresponding funds in the Series Fund (the “underlying funds”), modified to reflect the charges and expenses as if the Variable Portfolio had been in existence since the inception date of each respective underlying fund. Performance figures similarly adjusted but based on underlying fund performance (outside of this Separate Account) should not be construed to be actual historical performance of the relevant Separate Account Variable Portfolio. Rather, these figures are intended to indicate the historical performance of the corresponding underlying funds of the Series Fund, 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). The Series Fund also serves 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.

Money Market Portfolio

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

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

where:

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

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

The change in the value of an Accumulation Unit during the 7 day period reflects the income received, minus any expenses accrued, during such 7 day period. The result is multiplied by the fraction 365/7 to arrive at the portion attributable to the 7 day period.

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

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

The Money Market 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 Money Market 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 Money Market Portfolio and for providing a basis for comparison with other investment alternatives. However, the Money Market Portfolio’s yield fluctuates, unlike bank deposits or other investments that typically pay a fixed yield for a stated period of time.

5

Other Variable Portfolios

The Variable Portfolios of the Separate Account other than the Money Market Portfolio compute their performance data as “total return.” We may periodically advertise other variations of performance along with the standardized performance as described above.

We advertise the total returns since each Variable Portfolio inception date, for a 1-year period and, if applicable, for 5-year and 10-year periods, both with and without an assumed complete redemption at the end of the stated period.

The rates of return do not reflect election of any additional optional features. As a fee is charged for these features, the rates of return would be lower if these features were included in the calculations. 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 at the end of the period (or fractional portion thereof).

The total return figures reflect the effect of recurring charges, as discussed herein. Recurring charges are taken into account in a manner similar to that used for the yield computations for the Money Market Portfolio, described above. As with the Money Market Portfolio yield figures, total return figures are derived from historical data and are not intended to be a projection of future performance.

6

DEATH BENEFITS FOR CONTRACTS PURCHASED BEFORE MAY 3, 2004

Death Benefits for contracts purchased before May 3, 2004.

If you purchased your contract before May 3, 2004, the following death benefit options apply:

Standard Death Benefit

The Standard Death Benefit on your contract is the greatest of:

1. contract value on the date we receive all required paperwork and satisfactory proof of death, less Premium Enhancements paid during 24 months prior to death;

2. Net Purchase Payments; or

3. the greatest contract value on any seventh Contract Anniversary less any Premium Enhancements paid during 24 months prior to death, reduced proportionately by any withdrawals subsequent to that Contract Anniversary in the same proportion that the contract value was reduced on the date of each withdrawal, plus any Purchase Payments paid subsequent to that Contract Anniversary.

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Optional Death Benefits

For an additional fee, you may elect one or more of the Optional Death Benefits below which can provide greater protection for your Beneficiaries. In the case of joint owners, the Optional Death Benefits will be paid upon the death of either owner, except for the Accidental Death Benefit which will only be paid upon the death of the owner first listed on the contract schedule. These elections must be made at the time of contract issue and may not be terminated at a later date. All optional death benefits may not be available in all states. The maximum issue age for the elections varies as shown below. The fees for the optional death benefits are deducted from your contract value each month. An Optional Death Benefit will be in effect if you select it on your application and the charge for the Optional Death Benefit is shown in your contract.

Annual Ratchet Plan. (Maximum issue age is 80.) If the Annual Ratchet Plan is in effect, we will pay a death benefit equal to the greatest of:

1. the contract value less any Premium Enhancements paid during 24 months prior to death;

2. the total of Net Purchase Payments; or

3. the greatest contract value on any Contract Anniversary less any Premium Enhancements paid during 24 months prior to death, reduced proportionally by any withdrawals subsequent to that Contract Anniversary in the same proportion that the contract value was reduced on the date of each withdrawal, plus any Purchase Payments paid subsequent to that Contract Anniversary.

Equity Assurance Plan. (Maximum issue age is 75.) We will pay a death benefit equal to the greatest of:

1. the contract value less any Premium Enhancements paid during 24 months prior to death;

2. the greatest contract value on any seventh Contract Anniversary less any Premium Enhancements paid during 24 months prior to death, reduced proportionately by any withdrawals subsequent to that Contract Anniversary in the same proportion that the contract value was reduced on the date of each withdrawal, plus any Purchase Payments paid subsequent to that Contract Anniversary; or

3. an amount equal to (a) plus (b) where:

(a) is equal to the total of all Purchase Payments paid on or before the first Contract Anniversary following the 85th birthday, adjusted proportionately for partial withdrawals and then accumulated at the compound interest rates shown below for the number of completed years, not to exceed 10, from the date of receipt of each Purchase Payment to the earlier of the date of death or the first Contract Anniversary following the 85th birthday:

Annual Interest Rate	Period When Death Occurs
0%	1 through 24 months after Purchase Payment receipt;
2%	25 through 48 months after Purchase Payment receipt;
4%	49 through 72 months after Purchase Payment receipt;
6%	73 through 96 months after Purchase Payment receipt;
8%	97 through 120 months after Purchase Payment receipt;
10%	if 120 months or more after Purchase Payment receipt, for a maximum of 10 years; and

(b) is equal to all Purchase Payments paid after the first Contract Anniversary following the 85th birthday, reduced proportionately for partial withdrawals.

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Enhanced Equity Assurance Plan. (Maximum issue age is 75.) We will pay a death benefit equal to the greatest of:

1. the contract value less any Premium Enhancement paid during 24 months prior to date of death;

2. the greatest contract value on any Contract Anniversary less any Premium Enhancements paid during 24 months prior to death, reduced proportionately by any withdrawals subsequent to that Contract Anniversary in the same proportion that the contract value was reduced on the date of each withdrawal, plus any Purchase Payments paid subsequent to that Contract Anniversary; or

3. an amount equal to (a) plus (b) where:

(a) is equal to the total of all Purchase Payments paid on or before the first Contract Anniversary following the 85th birthday, reduced proportionately for partial withdrawals and then accumulated at the compound interest rates shown below for the number of completed years, not to exceed 10, from the date of receipt of each Purchase Payment to the earlier of the date of death or the first Contract Anniversary following the 85th birthday:

Annual Interest Rate	Period When Death Occurred
0%	1 through 24 months after Continuation Net Purchase Payment receipt;
2%	25 through 48 months after the Continuation Net Purchase Payment receipt;
4%	49 through 72 months after the Continuation Net Purchase Payment receipt;
6%	73 through 96 months after the Continuation Net Purchase Payment receipt;
8%	97 through 120 months after the Continuation Net Purchase Payment receipt;
10%	if 120 months or more after the Continuation Net Purchase Payment receipt, for a maximum of 10 years from the Continuation Date; and

(b) is equal to all Purchase Payments paid after the first Contract Anniversary following the 85th birthday, reduced proportionately for partial withdrawals.

Estate Benefit Payment. (Maximum issue age is 80.)

If you select the estate benefit payment, we will pay it in addition to any other death benefit in effect at the time of your death. If selected, we will increase the death benefit otherwise payable upon your death by the amount of the estate benefit payment determined as follows:

If you are age 60 or younger on the effective date of your contract, the estate benefit payment will equal the lesser of (a) 70% of Net Purchase Payments or (b) 70% of the contract value less Net Purchase Payments.

If you are between ages 61 and 70 on the effective date of your contract, the estate benefit payment will equal the lesser of (a) 50% of Net Purchase Payments or (b) 50% of the contract value less Net Purchase Payments.

If you are between ages 71 and 80 on the effective date of your contract, the estate benefit payment will equal the lesser of (a) 30% of Net Purchase Payments or (b) 30% of the contract value less Net Purchase Payments.

If upon your death your spouse elects to continue the contract in his or her name, the spouse’s age as of the date of your death will be the age we use to determine the amount of estate benefit payment payable upon the spouse’s death. The estate benefit payment will not be available if your spouse is older than 80 as of the date of your death.

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Accidental Death Benefit. (Maximum issue age is 75.)

If you select the accidental death benefit at the time of application, we will pay it in addition to any other death benefit in effect at the time of your death. The accidental death benefit is not available if the contract is used in connection with an individual retirement annuity. If selected at the time of application, the accidental death benefit payable under this option will be equal to the lesser of:

1. the contract value as of the date the death benefit is determined; or

2. $250,000.

The accidental death benefit is payable if you die as a result of injury prior to the Contract Anniversary following your 75th birthday. The death must also occur before the Annuity Date and within 365 days of the date of the accident that caused the injury. The accidental death benefit does not apply to the death of a continuing spouse.

The accidental death benefit will not be paid for any death caused by or resulting (in whole or in part) from the following:

• suicide or attempted suicide, while sane or insane, or intentionally self-inflicted injuries;

• sickness, disease or bacterial infection of any kind, except pyogenic infections which occur as a result of an injury or bacterial infections which result from the accidental ingestion of contaminated substances;

• injury sustained as a consequence of riding in, including boarding or alighting from, any vehicle or device used for aerial navigation except if you are a passenger on any aircraft licensed for the transportation of passengers;

• declared or undeclared war or any act thereof; or

• service in the military, naval or air service of any country.

The accidental death benefit will cease to be in effect upon the Contract Anniversary following your 75th birthday.

SPOUSAL CONTINUATION

If the original owner purchased the contract before May 3, 2004, the death benefit calculations upon a continuing spouse’s death are as follows:

Death Benefits Payable upon Continuing Spouse’s Death:

Standard Death Benefit:

  The death benefit is the greatest of:

1. Continuation Net Purchase Payments;

2. contract value less any Premium Enhancements paid during 24 months prior to date of death; or

3. the greatest contract value on any seventh Contract Anniversary occurring after the Continuation Date, less any Premium Enhancements paid during 24 months prior to death, reduced proportionately by any withdrawals subsequent to that Contract Anniversary in the same proportion that the contract value was reduced on the date of each withdrawal, plus any premium paid subsequent to that Contract Anniversary.

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Annual Ratchet Plan. (Maximum continuation age is 80.) We will pay a death benefit equal to the greatest of:

1. Continuation Net Purchase Payments; or

2. contract value less any Premium Enhancements paid during 24 months prior to date of death; or

3. the greatest contract value on any Contract Anniversary occurring after the Continuation Date, less any Premium Enhancements paid during 24 months prior to death, reduced proportionately by any withdrawals subsequent to that Contract Anniversary in the same proportion that the contract value was reduced on the date of each withdrawal, plus any Purchase Payments paid subsequent to that Contract Anniversary.

Equity Assurance Plan. (Maximum continuation age is 75.) We will pay a death benefit equal to the greatest of:

1. contract value less any Premium Enhancements paid during 24 months prior to date of death; or

2. the greatest contract value on any seventh Contract Anniversary occurring after the Continuation Date, less any Premium Enhancements paid during 24 months prior to death, reduced proportionately by any withdrawals subsequent to that Contract Anniversary in the same proportion that the contract value was reduced on the date of each withdrawal, plus any Purchase Payments paid subsequent to that Contract Anniversary.

3. an amount equal to (a) plus (b) where:

(a) is equal to the total of all Continuation Net Purchase Payments paid on or before the first Contract Anniversary following the Continuing Spouse’s 85th birthday, accumulated at the compound interest rates shown below for the number of completed years, not to exceed 10 years from the Continuation Date to the earlier of the Continuing Spouse’s date of death or the first Contract Anniversary following the Continuing Spouse’s 85th birthday:

Annual Interest Rate Period When Death Occurs

0%	1 through 24 months after Continuation Net Purchase Payment receipt;
2%	25 through 48 months after the Continuation Net Purchase Payment receipt;
4%	49 through 72 months after the Continuation Net Purchase Payment receipt;
6%	73 through 96 months after the Continuation Net Purchase Payment receipt;
8%	97 through 120 months after the Continuation Net Purchase Payment receipt;
10%	if 120 months or more after the Continuation Net Purchase Payment receipt, for a maximum of 10 years from the Continuation Date; and

(b) is equal to all Continuation Net Purchase Payments paid after the first Contract Anniversary following the Continuing Spouse’s 85th birthday.

Enhanced Equity Assurance Plan. (Maximum continuation age is 75.) We will pay a death benefit equal to the greatest of:

1. the contract value; or

2. the greatest contract value on any Contract Anniversary occurring after the Continuation Date, plus any Purchase Payments made after that Contract Anniversary, reduced proportionally by any withdrawals taken after that Contract Anniversary in the same proportion that the contract value was reduced on the date of each such withdrawal.

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3. an amount equal to (a) plus (b) where:

(a) is equal to the total of all Continuation Net Purchase Payments paid on or before the first Contract Anniversary following the Continuing Spouse’s 85th birthday, accumulated at the compound interest rates shown below for the number of completed years, not to exceed 10 years from the Continuation Date to the earlier of the Continuing Spouse’s date of death or the first Contract Anniversary following the Continuing Spouse’s 85th birthday:

Annual Interest Rate Period When Death Occurs

0%	1 through 24 months after Continuation Net Purchase Payment receipt;
2%	25 through 48 months after the Continuation Net Purchase Payment receipt;
4%	49 through 72 months after the Continuation Net Purchase Payment receipt;
6%	73 through 96 months after the Continuation Net Purchase Payment receipt;
8%	97 through 120 months after the Continuation Net Purchase Payment receipt;
10%	if 120 months or more after the Continuation Net Purchase Payment receipt, for a maximum of 10 years from the Continuation Date; and

(b) is equal to all Continuation Net Purchase Payments paid after the first Contract Anniversary following the Continuing Spouse’s 85th birthday.

Enhanced Death Benefit Rider (Estate Benefit Payment). (Maximum continuation age is 80.)

If the original owner selected the estate benefit payment and the Continuing Spouse continues the benefit, we will pay it in addition to any other death benefit in effect at the time of the death of the Continuing Spouse. If selected, we will increase the death benefit otherwise payable by the amount of the estate benefit payment determined as follows:

If the Continuing Spouse is age 60 or younger as of the Continuation Date, the estate benefit payment will equal the lesser of (a) 70% of Continuation Net Purchase Payments or (b) 70% of the contract value less Continuation Net Purchase Payments.

If the Continuing Spouse is between ages 61 and 70 as of the Continuation Date, the estate benefit payment will equal the lesser of (a) 50% of Continuation Net Purchase Payments or (b) 50% of the contract value less Continuation Net Purchase Payments.

If the Continuing Spouse is between ages 71 and 80 as of the date of the Continuation Date, the estate benefit payment will equal the lesser of (a) 30% of Continuation Net Purchase Payments or (b) 30% of the contract value less Continuation Net Purchase Payments.

We reserve the right to modify, suspend or terminate the spousal continuation provision (in its entirety or any component) at any time with respect to prospectively issued contracts

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 Account options and the Variable Portfolio(s), less any state 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 gender (except in certain states where, as in the case of certain Qualified contracts and other employer-sponsored retirement plans, such classification is not permitted) and age of the Annuitant and designated second person, if any, and the annuity option selected.

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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 on the due date of the payment.

ANNUITY UNIT VALUES

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

The annuity tables contained in the contract are based on a 5% per annum assumed investment rate for variable payments. If the actual net investment rate experienced by a Variable Portfolio exceeds 5%, variable income payments derived from allocations to that Variable Portfolio will increase over time. Conversely, if the actual rate is less than 5%, variable income payments will decrease over time. If the net investment rate equals 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 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.

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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 in no change; a NIF greater than 1.000 results in an increase; and a NIF less than 1.000 results in a decrease. The NIF is increased (or decreased) in accordance with the increases (or decreases, respectively) in the value of a share of the underlying fund in which the Variable Portfolio invests; it is also reduced by Separate Account asset charges.

Illustrative Example

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

NIF = ($11.46/$11.44) = 1.00174825

The change in Annuity Unit value for a 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 5% 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 5% per annum is:

1/[(1.05)(1/12) ] = 0.99594241

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 0.99594241 = $10.080119

To determine the initial payment, the initial annuity payment for variable annuitization is calculated based on our mortality expectations and an assumed interest rate (AIR) of 3.5%. Thus the initial variable annuity payment is the same as the initial payment for a fixed interest payout annuity calculated at an effective rate of 3.5%.

The NIF measures the performance of the funds that are basis for the amount of future annuity payments. This performance is compared to the AIR, and if the growth in the NIF is the same as the AIR rate the payment remains the same as the prior month. If the rate of growth of the NIF is different than the AIR, then the payment is changed proportionately to the ratio (1+NIF) / (1+AIR), calculated on a monthly basis. If the NIF is greater than the AIR, then this proportion is less than one and payments are decreased.

Variable Income Payments

Illustrative Example

Assume that a male owner, P, owns a contract in connection with which P has allocated all of his contract value to a single Variable Portfolio. P is also the sole Annuitant and, at age 60, has elected to annuitize his contract under Option 2, 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.

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P’s first variable income payment is determined from the annuity factor tables in P’s contract, using the information assumed above. From these tables, which supply monthly annuity factors for each $1,000 of applied contract value, P’s first variable income payment is determined by multiplying the factor of $5.56 (Option 2 tables, male Annuitant age 60 at the Year of Annuitant 2040) by the result of dividing P’s account value by $1,000:

First Payment = $5.56 x ($116,412.31/$1,000) = $647.25

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

Annuity Units = $647.25/$13.256932 = 48.823514

P’s second variable income payment is determined by multiplying the number of Annuity Units by the Annuity Unit value on the second payment date:

Second Payment = 48.823514 x $13.327695 = $650.71

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

Note: We have prepared the following information on taxes as a general discussion of the subject. It is not intended as tax advice to any individual. You should consult your own tax adviser about your own circumstances.

Section 72 of the Internal Revenue Code of 1986, as amended (the “Code” or “IRC”) governs taxation of annuities in general. An owner is not taxed on increases in the value of a contract until distribution occurs, either in the form of a non-annuity distribution or as income payments under the annuity option elected. For a lump sum payment received as a total surrender (total redemption), the recipient is taxed on the portion of the payment that exceeds the cost basis of the contract. For a payment received as a withdrawal (partial redemption), federal tax liability is determined on a last-in, first-out basis, meaning taxable income is withdrawn before the cost basis of the contract is withdrawn. A different rule applies to Purchase Payments made (including, if applicable, in the case of a contract issued in exchange for a prior contract) prior to August 14, 1982. Those Purchase Payments are considered withdrawn first for federal income tax purposes, followed by earnings on those Purchase Payments. For contracts issued in connection with Nonqualified plans, the cost basis is generally the Purchase Payments, while for contracts issued in connection with Qualified plans there may be no cost basis. The taxable portion of the lump sum payment is taxed at ordinary income tax rates. Tax penalties may also apply.

For annuity payments, the portion of each payment that is in excess of the exclusion amount is includible in taxable income. The exclusion amount for payments based on a fixed annuity option is determined by multiplying the payment by the ratio that the cost basis of the Contract (if any, and adjusted for any period or refund feature) bears to the expected return under the Contract. The exclusion amount for payments based on a variable annuity option is determined by dividing the cost basis of the Contract (adjusted for any period certain or refund guarantee) by the number of years over which the annuity is expected to be paid. Payments received after the investment in the Contract has been recovered (i.e. when the total of the excludable amount equals the investment in the Contract) are fully taxable. The taxable portion is taxed at ordinary income tax rates. For certain types of Qualified Plans there may be no cost basis in the Contract within the meaning of Section 72 of the Code. owners, annuitants and beneficiaries under the Contracts should seek competent financial advice about the tax consequences of any distributions.

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.

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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, not including IRAs, 20% of the distribution must be withheld, unless the payee elects to have the distribution “rolled over” or transferred 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, including distributions from IRAs can be waived.

An “eligible rollover distribution” is the taxable portion of any amount received by a covered employee from a traditional IRA or retirement plan qualified under Sections 401(a) or 403(a) or, if from a plan of a governmental employer, under Section 457(b) of the Code, or from a tax-sheltered annuity qualified under Section 403(b) of the Code other than (1) substantially equal periodic payments calculated using 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; (2) financial hardship withdrawals; and (3) minimum 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 taxable portion of the distribution, but the owner may elect in such cases to waive the withholding requirement. If not waived, withholding is imposed (1) for periodic payments, at the rate that would be imposed if the payments were wages, or (2) for other distributions, at the rate of 10%. If no withholding exemption certificate is in effect for the payee, the rate under (1) above is computed by treating the payee as a married individual claiming 3 withholding exemptions.

Diversification — Separate Account Investments

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

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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.”

Non-Natural owners

Under Section 72(u) of the Code, the investment earnings on premiums for the Contracts will be taxed currently to the owner if the owner is a non-natural person, e.g., a corporation or certain other entities. Such Contracts generally will not be treated as annuities for federal income tax purposes. However, this treatment is not applied to a Contract held by a trust or other entity as an agent for a natural person nor to Contracts held by Qualified Plans. Purchasers should consult their own tax counsel or other tax adviser before purchasing a Contract to be owned by a non-natural person.

Multiple Contracts

The Code provides that multiple Nonqualified 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 combination of contracts. For purposes of this rule, contracts received in a Section 1035 exchange will be considered issued in the year of the exchange. (However, they may be treated as issued on the issue date of the contract being exchanged, for certain purposes, including for determining whether the contract is an immediate annuity contract.) owners should consult a tax adviser prior to purchasing more than one Nonqualified annuity contract from the same issuer in any calendar year.

Tax Treatment of Assignments of Qualified Contracts

Generally, a Qualified contract, including an IRA, may not be assigned or pledged. One exception to this rule is if the assignment is part of a permitted loan program under an employer-sponsored plan or pursuant to a qualified domestic relations order meeting the requirements of the plan or arrangement under which the contract is issued (or, in the case of an IRA, pursuant to a domestic relations order.)

Tax Treatment of Gifting, Assigning, or Transferring Ownership of a Nonqualified Contract

If you transfer ownership of your Nonqualified Contract to a person other than your spouse (or former spouse if incident to divorce) you will be taxed on the earnings above the purchase payments at the time of transfer. If you transfer ownership of your Nonqualified Contract and receive payment less than the Contract’s value, you will also be liable for the tax on the Contract’s value above your purchase payments not previously withdrawn. The new Contract owner’s purchase payments (basis) in the Contract will be increased to reflect the amount included in your taxable income.

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Trustee to Trustee Transfers of Qualified Contracts

The IRC limits the withdrawal of Purchase Payments from certain Tax-Sheltered Annuities (TSAs) and certain other Qualified contracts. Withdrawals can only be made when an owner: (1) reaches age 59 ¹/2; (2) separates from employment from the employer sponsoring the plan; (3) dies; (4) becomes disabled (as defined in the IRC); or (5) experiences a financial hardship (as defined in the IRC). In the case of hardship, the owner can only withdraw Purchase Payments. Transfers of amounts from one Qualified contract to another Qualified contract of the same plan type or to a state defined benefit plan to purchase service credits are not considered distributions, and thus are not subject to these withdrawal limitations. Such transfers may, however, be subject to limitations under the annuity contract.

Partial 1035 Exchanges

Section 1035 of the Code provides that an annuity contract may be exchanged in a tax-free transaction for another annuity contract. Historically, it was generally understood that only the exchange of an entire annuity contract, as opposed to a partial exchange, would be respected by the IRS as a tax-free exchange. In 1998, the U.S. Tax Court ruled that the direct transfer of a portion of an annuity contract into another annuity contract qualified as a tax-free exchange. In 1999, the IRS acquiesced in that Tax Court decision, but stated that it would nonetheless continue to challenge partial exchange transactions under certain circumstances. In Notice 2003-51, published on July 9, 2003, the IRS announced that, pending the publication of final regulations, it will consider all the facts and circumstances to determine whether a partial exchange and subsequent withdrawal from, or surrender of, either the surviving annuity contract or the new annuity contract within 24 months of the partial exchange should be treated as an integrated transaction, and thus whether the two contracts should be treated as a single contract to determine the tax treatment of the surrender or withdrawal under Section 72 of the Code. Although Notice 2003-51 and the IRS’s acquiescence in the Tax Court decision indicate that the IRS will respect partial exchanges of annuity contracts under certain circumstances, uncertainty remains, and owners should seek their own tax advice regarding such transactions and the tax risks associated with subsequent surrenders or withdrawals.

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 and Beneficiaries are cautioned that benefits under a Qualified plan may be subject to limitations under the employer-sponsored plan, in addition to 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 contractual withdrawal penalties and restrictions may apply to surrenders from Qualified contracts.

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(a) Plans of Self-Employed Individuals: “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 these plans, such as: amounts of allowable contributions; form, manner and timing of distributions; vesting and non-forfeitability 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.

One of these limits, on the amount that the employee may contribute on a voluntary basis, is imposed by the annuity contract as well as by the Code. That limit for 2005 is $14,000. The limit may be increased by up to $3,000 for certain employees with at least fifteen years of full-time equivalent service with an eligible employer, and by an additional $4,000 in 2005 for employees age 50 or older, provided that other applicable requirements are satisfied. Total combined employer and employee contributions for 2005 may not exceed the lessor of $42,000 or 100% of compensation. Furthermore, the Code sets forth additional restrictions governing such items as transferability, distributions, nondiscrimination and withdrawals. Any employee should obtain competent tax advice as to the tax treatment and suitability of such an Investment.

(c) Individual Retirement Annuities

Section 408(b) of the Code permits eligible individuals to contribute to an individual retirement program known as a traditional “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. The ability to deduct an IRA contribution to a traditional IRA is subject to limits based upon income levels, retirement plan participation status, and other factors. The maximum IRA (traditional and/or Roth) contribution for 2005 is the lessor of $4,000 or 100% of compensation. Individuals age 50 or older may be able to contribute an additional $500 in 2005. 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 408(A) of the Code permits an individual to contribute to an individual retirement program called a Roth IRA. Contributions to a Roth IRA are not deductible but distributions are tax-free if certain requirements are satisfied. The maximum IRA (traditional and/or Roth) contribution for 2005 is the lessor of $4,000 or 100% of compensation. Individuals age 50 or older may be able to contribute an additional $500 in 2005. Unlike traditional IRAs, to which everyone can contribute even if they cannot deduct the full contribution, income limits for Roth IRAs are limitations on who can establish such a contract. Generally, you can contribute to a Roth IRA if you have taxable compensation and your modified adjusted gross income is less than: $160,000 for married filing jointly or qualifying widow(er), $10,000 for married filing separately and you lived with your spouse at any time during the year, and $110,000 for single, head of household, or married filing separately and you did not live with your spouse at any time during the year. Certain persons may be eligible to convert a traditional IRA into a Roth IRA.

19

Conversion into Roth IRAs normally require taxes to be paid on any previously untaxed amounts included in the amount converted. If the Contracts are made available for use with Roth IRAs, they may be subject to special requirements imposed by the Internal Revenue Service (“IRS”). Purchasers of the Contracts for this purpose will be provided with such supplementary information as may be required by the IRS or other appropriate agency.

(e) Pension and Profit-Sharing Plans

Sections 401(a) of the Code permits certain employers to establish various types of retirement plans, including 401(k) plans, for employees. However, public employers may not establish new 401(k) plans. 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 non-forfeitability of interests; nondiscrimination in eligibility and participation; and the tax treatment of distributions, withdrawals and surrenders. Purchasers of contracts for use with pension or profit sharing plans should obtain competent tax advice as to the tax treatment and suitability of such an investment.

(f) Deferred Compensation Plans - Section 457(b)

Under Section 457(b) 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. Funds in a non-governmental 457(b) plan remain assets of the employer and are subject to claims by the creditors of the employer. As of January 1, 1999, all 457(b) plans of state and local governments must hold assets and income in a qualifying trust, custodial account, or annuity contract for the exclusive benefit of participants and their Beneficiaries.

Economic Growth and Tax Relief Reconciliation Act of 2001

For tax years beginning in 2002, the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) expands the range of eligible tax-free rollover distributions that may be made among qualified contracts. The changes made to the IRC by EGTRRA are scheduled to expire on December 31, 2010. Congress may, however, decide to promulgate legislation making the changes permanent or delaying their expiration.

20

DISTRIBUTION OF CONTRACTS

The contracts are offered on a continuous basis through AIG SunAmerica Capital Services, Inc., located at Harborside Financial Center, 3200 Plaza 5, Jersey City, NJ 07311-4992. AIG 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 AIG SunAmerica Capital Services, Inc. are each an indirect wholly owned subsidiary of AIG Retirement Services, Inc. No underwriting fees are paid in connection with the distribution of the contracts.

FINANCIAL STATEMENTS

The consolidated financial statements of the AIG SunAmerica Life Assurance Company at December 31, 2004 and 2003, and for each of the three years in the period ended December 31, 2004, are presented in this Statement of Additional Information. The consolidated financial statements of AIG SunAmerica Life Assurance Company should be considered only as bearing on the ability of AIG SunAmerica Life Assurance Company to meet its obligation under the contracts for amounts allocated to the Fixed Account options.

The financial Statements of Variable Annuity Account Nine at December 31, 2004, and for each of the two years in the period ended December 31, 2004 are also presented herein.

PricewaterhouseCoopers LLP, 350 South Grand Avenue, Los Angeles, California 90071, serves as the independent registered public accounting firm for the Separate Account and AIG SunAmerica Life Assurance Company. The financial statements referred to above have been so included in reliance on the reports of PricewaterhouseCoopers LLP, independent registered public accounting firm, given on authority of said firm as experts in auditing and accounting.

21

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholder of

AIG SunAmerica Life Assurance Company:

In our opinion, the accompanying consolidated balance sheet and the related consolidated statements of income and comprehensive income and of cash flows, in all material respects, the financial position of AIG SunAmerica Life Assurance Company (the “Company”), an indirect wholly owned subsidiary of American International Group, Inc., at December 31, 2004 and 2003, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2004 in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

As discussed in Note 2 to the consolidated financial statements, the Company changed its method of accounting and reporting for certain nontraditional long-duration contracts in 2004.

PricewaterhouseCoopers LLP

Los Angeles, California

April 15, 2005

F - 2

AIG SUNAMERICA LIFE ASSURANCE COMPANY

CONSOLIDATED BALANCE SHEET

	December 31, 2004		December 31, 2003
	(in thousands)
ASSETS
Investments and cash:
Cash and short-term investments	$	201,117	$	133,105
Bonds, notes and redeemable preferred stocks available for sale, at fair value (amortized cost: December 31, 2004, $5,007,868; December 31, 2003, $5,351,183)		5,161,027		5,505,800
Mortgage loans		624,179		716,846
Policy loans		185,958		200,232
Mutual funds		6,131		21,159
Common stocks available for sale, at fair value (cost: December 31, 2004, $4,876; December 31, 2003, $635)		4,902		727
Real estate		20,091		22,166
Securities lending collateral		883,792		514,145
Other invested assets		38,789		10,453
Total investments and cash		7,125,986		7,124,633
Variable annuity assets held in separate accounts		22,612,451		19,178,796
Accrued investment income		73,769		74,647
Deferred acquisition costs		1,349,089		1,268,621
Other deferred expenses		257,781		236,707
Income taxes currently receivable from Parent		9,945		15,455
Receivable from brokers for sales of securities		161		—
Goodwill		14,038		14,038
Other assets		52,795		58,830
TOTAL ASSETS	$	31,496,015	$	27,971,727

See accompanying notes to consolidated financial statements.

F - 3

AIG SUNAMERICA LIFE ASSURANCE COMPANY

CONSOLIDATED BALANCE SHEET (Continued)

	December 31, 2004		December 31, 2003
	(in thousands)
LIABILITIES AND SHAREHOLDER’S EQUITY
Reserves, payables and accrued liabilities:
Reserves for fixed annuity and fixed accounts of variable annuity contracts	$	3,948,158	$	4,274,329
Reserves for universal life insurance contracts		1,535,905		1,609,233
Reserves for guaranteed investment contracts		215,331		218,032
Reserves for guaranteed benefits		76,949		12,022
Securities lending payable		883,792		514,145
Due to affiliates		21,655		19,289
Payable to brokers		—		1,140
Other liabilities		190,198		247,435
Total reserves, payables and accrued liabilities		6,871,988		6,895,625
Variable annuity liabilities related to separate accounts		22,612,451		19,178,796
Subordinated notes payable to affiliates		—		40,960
Deferred income taxes		257,532		242,556
Total liabilities		29,741,971		26,357,937
Shareholder’s equity:
Common stock		3,511		3,511
Additional paid-in capital		758,346		709,246
Retained earnings		919,612		828,423
Accumulated other comprehensive income		72,575		72,610
Total shareholder’s equity		1,754,044		1,613,790
TOTAL LIABILITIES AND SHAREHOLDER’S EQUITY	$	31,496,015	$	27,971,727

See accompanying notes to consolidated financial statements.

F - 4

AIG SUNAMERICA LIFE ASSURANCE COMPANY

CONSOLIDATED STATEMENT OF INCOME AND COMPREHENSIVE INCOME

	Years Ended December 31,
	2004			2003			2002
	(in thousands)
REVENUES:
Fee income:
Variable annuity policy fees, net of reinsurance	$	369,141		$	281,359		$	286,919
Asset management fees		89,569			66,663			66,423
Universal life insurance fees, net of reinsurance		33,899			35,816			36,253
Surrender charges		26,219			27,733			32,507
Other fees		15,753			15,520			21,900
Total fee income		534,581			427,091			444,002
Investment income		363,594			402,923			387,355
Net realized investment losses		(23,807	)		(30,354	)		(65,811	)
Total revenues		874,368			799,660			765,546
BENEFITS AND EXPENSES:
Interest expense:
Fixed annuity and fixed accounts of variable annuity contracts		140,889			153,636			142,973
Universal life insurance contracts		73,745			76,415			80,021
Guaranteed investment contracts		6,034			7,534			11,267
Subordinated notes payable to affiliates		2,081			2,628			3,868
Total interest expense		222,749			240,213			238,129
Amortization of bonus interest		10,357			19,776			16,277
General and administrative expenses		131,612			119,093			115,210
Amortization of deferred acquisition costs and other deferred expenses		157,650			160,106			222,484
Annual commissions		64,323			55,661			58,389
Claims on universal life contracts, net of reinsurance recoveries		17,420			17,766			15,716
Guaranteed minimum death benefits, net of reinsurance recoveries		58,756			63,268			67,492
Total benefits and expenses		662,867			675,883			733,697
PRETAX INCOME BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGE		211,501			123,777			31,849
Income tax expense		6,410			30,247			160
NET INCOME BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGE		205,091			93,530			31,689
Cumulative effect of accounting change, net of tax		(62,589	)		—			—
NET INCOME	$	142,502		$	93,530		$	31,689

See accompanying notes to consolidated financial statements.

F - 5

AIG SUNAMERICA LIFE ASSURANCE COMPANY

CONSOLIDATED STATEMENT OF INCOME AND COMPREHENSIVE INCOME (Continued)

	Years Ended December 31,
	2004			2003			2002
	(in thousands)
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX:
Net unrealized gains (losses) on debt and equity securities available for sale identified in the current period less related amortization of deferred acquisition costs and other deferred expenses	$	(20,487	)	$	67,125		$	20,358
Less reclassification adjustment for net realized losses included in net income		19,263			19,194			52,285
Net unrealized gains (losses) on foreign currency		1,170			—			—
Change related to cash flow hedges		—			—			(2,218	)
Income tax (benefit) expense		19			(30,213	)		(24,649	)
OTHER COMPREHENSIVE INCOME (LOSS)		(35	)		56,106			45,776
COMPREHENSIVE INCOME	$	142,467		$	149,636		$	77,465

See accompanying notes to consolidated financial statements.

F - 6

AIG SUNAMERICA LIFE ASSURANCE COMPANY

CONSOLIDATED STATEMENT OF CASH FLOWS

	Years Ended December 31,
	2004			2003			2002
	(in thousands)
CASH FLOW FROM OPERATING ACTIVITIES:
Net income	$	142,502		$	93,530		$	31,689
Adjustments to reconcile net income to net cash provided by operating activities:
Cumulative effect of accounting change, net of tax		62,589			—			—
Interest credited to:
Fixed annuity and fixed accounts of variable annuity contracts		140,889			153,636			142,973
Universal life insurance contracts		73,745			76,415			80,021
Guaranteed investment contracts		6,034			7,534			11,267
Net realized investment losses		23,807			30,354			65,811
Accretion of net discounts on investments		(1,277	)		(9,378	)		(2,412	)
Loss on other invested assets		572			2,859			3,932
Amortization of deferred acquisition costs and other expenses		168,007			179,882			238,761
Acquisition costs deferred		(246,033	)		(212,251	)		(204,833	)
Other expenses deferred		(62,906	)		(70,158	)		(77,602	)
Depreciation of fixed assets		1,619			1,718			860
Provision for deferred income taxes		49,337			(129,591	)		106,044
Change in:
Accrued investment income		878			679			13,907
Other assets		4,416			(12,349	)		4,736
Income taxes currently payable to/ receivable from Parent		5157			148,898			(43,629	)
Due from/to affiliates		2,366			(36,841	)		(7,743	)
Other liabilities		7,485			10,697			(7,143	)
Other, net		2,284			14,885			10,877
NET CASH PROVIDED BY OPERATING ACTIVITIES		381,471			250,519			367,516
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of:
Bonds, notes and redeemable preferred stocks		(964,705	)		(2,078,310	)		(2,403,362	)
Mortgage loans		(31,502	)		(44,247	)		(128,764	)
Other investments, excluding short-term investments		(33,235	)		(20,266	)		(65,184	)
Sales of:
Bonds, notes and redeemable preferred stocks		383,695			1,190,299			849,022
Other investments, excluding short-term investments		22,283			12,835			825
Redemptions and maturities of:
Bonds, notes and redeemable preferred stocks		898,682			994,014			615,798
Mortgage loans		125,475			67,506			82,825
Other investments, excluding short-term investments		10,915			72,970			114,347
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES	$	411,608		$	194,801		$	(934,493	)

See accompanying notes to consolidated financial statements.

F - 7

AIG SUNAMERICA LIFE ASSURANCE COMPANY

CONSOLIDATED STATEMENT OF CASH FLOWS (Continued)

	Years Ended December 31,
	2004			2003			2002
	(in thousands)
CASH FLOW FROM FINANCING ACTIVITIES:
Deposits received on:
Fixed annuity and fixed accounts of variable annuity contracts	$	1,360,319		$	1,553,000		$	1,731,597
Universal life insurance contracts		45,183			45,657			49,402
Net exchanges from the fixed accounts of variable annuity contracts		(1,332,240	)		(1,108,030	)		(503,221	)
Withdrawal payments on:
Fixed annuity and fixed accounts of variable annuity contracts		(458,052	)		(464,332	)		(529,466	)
Universal life insurance contracts		(69,185	)		(61,039	)		(68,444	)
Guaranteed investment contracts		(8,614	)		(148,719	)		(135,084	)
Claims and annuity payments, net of reinsurance, on:
Fixed annuity and fixed accounts of variable annuity contracts		(108,691	)		(109,412	)		(98,570	)
Universal life insurance contracts		(105,489	)		(111,380	)		(100,995	)
Net receipt from (repayments of) other short-term financings		(41,060	)		14,000			—
Net payment related to a modified coinsurance transaction		(4,738	)		(26,655	)		(30,282	)
Capital contribution received from Parent		—			—			200,000
Dividends paid to Parent		(2,500	)		(12,187	)		(10,000	)
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES		(725,067	)		(429,097	)		504,937
NET INCREASE (DECREASE) IN CASH AND SHORT-TERM INVESTMENTS		68,012			16,223			(62,040	)
CASH AND SHORT-TERM INVESTMENTS AT BEGINNING OF PERIOD		133,105			116,882			178,922
CASH AND SHORT-TERM INVESTMENTS AT END OF PERIOD	$	201,117		$	133,105		$	116,882
SUPPLEMENTAL CASH FLOW FORMATION:
Interest paid on indebtedness	$	2,081		$	2,628		$	3,868
Net income taxes (received) paid to Parent	$	(47,749	)	$	10,989		$	5,856

See accompanying notes to consolidated financial statements.

F - 8

AIG SUNAMERICA LIFE ASSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. BASIS OF PRESENTATION

AIG SunAmerica Life Assurance Company (formerly Anchor National Life Insurance Company) (the “Company”) is a direct wholly owned subsidiary of SunAmerica Life Insurance Company (the “Parent”), which is a wholly owned subsidiary of AIG Retirement Services, Inc. (“AIGRS”) (formerly AIG SunAmerica Inc.), a wholly owned subsidiary of American International Group, Inc. (“AIG”). AIG is a holding company which through its subsidiaries is engaged in a broad range of insurance and insurance-related activities, financial services, retirement services and asset management. The Company is an Arizona-domiciled life insurance company principally engaged in the business of writing variable annuity contracts directed to the market for tax-deferred, long-term savings products.

The Company changed its name to AIG SunAmerica Life Assurance Company on January 24, 2002. The Company continued to do business as Anchor National Life Insurance Company until February 28, 2003, at which time it began doing business under its new name.

Effective January 1, 2004, the Parent contributed to the Company 100% of the outstanding capital stock of its consolidated subsidiary, AIG SunAmerica Asset Management Corp. (“SAAMCo”) (formerly SunAmerica Asset Management Corp.) which in turn has two wholly owned subsidiaries: AIG SunAmerica Capital Services, Inc. (“SACS”) (formerly SunAmerica Capital Services, Inc.) and AIG SunAmerica Fund Services, Inc. (“SFS”) (formerly SunAmerica Fund Services, Inc.). Pursuant to this contribution, SAAMCo became a direct wholly owned subsidiary of the Company. Assets, liabilities and shareholder’s equity at December 31, 2003 were restated to include $190,605,000, $39,952,000 and $150,653,000, respectively, of SAAMCo balances. Similarly, the results of operations and cash flows for the years ended December 31, 2003 and 2002 have been restated for the addition and subtraction to pretax income of $16,345,000 and $4,464,000 to reflect the SAAMCo activity. Prior to this capital contribution to the Company, SAAMCo distributed certain investments with a tax effect of $49,100,000 which was indemnified by its then parent, SALIC. See Note 10 of the Notes to Consolidated Financial Statements.

SAAMCo and its wholly owned distributor, SACS, and its wholly owned servicing administrator, SFS, are included in the Company’s asset management segment (see Note 13). These companies earn fee income by managing, distributing and administering a diversified family of mutual funds, managing certain subaccounts offered within the Company’s variable annuity products and providing professional management of individual, corporate and pension plan portfolios.

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

Products for the annuity operations and asset management operations are marketed through affiliated and independent broker-dealers, full-service securities firms and financial institutions. One independent selling organization in the annuity operations represented 24.8% of deposits in the year ended December 31, 2004, 14.6% of deposits in the year ended December 31, 2003 and 11.9% of deposits in the year ended December 31, 2002. No other independent selling organization was responsible for 10% or more of deposits for any such period. One

F - 9

AIG SUNAMERICA LIFE ASSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

1. BASIS OF PRESENTATION (Continued)

independent selling organization in the asset management operations represented 16.0% of deposits in the year ended December 31, 2004 and 10.8% of deposits in the year ended December 31, 2003. No other independent selling organization was responsible for 10% or more of deposits for any such period.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION: The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of financial statements in conformity with GAAP requires the use of estimates and assumptions that affect the amounts reported in the financial statements and the accompanying notes. Actual results could differ from those estimates. Certain prior period items have been reclassified to conform to the current period’s presentation.

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

Bonds, notes and redeemable preferred stocks available for sale and common stocks are carried at aggregate fair value and changes in unrealized gains or losses, net of deferred acquisition costs, deferred other expenses and income tax, are credited or charged directly to the accumulated other comprehensive income or loss component of shareholder’s equity. Bonds, notes, redeemable preferred stocks and common stocks are reduced to estimated net fair value when declines in such values are considered to be other than temporary. Estimates of net fair value are subjective and actual realization will be dependent upon future events.

Mortgage loans are carried at amortized unpaid balances, net of provisions for estimated losses. Policy loans are carried at unpaid balances. Mutual funds consist of seed money for mutual funds used as investment vehicles for the Company’s variable annuity separate accounts and is carried at market value. Real estate is carried at the lower of cost or net realizable value.

Securities lending collateral consist of securities provided as collateral with respect to the Company’s securities lending program. The Company has entered into a securities lending agreement with an affiliated lending agent, which authorizes the agent to lend securities held in the Company’s portfolio to a list of authorized borrowers. The fair value of securities pledged under the securities lending agreement were $862,481,000 and $502,885,000 as of December 31, 2004 and 2003, respectively, and represents securities included in bonds, notes and redeemable preferred stocks available for sale caption in the consolidated balance sheet as of December 31, 2004 and 2003, respectively. The Company receives primarily cash collateral in an amount in excess of the market value of the securities loaned. The affiliated lending agent monitors the daily market value of securities loaned with respect to the collateral value and obtains additional collateral when necessary to ensure that collateral is maintained at a minimum of 102% of the value of the loaned securities. Such collateral is not available for the general use of the Company. Income earned on the collateral, net of interest paid on the securities lending agreements and the related management fees paid to administer the program, is recorded as investment income in the consolidated statement of income and comprehensive income.

Other invested assets consist principally of investments in limited partnerships and put options on the S&P 500 index purchased to partially offset the risk of Guaranteed Minimum Account Value (“GMAV”) benefits and Guaranteed Minimum Withdrawal (“GMWB”) benefits (see Note 7). Limited partnerships are carried at cost. The put options do not qualify for hedge accounting and accordingly are marked to market and changes in market value are recorded through investment income.

F - 10

AIG SUNAMERICA LIFE ASSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

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

The Company regularly reviews its investments for possible impairment based on criteria including economic conditions, market prices, past experience and other issuer-specific developments among other factors. If there is a decline in a security’s net realizable value, a determination is made as to whether that decline is temporary or “other than temporary”. If it is believed that a decline in the value of a particular investment is temporary, the decline is recorded as an unrealized loss in accumulated other comprehensive income. If it is believed that the decline is “other than temporary”, the Company writes down the carrying value of the investment and records a realized loss in the consolidated statement of income and comprehensive income. Impairments writedowns totaled $21,050,000, $54,092,000 and $57,273,000 in the years ending December 31, 2004, 2003 and 2002.

DERIVATIVE FINANCIAL INSTRUMENTS: Derivative financial instruments primarily used by the Company include interest rate swap agreements and put options on the S&P 500 index entered into to partially offset the risk of certain guarantees of annuity contract values. The Company is neither a dealer nor a trader in derivative financial instruments.

The Company recognizes all derivatives in the consolidated balance sheet at fair value. Hedge accounting requires a high correlation between changes in fair values or cash flows of the derivative financial instrument and the specific item being hedged, both at inception and throughout the life of the hedge. For fair value hedges, gains and losses in the fair value of both the derivative and the hedged item attributable to the risk being hedged are recognized in earnings. For cash flow hedges, to the extent the hedge is effective, gains and losses in the fair value of both the derivative and the hedged item attributable to the risk being hedged are recognized as component of accumulated other comprehensive income in shareholder’s equity.

Any ineffective portion of cash flow hedges is reported in investment income. On the date a derivative contract is entered into, the Company formally documents all relationships between hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking various hedge transactions. This process includes linking all derivatives designated as fair value or cash flow hedges to specific assets and liabilities on the balance sheet.

Interest rate swap agreements convert specific investment securities from a floating-rate to a fixed-rate basis, or vice versa, and hedge against the risk of declining rates on anticipated security purchases. Interest rate swaps in which the Company agrees to pay a fixed rate and receive a floating rate are accounted for as fair value hedges. Interest rate swaps in which the Company agrees to pay a floating rate and receive a fixed rate are accounted for as cash flow hedges. The difference between amounts paid and received on swap agreements is recorded as an adjustment to investment income or interest expense, as appropriate, on an accrual basis over the periods covered by the agreements. The related amount payable to or receivable from counterparties is included in other liabilities or other assets.

The Company issues certain variable annuity products that offer an optional GMAV and GMWB living benefit. If elected by the contract holder at the time of contract issuance, the GMAV feature guarantees that the account value under the contract will equal or exceed the amount of the initial principal invested, adjusted for withdrawals, at the end of a ten-year waiting period. If elected by the contract holder at the time of contract issuance, the GMWB feature guarantees an annual withdrawal stream, regardless of market performance, equal to deposits invested during the first ninety days, adjusted for any subsequent withdrawals. There is a separate charge to the contract holder for these features. The Company bears the risk that protracted under-performance of the financial markets could result in GMAV and GMWB benefits being higher than the underlying contract holder account balance and that the fees collected under the contract are insufficient to cover the costs of the benefit to be provided.

F - 11

AIG SUNAMERICA LIFE ASSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Under Financial Accounting Standards Board Statement of Financial Accounting Standards No. 133, “Accounting for Derivative Instruments and Hedging Activities”(“FAS 133”), the GMAV and GMWB benefits are considered embedded derivatives that are bifurcated and marked to market and recorded in other liabilities in the consolidated balance sheet. Changes in the market value of the estimated GMAV and GMWB benefits are recorded through investment income.

DEFERRED ACQUISITION COSTS (“DAC”): Policy acquisition costs are deferred and amortized over the estimated lives of the annuity and universal life insurance contracts. Policy acquisition costs include commissions and other costs that vary with, and are primarily related to, the production or acquisition of new business.

DAC is amortized based on a percentage of expected gross profits (“EGPs”) over the life of the underlying contracts. EGPs are computed based on assumptions related to the underlying contracts, including their anticipated duration, the growth rate of the separate account assets (with respect to variable options of the variable annuity contracts) or general account assets (with respect to fixed options of variable annuity contracts (“Fixed Options”) and universal life insurance contracts) supporting the annuity obligations, costs of providing for contract guarantees and the level of expenses necessary to maintain the contracts. The Company adjusts amortization of DAC and other deferred expenses (a “DAC unlocking”) when estimates of future gross profits to be realized from its annuity contracts are revised.

The assumption for the long-term annual net growth of the separate account assets used by the Company in the determination of DAC amortization with respect to its variable annuity contracts is 10% (the “long-term growth rate assumption”). The Company uses a “reversion to the mean” methodology that allows the Company to maintain this 10% long-term growth rate assumption, while also giving consideration to the effect of short-term swings in the equity markets. For example, if performance were 15% during the first year following the introduction of a product, the DAC model would assume that market returns for the following five years (the “short-term growth rate assumption”) would approximate 9%, resulting in an average annual growth rate of 10% during the life of the product. Similarly, following periods of below 10% performance, the model will assume a short-term growth rate higher than 10%. A DAC unlocking will occur if management deems the short-term growth rate (i.e., the growth rate required to revert to the mean 10% growth rate over a five-year period) to be unreasonable. The use of a reversion to the mean assumption is common within the industry; however, the parameters used in the methodology are subject to judgment and vary within the industry.

As debt and equity securities available for sale are carried at aggregate fair value, an adjustment is made to DAC equal to the change in amortization that would have been recorded if such securities had been sold at their stated aggregate fair value and the proceeds reinvested at current yields. The change in this adjustment, net of tax, is included with the change in net unrealized gains or losses on debt and equity securities available for sale which is a component of accumulated other comprehensive income (loss) and is credited or charged directly to shareholder’s equity.

The Company reviews the carrying value of DAC on at least an annual basis. Management considers estimated future gross profit margins as well as expected mortality, interest earned and credited rates, persistency and expenses in determining whether the carrying amount is recoverable. Any amounts deemed unrecoverable are charged to amortization expense on the consolidated statement of income and comprehensive income.

OTHER DEFERRED EXPENSES: The annuity operations currently offers enhanced crediting rates or bonus payments to contract holders on certain of its products. Such amounts are deferred and amortized over the life of the contract using the same methodology and assumptions used to amortize DAC. The Company previously deferred these expenses as part of DAC and reported the amortization of such amounts as part of DAC amortization. Upon implementation of Statement of Position 03-1, “Accounting and Reporting by Insurance Enterprises for Certain Nontraditional Long-Duration Contracts and for Separate Accounts” (“SOP 03-1”), the Company reclassified $155,695,000 of these expenses from DAC to other deferred expenses, which is reported on the consolidated balance

F - 12

AIG SUNAMERICA LIFE ASSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

sheet. The prior period consolidated balance sheet and consolidated statements of income and comprehensive income presentation has been reclassified to conform to the new presentation. See Recently Issued Accounting Standards below.

The asset management operations defer distribution costs that are directly related to the sale of mutual funds that have a 12b-1 distribution plan and/or contingent deferred sales charge feature (collectively, “Distribution Fee Revenue”). The Company amortizes these deferred distribution costs on a straight-line basis, adjusted for redemptions, over a period ranging from one year to eight years depending on share class. Amortization of these deferred distribution costs is increased if at any reporting period the value of the deferred amount exceeds the projected Distribution Fee Revenue. The projected Distribution Fee Revenue is impacted by estimated future withdrawal rates and the rates of market return. Management uses historical activity to estimate future withdrawal rates and average annual performance of the equity markets to estimate the rates of market return.

The Company reviews the carrying value of other deferred expenses on at least an annual basis. Management considers estimated future gross profit margins as well as expected mortality, interest earned, credited rates, persistency, withdrawal rates, rates of market return and expenses in determining whether the carrying amount is recoverable. Any amounts deemed unrecoverable are charged to expense.

VARIABLE ANNUITY ASSETS AND LIABILITIES RELATED TO SEPARATE ACCOUNTS: The assets and liabilities resulting from the receipt of variable annuity deposits are segregated in separate accounts. The Company receives administrative fees for managing the funds and other fees for assuming mortality and certain expense risks. Such fees are included in variable annuity policy fees in the consolidated statement of income and comprehensive income.

GOODWILL: Goodwill amounted to $14,038,000 (net of accumulated amortization of $18,838,000) at December 31, 2004 and 2003. In accordance with Statement of Financial Accounting Standard No. 142, “Goodwill and Other Intangible Assets” (“SFAS 142”), the Company assesses goodwill for impairment on an annual basis, or more frequently if circumstances indicate that a possible impairment has occurred. The assessment of impairment involves a two-step process whereby an initial assessment for potential impairment is performed, followed by a measurement of the amount of the impairment, if any. The Company has evaluated goodwill for impairment as of December 31, 2004 and 2003, and has determined that no impairment provision is necessary.

RESERVES FOR FIXED ANNUITY CONTRACTS, FIXED ACCOUNTS OF VARIABLE ANNUITY CONTRACTS, UNIVERSAL LIFE INSURANCE CONTRACTS AND GICs: Reserves for fixed annuity, Fixed Options, universal life insurance and GIC contracts are accounted for in accordance with Statement of Financial Accounting Standards No. 97, “Accounting and Reporting by Insurance Enterprises for Certain Long-Duration Contracts and for Realized Gains and Losses from the Sale of Investments,” and are recorded at accumulated value (deposits received, plus accrued interest, less withdrawals and assessed fees). Under GAAP, deposits collected on non-traditional life and annuity insurance products, such as those sold by the Company, are not reflected as revenues in the Company’s consolidated statement of income and comprehensive income, as they are recorded directly to contract holders’ liabilities upon receipt.

RESERVES FOR GUARANTEED BENEFITS: Reserves for guaranteed minimum death benefits (“GMDB”), earnings enhancement benefit and guaranteed minimum income benefits are accounted for in accordance with SOP 03-1. See Recently Issued Accounting Standards below.

FEE INCOME: Fee income includes variable annuity policy fees, asset management fees, universal life insurance fees, commissions and surrender charges. Variable annuity policy fees are generally based on the market value of assets in the separate accounts supporting the variable annuity contracts. Asset management fees include investment advisory fees and 12b-1 distribution fees and are based on the market value of assets managed in mutual funds and certain variable annuity portfolios by SAAMCo. Universal life insurance policy fees consist of mortality charges,

F - 13

AIG SUNAMERICA LIFE ASSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

up-front fees earned on deposits received and administrative fees, net of reinsurance premiums. Surrender charges are assessed on withdrawals occurring during the surrender charge period. All fee income is recorded as income when earned with net retained commissions are recognized as income on a trade date basis.

INCOME TAXES: Prior to the 2004, AIG SunAmerica Life Assurance Company was included in a consolidated federal income tax return of its Parent. Also, prior to 2004, SAAMCO, SFS and SACS were included in a separate consolidated federal income tax return with their parent, Saamsun Holdings Corporation. Beginning in 2004, all of these companies are included in the consolidated federal income tax return of their ultimate parent, AIG. Income taxes have been calculated as if each entity files a separate return. Deferred income tax assets and liabilities are recognized based on the difference between financial statement carrying amounts and income tax basis of assets and liabilities using enacted income tax rates and laws.

RECENTLY ISSUED ACCOUNTING STANDARDS: In July 2003, the American Institute of Certified Public Accountants issued SOP 03-1. This statement was effective as of January 1, 2004, and requires the Company to recognize a liability for GMDB and certain living benefits related to its variable annuity contracts, account for enhanced crediting rates or bonus payments to contract holders and modifies certain disclosures and financial statement presentations for these products. In addition, SOP 03-1 addresses the presentation and reporting of separate accounts and the capitalization and amortization of certain other expenses. The Company reported for the first quarter of 2004 a one-time cumulative accounting charge upon adoption of $62,589,000 ($96,291,000 pre-tax) to reflect the liability and the related impact of DAC and reinsurance as of January 1, 2004.

F - 14

AIG SUNAMERICA LIFE ASSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

3. INVESTMENTS

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

	Amortized Cost		Estimated Fair Value
	(in thousands)
AT DECEMBER 31, 2004:
U.S. government securities	$	28,443	$	30,300
Mortgage-backed securities		926,274		956,567
Securities of public utilities		321,381		332,038
Corporate bonds and notes		2,797,943		2,902,829
Redeemable preferred stocks		20,140		21,550
Other debt securities		913,687		917,743
Total	$	5,007,868	$	5,161,027
	Amortized Cost		Estimated Fair Value
	(in thousands)
AT DECEMBER 31, 2003:
U.S. government securities	$	22,393	$	24,292
Mortgage-backed securities		1,148,452		1,191,817
Securities of public utilities		352,998		365,150
Corporate bonds and notes		2,590,254		2,697,142
Redeemable preferred stocks		21,515		22,175
Other debt securities		1,215,571		1,205,224
Total	$	5,351,183	$	5,505,800

At December 31, 2004, bonds, notes and redeemable preferred stocks included $386,426,000 that were not rated investment grade. These non-investment-grade securities are comprised of bonds spanning 10 industries with 19%, 16%, 16% and 10% concentrated in telecommunications, utilities, financial institutions and noncyclical consumer products industries, respectively. No other industry concentration constituted more than 10% of these assets.

At December 31, 2004, mortgage loans were collateralized by properties located in 30 states, with loans totaling approximately 27%, 11% and 10% of the aggregate carrying value of the portfolio secured by properties located in California, Michigan and Massachusetts, respectively. No more than 10% of the portfolio was secured by properties in any other single state.

At December 31, 2004, the carrying value, which approximates its estimated fair value, of all investments in default as to the payment of principal or interest totaled $40,051,000 of bonds.

F - 15

AIG SUNAMERICA LIFE ASSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

3. INVESTMENTS (Continued)

As a component of its asset and liability management strategy, the Company utilizes interest rate swap agreements to match assets more closely to liabilities. Interest rate swap agreements exchange interest rate payments of differing character (for example, variable-rate payments exchanged for fixed-rate payments) with a counterparty, based on an underlying principal balance (notional principal) to hedge against interest rate changes.

The Company typically utilizes swap agreements to create a hedge that effectively converts floating-rate assets and liabilities to fixed-rate instruments.

At December 31, 2004, $10,505,000 of bonds, at amortized cost, were on deposit with regulatory authorities in accordance with statutory requirements.

At December 31, 2004, no investments in any one entity or its affiliates exceeded 10% of the Company’s shareholder’s equity.

The amortized cost and estimated fair value of bonds, notes and redeemable preferred stocks by contractual maturity, as of December 31, 2004, follow:

	Amortized Cost		Estimated Fair Value
	(in thousands)
Due in one year or less	$	278,939	$	281,954
Due after one year through five years		2,076,145		2,138,574
Due after five years through ten years		1,299,345		1,339,499
Due after ten years		427,165		444,433
Mortgage-backed securities		926,274		956,567
Total	$	5,007,868	$	5,161,027

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

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

	Gross Unrealized Gains		Gross Unrealized Losses
	(in thousands)
AT DECEMBER 31, 2004:
U.S. government securities	$	1,857	$	—
Mortgage-backed securities		32,678		(2,385	)
Securities of public utilities		11,418		(761	)
Corporate bonds and notes		118,069		(13,183	)
Redeemable preferred stocks		1,410		—
Other debt securities		14,871		(10,815	)
Total	$	180,303	$	(27,144	)

F - 16

AIG SUNAMERICA LIFE ASSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

3. INVESTMENTS (Continued)

	Gross Unrealized Gains		Gross Unrealized Losses
	(in thousands)
AT DECEMBER 31, 2003:
U.S. government securities	$	1,898	$	—
Mortgage-backed securities		46,346		(2,980	)
Securities of public utilities		13,467		(1,315	)
Corporate bonds and notes		127,996		(21,108	)
Redeemable preferred stocks		660		—
Other debt securities		24,366		(34,713	)
Total	$	214,733	$	(60,116	)

Gross unrealized gains on equity securities aggregated $26,000 at December 31, 2004 and $112,000 at December 31, 2003. There were no unrealized losses on equity securities at December 31, 2004 and gross unrealized losses on equity securities aggregated $20,000 at December 31, 2003.

The following tables summarize the Company’s gross unrealized losses and estimated fair values on investments, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at December 31, 2004 and 2003 (dollars in thousands).

	Less than 12 Months						12 Months or More						Total
	Fair Value		Unrealized Loss			Items	Fair Value		Unrealized Loss			Items	Fair Value		Unrealized Loss			Items
December 31, 2004
Mortgage-backed securities	$	125,589	$	(1,282	)	23	$	40,275	$	(1,103	)	9	$	165,864	$	(2,385	)	32
Securities of public utilities		46,249		(761	)	9		—		—		—		46,249		(761	)	9
Corporate bonds and notes		487,923		(7,418	)	86		87,194		(5,765	)	15		575,117		(13,183	)	101
Other debt securities		207,378		(4,062	)	36		79,782		(6,753	)	12		287,160		(10,815	)	48
Total	$	867,139	$	(13,523	)	154	$	207,251	$	(13,621	)	36	$	1,074,390	$	(27,144	)	190

F - 17

AIG SUNAMERICA LIFE ASSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

3. INVESTMENTS (Continued)

	Less than 12 Months						12 Months or More						Total
	Fair Value		Unrealized Loss			Items	Fair Value		Unrealized Loss			Items	Fair Value		Unrealized Loss			Items
December 31, 2003
Mortgage-backed securities	$	180,559	$	(2,882	)	49	$	13,080	$	(98	)	6	$	193,639	$	(2,980	)	55
Securities of public utilities		67,626		(1,315	)	8		—		—		—		67,626		(1,315	)	8
Corporate bonds and notes		276,373		(17,086	)	54		30,383		(4,022	)	5		306,756		(21,108	)	59
Other debt securities		302,230		(33,951	)	54		41,523		(762	)	5		343,753		(34,713	)	59
Total	$	826,788	$	(55,234	)	165	$	84,986	$	(4,882	)	16	$	911,774	$	(60,116	)	181

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

	Years ended December 31,
	2004			2003			2002
	(in thousands)
BONDS, NOTES AND REDEEMABLE PREFERRED STOCKS:
Realized gains	$	12,240		$	30,896		$	25,013
Realized losses		(12,623	)		(11,818	)		(32,865	)
COMMON STOCKS:
Realized gains		5			561			—
Realized losses		(247	)		(117	)		(169	)

F - 18

AIG SUNAMERICA LIFE ASSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

3. INVESTMENTS (Continued)

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

	Years ended December 31,
	2004			2003			2002
	(in thousands)
Short-term investments	$	2,483		$	1,363		$	5,447
Bonds, notes and redeemable preferred stocks		293,258			321,493			305,480
Mortgage loans		50,825			53,951			55,417
Partnerships		417			(478	)		12,344
Policy loans		17,130			15,925			18,796
Real estate		(202	)		(331	)		(276	)
Other invested assets		2,149			13,308			(7,496	)
Less: investment expenses		(2,466	)		(2,308	)		(2,357	)
Total investment income	$	363,594		$	402,923		$	387,355
Investment income was attributable to the following products:
	Years ended December 31,
	2004			2003			2002
	(in thousands)
Fixed annuity contracts	$	34,135		$	37,762		$	41,856
Variable annuity contracts		222,660			239,863			201,766
Guaranteed investment contracts		13,191			20,660			28,056
Universal life insurance contracts		92,645			100,019			105,878
Asset management		963			4,619			9,799
Total	$	363,594		$	402,923		$	387,355

F - 19

AIG SUNAMERICA LIFE ASSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

4. FAIR VALUE OF FINANCIAL INSTRUMENTS

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

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

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

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

BONDS, NOTES AND REDEEMABLE PREFERRED STOCKS: Fair value is based principally on independent pricing services, broker quotes and other independent information. For securities that do not have readily determinable market prices, the fair value is estimated with internally prepared valuations (including those based on estimates of future profitability). Otherwise, the most recent purchases and sales of similar unquoted securities, independent broker quotes or comparison to similar securities with quoted prices when possible is used to estimate the fair value of those securities.

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

POLICY LOANS: Carrying value is considered a reasonable estimate of fair value.

MUTUAL FUNDS: Fair value is considered to be the market value of the underlying securities.

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

PARTNERSHIPS: Fair value of partnerships that invest in debt and equity securities is based upon the fair value of the net assets of the partnerships as determined by the general partners.

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

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

RESERVES FOR GUARANTEED INVESTMENT CONTRACTS: Fair value is based on the present value of future cash flows at current pricing rates.

SECURITIES LENDING COLLATERAL/PAYABLE: Carrying value is considered to be a reasonable estimate of fair value.

F - 20

AIG SUNAMERICA LIFE ASSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

4. FAIR VALUE OF FINANCIAL INSTRUMENTS (Continued)

VARIABLE ANNUITY LIABILITIES RELATED TO SEPARATE ACCOUNTS: Variable annuity liabilities are carried at the market value of the underlying securities of the variable annuity assets held in separate accounts.

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

The estimated fair values of the Company’s financial instruments at December 31, 2004 and 2003 compared with their respective carrying values, are as follows:

	Carrying Value		Fair Value
	(in thousands)
DECEMBER 31, 2004:
ASSETS:
Cash and short-term investments	$	201,117	$	201,117
Bonds, notes and redeemable preferred stocks		5,161,027		5,161,027
Mortgage loans		624,179		657,828
Policy loans		185,958		185,958
Mutual funds		6,131		6,131
Common stocks		4,902		4,902
Partnerships		1,084		1,084
Securities lending collateral		883,792		883,792
Put options hedging guaranteed benefits		37,705		37,705
Variable annuity assets held in separate accounts		22,612,451		22,612,451
LIABILITIES:
Reserves for fixed annuity and fixed accounts of variable annuity contracts	$	3,948,158	$	3,943,265
Reserves for guaranteed investment contracts		215,331		219,230
Securities lending payable		883,792		883,792
Variable annuity liabilities related to separate accounts		22,612,451		22,612,451

F - 21

AIG SUNAMERICA LIFE ASSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

4. FAIR VALUE OF FINANCIAL INSTRUMENTS (Continued)

	Carrying Value		Fair Value
	(in thousands)
DECEMBER 31, 2003:
ASSETS:
Cash and short-term investments	$	133,105	$	133,105
Bonds, notes and redeemable preferred stocks		5,505,800		5,505,800
Mortgage loans		716,846		774,758
Policy loans		200,232		200,232
Mutual funds		21,159		21,159
Common stocks		727		727
Partnerships		1,312		1,685
Securities lending collateral		514,145		514,145
Put options hedging guaranteed benefits		9,141		9,141
Variable annuity assets held in separate accounts		19,178,796		19,178,796
LIABILITIES:
Reserves for fixed annuity and fixed accounts of variable annuity contracts	$	4,274,329	$	4,225,329
Reserves for guaranteed investment contracts		218,032		223,553
Securities lending payable		514,145		514,145
Variable annuity liabilities related to separate accounts		19,178,796		19,178,796
Subordinated note payable to affiliate		40,960		40,960

5. DEFERRED ACQUISITION COSTS

The following table summarizes the activity in deferred acquisition costs:

	Years Ended December 31,
	2004			2003
	(in thousands)
Balance at beginning of year	$	1,268,621		$	1,224,101
Acquisition costs deferred		246,033			212,250
Effect of net unrealized gains (losses) on securities		267			(30,600	)
Amortization charged to income		(126,142	)		(137,130	)
Cumulative effect of SOP 03-1		(39,690	)		—
Balance at end of year	$	1,349,089		$	1,268,621

F - 22

AIG SUNAMERICA LIFE ASSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

6. OTHER DEFERRED EXPENSES

The annuity operations defer enhanced crediting rates or bonus payments to contract holders on certain of its products (“Bonus Payments”). The asset management operations defer distribution costs that are directly related to the sale of mutual funds that have a 12b-1 distribution plan and/or contingent deferred sales charge feature. The following table summarizes the activity in these deferred expenses:

	Bonus Payments			Distribution Costs			Total
	(in thousands)
YEAR ENDED DECEMBER 31, 2004
Balance at beginning of year	$	155,695		$	81,011		$	236,707
Expenses deferred		36,732			26,175			62,906
Effect of net unrealized gains (losses) on securities		33			—			33
Amortization charged in income		(10,357	)		(31,508	)		(41,865	)
Balance at end of year	$	182,103		$	75,678		$	257,781
YEAR ENDED DECEMBER 31, 2003
Balance at beginning of year	$	140,647		$	72,053		$	212,700
Expenses deferred		38,224			31,934			70,159
Effect of net unrealized gains (losses) on securities		(3,400	)		—			(3,400	)
Amortization charged in income		(19,776	)		(22,976	)		(42,752	)
Balance at end of year	$	155,695		$	81,011		$	236,707

F - 23

AIG SUNAMERICA LIFE ASSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

7. GUARANTEED BENEFITS

The Company issues variable annuity contracts for which the investment risk is generally borne by the contract holder, except with respect to amounts invested in the Fixed Options. For many of the Company’s variable annuity contracts, the Company offers contractual guarantees in the event of death, at specified dates during the accumulation period, upon certain withdrawals or at annuitization. Such benefits are referred to as GMDB, GMAV, GMWB and guaranteed minimum income benefits (“GMIB”), respectively. The Company also issues certain variable annuity products that offer an optional earnings enhancement benefit (“EEB”) feature that provides an additional death benefit amount equal to a fixed percentage of earnings in the contract, subject to certain maximums.

The assets supporting the variable portion of variable annuity contracts are carried at fair value and reported as summary total “variable annuity assets held in separate accounts” with an equivalent summary total reported for liabilities. Amounts assessed against the contract holders for mortality, administrative, other services and certain features are included in variable annuity policy fees, net of reinsurance, in the consolidated statement of income and comprehensive income. Changes in liabilities for minimum guarantees are included in guaranteed benefits, net of reinsurance, in the consolidated statement of income and comprehensive income. Separate account net investment income, net investment gains and losses and the related liability charges are offset within the same line item in the consolidated statement of income and comprehensive income.

The Company offers GMDB options that guarantee for virtually all contract holders, that upon death, the contract holder’s beneficiary will receive the greater of (1) the contract holder’s account value, or (2) a guaranteed minimum death benefit that varies by product and election by policy owner. The GMDB liability is determined each period end by estimating the expected value of death benefits in excess of the projected account balance and recognizing the excess ratably over the accumulation period based on total expected assessments. The Company regularly evaluates estimates used and adjusts the additional liability balance, with a related charge or credit to guaranteed benefits, net of reinsurance recoveries, if actual experience or other evidence suggests that earlier assumptions should be revised.

EEB is a feature the Company offers on certain variable annuity products. For contract holders who elect the feature, the EEB provides an additional death benefit amount equal to a fixed percentage of earnings in the contract, subject to certain maximums. The Company bears the risk that account values following favorable performance of the financial markets will result in greater EEB death claims and that the fees collected under the contract are insufficient to cover the costs of the benefit to be provided.

If available and elected by the contract holder, GMIB provides a minimum fixed annuity payment guarantee after a seven, nine or ten-year waiting period. As there is a waiting period to annuitize using the GMIB, there are no policies eligible to receive this benefit at December 31, 2004. The GMIB liability is determined each period end by estimating the expected value of the annuitization benefits in excess of the projected account balance at the date of annuitization and recognizing the excess ratably over the accumulation period based on total expected assessments. The Company regularly evaluates estimates used and adjusts the additional liability balance, with a related charge or credit to guaranteed benefits, net of reinsurance recoveries, if actual experience or other evidence suggests that earlier assumptions should be revised.

F - 24

AIG SUNAMERICA LIFE ASSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

7. GUARANTEED BENEFITS (Continued)

GMAV is a feature offered on certain variable annuity products. If available and elected by the contract holder at the time of contract issuance, GMAV guarantees that the account value under the contract will at least equal the amount of deposits invested during the first ninety days, adjusted for any subsequent withdrawals, at the end of a ten-year waiting period. The Company purchases put options on the S&P 500 index to partially offset this risk. GMAVs are considered to be derivatives under FAS 133, and are recognized at fair value in the consolidated balance sheet and through investment income in the consolidated statement of income and comprehensive income.

GMWB is a feature offered on certain variable annuity products. If available and elected by the contract holder at the time of contract issuance, this feature provides a guaranteed annual withdrawal stream, regardless of market performance, equal to deposits invested during the first ninety days adjusted for any subsequent withdrawals (“Eligible Premium”). These guaranteed annual withdrawals of up to 10% of Eligible Premium are available after either a three-year or a five-year waiting period as elected by the contract holder at time of contract issuance, without reducing the future amounts guaranteed. If no withdrawals have been made during the waiting period of three or five years, the contract holder will realize an additional 10% or 20%, respectively, of Eligible Premium after all other amounts guaranteed under this benefit have been paid. GMWBs are considered to be derivatives under FAS 133 and are recognized at fair value in the consolidated balance sheet and through investment income in the consolidated statement of income and comprehensive income.

F - 25

AIG SUNAMERICA LIFE ASSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

7. GUARANTEED BENEFITS (Continued)

Details concerning the Company’s guaranteed benefit exposures as of December 31, 2004 are as follows:

	Return of Net Deposits Plus a Minimum Return			Highest Specified Anniversary Account Value Minus Withdrawals Post Anniversary
	(dollars in millions)
In the event of death (GMDB and EEB):
Account value	$	12,883		$	12,890
Net amount at risk (a)	$	933		$	1,137
Average attained age of contract holders		67			64
Range of guaranteed minimum return rates		0%-5	%		0	%
At annuitization (GMIB):
Account value	$	6,942
Net amount at risk (b)	$	3
Weighted average period remaining until earliest annuitization		3.8 Years
Range of guaranteed minimum return rates		0%-6.5	%
Accumulation at specified date (GMAV):
Account value	$	1,533
Net amount at risk (c)	$	—
Weighted average period remaining until guaranteed payment		9.0 Years
Annual withdrawals at specified date (GMWB):
Account value	$	294
Net amount at risk (d)	$	—
Weighted average period remaining until expected payout		13.9 Years

(a) Net amount at risk represents the guaranteed benefit exposure in excess of the current account value, net of reinsurance, if all contract holders died at the same balance sheet date. The net amount at risk does not take into account the effect of caps and deductibles from the various reinsurance treaties.

(b) Net amount at risk represents the present value of the expected annuitization payments at the expected annuitization dates in excess of the present value of the expected account value at the expected annuitization dates, net of reinsurance.

(c) Net amount at risk represents the guaranteed benefit exposure in excess of the current account value, if all contract holders reached the specified date at the same balance sheet date.

(d) Net amount at risk represents the guaranteed benefit exposure in excess of the current account value if all contract holders exercise the maximum withdrawal benefits at the same balance sheet date. If no withdrawals have been made during the waiting period of 3 or 5 years, the contract holder will realize an additional 10% or 20% of Eligible Premium, respectively, after all other amounts guaranteed under this benefit have been paid. The additional 10% or 20% enhancement increases the net amount at risk by $26.3 million and is payable no sooner than 13 or 15 years from contract issuance for the 3 or 5 year waiting periods, respectively.

F - 26

AIG SUNAMERICA LIFE ASSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

7. GUARANTEED BENEFITS (Continued)

The following summarizes the reserve for guaranteed benefits, net of reinsurance, on variable contracts reflected in the general account:

	(in thousands)
Balance at January 1, 2004 before reinsurance (e)	$	92,873
Guaranteed benefits incurred		61,472
Guaranteed benefits paid		(49,947	)
Balance at December 31, 2004 before reinsurance		104,398
Less reinsurance		(27,449	)
Balance at December 31, 2004, net of reinsurance	$	76,949

(e) Includes amounts from the one-time cumulative accounting change resulting from the adoption of SOP 03-1.

The following assumptions and methodology were used to determine the reserve for guaranteed benefits at December 31, 2004:

• Data used was 5,000 stochastically generated investment performance scenarios.

• Mean investment performance assumption was 10%.

• Volatility assumption was 16%.

• Mortality was assumed to be 64% of the 75-80 ALB table.

• Lapse rates vary by contract type and duration and range from 0% to 40%.

• The discount rate was approximately 8%.

8. REINSURANCE

Reinsurance contracts do not relieve the Company from its obligations to contract holders. The Company could become liable for all obligations of the reinsured policies if the reinsurers were to become unable to meet the obligations assumed under the respective reinsurance agreements. The Company monitors its credit exposure with respect to these agreements. However, due to the high credit ratings of the reinsurers, such risks are considered to be minimal. The Company has no reinsurance recoverable or related concentration of credit risk greater than 10% of shareholder’s equity.

Variable policy fees are net of reinsurance premiums of $28,604,000, $30,795,000 and $22,500,000 in 2004, 2003 and 2002, respectively. Universal life insurance fees are net of reinsurance premiums of $34,311,000, $33,710,000 and $34,098,000 in 2004, 2003 and 2002, respectively.

The Company has a reinsurance treaty under which the Company retains no more than $100,000 of risk on any one insured life in order to limit the exposure to loss on any single insured. Reinsurance recoveries recognized as a reduction of claims on universal life insurance contracts amounted to $34,163,000, $34,036,000 and $29,171,000 in 2004, 2003 and 2002, respectively. Guaranteed benefits were reduced by reinsurance recoveries of $2,716,000, $8,042,000 and $8,362,000 in 2004, 2003 and 2002, respectively.

F - 27

AIG SUNAMERICA LIFE ASSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

9. COMMITMENTS AND CONTINGENT LIABILITIES

The Company has six agreements outstanding in which it has provided liquidity support for certain short-term securities of municipalities and non-profit organizations by agreeing to purchase such securities in the event there is no other buyer in the short-term marketplace. In return the Company receives a fee. In addition, the Company guarantees the payment of these securities upon redemption. The maximum liability under these guarantees at December 31, 2004 is $195,442,000. These commitments have contractual maturity dates in 2005. Related to each of these agreements are participation agreements with the Parent under which the Parent will share in $62,590,000 of these liabilities in exchange for a proportionate percentage of the fees received under these agreements. The Internal Revenue Service has completed its examinations into the transactions underlying these commitments, including the Company’s role in the transactions. The examination did not result in a material loss to the Company.

At December 31, 2004, the Company has commitments to purchase a total of approximately $10,000,000 of asset- backed securities in the ordinary course of business. The expiration dates of these commitments are as follows: $2,000,000 in 2005 and $8,000,000 in 2007.

Various federal, state and other regulatory agencies are reviewing certain transactions and practices of the Company and its subsidiaries in connection with industry-wide and other inquiries. In the opinion of the Company’s management, based on the current status of these inquiries, it is not likely that any of these inquiries will have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows of the Company.

Various lawsuits against the Company and its subsidiaries have arisen in the ordinary course of business. Contingent liabilities arising from litigation, income taxes and regulatory and other matters are not considered material in relation to the consolidated financial position, results of operations or cash flows of the Company.

On April 5, 2004, a purported class action captioned Nitika Mehta, as Trustee of the N.D. Mehta Living Trust vs. AIG SunAmerica Life Assurance Company, Case 04L0199, was filed in the Circuit Court, Twentieth Judicial District in St. Clair County, Illinois. The lawsuit alleges certain improprieties in conjunction with alleged market timing activities. The probability of any particular outcome cannot be reasonably estimated at this time. The Company cannot estimate a range because the litigation has not progressed beyond the preliminary stage.

F - 28

AIG SUNAMERICA LIFE ASSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

10. SHAREHOLDER’S EQUITY

The Company is authorized to issue 4,000 shares of its $1,000 par value Common Stock. At December 31, 2004 and 2003, 3,511 shares were outstanding.

Changes in shareholder’s equity are as follows:

	Years ended December 31,
	2004			2003			2002
	(in thousands)
ADDITIONAL PAID-IN CAPITAL:
Beginning balances	$	709,246		$	709,246		$	509,246
Capital contributions by Parent		49,100			—			200,000
Ending balances	$	758,346		$	709,246		$	709,246
RETAINED EARNINGS:
Beginning balances	$	828,423		$	730,321		$	669,103
Net income		142,502			93,530			31,689
Dividends paid to Parent		(2,500	)		(12,187	)		(10,000	)
Adjustment for tax benefit of distributed subsidiary		287			16,759			39,529
Tax effect on a distribution of investment		(49,100	)		—			—
Ending balances	$	919,612		$	828,423		$	730,321
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS):
Beginning balances	$	72,610		$	16,504		$	(29,272	)
Change in net unrealized gains (losses) on debt securities available for sale		(1,459	)		118,725			98,718
Change in net unrealized gains (losses) on equity securities available for sale		(65	)		1,594			(1,075	)
Change in net unrealized gains on foreign currency		1,170			—			—
Change in adjustment to deferred acquisition costs and other deferred expenses		300			(34,000	)		(25,000	)
Net change related to cash flow hedges		—			—			(2,218	)
Tax effects of net changes		19			(30,213	)		(24,649	)
Ending balances	$	72,575		$	72,610		$	16,504

F - 29

AIG SUNAMERICA LIFE ASSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

10. SHAREHOLDER’S EQUITY (Continued)

Gross unrealized gains (losses) on fixed maturity and equity securities included in accumulated other comprehensive income are as follows:

	December 31, 2004			December 31, 2003
	(in thousands)
Gross unrealized gains	$	180,329		$	214,845
Gross unrealized losses		(27,144	)		(60,136	)
Unrealized gain on foreign currency		1,170			—
Adjustment to DAC and other deferred expenses		(42,700	)		(43,000	)
Deferred income taxes		(39,080	)		(39,099	)
Accumulated other comprehensive income	$	72,575		$	72,610

On October 30, 2002, the Company received a capital contribution of $200,000,000 in cash from the Parent.

F - 30

AIG SUNAMERICA LIFE ASSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

10. SHAREHOLDER’S EQUITY (Continued)

Dividends that the Company may pay to its shareholder in any year without prior approval of the Arizona Department of Insurance are limited by statute. The maximum amount of dividends which can be paid to shareholders of insurance companies domiciled in the state of Arizona without obtaining the prior approval of the Insurance Commissioner is limited to the lesser of either 10% of the preceding year’s statutory surplus or the preceding year’s statutory net gain from operations if, after paying the dividend, the Company’s capital and surplus would be adequate in the opinion of the Arizona Department of Insurance. Accordingly, the maximum amount of dividends that can be paid to stockholders in the year 2005 without obtaining prior approval is $83,649,000. Dividends of $2,500,000 were paid in 2004. Prior to the capital contribution of SAAMCo to the Company, SAAMCo paid dividends to its parent, SunAmerica Life Insurance Company, of $12,187,000 and $10,000,000 in 2003 and 2002, respectively.

Under statutory accounting principles utilized in filings with insurance regulatory authorities, the Company’s net income totaled $99,288,000 for the year ended December 31, 2004, net income of $89,071,000 and net loss of $180,737,000 for the years ended December 31, 2003 and 2002, respectively. The Company’s statutory capital and surplus totaled $840,001,000 at December 31, 2004 and $602,348,000 at December 31, 2003.

11. INCOME TAXES

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

	Years ended December 31,
	2004			2003			2002
	(in thousands)
Current expense (benefit)	$	(42,927	)	$	127,655		$	(105,369	)
Deferred expense (benefit)		49,337			(97,408	)		105,529
Total income tax expense	$	6,410		$	30,247		$	160

F - 31

AIG SUNAMERICA LIFE ASSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

11. INCOME TAXES (Continued)

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

	Years ended December 31,
	2004			2003			2002
	(in thousands)
Amount computed at statutory rate	$	74,025		$	43,322		$	11,147
Increases (decreases) resulting from:
State income taxes, net of federal tax benefit		4,020			2,273			(567	)
Dividends received deduction		(19,058	)		(15,920	)		(10,117	)
Tax credits		(4,000	)		—			—
Adjustment to prior year tax liability (a)		(39,730	)		—			—
Other, net		(8,847	)		572			(303	)
Total income tax expense	$	6,410		$	30,247		$	160

(a) In 2004, the Company revised its estimate of tax contingency amount for prior year based on additional information that became available.

Under prior federal income tax law, one-half of the excess of a life insurance company’s income from operations over its taxable investment income was not taxed, but was set aside in a special tax account designated as “policyholders’ surplus”. At December 31, 2004, the Company had approximately $14,300,000 of policyholders’ surplus on which no deferred tax liability has been recognized, as federal income taxes are not required unless this amount is distributed as a dividend or recognized under other specified conditions. The American Jobs Creation Act of 2004 modified federal income tax law to allow life insurance companies to distribute amounts from policyholders’ surplus during 2005 and 2006 without incurring federal income tax on the distributions. The Company eliminated its policyholders’ surplus balance in January 2005.

At December 31, 2004, the Company had net operating carryforwards, capital loss carryforwards and tax credit carryforwards for Federal income tax purposes of $15,515,000, $63,774,000 and $44,604,000, respectively, arising from affordable housing investments no longer owned by SAAMCo. Such carryforwards expire in 2018, 2006 to 2008 and 2018, respectively.

F - 32

AIG SUNAMERICA LIFE ASSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

11. INCOME TAXES (Continued)

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

	December 31, 2004			December 31, 2003
	(in thousands)
DEFERRED TAX LIABILITIES:
Deferred acquisition costs and other deferred expenses	$	432,868		$	473,387
State income taxes		10,283			5,744
Other liabilities		15,629			350
Net unrealized gains on debt and equity securities available for sale		39,080			39,098
Total deferred tax liabilities		497,860			518,579
DEFERRED TAX ASSETS:
Investments		(28,915	)		(25,213	)
Contract holder reserves		(122,691	)		(158,112	)
Guaranty fund assessments		(3,402	)		(3,408	)
Deferred income		(5,604	)		(3,801	)
Other assets		(1,068	)		(7,446	)
Net operating loss carryforward		(5,430	)		—
Capital loss carryforward		(22,321	)		(20,565	)
Low income housing credit carryforward		(44,604	)		(36,600	)
Partnership income/loss		(6,293	)		(20,878	)
Total deferred tax assets		(240,328	)		(276,023	)
Deferred income taxes	$	257,532		$	242,556

The Company has concluded that the deferred tax asset will be fully realized and no valuation allowance is necessary.

12. RELATED-PARTY MATTERS

As of December 31, 2004, subordinated notes payable to affiliates were paid off except for accrued interest totaling $460,000 which is included in other liabilities on the consolidated balance sheet.

On February 15, 2004, the Company entered into a short-term financing arrangement with the Parent whereby the Company has the right to borrow up to $500,000,000 from the Parent and vice versa. Any advances made under this arrangement must be repaid within 30 days. There were no balances outstanding under this agreement at December 31, 2004.

F - 33

AIG SUNAMERICA LIFE ASSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

12. RELATED-PARTY MATTERS (Continued)

On February 15, 2004, the Company entered into a short-term financing arrangement with its affiliate, First SunAmerica Life Insurance Company (“FSA”), whereby the Company has the right to borrow up to $15,000,000 from FSA and vice versa. Any advances made under this arrangement must be repaid within 30 days. There were no balances outstanding under this agreement at December 31, 2004.

On December 19, 2001, the Company entered into a short-term financing arrangement with AIGRS whereby AIGRS has the right to borrow up to $500,000,000. Any advances made under this arrangement must be repaid within 30 days. There were no balances outstanding under this agreement at December 31, 2004.

On December 19, 2001, the Company entered into a short-term financing arrangement with SunAmerica Investments, Inc. (“SAII”), whereby SAII has the right to borrow up to $500,000,000 from the Company. Any advances made under this agreement must be repaid within 30 days. There were no balances outstanding under this agreement at December 31, 2004.

On September 26, 2001, the Company entered into a short-term financing arrangement with AIGRS. Under the terms of this agreement, the Company has immediate access of up to $500,000,000. Any advances made under this arrangement must be repaid within 30 days. There were no balances outstanding under this agreement at December 31, 2004.

On September 26, 2001, the Company entered into a short-term financing arrangement with SAII, whereby the Company has the right to borrow up to $500,000,000. Any advances made under this agreement must be repaid within 30 days. At December 31, 2004 and 2003, the Company owed $0 and $14,000,000, respectively, under this agreement, which was included in due to affiliates.

On October 31, 2003, the Company became a party to an existing credit agreement under which the Company agreed to make loans to AIG in an aggregate amount of up to $60,000,000. This commitment expires on October 28, 2005. There were no balances outstanding under this agreement at December 31, 2004.

For the years ended December 31, 2004, 2003 and 2002, the Company paid commissions totaling $60,674,000, $51,716,000 and $59,058,000, respectively, to nine affiliated broker-dealers: Royal Alliance Associates, Inc.; SunAmerica Securities, Inc.; Advantage Capital Corporation; FSC Services Corporation; Sentra Securities Corporation; Spelman & Co., Inc.; VALIC Financial Advisors; American General Equity Securities Corporation and American General Securities Inc. These affiliated broker-dealers distribute a significant portion of the Company’s variable annuity products amounting to approximately 23%, 24% and 31% of deposits for each of the respective years. Of the Company’s mutual fund sales, approximately 25%, 23% and 28% were distributed by these affiliated broker-dealers for the years ended December 31, 2004, 2003 and 2002, respectively.

On February 1, 2004, SAAMCo entered into an administrative services agreement with FSA whereby SAAMCo will pay to FSA a fee based on a percentage of all assets invested through FSA’s variable annuity products in exchange for services performed. SAAMCo is the investment advisor for certain trusts that serve as investment options for FSA’s variable annuity products. Amounts incurred by the Company under this agreement totaled $1,537,000 in 2004 and are included in the Company’s consolidated statement of income and comprehensive income. A fee of $150,000, $1,620,000 and $1,777,000 was paid under a different agreement in 2004, 2003 and 2002, respectively.

On October 1, 2001, SAAMCo entered into two administrative services agreements with business trusts established by its affiliate, The Variable Annuity Life Insurance Company (“VALIC”), whereby the trust pays to SAAMCo a fee based on a percentage of average daily net assets invested through VALIC’s annuity products in exchange for services performed. Amounts earned by SAAMCo under this agreement totaled $9,074,000, $7,587,000 and $7,614,000 in 2004, 2003 and 2002, respectively, and are net of certain administrative costs incurred by VALIC of

F - 34

AIG SUNAMERICA LIFE ASSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

12. RELATED-PARTY MATTERS (Continued)

$2,593,000, $2,168,000 and $2,175,000, respectively. The net amounts earned by SAAMCo are included in other fees in the consolidated statement of income and comprehensive income.

The Company has a support agreement in effect between the Company and AIG (the “Support Agreement”), pursuant to which AIG has agreed that AIG will cause the Company to maintain a policyholder’s surplus of not less than $1,000,000 or such greater amount as shall be sufficient to enable the Company to perform its obligations under any policy issued by it. The Support Agreement also provides that if the Company needs funds not otherwise available to it to make timely payment of its obligations under policies issued by it, AIG will provide such funds at the request of the Company. The Support Agreement is not a direct or indirect guarantee by AIG to any person of any obligations of the Company. AIG may terminate the Support Agreement with respect to outstanding obligations of the Company only under circumstances where the Company attains, without the benefit of the Support Agreement, a financial strength rating equivalent to that held by the Company with the benefit of the Support Agreement. Contract holders have the right to cause the Company to enforce its rights against AIG and, if the Company fails or refuses to take timely action to enforce the Support Agreement or if the Company defaults in any claim or payment owed to such contract holder when due, have the right to enforce the Support Agreement directly against AIG.

The Company’s insurance policy obligations are guaranteed by American Home Assurance Company (“American Home”), a subsidiary of AIG, and a member of an AIG intercompany pool. This guarantee is unconditional and irrevocable, and the Company’s contract holders have the right to enforce the guarantee directly against American Home. While American Home does not publish financial statements, it does file statutory annual and quarterly reports with the New York State Insurance Department, where such reports are available to the public. AIG is a reporting company under the Securities Exchange Act of 1934, and publishes annual reports on Form 10-K and quarterly reports on Form 10-Q, which are available from the Securities and Exchange Commission.

The Company’s ultimate parent, AIG, has announced that it has delayed filing its Annual Report on Form 10-K for the year ended December 31, 2004 to allow AIG’s Board of Directors and new management adequate time to complete an extensive review of AIG’s books and records. The review includes issues arising from pending investigations into non-traditional insurance products and certain assumed reinsurance transactions by the Office of the Attorney General for the State of New York and the SEC and from AIG’s decision to review the accounting treatment of certain additional items. Circumstances affecting AIG can have an impact on the Company. For example, the recent downgrades and ratings actions taken by the major rating agencies with respect to AIG, resulted in corresponding downgrades and ratings actions being taken with respect to the Company’s ratings. Accordingly, we can give no assurance that any further changes in circumstances for AIG will not impact us. While the outcome of this investigation is not determinable at this time, management believes that the ultimate outcome will not have a material adverse effect on Company operating results, cash flows or financial position.

Pursuant to a cost allocation agreement, the Company purchases administrative, investment management, accounting, legal, marketing and data processing services from its Parent, AIGRS and AIG. The allocation of such costs for investment management services is based on the level of assets under management. The allocation of costs for other services is based on estimated levels of usage, transactions or time incurred in providing the respective services. Amounts paid for such services totaled $148,554,000 for the year ended December 31, 2004, $126,531,000 for the year ended December 31, 2003 and $119,981,000 for the year ended December 31, 2002. The component of such costs that relate to the production or acquisition of new business during these periods amounted to $60,183,000, $48,733,000 and $49,004,000 respectively, and is deferred and amortized as part of deferred acquisition costs. The other components of such costs are included in general and administrative expenses in the consolidated statement of income and comprehensive income.

The majority of the Company’s invested assets are managed by an affiliate of the Company. The investment management fees incurred were $3,712,000, $3,838,000 and $3,408,000 for the years ended December 31, 2004, 2003 and 2002, respectively.

F - 35

AIG SUNAMERICA LIFE ASSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

12. RELATED-PARTY MATTERS (Continued)

The Company incurred $1,113,000, $500,000 and $790,000 of management fees to an affiliate of the Company to administer its securities lending program for the years ended December 31, 2004, 2003 and 2002, respectively (see Note 2).

In December 2003, the Company purchased an affiliated bond with a carrying value of $37,129,000. At December 31, 2004, the affiliated bond has a market value of $34,630,000.

F - 36

AIG SUNAMERICA LIFE ASSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

13. BUSINESS SEGMENTS

The Company conducts its business through two business segments, annuity operations and asset management operations. Annuity operations consists of the sale and administration of deposit-type insurance contracts, including fixed and variable annuity contracts, universal life insurance contracts and GICs. Asset management operations, which includes the managing, distributing and administering a diversified family of mutual funds, managing certain subaccounts offered within the Company’s variable annuity products and providing professional management of individual, corporate and pension plan portfolios, is conducted by SAAMCo and its subsidiary and distributor, SACS, and its subsidiary and servicing administrator, SFS. Following is selected information pertaining to the Company’s business segments.

	Annuity Operations			Asset Management Operations		Total
	(in thousands)
YEAR ENDED DECEMBER 31, 2004:
REVENUES:
Fee income:
Variable annuity policy fees, net of reinsurance	$	369,141		$	—	$	369,141
Asset management fees		—			89,569		89,569
Universal life insurance policy fees, net of reinsurance		33,899			—		33,899
Surrender charges		26,219			—		26,219
Other fees		—			15,753		15,753
Total fee income		429,259			105,322		534,581
Investment income		362,631			963		363,594
Net realized investment gains (losses)		(24,100	)		293		(23,807	)
Total revenues		767,790			106,578		874,368
BENEFITS AND EXPENSES:
Interest expense		220,668			2,081		222,749
Amortization of bonus interest		10,357			—		10,357
General and administrative expenses		93,188			38,424		131,612
Amortization of deferred acquisition costs and other deferred expenses		126,142			31,508		157,650
Annual commissions		64,323			—		64,323
Claims on universal life contracts, net of reinsurance recoveries		17,420			—		17,420
Guaranteed benefits, net of reinsurance recoveries		58,756			—		58,756
Total benefits and expenses		590,854			72,013		662,867
Pretax income before cumulative effect of accounting change	$	176,936		$	34,565	$	211,501
Total assets	$	31,323,462		$	217,155	$	31,540,617
Expenditures for long-lived assets	$	—		$	132	$	132

F - 37

AIG SUNAMERICA LIFE ASSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

13. BUSINESS SEGMENTS (Continued)

	Annuity Operations			Asset Management Operations		Total
	(in thousands)
YEAR ENDED DECEMBER 31, 2003:
REVENUES:
Fee income:
Variable annuity policy fees, net of reinsurance	$	281,359		$	—	$	281,359
Asset management fees		—			66,663		66,663
Universal life insurance policy fees, net of reinsurance		35,816			—		35,816
Surrender charges		27,733			—		27,733
Other fees		—			15,520		15,520
Total fee income		344,908			82,183		427,091
Investment income		398,304			4,619		402,923
Net realized investment losses		(30,354	)		—		(30,354	)
Total revenues		712,858			86,802		799,660
BENEFITS AND EXPENSES:
Interest expense		237,585			2,628		240,213
Amortization of bonus interest		19,776			—		19,776
General and administrative expenses		83,013			36,080		119,093
Amortization of deferred acquisition costs and other deferred expenses		137,130			22,976		160,106
Annual commissions		55,661			—		55,661
Claims on universal life contracts, net of reinsurance recoveries		17,766			—		17,766
Guaranteed benefits, net of reinsurance recoveries		63,268			—		63,268
Total benefits and expenses		614,199			61,684		675,883
Pretax income before cumulative effect of accounting change	$	98,659		$	25,118	$	123,777
Total assets	$	27,781,457		$	190,270	$	27,971,727
Expenditures for long-lived assets	$	—		$	2,977	$	2,977

F - 38

AIG SUNAMERICA LIFE ASSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

13. BUSINESS SEGMENTS (Continued)

	Annuity Operations			Asset Management Operations		Total
	(in thousands)
YEAR ENDED DECEMBER 31, 2002:
REVENUES:
Fee income:
Variable annuity policy fees, net of reinsurance	$	286,919		$	—	$	286,919
Asset management fees		—			66,423		66,423
Universal life insurance policy fees, net of reinsurance		36,253			—		36,253
Surrender charges		32,507			—		32,507
Other fees		3,304			18,596		21,900
Total fee income		358,983			85,019		444,002
Investment income		377,556			9,799		387,355
Net realized investment losses		(65,811	)		—		(65,811	)
Total revenues		670,728			94,818		765,546
BENEFITS AND EXPENSES:
Interest expense		234,261			3,868		238,129
Amortization of bonus interest		16,277			—		16,277
General and administrative expenses		79,287			35,923		115,210
Amortization of deferred acquisition costs and other deferred expenses		171,583			50,901		222,484
Annual commissions		58,389			—		58,389
Claims on universal life contracts, net of reinsurance recoveries		15,716			—		15,716
Guaranteed benefits, net of reinsurance recoveries		67,492			—		67,492
Total benefits and expenses		643,005			90,692		733,697
Pretax income before cumulative effect of accounting change	$	27,723		$	4,126	$	31,849
Total assets	$	23,538,832		$	214,157	$	23,752,989
Expenditures for long-lived assets	$	—		$	7,297	$	7,297

F - 39

VARIABLE ANNUITY ACCOUNT NINE

OF

AIG SUNAMERICA LIFE ASSURANCE COMPANY

FINANCIAL STATEMENTS

DECEMBER 31, 2004

Variable Annuity Account Nine

of

AIG SunAmerica Life Assurance Company

Financial Statements

December 31, 2004

Contents

Report of Independent Registered Public Accounting Firm	1
Statement of Assets and Liabilities	2
Schedule of Portfolio Investments	7
Statement of Operations	8
Statement of Changes in Net Assets	14
Notes to Financial Statements	24

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors of AIG SunAmerica Life Assurance Company

and the Contractholders of its separate account, Variable Annuity Account Nine

In our opinion, the accompanying statement of assets and liabilities, including the schedule of portfolio investments, and the related statements of operations and of changes in net assets present fairly, in all material respects, the financial position of each of the Variable Accounts constituting Variable Annuity Account Nine, a separate account of AIG SunAmerica Life Assurance Company (the “Separate Account”) at December 31, 2004, the results of each of their operations for each of the periods indicated, and the changes in each of their net assets for each of the periods indicated, in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Separate Account’s management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States), which require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 2004 by correspondence with the custodian, provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP

Los Angeles, California

March 31, 2005

1

VARIABLE ANNUITY ACCOUNT NINE

OF

AIG SUNAMERICA LIFE ASSURANCE COMPANY

STATEMENT OF ASSETS AND LIABILITIES

DECEMBER 31, 2004

		AllianceBernstein Americas Government Income Portfolio (Class A	)		AllianceBernstein International Value Portfolio (Class A	)		AllianceBernstein Real Estate Investment Portfolio (Class A	)		AllianceBernstein Small Cap Value Portfolio (Class A	)		AllianceBernstein Utility Income Portfolio (Class A	)		AllianceBernstein Global Bond Portfolio (Class A	)		AllianceBernstein Global Dollar Government Portfolio (Class A	)
Assets:
Investments in AllianceBernstein Variable Products Series Fund, Inc., at net asset value	$	917,137		$	1,057,089		$	971,266		$	1,448,803		$	599,658		$	229,082		$	341,691
Dividend receivable		0			0			0			0			0			0			0
Total Assets:	$	917,137		$	1,057,089		$	971,266		$	1,448,803		$	599,658		$	229,082		$	341,691
Liabilities:		0			0			0			0			0			0			0
Net Assets	$	917,137		$	1,057,089		$	971,266		$	1,448,803		$	599,658		$	229,082		$	341,691
Accumulation units outstanding		78,848			73,487			57,507			104,889			46,222			17,242			22,863
Contracts with total expenses of 1.40%*:
Net Assets	$	0		$	0		$	0		$	0		$	0		$	0		$	0
Accumulation units outstanding		0			0			0			0			0			0			0
Unit value of accumulation units	$	0		$	0		$	0		$	0		$	0		$	0		$	0
Contracts with total expenses of 1.50%**:
Net Assets	$	0		$	0		$	0		$	0		$	0		$	0		$	0
Accumulation units outstanding		0			0			0			0			0			0			0
Unit value of accumulation units	$	0		$	0		$	0		$	0		$	0		$	0		$	0
Contracts with total expenses of 1.60%***:
Net Assets	$	0		$	0		$	0		$	0		$	0		$	0		$	0
Accumulation units outstanding		0			0			0			0			0			0			0
Unit value of accumulation units	$	0		$	0		$	0		$	0		$	0		$	0		$	0
Contracts with total expenses of 1.65%****:
Net Assets	$	917,137		$	1,057,089		$	971,266		$	1,448,803		$	599,658		$	229,082		$	341,691
Accumulation units outstanding		78,848			73,487			57,507			104,889			46,222			17,242			22,863
Unit value of accumulation units	$	11.63		$	14.38		$	16.89		$	13.81		$	12.97		$	13.29		$	14.95
Contracts with total expenses of 1.70%*****:
Net Assets	$	0		$	0		$	0		$	0		$	0		$	0		$	0
Accumulation units outstanding		0			0			0			0			0			0			0
Unit value of accumulation units	$	0		$	0		$	0		$	0		$	0		$	0		$	0
Contracts with total expenses of 1.75%******:
Net Assets	$	0		$	0		$	0		$	0		$	0		$	0		$	0
Accumulation units outstanding		0			0			0			0			0			0			0
Unit value of accumulation units	$	0		$	0		$	0		$	0		$	0		$	0		$	0

*	Contracts with total expenses of 1.40% are offered only through the AllianceBernstein Ovation product.
**	Contracts with total expenses of 1.50% are offered only through the AllianceBernstein Ovation product.
***	Contracts with total expenses of 1.60% are offered only through the AllianceBernstein Ovation Advisor and AllianceBernstein Ovation Plus products.
****	Contracts with total expenses of 1.65% are offered only through the AllianceBernstein Ovation Advantage product.
*****	Contracts with total expenses of 1.70% are offered only through the AllianceBernstein Ovation Advisor and AllianceBernstein Ovation Plus products.
******	Contracts with total expenses of 1.75% are offered only through the AllianceBernstein Ovation Advantage product.

See accompanying notes to financial statements.

2

VARIABLE ANNUITY ACCOUNT NINE

OF

AIG SUNAMERICA LIFE ASSURANCE COMPANY

STATEMENT OF ASSETS AND LIABILITIES

DECEMBER 31, 2004

(Continued)

		AllianceBernstein High-Yield Portfolio (Class A	)		AllianceBernstein International Portfolio (Class A	)		AllianceBernstein Small Cap Growth Portfolio (Class A	)		AllianceBernstein Worldwide Privatization Portfolio (Class A	)		AllianceBernstein Americas Government Income Portfolio (Class B	)		AllianceBernstein International Value Portfolio (Class B	)		AllianceBernstein Real Estate Investment Portfolio (Class B	)
Assets:
Investments in AllianceBernstein Variable Products Series Fund, Inc., at net asset value	$	662,103		$	432,391		$	637,200		$	336,775		$	9,395,876		$	18,894,736		$	10,458,724
Dividend receivable		0			0			0			0			0			0			0
Total Assets:	$	662,103		$	432,391		$	637,200		$	336,775		$	9,395,876		$	18,894,736		$	10,458,724
Liabilities:		0			0			0			0			0			0			0
Net Assets	$	662,103		$	432,391		$	637,200		$	336,775		$	9,395,876		$	18,894,736		$	10,458,724
Accumulation units outstanding		53,518			34,866			50,435			22,138			513,866			1,213,119			486,517
Contracts with total expenses of 1.40%*:
Net Assets	$	0		$	0		$	0		$	0		$	4,912,719		$	8,480,511		$	5,262,633
Accumulation units outstanding		0			0			0			0			248,058			531,945			230,509
Unit value of accumulation units	$	0		$	0		$	0		$	0		$	19.80		$	15.94		$	22.83
Contracts with total expenses of 1.50%**:
Net Assets	$	0		$	0		$	0		$	0		$	411,596		$	429,991		$	283,817
Accumulation units outstanding		0			0			0			0			20,810			27,001			12,442
Unit value of accumulation units	$	0		$	0		$	0		$	0		$	19.78		$	15.93		$	22.81
Contracts with total expenses of 1.60%***:
Net Assets	$	0		$	0		$	0		$	0		$	2,793,672		$	6,459,755		$	3,005,047
Accumulation units outstanding		0			0			0			0			141,832			409,094			132,174
Unit value of accumulation units	$	0		$	0		$	0		$	0		$	19.70		$	15.79		$	22.74
Contracts with total expenses of 1.65%****:
Net Assets	$	662,103		$	432,391		$	637,200		$	336,775		$	1,042,473		$	3,113,015		$	1,670,708
Accumulation units outstanding		53,518			34,866			50,435			22,138			89,873			217,239			99,255
Unit value of accumulation units	$	12.37		$	12.40		$	12.63		$	15.21		$	11.60		$	14.33		$	16.83
Contracts with total expenses of 1.70%*****:
Net Assets	$	0		$	0		$	0		$	0		$	198,234		$	143,419		$	125,940
Accumulation units outstanding		0			0			0			0			10,081			9,096			5,550
Unit value of accumulation units	$	0		$	0		$	0		$	0		$	19.66		$	15.77		$	22.69
Contracts with total expenses of 1.75%******:
Net Assets	$	0		$	0		$	0		$	0		$	37,182		$	268,045		$	110,579
Accumulation units outstanding		0			0			0			0			3,212			18,744			6,587
Unit value of accumulation units	$	0		$	0		$	0		$	0		$	11.58		$	14.30		$	16.79

*	Contracts with total expenses of 1.40% are offered only through the AllianceBernstein Ovation product.
**	Contracts with total expenses of 1.50% are offered only through the AllianceBernstein Ovation product.
***	Contracts with total expenses of 1.60% are offered only through the AllianceBernstein Ovation Advisor and AllianceBernstein Ovation Plus products.
****	Contracts with total expenses of 1.65% are offered only through the AllianceBernstein Ovation Advantage product.
*****	Contracts with total expenses of 1.70% are offered only through the AllianceBernstein Ovation Advisor and AllianceBernstein Ovation Plus products.
******	Contracts with total expenses of 1.75% are offered only through the AllianceBernstein Ovation Advantage product.

See accompanying notes to financial statements.

3

VARIABLE ANNUITY ACCOUNT NINE

OF

AIG SUNAMERICA LIFE ASSURANCE COMPANY

STATEMENT OF ASSETS AND LIABILITIES

DECEMBER 31, 2004

(Continued)

		AllianceBernstein Small Cap Value Portfolio (Class B	)		AllianceBerstein Utility Income Portfolio (Class B	)		AllianceBernstein Value Portfolio (Class B	)		AllianceBernstein Global Bond Portfolio (Class B	)		AllianceBernstein Global Dollar Government Portfolio (Class B	)		AllianceBernstein Growth Portfolio (Class B	)		AllianceBernstein Growth and Income Portfolio (Class B	)
Assets:
Investments in AllianceBernstein Variable Products Series Fund, Inc., at net asset value	$	23,828,338		$	6,515,588		$	28,535,952		$	6,018,887		$	4,977,466		$	17,058,444		$	59,091,230
Dividend receivable		0			0			0			0			0			0			0
Total Assets:	$	23,828,338		$	6,515,588		$	28,535,952		$	6,018,887		$	4,977,466		$	17,058,444		$	59,091,230
Liabilities:		0			0			0			0			0			0			0
Net Assets	$	23,828,338		$	6,515,588		$	28,535,952		$	6,018,887		$	4,977,466		$	17,058,444		$	59,091,230
Accumulation units outstanding		1,475,577			339,625			2,359,230			346,017			200,920			780,560			2,169,320
Contracts with total expenses of 1.40%*:
Net Assets	$	14,967,976		$	3,915,202		$	17,773,280		$	3,911,192		$	2,708,199		$	11,370,143		$	34,995,713
Accumulation units outstanding		900,135			188,332			1,467,852			211,346			88,232			462,128			913,898
Unit value of accumulation units	$	16.63		$	20.79		$	12.11		$	18.51		$	30.69		$	24.60		$	38.29
Contracts with total expenses of 1.50%**:
Net Assets	$	573,967		$	71,138		$	781,059		$	91,790		$	17,410		$	823,652		$	1,636,106
Accumulation units outstanding		34,543			3,427			64,569			4,966			573			33,493			42,739
Unit value of accumulation units	$	16.62		$	20.76		$	12.10		$	18.48		$	30.39		$	24.59		$	38.28
Contracts with total expenses of 1.60%***:
Net Assets	$	4,802,495		$	1,529,220		$	5,829,477		$	1,077,857		$	1,131,536		$	2,651,229		$	10,927,295
Accumulation units outstanding		290,467			74,096			483,943			59,107			37,150			108,255			286,512
Unit value of accumulation units	$	16.53		$	20.64		$	12.05		$	18.24		$	30.46		$	24.49		$	38.14
Contracts with total expenses of 1.65%****:
Net Assets	$	3,088,389		$	852,262		$	3,770,434		$	872,992		$	1,071,189		$	2,055,933		$	10,047,619
Accumulation units outstanding		224,404			65,953			311,139			66,021			72,017			167,690			848,758
Unit value of accumulation units	$	13.76		$	12.92		$	12.12		$	13.22		$	14.87		$	12.26		$	11.84
Contracts with total expenses of 1.70%*****:
Net Assets	$	226,126		$	125,524		$	229,097		$	16,982		$	10,630		$	95,070		$	828,382
Accumulation units outstanding		13,693			6,092			19,045			933			350			3,890			21,746
Unit value of accumulation units	$	16.51		$	20.60		$	12.03		$	18.21		$	30.37		$	24.44		$	38.09
Contracts with total expenses of 1.75%******:
Net Assets	$	169,385		$	22,242		$	152,605		$	48,074		$	38,502		$	62,417		$	656,115
Accumulation units outstanding		12,335			1,725			12,682			3,644			2,598			5,104			55,667
Unit value of accumulation units	$	13.73		$	12.90		$	12.03		$	13.19		$	14.82		$	12.23		$	11.79

*	Contracts with total expenses of 1.40% are offered only through the AllianceBernstein Ovation product.
**	Contracts with total expenses of 1.50% are offered only through the AllianceBernstein Ovation product.
***	Contracts with total expenses of 1.60% are offered only through the AllianceBernstein Ovation Advisor and AllianceBernstein Ovation Plus products.
****	Contracts with total expenses of 1.65% are offered only through the AllianceBernstein Ovation Advantage product.
*****	Contracts with total expenses of 1.70% are offered only through the AllianceBernstein Ovation Advisor and AllianceBernstein Ovation Plus products.
******	Contracts with total expenses of 1.75% are offered only through the AllianceBernstein Ovation Advantage product.

See accompanying notes to financial statements.

4

VARIABLE ANNUITY ACCOUNT NINE

OF

AIG SUNAMERICA LIFE ASSURANCE COMPANY

STATEMENT OF ASSETS AND LIABILITIES

DECEMBER 31, 2004

(Continued)

		AllianceBernstein High-Yield Portfolio (Class B	)		AllianceBernstein International Portfolio (Class B	)		AllianceBernstein Money Market Portfolio (Class B	)		AllianceBernstein Premier Growth Portfolio (Class B	)		AllianceBernstein Small Growth Value Portfolio (Class B	)		AllianceBernstein Technology Portfolio (Class B	)		AllianceBernstein Total Return Portfolio (Class B	)
Assets:
Investments in AllianceBernstein Variable Products Series Fund, Inc., at net asset value	$	12,553,907		$	6,525,104		$	9,407,937		$	23,314,959		$	10,453,525		$	6,826,481		$	41,605,523
Dividend receivable		0			0			7,576			0			0			0			0
Total Assets:	$	12,553,907		$	6,525,104		$	9,415,513		$	23,314,959		$	10,453,525		$	6,826,481			41,605,523
Liabilities:		0			0			0			0			0			0			0
Net Assets	$	12,553,907		$	6,525,104		$	9,415,513		$	23,314,959		$	10,453,525		$	6,826,481		$	41,605,523
Accumulation units outstanding		1,141,149			462,028			787,337			1,108,343			875,143			471,463			2,037,825
Contracts with total expenses of 1.40%*:
Net Assets	$	7,960,084		$	3,735,250		$	5,703,778		$	12,959,508		$	6,096,770		$	3,332,320		$	19,575,650
Accumulation units outstanding		730,337			257,407			455,580			496,700			514,919			217,973			820,104
Unit value of accumulation units	$	10.90		$	14.51		$	12.52		$	26.09		$	11.84		$	15.29		$	23.87
Contracts with total expenses of 1.50%**:
Net Assets	$	300,980		$	309,297		$	327,636		$	740,549		$	241,724		$	286,310		$	558,805
Accumulation units outstanding		27,623			21,346			26,208			28,404			20,425			18,740			23,450
Unit value of accumulation units	$	10.90		$	14.49		$	12.50		$	26.07		$	11.84		$	15.28		$	23.83
Contracts with total expenses of 1.60%***:
Net Assets	$	2,883,532		$	1,580,757		$	1,725,622		$	5,749,206		$	2,328,000		$	2,334,387		$	13,424,678
Accumulation units outstanding		266,807			110,912			139,067			221,410			197,823			154,375			565,128
Unit value of accumulation units	$	10.81		$	14.25		$	12.41		$	25.97		$	11.77		$	15.12		$	23.76
Contracts with total expenses of 1.65%****:
Net Assets	$	1,157,531		$	796,493		$	1,211,755		$	3,595,607		$	1,668,424		$	760,609		$	6,092,834
Accumulation units outstanding		93,960			64,449			125,058			338,673			132,399			70,851			527,608
Unit value of accumulation units	$	12.32		$	12.36		$	9.69		$	10.62		$	12.60		$	10.74		$	11.55
Contracts with total expenses of 1.70%*****:
Net Assets	$	170,820		$	43,728		$	209,374		$	42,295		$	25,954		$	37,215		$	1,524,667
Accumulation units outstanding		15,830			3,075			16,896			1,633			2,209			2,468			64,288
Unit value of accumulation units	$	10.79		$	14.22		$	12.39		$	25.90		$	11.75		$	15.08		$	23.72
Contracts with total expenses of 1.75%******:
Net Assets	$	80,960		$	59,579		$	237,348		$	227,794		$	92,653		$	75,640		$	428,889
Accumulation units outstanding		6,592			4,839			24,528			21,523			7,368			7,056			37,247
Unit value of accumulation units	$	12.28		$	12.31		$	9.68		$	10.58		$	12.57		$	10.72		$	11.51

*	Contracts with total expenses of 1.40% are offered only through the AllianceBernstein Ovation product.
**	Contracts with total expenses of 1.50% are offered only through the AllianceBernstein Ovation product.
***	Contracts with total expenses of 1.60% are offered only through the AllianceBernstein Ovation Advisor and AllianceBernstein Ovation Plus products.
****	Contracts with total expenses of 1.65% are offered only through the AllianceBernstein Ovation Advantage product.
*****	Contracts with total expenses of 1.70% are offered only through the AllianceBernstein Ovation Advisor and AllianceBernstein Ovation Plus products.
******	Contracts with total expenses of 1.75% are offered only through the AllianceBernstein Ovation Advantage product.

See accompanying notes to financial statements.

5

VARIABLE ANNUITY ACCOUNT NINE

OF

AIG SUNAMERICA LIFE ASSURANCE COMPANY

STATEMENT OF ASSETS AND LIABILITIES

DECEMBER 31, 2004

(Continued)

		AllianceBernstein U.S. Government/High Grade Securities Portfolio (Class B	)		AllianceBernstein U.S. Large Cap Blended Style Portfolio (Class B	)		AllianceBernstein Worldwide Privatization Portfolio (Class B	)		AllianceBernstein Wealth Appreciation Strategy Portfolio (Class B	)		AllianceBernstein Balanced Wealth Strategy Portfolio (Class B	)
Assets:
Investments in AllianceBernstein Variable Products Series Fund, Inc., at net asset value	$	18,378,555		$	13,073,820		$	4,250,880		$	10,308,032		$	17,719,108
Dividend receivable		0			0			0			0			0
Total Assets:		18,378,555			13,073,820			4,250,880			10,308,032			17,719,108
Liabilities:		0			0			0			0			0
Net Assets	$	18,378,555		$	13,073,820		$	4,250,880		$	10,308,032		$	17,719,108
Accumulation units outstanding		1,241,230			1,125,777			194,928			974,118			1,677,266
Contracts with total expenses of 1.40%*:
Net Assets	$	11,060,769		$	7,314,618		$	2,062,041		$	3,404,409		$	4,086,201
Accumulation units outstanding		699,186			628,960			85,489			321,199			386,434
Unit value of accumulation units	$	15.82		$	11.63		$	24.12		$	10.60		$	10.57
Contracts with total expenses of 1.50%**:
Net Assets	$	277,388		$	465,403		$	111,530		$	1,547,325		$	2,413,703
Accumulation units outstanding		17,550			40,040			4,629			146,462			228,277
Unit value of accumulation units	$	15.81		$	11.62		$	24.09		$	10.56		$	10.57
Contracts with total expenses of 1.60%***:
Net Assets	$	4,297,244		$	4,627,296		$	1,314,506		$	2,758,696		$	1,926,082
Accumulation units outstanding		273,171			399,124			55,673			260,657			182,248
Unit value of accumulation units	$	15.73		$	11.59		$	23.61		$	10.58		$	10.57
Contracts with total expenses of 1.65%****:
Net Assets	$	2,662,966		$	555,121		$	644,080		$	969,757		$	3,380,125
Accumulation units outstanding		245,212			47,991			42,687			91,652			319,905
Unit value of accumulation units	$	10.86		$	11.57		$	15.09		$	10.58		$	10.57
Contracts with total expenses of 1.70%*****:
Net Assets	$	45,275		$	39,873		$	60,009		$	635,764		$	2,981,214
Accumulation units outstanding		2,890			3,446			2,546			60,229			282,516
Unit value of accumulation units	$	15.67		$	11.57		$	23.57		$	10.56		$	10.55
Contracts with total expenses of 1.75%******:
Net Assets	$	34,913		$	71,509		$	58,714		$	992,081		$	2,931,783
Accumulation units outstanding		3,221			6,216			3,904			93,919			277,886
Unit value of accumulation units	$	10.84		$	11.50		$	15.04		$	10.56		$	10.55

*	Contracts with total expenses of 1.40% are offered only through the AllianceBernstein Ovation product.
**	Contracts with total expenses of 1.50% are offered only through the AllianceBernstein Ovation product.
***	Contracts with total expenses of 1.60% are offered only through the AllianceBernstein Ovation Advisor and AllianceBernstein Ovation Plus products.
****	Contracts with total expenses of 1.65% are offered only through the AllianceBernstein Ovation Advantage product.
*****	Contracts with total expenses of 1.70% are offered only through the AllianceBernstein Ovation Advisor and AllianceBernstein Ovation Plus products.
******	Contracts with total expenses of 1.75% are offered only through the AllianceBernstein Ovation Advantage product.

See accompanying notes to financial statements.

6

VARIABLE ANNUITY ACCOUNT NINE

OF

AIG SUNAMERICA LIFE ASSURANCE COMPANY

SCHEDULE OF PORTFOLIO INVESTMENTS

DECEMBER 31, 2004

Variable Accounts	Shares		Net Asset Value Per Share		Net Asset Value		Cost
ALLIANCEBERNSTEIN Variable Products Series Fund, Inc.:
AllianceBernstein Americas Government Income Portfolio (Class A)	71,041	$	12.91	$	917,137	$	905,787
AllianceBernstein International Value Portfolio (Class A)	63,261		16.71		1,057,089		785,405
AllianceBernstein Real Estate Investment Portfolio (Class A)	47,012		20.66		971,266		672,478
AllianceBernstein Small Cap Value Portfolio (Class A)	86,033		16.84		1,448,803		963,049
AllianceBernstein Utility Income Portfolio (Class A)	33,003		18.17		599,658		476,828
AllianceBernstein Global Bond Portfolio (Class A)	16,807		13.63		229,082		213,081
AllianceBernstein Global Dollar Government Portfolio (Class A)	23,103		14.79		341,691		290,823
AllianceBernstein High-Yield Portfolio (Class A)	83,074		7.97		662,103		618,043
AllianceBernstein International Portfolio (Class A)	28,335		15.26		432,391		296,751
AllianceBernstein Small Cap Growth Portfolio (Class A)	54,695		11.65		637,200		419,230
AllianceBernstein Worldwide Privatization Portfolio (Class A)	16,689		20.18		336,775		245,424
AllianceBernstein Americas Government Income Portfolio (Class B)	728,363		12.90		9,395,876		9,384,917
AllianceBernstein International Value Portfolio (Class B)	1,137,552		16.61		18,894,736		14,757,594
AllianceBernstein Real Estate Investment Portfolio (Class B)	509,188		20.54		10,458,724		7,845,349
AllianceBernstein Small Cap Value Portfolio (Class B)	1,419,198		16.79		23,828,338		19,110,716
AllianceBernstein Utility Income Portfolio (Class B)	359,977		18.10		6,515,588		5,285,574
AllianceBernstein Value Portfolio (Class B)	2,275,594		12.54		28,535,952		23,568,905
AllianceBernstein Global Bond Portfolio (Class B)	445,513		13.51		6,018,887		5,712,788
AllianceBernstein Global Dollar Government Portfolio (Class B)	337,684		14.74		4,977,466		4,613,434
AllianceBernstein Growth Portfolio (Class B)	945,066		18.05		17,058,444		14,380,105
AllianceBernstein Growth and Income Portfolio (Class B)	2,475,544		23.87		59,091,230		50,217,315
AllianceBernstein High-Yield Portfolio (Class B)	1,579,108		7.95		12,553,907		12,032,443
AllianceBernstein International Portfolio (Class B)	430,700		15.15		6,525,104		5,372,233
AllianceBernstein Money Market Portfolio (Class B)	9,407,937		1.00		9,407,937		9,407,937
AllianceBernstein Premier Growth Portfolio (Class B)	1,008,869		23.11		23,314,959		20,274,670
AllianceBernstein Small Cap Growth Portfolio (Class B)	906,637		11.53		10,453,525		8,569,104
AllianceBernstein Technology Portfolio (Class B)	452,684		15.08		6,826,481		5,972,528
AllianceBernstein Total Return Portfolio (Class B)	2,209,534		18.83		41,605,523		37,864,693
AllianceBernstein U.S. Government/High Grade Securities Portfolio (Class B)	1,508,913		12.18		18,378,555		18,574,562
AllianceBernstein US Large Cap Blended Style Portfolio (Class B)	1,099,564		11.89		13,073,820		11,759,463
AllianceBernstein Worldwide Privatization Portfolio (Class B)	211,381		20.11		4,250,880		3,436,172
AllianceBernstein Wealth Appreciation Strategy Portfolio (Class B)	966,076		10.67		10,308,032		9,577,880
AllianceBernstein Balanced Wealth Strategy Portfolio (Class B)	1,663,766		10.65		17,719,108		16,905,560

See accompanying notes to financial statements.

7

VARIABLE ANNUITY ACCOUNT NINE

OF

AIG SUNAMERICA LIFE ASSURANCE COMPANY

STATEMENT OF OPERATIONS

FOR THE YEAR ENDED

DECEMBER 31, 2004

		AllianceBernstein Americas Government Income Portfolio (Class A	)		AllianceBernstein International Value Portfolio (Class A	)		AllianceBernstein Real Estate Investment Portfolio (Class A	)		AllianceBernstein Small Cap Value Portfolio (Class A	)		AllianceBernstein Utility Income Portfolio (Class A	)		AllianceBernstein Value Portfolio (Class A	)		AllianceBernstein Global Bond Portfolio (Class A	)
Investment income:
Dividends	$	20,929		$	2,820		$	12,850		$	2,501		$	6,180		$	0		$	13,280
Total investment income		20,929			2,820			12,850			2,501			6,180			0			13,280
Expenses:
Mortality and expense risk charge		(12,745	)		(8,256	)		(10,728	)		(18,775	)		(5,261	)		0			(3,091	)
Distribution expense charge		(2,276	)		(1,474	)		(1,916	)		(3,353	)		(939	)		0			(552	)
Total expenses		(15,021	)		(9,730	)		(12,644	)		(22,128	)		(6,200	)		0			(3,643	)
Net investment income (loss)		5,908			(6,910	)		206			(19,627	)		(20	)		0			9,637
Net realized gains (losses) from securities transactions:
Proceeds from shares sold		1,837,547			80,523			608,593			209,797			99,468			237			60,653
Cost of shares sold		(1,895,895	)		(60,602	)		(456,635	)		(157,844	)		(85,322	)		(171	)		(59,510	)
Net realized gains (losses) from securities transactions		(58,348	)		19,921			151,958			51,953			14,146			66			1,143
Realized gain distributions		0			1,166			0			32,152			0			0			4,650
Net realized gains (losses)		(58,348	)		21,087			151,958			84,105			14,146			66			5,793
Net unrealized appreciation (depreciation) of investments:
Beginning of period		16,593			139,723			190,369			330,519			41,193			68			15,051
End of period		11,350			271,684			298,788			485,754			122,830			0			16,001
Change in net unrealized appreciation (depreciation) of investments		(5,243	)		131,961			108,419			155,235			81,637			(68	)		950
Increase (decrease) in net assets from operations	$	(57,683	)	$	146,138		$	260,583		$	219,713		$	95,763		$	(2	)	$	16,380

See accompanying notes to financial statements.

8

VARIABLE ANNUITY ACCOUNT NINE

OF

AIG SUNAMERICA LIFE ASSURANCE COMPANY

STATEMENT OF OPERATIONS

FOR THE YEAR ENDED

DECEMBER 31, 2004

(Continued)

		AllianceBernstein Global Dollar Government Portfolio (Class A	)		AllianceBernstein Growth Portfolio (Class A	)		AllianceBernstein Growth and Income Portfolio (Class A	)		AllianceBernstein High-Yield Portfolio (Class A	)		AllianceBernstein International Portfolio (Class A	)		AllianceBernstein Money Market Portfolio (Class A	)		AllianceBernstein Premier Growth Portfolio (Class A	)
Investment income:
Dividends	$	14,896		$	0		$	0		$	45,357		$	931		$	0		$	0
Total investment income		14,896			0			0			45,357			931			0			0
Expenses:
Mortality and expense risk charge		(3,926	)		0			0			(10,060	)		(4,925	)		0			0
Distribution expense charge		(701	)		0			0			(1,797	)		(880	)		0			0
Total expenses		(4,627	)		0			0			(11,857	)		(5,805	)		0			0
Net investment income (loss)		10,269			0			0			33,500			(4,874	)		0			0
Net realized gains (losses) from securities transactions:
Proceeds from shares sold		81,483			211			199			755,970			19,166			142			179
Cost of shares sold		(71,309	)		(141	)		(143	)		(711,930	)		(15,595	)		(142	)		(141	)
Net realized gains (losses) from securities transactions		10,174			70			56			44,040			3,571			0			38
Realized gain distributions		0			0			0			0			0			0			0
Net realized gains (losses)		10,174			70			56			44,040			3,571			0			38
Net unrealized appreciation (depreciation) of investments:
Beginning of period		46,044			61			55			82,046			78,282			0			42
End of period		50,868			0			0			44,060			135,640			0			0
Change in net unrealized appreciation (depreciation) of investments		4,824			(61	)		(55	)		(37,986	)		57,358			0			(42	)
Increase (decrease) in net assets from operations	$	25,267		$	9		$	1		$	39,554		$	56,055		$	0		$	(4	)

See accompanying notes to financial statements.

9

VARIABLE ANNUITY ACCOUNT NINE

OF

AIG SUNAMERICA LIFE ASSURANCE COMPANY

STATEMENT OF OPERATIONS

FOR THE YEAR ENDED

DECEMBER 31, 2004

(Continued)

		AllianceBernstein Small Cap Growth Portfolio (Class A	)		AllianceBernstein Technology Portfolio (Class A	)		AllianceBernstein Total Return Portfolio (Class A	)		AllianceBernstein U.S. Government/High Grade Securities Portfolio (Class A	)		AllianceBernstein Worldwide Privatization Portfolio (Class A	)		AllianceBernstein Americas Government Income Portfolio (Class B	)		AllianceBernstein International Value Portfolio (Class B	)
Investment income:
Dividends	$	0		$	0		$	0		$	0		$	264		$	347,443		$	54,744
Total investment income		0			0			0			0			264			347,443			54,744
Expenses:
Mortality and expense risk charge		(8,441	)		0			0			0			(2,431	)		(108,974	)		(184,028	)
Distribution expense charge		(1,507	)		0			0			0			(434	)		(7,582	)		(13,704	)
Total expenses		(9,948	)		0			0			0			(2,865	)		(116,556	)		(197,732	)
Net investment income (loss)		(9,948	)		0			0			0			(2,601	)		230,887			(142,988	)
Net realized gains (losses) from securities transactions:
Proceeds from shares sold		91,192			181			177			151			9,067			4,553,804			4,423,799
Cost of shares sold		(71,080	)		(142	)		(146	)		(146	)		(7,844	)		(4,698,821	)		(3,950,898	)
Net realized gains (losses) from securities transactions		20,112			39			31			5			1,223			(145,017	)		472,901
Realized gain distributions		0			0			0			0			0			0			27,372
Net realized gains (losses)		20,112			39			31			5			1,223			(145,017	)		500,273
Net unrealized appreciation (depreciation) of investments:
Beginning of period		157,235			48			32			7			31,627			46,548			1,264,259
End of period		217,970			0			0			0			91,351			10,959			4,137,142
Change in net unrealized appreciation (depreciation) of investments		60,735			(48	)		(32	)		(7	)		59,724			(35,589	)		2,872,883
Increase (decrease) in net assets from operations	$	70,899		$	(9	)	$	(1	)	$	(2	)	$	58,346		$	50,281		$	3,230,168

See accompanying notes to financial statements.

10

VARIABLE ANNUITY ACCOUNT NINE

OF

AIG SUNAMERICA LIFE ASSURANCE COMPANY

STATEMENT OF OPERATIONS

FOR THE YEAR ENDED

DECEMBER 31, 2004

(Continued)

		AllianceBernstein Real Estate Investment Portfolio (Class B	)		AllianceBernstein Small Cap Value Portfolio (Class B	)		AllianceBerstein Utility Income Portfolio (Class B	)		AllianceBernstein Value Portfolio (Class B	)		AllianceBernstein Global Bond Portfolio (Class B	)		AllianceBernstein Global Dollar Government Portfolio (Class B	)		AllianceBernstein Growth Portfolio (Class B	)
Investment income:
Dividends	$	153,394		$	14,321		$	85,051		$	201,456		$	292,688		$	308,029		$	0
Total investment income		153,394			14,321			85,051			201,456			292,688			308,029			0
Expenses:
Mortality and expense risk charge		(102,952	)		(252,489	)		(62,280	)		(321,409	)		(73,135	)		(59,852	)		(180,191	)
Distribution expense charge		(7,330	)		(13,060	)		(3,301	)		(17,852	)		(3,879	)		(4,160	)		(8,532	)
Total expenses		(110,282	)		(265,549	)		(65,581	)		(339,261	)		(77,014	)		(64,012	)		(188,723	)
Net investment income (loss)		43,112			(251,228	)		19,470			(137,805	)		215,674			244,017			(188,723	)
Net realized gains (losses) from securities transactions:
Proceeds from shares sold		2,788,691			2,861,771			620,044			2,978,636			1,441,241			1,499,240			1,835,027
Cost of shares sold		(2,404,889	)		(2,471,166	)		(560,444	)		(2,629,620	)		(1,421,585	)		(1,468,060	)		(1,682,424	)
Net realized gains (losses) from securities transactions		383,802			390,605			59,600			349,016			19,656			31,180			152,603
Realized gain distributions		0			429,626			0			0			105,900			0			0
Net realized gains (losses)		383,802			820,231			59,600			349,016			125,556			31,180			152,603
Net unrealized appreciation (depreciation) of investments:
Beginning of period		586,592			2,030,057			258,656			2,332,843			166,182			276,918			989,828
End of period		2,613,375			4,717,622			1,230,014			4,967,047			306,099			364,032			2,678,339
Change in net unrealized appreciation (depreciation) of investments		2,026,783			2,687,565			971,358			2,634,204			139,917			87,114			1,688,511
Increase (decrease) in net assets from operations	$	2,453,697		$	3,256,568		$	1,050,428		$	2,845,415		$	481,147		$	362,311		$	1,652,391

See accompanying notes to financial statements.

11

VARIABLE ANNUITY ACCOUNT NINE

OF

AIG SUNAMERICA LIFE ASSURANCE COMPANY

STATEMENT OF OPERATIONS

FOR THE YEAR ENDED

DECEMBER 31, 2004

(Continued)

		AllianceBernstein Growth and Income Portfolio (Class B	)		AllianceBernstein High-Yield Portfolio (Class B	)		AllianceBernstein International Portfolio (Class B	)		AllianceBernstein Money Market Portfolio (Class B	)		AllianceBernstein Premier Growth Portfolio (Class B	)		AllianceBernstein Small Cap Growth Portfolio (Class B	)		AllianceBernstein Technology Portfolio (Class B	)
Investment income:
Dividends	$	356,032		$	641,967		$	8,812		$	47,447		$	0		$	0		$	0
Total investment income		356,032			641,967			8,812			47,447			0			0			0
Expenses:
Mortality and expense risk charge		(681,668	)		(142,631	)		(63,067	)		(146,382	)		(281,886	)		(108,768	)		(72,895	)
Distribution expense charge		(40,871	)		(7,812	)		(3,865	)		(12,467	)		(17,781	)		(6,655	)		(5,103	)
Total expenses		(722,539	)		(150,443	)		(66,932	)		(158,849	)		(299,667	)		(115,423	)		(77,998	)
Net investment income (loss)		(366,507	)		491,524			(58,120	)		(111,402	)		(299,667	)		(115,423	)		(77,998	)
Net realized gains (losses) from securities transactions:
Proceeds from shares sold		9,808,954			3,493,260			1,202,454			31,586,306			4,229,109			1,517,205			1,045,917
Cost of shares sold		(8,892,909	)		(3,408,327	)		(1,128,392	)		(31,586,306	)		(3,925,590	)		(1,341,686	)		(988,579	)
Net realized gains (losses) from securities transactions		916,045			84,933			74,062			0			303,519			175,519			57,338
Realized gain distributions		0			0			0			0			0			0			0
Net realized gains (losses)		916,045			84,933			74,062			0			303,519			175,519			57,338
Net unrealized appreciation (depreciation) of investments:
Beginning of period		4,561,497			439,758			314,607			0			1,540,563			804,505			535,967
End of period		8,873,915			521,464			1,152,871			0			3,040,289			1,884,421			853,953
Change in net unrealized appreciation (depreciation) of investments		4,312,418			81,706			838,264			0			1,499,726			1,079,916			317,986
Increase (decrease) in net assets from operations	$	4,861,956		$	658,163		$	854,206		$	(111,402	)	$	1,503,578		$	1,140,012		$	297,326

See accompanying notes to financial statements.

12

VARIABLE ANNUITY ACCOUNT NINE

OF

AIG SUNAMERICA LIFE ASSURANCE COMPANY

STATEMENT OF OPERATIONS

FOR THE YEAR ENDED

DECEMBER 31, 2004

(Continued)

		AllianceBernstein Total Return Portfolio (Class B	)		AllianceBernstein U.S. Government/High Grade Securities Portfolio (Class B	)		AllianceBernstein U.S. Large Cap Blended Style Portfolio (Class B	)		AllianceBernstein Worldwide Privatization Portfolio (Class B	)		AllianceBernstein Wealth Appreciation Strategy Portfolio (Class B	) (1)		AllianceBernstein Balanced Wealth Strategy Portfolio (Class B	) (1)
Investment income:
Dividends	$	736,697		$	446,300		$	7,497		$	2,606		$	0		$	0
Total investment income		736,697			446,300			7,497			2,606			0			0
Expenses:
Mortality and expense risk charge		(479,705	)		(233,912	)		(139,171	)		(35,523	)		(34,411	)		(58,337	)
Distribution expense charge		(38,659	)		(14,525	)		(7,934	)		(2,511	)		(2,626	)		(6,029	)
Total expenses		(518,364	)		(248,437	)		(147,105	)		(38,034	)		(37,037	)		(64,366	)
Net investment income (loss)		218,333			197,863			(139,608	)		(35,428	)		(37,037	)		(64,366	)
Net realized gains (losses) from securities transactions:
Proceeds from shares sold		5,088,977			4,599,745			1,412,535			1,105,982			435,082			820,665
Cost of shares sold		(4,843,894	)		(4,630,466	)		(1,370,837	)		(1,006,111	)		(415,477	)		(792,371	)
Net realized gains (losses) from securities transactions		245,083			(30,721	)		41,698			99,871			19,605			28,294
Realized gain distributions		0			478,178			0			0			0			0
Net realized gains (losses)		245,083			447,457			41,698			99,871			19,605			28,294
Net unrealized appreciation (depreciation) of investments:
Beginning of period		1,654,622			100,626			310,822			186,133			0			0
End of period		3,740,830			(196,007	)		1,314,357			814,708			730,152			813,548
Change in net unrealized appreciation (depreciation) of investments		2,086,208			(296,633	)		1,003,535			628,575			730,152			813,548
Increase (decrease) in net assets from operations	$	2,549,624		$	348,687		$	905,625		$	693,018		$	712,720		$	777,476

(1) For the period from July 1, 2004 (inception) to December 31, 2004.

See accompanying notes to financial statements.

13

VARIABLE ANNUITY ACCOUNT NINE

OF

AIG SUNAMERICA LIFE ASSURANCE COMPANY

STATEMENT OF CHANGES IN NET ASSETS

FOR THE YEAR ENDED

DECEMBER 31, 2004

		AllianceBernstein Americas Government Income Portfolio (Class A	)		AllianceBernstein International Value Portfolio (Class A	)		AllianceBernstein Real Estate Investment Portfolio (Class A	)		AllianceBernstein Small Cap Value Portfolio (Class A	)		AllianceBernstein Utility Income Portfolio (Class A	)		AllianceBernstein Value Portfolio (Class A	) **		AllianceBernstein Global Bond Portfolio (Class A	)		AllianceBernstein Global Dollar Government Portfolio (Class A	)		AllianceBernstein Growth Portfolio (Class A	)**
INCREASE IN NET ASSETS:
From operations:
Net investment income (loss)	$	5,908		$	(6,910	)	$	206		$	(19,627	)	$	(20	)	$	0		$	9,637		$	10,269		$	0
Net realized gains (losses)		(58,348	)		21,087			151,958			84,105			14,146			66			5,793			10,174			70
Change in net unrealized appreciation (depreciation) of investments		(5,243	)		131,961			108,419			155,235			81,637			(68	)		950			4,824			(61	)
Increase (decrease) in net assets from operations		(57,683	)		146,138			260,583			219,713			95,763			(2	)		16,380			25,267			9
From capital transactions:
Net proceeds from units sold		36,076			13,748			10,639			18,449			3,789			0			16,427			60			0
Cost of units redeemed		(37,218	)		(52,002	)		(38,245	)		(60,036	)		(44,719	)		(237	)		(19,958	)		(921	)		(211	)
Optional enhanced death benefits		(3,384	)		(1,565	)		(1,792	)		(2,721	)		(1,247	)		0			(497	)		(698	)		0
Net transfers		(120,745	)		469,106			(277,371	)		(6,841	)		254,924			0			14,954			50,480			0
Contract maintenance charge		(138	)		(110	)		(64	)		(103	)		(10	)		0			(21	)		(11	)		0
Increase in net assets from capital transactions		(125,409	)		429,177			(306,833	)		(51,252	)		212,736			(237	)		10,905			48,910			(211	)
Increase in net assets		(183,092	)		575,315			(46,250	)		168,461			308,499			(239	)		27,285			74,177			(202	)
Net assets at beginning of period		1,100,229			481,774			1,017,516			1,280,342			291,159			239			201,797			267,514			202
Net assets at end of period	$	917,137		$	1,057,089		$	971,266		$	1,448,803		$	599,658		$	0		$	229,082		$	341,691		$	0
ANALYSIS OF INCREASE IN UNITS OUTSTANDING:
Contracts with total expenses of .25% :
Units sold		0			0			0			0			0			0			0			0			0
Units redeemed		(14	)		(17	)		(17	)		(17	)		(17	)		(17	)		(14	)		(14	)		(14	)
Units transferred		0			0			0			0			0			0			0			0			0
Increase in units outstanding		(14	)		(17	)		(17	)		(17	)		(17	)		(17	)		(14	)		(14	)		(14	)
Beginning units		14			17			17			17			17			17			14			14			14
Ending units		0			0			0			0			0			0			0			0			0
Contracts with total expenses of 1.40% :
Units sold		0			0			0			0			0			0			0			0			0
Units redeemed		0			0			0			0			0			0			0			0			0
Units transferred		0			0			0			0			0			0			0			0			0
Increase in units outstanding		0			0			0			0			0			0			0			0			0
Beginning units		0			0			0			0			0			0			0			0			0
Ending units		0			0			0			0			0			0			0			0			0
Contracts with total expenses of 1.50% :
Units sold		0			0			0			0			0			0			0			0			0
Units redeemed		0			0			0			0			0			0			0			0			0
Units transferred		0			0			0			0			0			0			0			0			0
Increase in units outstanding		0			0			0			0			0			0			0			0			0
Beginning units		0			0			0			0			0			0			0			0			0
Ending units		0			0			0			0			0			0			0			0			0
Contracts with total expenses of 1.60% :
Units sold		0			0			0			0			0			0			0			0			0
Units redeemed		0			0			0			0			0			0			0			0			0
Units transferred		0			0			0			0			0			0			0			0			0
Increase in units outstanding		0			0			0			0			0			0			0			0			0
Beginning units		0			0			0			0			0			0			0			0			0
Ending units		0			0			0			0			0			0			0			0			0
Contracts with total expenses of 1.65% :
Units sold		3,128			1,123			803			1,499			341			0			1,329			4			0
Units redeemed		(3,620	)		(4,346	)		(2,892	)		(5,161	)		(4,076	)		0			(1,641	)		(102	)		0
Units transferred		(18,225	)		35,484			(20,756	)		(205	)		22,533			0			1,188			3,588			0
Increase in units outstanding		(18,717	)		32,261			(22,845	)		(3,867	)		18,798			0			876			3,490			0
Beginning units		97,565			41,226			80,352			108,756			27,424			0			16,366			19,373			0
Ending units		78,848			73,487			57,507			104,889			46,222			0			17,242			22,863			0
Contracts with total expenses of 1.70% :
Units sold		0			0			0			0			0			0			0			0			0
Units redeemed		0			0			0			0			0			0			0			0			0
Units transferred		0			0			0			0			0			0			0			0			0
Increase in units outstanding		0			0			0			0			0			0			0			0			0
Beginning units		0			0			0			0			0			0			0			0			0
Ending units		0			0			0			0			0			0			0			0			0
Contracts with total expenses of 1.75% :
Units sold		0			0			0			0			0			0			0			0			0
Units redeemed		0			0			0			0			0			0			0			0			0
Units transferred		0			0			0			0			0			0			0			0			0
Increase in units outstanding		0			0			0			0			0			0			0			0			0
Beginning units		0			0			0			0			0			0			0			0			0
Ending units		0			0			0			0			0			0			0			0			0

** Decrease relates to net assets retained in Variable Annuity Account Nine by AIG SunAmerica Life Assurance Company.

See accompanying notes to financial statements.

14

VARIABLE ANNUITY ACCOUNT NINE

OF

AIG SUNAMERICA LIFE ASSURANCE COMPANY

STATEMENT OF CHANGES IN NET ASSETS

FOR THE YEAR ENDED

DECEMBER 31, 2004

(continued)

		AllianceBernstein Growth and Income Portfolio (Class A	)**		AllianceBernstein High-Yield Portfolio (Class A	)		AllianceBernstein International Portfolio (Class A	)		AllianceBernstein Money Market Portfolio (Class A	)**		AllianceBernstein Premier Growth Portfolio (Class A	)**		AllianceBernstein Small Cap Growth Portfolio (Class A	)		AllianceBernstein Technology Portfolio (Class A	)**		AllianceBernstein Total Return Portfolio (Class A	)**		AllianceBernstein U.S. Government/High Grade Securities Portfolio (Class A	)**
INCREASE IN NET ASSETS:
From operations:
Net investment income (loss)	$	0		$	33,500		$	(4,874	)	$	0		$	0		$	(9,948	)	$	0		$	0		$	0
Net realized gains (losses)		56			44,040			3,571			0			38			20,112			39			31			5
Change in net unrealized appreciation (depreciation) of investments		(55	)		(37,986	)		57,358			0			(42	)		60,735			(48	)		(32	)		(7	)
Increase (decrease) in net assets from operations		1			39,554			56,055			0			(4	)		70,899			(9	)		(1	)		(2	)
From capital transactions:
Net proceeds from units sold		0			15,350			10,828			0			0			123			0			0			0
Cost of units redeemed		(199	)		(20,595	)		(5,855	)		(142	)		(179	)		(26,151	)		(180	)		(176	)		(152	)
Optional enhanced death benefits		0			(2,361	)		(458	)		0			0			(1,507	)		0			0			0
Net transfers		0			(434,385	)		42,050			0			0			(15,655	)		0			0			0
Contract maintenance charge		0			(74	)		(35	)		0			0			(70	)		0			0			0
Increase in net assets from capital transactions		(199	)		(442,065	)		46,530			(142	)		(179	)		(43,260	)		(180	)		(176	)		(152	)
Increase in net assets		(198	)		(402,511	)		102,585			(142	)		(183	)		27,639			(189	)		(177	)		(154	)
Net assets at beginning of period		198			1,064,614			329,806			142			183			609,561			189			177			154
Net assets at end of period	$	0		$	662,103		$	432,391		$	0		$	0		$	637,200		$	0		$	0		$	0
ANALYSIS OF INCREASE IN UNITS OUTSTANDING:
Contracts with total expenses of .25% :
Units sold		0			0			0			0			0			0			0			0			0
Units redeemed		(14	)		(14	)		(14	)		(14	)		(14	)		(14	)		(14	)		(14	)		(14	)
Units transferred		0			0			0			0			0			0			0			0			0
Increase in units outstanding		(14	)		(14	)		(14	)		(14	)		(14	)		(14	)		(14	)		(14	)		(14	)
Beginning units		14			14			14			14			14			14			14			14			14
Ending units		0			0			0			0			0			0			0			0			0
Contracts with total expenses of 1.40% :
Units sold		0			0			0			0			0			0			0			0			0
Units redeemed		0			0			0			0			0			0			0			0			0
Units transferred		0			0			0			0			0			0			0			0			0
Increase in units outstanding		0			0			0			0			0			0			0			0			0
Beginning units		0			0			0			0			0			0			0			0			0
Ending units		0			0			0			0			0			0			0			0			0
Contracts with total expenses of 1.50% :
Units sold		0			0			0			0			0			0			0			0			0
Units redeemed		0			0			0			0			0			0			0			0			0
Units transferred		0			0			0			0			0			0			0			0			0
Increase in units outstanding		0			0			0			0			0			0			0			0			0
Beginning units		0			0			0			0			0			0			0			0			0
Ending units		0			0			0			0			0			0			0			0			0
Contracts with total expenses of 1.60% :
Units sold		0			0			0			0			0			0			0			0			0
Units redeemed		0			0			0			0			0			0			0			0			0
Units transferred		0			0			0			0			0			0			0			0			0
Increase in units outstanding		0			0			0			0			0			0			0			0			0
Beginning units		0			0			0			0			0			0			0			0			0
Ending units		0			0			0			0			0			0			0			0			0
Contracts with total expenses of 1.65% :
Units sold		0			1,302			983			0			0			11			0			0			0
Units redeemed		0			(1,925	)		(554	)		0			0			(2,385	)		0			0			0
Units transferred		0			(37,240	)		3,686			0			0			(1,537	)		0			0			0
Increase in units outstanding		0			(37,863	)		4,115			0			0			(3,911	)		0			0			0
Beginning units		0			91,381			30,751			0			0			54,346			0			0			0
Ending units		0			53,518			34,866			0			0			50,435			0			0			0
Contracts with total expenses of 1.70% :
Units sold		0			0			0			0			0			0			0			0			0
Units redeemed		0			0			0			0			0			0			0			0			0
Units transferred		0			0			0			0			0			0			0			0			0
Increase in units outstanding		0			0			0			0			0			0			0			0			0
Beginning units		0			0			0			0			0			0			0			0			0
Ending units		0			0			0			0			0			0			0			0			0
Contracts with total expenses of 1.75% :
Units sold		0			0			0			0			0			0			0			0			0
Units redeemed		0			0			0			0			0			0			0			0			0
Units transferred		0			0			0			0			0			0			0			0			0
Increase in units outstanding		0			0			0			0			0			0			0			0			0
Beginning units		0			0			0			0			0			0			0			0			0
Ending units		0			0			0			0			0			0			0			0			0

** Decrease relates to net assets retained in Variable Annuity Account Nine by AIG SunAmerica Life Assurance Company.

See accompanying notes to financial statements.

15

VARIABLE ANNUITY ACCOUNT NINE

OF

AIG SUNAMERICA LIFE ASSURANCE COMPANY

STATEMENT OF CHANGES IN NET ASSETS

FOR THE YEAR ENDED

DECEMBER 31, 2004

(continued)

		AllianceBernstein Worldwide Privatization Portfolio (Class A	)		AllianceBernstein Americas Government Income Portfolio (Class B	)		AllianceBernstein International Value Portfolio (Class B	)		AllianceBernstein Real Estate Investment Portfolio (Class B	)		AllianceBernstein Small Cap Value Portfolio (Class B	)		AllianceBernstein Utility Income Portfolio (Class B	)		AllianceBernstein Value Portfolio (Class B	)		AllianceBernstein Global Bond Portfolio (Class B	)		AllianceBernstein Global Dollar Government Portfolio (Class B	)
INCREASE IN NET ASSETS:
From operations:
Net investment income (loss)	$	(2,601	)	$	230,887		$	(142,988	)	$	43,112		$	(251,228	)	$	19,470		$	(137,805	)	$	215,674		$	244,017
Net realized gains (losses)		1,223			(145,017	)		500,273			383,802			820,231			59,600			349,016			125,556			31,180
Change in net unrealized appreciation (depreciation) of investments		59,724			(35,589	)		2,872,883			2,026,783			2,687,565			971,358			2,634,204			139,917			87,114
Increase (decrease) in net assets from operations		58,346			50,281			3,230,168			2,453,697			3,256,568			1,050,428			2,845,415			481,147			362,311
From capital transactions:
Net proceeds from units sold		0			2,783,721			3,567,667			2,393,002			5,325,687			752,586			6,011,444			1,197,462			927,266
Cost of units redeemed		(5,110	)		(596,300	)		(601,032	)		(468,339	)		(1,053,916	)		(287,248	)		(1,286,228	)		(337,270	)		(220,053	)
Optional enhanced death benefits		(512	)		(14,931	)		(39,458	)		(19,315	)		(47,404	)		(7,670	)		(51,070	)		(10,978	)		(8,664	)
Net transfers		180,218			1,475,509			3,787,216			1,353,647			3,820,014			2,205,579			4,424,755			1,166,798			755,300
Contract maintenance charge		(5	)		(870	)		(640	)		(630	)		(1,372	)		(407	)		(1,811	)		(333	)		(299	)
Increase in net assets from capital transactions		174,591			3,647,129			6,713,753			3,258,364			8,043,008			2,662,840			9,097,091			2,015,679			1,453,549
Increase in net assets		232,937			3,697,410			9,943,921			5,712,061			11,299,576			3,713,268			11,942,506			2,496,826			1,815,860
Net assets at beginning of period		103,838			5,698,466			8,950,815			4,746,663			12,528,762			2,802,320			16,593,446			3,522,061			3,161,606
Net assets at end of period	$	336,775		$	9,395,876		$	18,894,736		$	10,458,724		$	23,828,338		$	6,515,588		$	28,535,952		$	6,018,887		$	4,977,466
ANALYSIS OF INCREASE IN UNITS OUTSTANDING:
Contracts with total expenses of .25% :
Units sold		0			0			0			0			0			0			0			0			0
Units redeemed		(14	)		0			0			0			0			0			0			0			0
Units transferred		0			0			0			0			0			0			0			0			0
Increase in units outstanding		(14	)		0			0			0			0			0			0			0			0
Beginning units		14			0			0			0			0			0			0			0			0
Ending units		0			0			0			0			0			0			0			0			0
Contracts with total expenses of 1.40% :
Units sold		0			74,953			101,343			61,533			170,305			27,421			278,508			31,942			14,397
Units redeemed		0			(13,891	)		(26,551	)		(15,800	)		(58,408	)		(12,280	)		(86,231	)		(12,609	)		(4,677	)
Units transferred		0			51,437			98,494			49,168			165,280			61,578			305,275			44,006			7,605
Increase in units outstanding		0			112,499			173,286			94,901			277,177			76,719			497,552			63,339			17,325
Beginning units		0			135,559			358,659			135,608			622,958			111,613			970,300			148,007			70,907
Ending units		0			248,058			531,945			230,509			900,135			188,332			1,467,852			211,346			88,232
Contracts with total expenses of 1.50% :
Units sold		0			14,126			17,519			8,076			25,058			2,092			53,134			3,409			990
Units redeemed		0			(650	)		(462	)		(344	)		(1,925	)		(254	)		(1,020	)		(639	)		(935	)
Units transferred		0			7,334			9,944			4,710			11,410			1,589			12,455			2,196			518
Increase in units outstanding		0			20,810			27,001			12,442			34,543			3,427			64,569			4,966			573
Beginning units		0			0			0			0			0			0			0			0			0
Ending units		0			20,810			27,001			12,442			34,543			3,427			64,569			4,966			573
Contracts with total expenses of 1.60% :
Units sold		0			37,848			57,544			35,996			80,756			7,551			111,486			16,365			6,063
Units redeemed		0			(13,044	)		(9,573	)		(7,202	)		(8,043	)		(2,533	)		(19,116	)		(3,663	)		(1,249	)
Units transferred		0			(2,131	)		83,931			2,436			28,616			32,240			36,694			1,254			(1,956	)
Increase in units outstanding		0			22,673			131,902			31,230			101,329			37,258			129,064			13,956			2,858
Beginning units		0			119,159			277,192			100,944			189,138			36,838			354,879			45,151			34,292
Ending units		0			141,832			409,094			132,174			290,467			74,096			483,943			59,107			37,150
Contracts with total expenses of 1.65% :
Units sold		0			18,585			89,784			28,958			86,760			4,047			82,508			21,185			20,520
Units redeemed		(417	)		(6,728	)		(11,523	)		(2,693	)		(7,491	)		(1,186	)		(14,954	)		(4,562	)		(1,969	)
Units transferred		14,227			5,317			74,948			17,491			56,758			36,458			36,184			31,796			40,023
Increase in units outstanding		13,810			17,174			153,209			43,756			136,027			39,319			103,738			48,419			58,574
Beginning units		8,328			72,699			64,030			55,499			88,377			26,634			207,401			17,602			13,443
Ending units		22,138			89,873			217,239			99,255			224,404			65,953			311,139			66,021			72,017
Contracts with total expenses of 1.70% :
Units sold		0			3,779			2,003			2,799			11,044			2,431			17,073			793			350
Units redeemed		0			(211	)		(127	)		(85	)		(211	)		(208	)		(302	)		(20	)		0
Units transferred		0			6,513			7,220			2,836			2,860			3,869			2,274			160			0
Increase in units outstanding		0			10,081			9,096			5,550			13,693			6,092			19,045			933			350
Beginning units		0			0			0			0			0			0			0			0			0
Ending units		0			10,081			9,096			5,550			13,693			6,092			19,045			933			350
Contracts with total expenses of 1.75% :
Units sold		0			2,415			4,756			2,941			5,063			858			1,965			3,667			1,759
Units redeemed		0			(14	)		(45	)		(37	)		(51	)		(7	)		(11	)		(6	)		(6	)
Units transferred		0			811			14,033			3,683			7,323			874			10,728			(17	)		845
Increase in units outstanding		0			3,212			18,744			6,587			12,335			1,725			12,682			3,644			2,598
Beginning units		0			0			0			0			0			0			0			0			0
Ending units		0			3,212			18,744			6,587			12,335			1,725			12,682			3,644			2,598

See accompanying notes to financial statements.

16

VARIABLE ANNUITY ACCOUNT NINE

OF

AIG SUNAMERICA LIFE ASSURANCE COMPANY

STATEMENT OF CHANGES IN NET ASSETS

FOR THE YEAR ENDED

DECEMBER 31, 2004

(continued)

		AllianceBernstein Growth Portfolio (Class B	)		AllianceBernstein Growth and Income Portfolio (Class B	)		AllianceBernstein High-Yield Portfolio (Class B	)		AllianceBernstein International Portfolio (Class B	)		AllianceBernstein Money Market Portfolio (Class B	)		AllianceBernstein Premier Growth Portfolio (Class B	)		AllianceBernstein Small Growth Value Portfolio (Class B	)		AllianceBernstein Technology Portfolio (Class B	)		AllianceBernstein Total Return Portfolio (Class B	)
INCREASE IN NET ASSETS:
From operations:
Net investment income (loss)	$	(188,723	)	$	(366,507	)	$	491,524		$	(58,120	)	$	(111,402	)	$	(299,667	)	$	(115,423	)	$	(77,998	)	$	218,333
Net realized gains (losses)		152,603			916,045			84,933			74,062			0			303,519			175,519			57,338			245,083
Change in net unrealized appreciation (depreciation) of investments		1,688,511			4,312,418			81,706			838,264			0			1,499,726			1,079,916			317,986			2,086,208
Increase (decrease) in net assets from operations		1,652,391			4,861,956			658,163			854,206			(111,402	)		1,503,578			1,140,012			297,326			2,549,624
From capital transactions:
Net proceeds from units sold		4,509,905			12,750,283			2,533,701			2,157,659			12,011,421			5,328,070			2,523,695			2,022,088			12,854,150
Cost of units redeemed		(787,752	)		(2,443,474	)		(610,193	)		(225,652	)		(7,550,325	)		(1,491,182	)		(454,511	)		(276,124	)		(1,781,931	)
Optional enhanced death benefits		(28,616	)		(111,173	)		(18,498	)		(10,162	)		(21,132	)		(50,209	)		(22,105	)		(12,978	)		(78,420	)
Net transfers		3,246,317			9,063,757			2,024,498			1,411,815			(4,694,540	)		1,661,194			1,594,790			870,539			6,990,363
Contract maintenance charge		(1,148	)		(3,905	)		(713	)		(347	)		(826	)		(1,654	)		(498	)		(717	)		(3,142	)
Increase in net assets from capital transactions		6,938,706			19,255,488			3,928,795			3,333,313			(255,402	)		5,446,219			3,641,371			2,602,808			17,981,020
Increase in net assets		8,591,097			24,117,444			4,586,958			4,187,519			(366,804	)		6,949,797			4,781,383			2,900,134			20,530,644
Net assets at beginning of period		8,467,347			34,973,786			7,966,949			2,337,585			9,782,317			16,365,162			5,672,142			3,926,347			21,074,879
Net assets at end of period	$	17,058,444		$	59,091,230		$	12,553,907		$	6,525,104		$	9,415,513		$	23,314,959		$	10,453,525		$	6,826,481		$	41,605,523
ANALYSIS OF INCREASE IN UNITS OUTSTANDING:
Contracts with total expenses of .25% :
Units sold		0			0			0			0			0			0			0			0			0
Units redeemed		0			0			0			0			0			0			0			0			0
Units transferred		0			0			0			0			0			0			0			0			0
Increase in units outstanding		0			0			0			0			0			0			0			0			0
Beginning units		0			0			0			0			0			0			0			0			0
Ending units		0			0			0			0			0			0			0			0			0
Contracts with total expenses of 1.40% :
Units sold		106,360			165,902			85,666			70,407			208,554			87,843			103,856			36,690			136,205
Units redeemed		(25,297	)		(49,960	)		(40,292	)		(8,794	)		(77,840	)		(46,608	)		(30,392	)		(15,137	)		(33,561	)
Units transferred		110,749			183,372			240,692			75,803			58,340			61,380			112,062			46,279			226,252
Increase in units outstanding		191,812			299,314			286,066			137,416			189,054			102,615			185,526			67,832			328,896
Beginning units		270,316			614,584			444,271			119,991			266,526			394,085			329,393			150,141			491,208
Ending units		462,128			913,898			730,337			257,407			455,580			496,700			514,919			217,973			820,104
Contracts with total expenses of 1.50% :
Units sold		31,926			32,419			18,230			19,730			112,693			27,757			13,983			18,991			22,895
Units redeemed		(300	)		(2,776	)		(3,120	)		(205	)		(726	)		(1,175	)		(171	)		(19	)		(6,947	)
Units transferred		1,867			13,096			12,513			1,821			(85,759	)		1,822			6,613			(232	)		7,502
Increase in units outstanding		33,493			42,739			27,623			21,346			26,208			28,404			20,425			18,740			23,450
Beginning units		0			0			0			0			0			0			0			0			0
Ending units		33,493			42,739			27,623			21,346			26,208			28,404			20,425			18,740			23,450
Contracts with total expenses of 1.60% :
Units sold		34,081			66,981			99,815			53,216			227,931			50,543			43,364			64,302			309,264
Units redeemed		(6,869	)		(11,317	)		(13,238	)		(1,252	)		(507,463	)		(4,843	)		(4,391	)		(4,114	)		(23,688	)
Units transferred		11,949			22,570			(61,850	)		7,220			(35,944	)		(547	)		6,676			12,759			20,213
Increase in units outstanding		39,161			78,234			24,727			59,184			(315,476	)		45,153			45,649			72,947			305,789
Beginning units		69,094			208,278			242,080			51,728			454,543			176,257			152,174			81,428			259,339
Ending units		108,255			286,512			266,807			110,912			139,067			221,410			197,823			154,375			565,128
Contracts with total expenses of 1.65% :
Units sold		43,302			213,149			23,189			25,303			102,614			117,479			61,939			20,037			89,138
Units redeemed		(8,582	)		(23,344	)		(3,150	)		(9,662	)		(25,179	)		(26,579	)		(8,612	)		(735	)		(32,737	)
Units transferred		33,966			80,478			(6,364	)		30,528			(24,560	)		1,936			23,375			1,398			64,139
Increase in units outstanding		68,686			270,283			13,675			46,169			52,875			92,836			76,702			20,700			120,540
Beginning units		99,004			578,475			80,285			18,280			72,183			245,837			55,697			50,151			407,068
Ending units		167,690			848,758			93,960			64,449			125,058			338,673			132,399			70,851			527,608
Contracts with total expenses of 1.70% :
Units sold		2,115			12,292			12,355			1,866			297,298			551			1,419			1,203			52,916
Units redeemed		(12	)		(288	)		(313	)		(55	)		(995	)		(18	)		(16	)		(108	)		(1,044	)
Units transferred		1,787			9,742			3,788			1,264			(279,407	)		1,100			806			1,373			12,416
Increase in units outstanding		3,890			21,746			15,830			3,075			16,896			1,633			2,209			2,468			64,288
Beginning units		0			0			0			0			0			0			0			0			0
Ending units		3,890			21,746			15,830			3,075			16,896			1,633			2,209			2,468			64,288
Contracts with total expenses of 1.75% :
Units sold		2,428			48,490			2,419			4,844			46,321			9,575			5,643			3,815			13,874
Units redeemed		(7	)		(109	)		(11	)		(26	)		(522	)		(29	)		(28	)		(42	)		(142	)
Units transferred		2,683			7,286			4,184			21			(21,271	)		11,977			1,753			3,283			23,515
Increase in units outstanding		5,104			55,667			6,592			4,839			24,528			21,523			7,368			7,056			37,247
Beginning units		0			0			0			0			0			0			0			0			0
Ending units		5,104			55,667			6,592			4,839			24,528			21,523			7,368			7,056			37,247

See accompanying notes to financial statements.

17

VARIABLE ANNUITY ACCOUNT NINE

OF

AIG SUNAMERICA LIFE ASSURANCE COMPANY

STATEMENT OF CHANGES IN NET ASSETS

FOR THE YEAR ENDED

DECEMBER 31, 2004

(continued)

		AllianceBernstein U.S. Government/High Grade Securities Portfolio (Class B	)		AllianceBernstein U.S. Large Cap Blended Style Portfolio (Class B	)		AllianceBernstein Worldwide Privatization Portfolio (Class B	)		AllianceBernstein Wealth Appreciation Strategy Portfolio (Class B	) (1)		AllianceBernstein Balanced Wealth Strategy Portfolio (Class B	) (1)
INCREASE IN NET ASSETS:
From operations:
Net investment income (loss)	$	197,863		$	(139,608	)	$	(35,428	)	$	(37,037	)	$	(64,366	)
Net realized gains (losses)		447,457			41,698			99,871			19,605			28,294
Change in net unrealized appreciation (depreciation) of investments		(296,633	)		1,003,535			628,575			730,152			813,548
Increase (decrease) in net assets from operations		348,687			905,625			693,018			712,720			777,476
From capital transactions:
Net proceeds from units sold		4,123,697			4,377,527			1,391,860			6,615,429			8,045,248
Cost of units redeemed		(985,247	)		(748,034	)		(216,818	)		(126,473	)		(368,296	)
Optional enhanced death benefits		(33,232	)		(25,033	)		(5,805	)		(100	)		(1,449	)
Net transfers		966,410			3,158,739			1,233,471			3,106,479			9,266,166
Contract maintenance charge		(1,767	)		(320	)		(155	)		(23	)		(37	)
Increase in net assets from capital transactions		4,069,861			6,762,879			2,402,554			9,595,312			16,941,632
Increase in net assets		4,418,548			7,668,504			3,095,572			10,308,032			17,719,108
Net assets at beginning of period		13,960,007			5,405,316			1,155,308			0			0
Net assets at end of period	$	18,378,555		$	13,073,820		$	4,250,880		$	10,308,032		$	17,719,108
ANALYSIS OF INCREASE IN UNITS OUTSTANDING:
Contracts with total expenses of .25% :
Units sold		0			0			0			0			0
Units redeemed		0			(15	)		0			0			0
Units transferred		0			0			0			0			0
Increase in units outstanding		0			(15	)		0			0			0
Beginning units		0			15			0			0			0
Ending units		0			0			0			0			0
Contracts with total expenses of 1.40% :
Units sold		77,290			153,250			28,792			228,734			101,689
Units redeemed		(32,424	)		(44,707	)		(4,362	)		(6,542	)		(689	)
Units transferred		122,560			236,897			28,320			99,007			285,434
Increase in units outstanding		167,426			345,440			52,750			321,199			386,434
Beginning units		531,760			283,520			32,739			0			0
Ending units		699,186			628,960			85,489			321,199			386,434
Contracts with total expenses of 1.50% :
Units sold		22,833			28,104			4,860			110,785			119,028
Units redeemed		(7,165	)		(67	)		(83	)		(519	)		(609	)
Units transferred		1,882			12,003			(148	)		36,196			109,858
Increase in units outstanding		17,550			40,040			4,629			146,462			228,277
Beginning units		0			0			0			0			0
Ending units		17,550			40,040			4,629			146,462			228,277
Contracts with total expenses of 1.60% :
Units sold		75,251			201,781			19,506			182,136			26,488
Units redeemed		(17,899	)		(25,986	)		(6,193	)		(4,131	)		(2,763	)
Units transferred		(16,072	)		30,936			19,208			82,652			158,523
Increase in units outstanding		41,280			206,731			32,521			260,657			182,248
Beginning units		231,891			192,393			23,152			0			0
Ending units		273,171			399,124			55,673			260,657			182,248
Contracts with total expenses of 1.65% :
Units sold		21,023			12,839			22,901			67,912			203,792
Units redeemed		(15,454	)		(391	)		(743	)		(65	)		(536	)
Units transferred		39,093			10,845			15,569			23,805			116,649
Increase in units outstanding		44,662			23,293			37,727			91,652			319,905
Beginning units		200,550			24,698			4,960			0			0
Ending units		245,212			47,991			42,687			91,652			319,905
Contracts with total expenses of 1.70% :
Units sold		72,292			1,699			753			29,977			97,250
Units redeemed		(1	)		(38	)		(45	)		(398	)		(29,688	)
Units transferred		(69,401	)		1,785			1,838			30,650			214,954
Increase in units outstanding		2,890			3,446			2,546			60,229			282,516
Beginning units		0			0			0			0			0
Ending units		2,890			3,446			2,546			60,229			282,516
Contracts with total expenses of 1.75% :
Units sold		3,226			4,702			603			57,210			243,034
Units redeemed		(5	)		(75	)		(7	)		(539	)		(2,551	)
Units transferred		0			1,589			3,308			37,248			37,403
Increase in units outstanding		3,221			6,216			3,904			93,919			277,886
Beginning units		0			0			0			0			0
Ending units		3,221			6,216			3,904			93,919			277,886

(1) For the period from July 1, 2004 (inception) to December 31, 2004.

See accompanying notes to financial statements.

18

VARIABLE ANNUITY ACCOUNT NINE

OF

AIG SUNAMERICA LIFE ASSURANCE COMPANY

STATEMENT OF CHANGES IN NET ASSETS

FOR THE YEAR ENDED

DECEMBER 31, 2003

		AllianceBernstein Americas Government Income Portfolio (Class A	)		AllianceBernstein International Value Portfolio (Class A	)		AllianceBernstein Real Estate Investment Portfolio (Class A	)		AllianceBernstein Small Cap Value Portfolio (Class A	)		AllianceBernstein Utility Income Portfolio (Class A	)		AllianceBernstein Value Portfolio (Class A) **			AllianceBernstein Global Bond Portfolio (Class A	)		AllianceBernstein Global Dollar Government Portfolio (Class A	)
INCREASE IN NET ASSETS:
From operations:
Net investment income (loss)	$	63,327		$	(4,392	)	$	1,122		$	(9,563	)	$	3,186		$	2		$	5,565		$	9,816
Net realized gains (losses)		(3,310	)		3,233			1,563			19,775			74			0			402			5,351
Change in net unrealized appreciation (depreciation) of investments		12,251			132,239			189,535			314,524			38,004			52			11,225			40,161
Increase (decrease) in net assets from operations		72,268			131,080			192,220			324,736			41,264			54			17,192			55,328
From capital transactions:
Net proceeds from units sold		1,470,360			28,568			48,414			85,825			26,715			0			2,646			151,236
Cost of units redeemed		(16,938	)		(8,489	)		(11,385	)		(20,286	)		(1,149	)		0			(1,545	)		(595	)
Optional enhanced death benefits		(4,197	)		(730	)		(1,407	)		(1,551	)		(454	)		0			(242	)		(577	)
Net transfers		(764,978	)		157,432			506,926			343,647			112,647			0			91,088			(2,904	)
Contract maintenance charge		(31	)		(64	)		(40	)		(88	)		(10	)		(2	)		(20	)		(6	)
Increase in net assets from capital transactions		684,216			176,717			542,508			407,547			137,749			(2	)		91,927			147,154
Increase in net assets		756,484			307,797			734,728			732,283			179,013			52			109,119			202,482
Net assets at beginning of period		343,745			173,977			282,788			548,059			112,146			187			92,678			65,032
Net assets at end of period	$	1,100,229		$	481,774		$	1,017,516		$	1,280,342		$	291,159		$	239		$	201,797		$	267,514
ANALYSIS OF INCREASE IN UNITS OUTSTANDING:
Contracts with total expenses of .25% :
Units sold		0			0			0			0			0			0			0			0
Units redeemed		0			0			0			0			0			0			0			0
Units transferred		0			0			0			0			0			0			0			0
Increase in units outstanding		0			0			0			0			0			0			0			0
Beginning units		14			17			17			17			17			17			14			14
Ending units		14			17			17			17			17			17			14			14
Contracts with total expenses of 1.40% :
Units sold		0			0			0			0			0			0			0			0
Units redeemed		0			0			0			0			0			0			0			0
Units transferred		0			0			0			0			0			0			0			0
Increase in units outstanding		0			0			0			0			0			0			0			0
Beginning units		0			0			0			0			0			0			0			0
Ending units		0			0			0			0			0			0			0			0
Contracts with total expenses of 1.60% :
Units sold		0			0			0			0			0			0			0			0
Units redeemed		0			0			0			0			0			0			0			0
Units transferred		0			0			0			0			0			0			0			0
Increase in units outstanding		0			0			0			0			0			0			0			0
Beginning units		0			0			0			0			0			0			0			0
Ending units		0			0			0			0			0			0			0			0
Contracts with total expenses of 1.65% :
Units sold		136,247			3,382			5,109			9,674			2,949			0			229			13,385
Units redeemed		(1,865	)		(1,046	)		(1,235	)		(2,355	)		(165	)		0			(154	)		(92	)
Units transferred		(69,000	)		17,758			45,890			36,756			12,196			0			7,923			(91	)
Increase in units outstanding		65,382			20,094			49,764			44,075			14,980			0			7,998			13,202
Beginning units		32,183			21,132			30,588			64,681			12,444			0			8,368			6,171
Ending units		97,565			41,226			80,352			108,756			27,424			0			16,366			19,373

** Increase relates to net assets retained in Variable Annuity Account Nine by AIG SunAmerica Life Assurance Company.

See accompanying notes to financial statements.

19

VARIABLE ANNUITY ACCOUNT NINE

OF

AIG SUNAMERICA LIFE ASSURANCE COMPANY

STATEMENT OF CHANGES IN NET ASSETS

FOR THE YEAR ENDED

DECEMBER 31, 2003

(continued)

		AllianceBernstein Growth Portfolio (Class A)**			AllianceBernstein Growth and Income Portfolio (Class A)**			AllianceBernstein High-Yield Portfolio (Class A	)		AllianceBernstein International Portfolio (Class A	)		AllianceBernstein Money Market Portfolio (Class A)**			AllianceBernstein Premier Growth Portfolio (Class A)**			AllianceBernstein Quasar Portfolio (Class A	)		AllianceBernstein Technology Portfolio (Class A)**
INCREASE IN NET ASSETS:
From operations:
Net investment income (loss)	$	0		$	2		$	25,320		$	(3,733	)	$	1		$	0		$	(6,281	)	$	0
Net realized gains (losses)		0			0			1,401			1,586			0			0			2,765			0
Change in net unrealized appreciation (depreciation) of investments		52			47			77,803			74,761			0			36			156,873			58
Increase (decrease) in net assets from operations		52			49			104,524			72,614			1			36			153,357			58
From capital transactions:
Net proceeds from units sold		1			0			140,927			7,593			0			0			11,711			0
Cost of units redeemed		0			0			(3,077	)		(3,170	)		(1	)		(1	)		(15,503	)		0
Optional enhanced death benefits		0			0			(2,307	)		(310	)		0			0			(854	)		0
Net transfers		0			0			714,568			72,437			0			0			233,246			0
Contract maintenance charge		(2	)		(2	)		(50	)		(33	)		(1	)		(1	)		(46	)		(1	)
Increase in net assets from capital transactions		(1	)		(2	)		850,061			76,517			(2	)		(2	)		228,554			(1	)
Increase in net assets		51			47			954,585			149,131			(1	)		34			381,911			57
Net assets at beginning of period		151			151			110,029			180,675			143			149			227,650			132
Net assets at end of period	$	202		$	198		$	1,064,614		$	329,806		$	142		$	183		$	609,561		$	189
ANALYSIS OF INCREASE IN UNITS OUTSTANDING:
Contracts with total expenses of .25% :
Units sold		0			0			0			0			0			0			0			0
Units redeemed		0			0			0			0			0			0			0			0
Units transferred		0			0			0			0			0			0			0			0
Increase in units outstanding		0			0			0			0			0			0			0			0
Beginning units		14			14			14			14			14			14			14			14
Ending units		14			14			14			14			14			14			14			14
Contracts with total expenses of 1.40% :
Units sold		0			0			0			0			0			0			0			0
Units redeemed		0			0			0			0			0			0			0			0
Units transferred		0			0			0			0			0			0			0			0
Increase in units outstanding		0			0			0			0			0			0			0			0
Beginning units		0			0			0			0			0			0			0			0
Ending units		0			0			0			0			0			0			0			0
Contracts with total expenses of 1.60% :
Units sold		0			0			0			0			0			0			0			0
Units redeemed		0			0			0			0			0			0			0			0
Units transferred		0			0			0			0			0			0			0			0
Increase in units outstanding		0			0			0			0			0			0			0			0
Beginning units		0			0			0			0			0			0			0			0
Ending units		0			0			0			0			0			0			0			0
Contracts with total expenses of 1.65% :
Units sold		0			0			13,916			871			0			0			1,579			0
Units redeemed		0			0			(493	)		(379	)		0			0			(1,946	)		0
Units transferred		0			0			66,595			8,457			0			0			24,993			0
Increase in units outstanding		0			0			80,018			8,949			0			0			24,626			0
Beginning units		0			0			11,363			21,802			0			0			29,720			0
Ending units		0			0			91,381			30,751			0			0			54,346			0

** Increase relates to net assets retained in Variable Annuity Account Nine by AIG SunAmerica Life Assurance Company.

See accompanying notes to financial statements.

20

VARIABLE ANNUITY ACCOUNT NINE

OF

AIG SUNAMERICA LIFE ASSURANCE COMPANY

STATEMENT OF CHANGES IN NET ASSETS

FOR THE YEAR ENDED

DECEMBER 31, 2003

(continued)

		AllianceBernstein Total Return Portfolio (Class A)**			AllianceBernstein U.S. Government/High Grade Securities Portfolio (Class A)**			AllianceBernstein Worldwide Privatization Portfolio (Class A	)		AllianceBernstein Americas Government Income Portfolio (Class B	)		AllianceBernstein International Value Portfolio (Class B	)		AllianceBernstein Real Estate Investment Portfolio (Class B	)		AllianceBernstein Small Cap Value Portfolio (Class B	)		AllianceBerstein Utility Income Portfolio (Class B	)
INCREASE IN NET ASSETS:
From operations:
Net investment income (loss)	$	4		$	4		$	(394	)	$	94,114		$	(47,481	)	$	(3,045	)	$	(56,138	)	$	7,950
Net realized gains (losses)		0			1			186			(41,940	)		513,673			31,241			154,638			6,703
Change in net unrealized appreciation (depreciation) of investments		24			0			30,222			43,545			1,260,503			584,498			2,014,440			257,894
Increase (decrease) in net assets from operations		28			5			30,014			95,719			1,726,695			612,694			2,112,940			272,547
From capital transactions:
Net proceeds from units sold		0			1			1,062			4,117,339			3,396,212			2,105,951			5,789,514			1,429,978
Cost of units redeemed		0			0			(636	)		(286,192	)		(185,404	)		(631,926	)		(567,737	)		(45,320	)
Optional enhanced death benefits		0			0			(158	)		(6,574	)		(8,879	)		(3,568	)		(13,504	)		(1,775	)
Net transfers		0			0			14,436			1,542,710			3,709,017			2,508,523			4,538,650			1,107,594
Contract maintenance charge		(1	)		(1	)		(3	)		(190	)		(66	)		(121	)		(180	)		(24	)
Increase in net assets from capital transactions		(1	)		0			14,701			5,367,093			6,910,880			3,978,859			9,746,743			2,490,453
Increase in net assets		27			5			44,715			5,462,812			8,637,575			4,591,553			11,859,683			2,763,000
Net assets at beginning of period		150			149			59,123			235,654			313,240			155,110			669,079			39,320
Net assets at end of period	$	177		$	154		$	103,838		$	5,698,466		$	8,950,815		$	4,746,663		$	12,528,762		$	2,802,320
ANALYSIS OF INCREASE IN UNITS OUTSTANDING:
Contracts with total expenses of .25% :
Units sold		0			0			0			0			0			0			0			0
Units redeemed		0			0			0			0			0			0			0			0
Units transferred		0			0			0			0			0			0			0			0
Increase in units outstanding		0			0			0			0			0			0			0			0
Beginning units		14			14			14			0			0			0			0			0
Ending units		14			14			14			0			0			0			0			0
Contracts with total expenses of 1.40% :
Units sold		0			0			0			48,117			155,048			65,316			305,327			55,590
Units redeemed		0			0			0			(8,228	)		(18,265	)		(8,658	)		(43,660	)		(2,663	)
Units transferred		0			0			0			86,805			208,431			68,394			303,959			56,792
Increase in units outstanding		0			0			0			126,694			345,214			125,052			565,626			109,719
Beginning units		0			0			0			8,865			13,445			10,556			57,332			1,894
Ending units		0			0			0			135,559			358,659			135,608			622,958			111,613
Contracts with total expenses of 1.60% :
Units sold		0			0			0			125,883			113,374			50,029			125,627			24,397
Units redeemed		0			0			0			(6,696	)		(1,457	)		(35,107	)		(1,609	)		(165	)
Units transferred		0			0			0			(4,152	)		144,292			84,151			56,788			11,768
Increase in units outstanding		0			0			0			115,035			256,209			99,073			180,806			36,000
Beginning units		0			0			0			4,124			20,983			1,871			8,332			838
Ending units		0			0			0			119,159			277,192			100,944			189,138			36,838
Contracts with total expenses of 1.65% :
Units sold		0			0			119			77,173			57,962			31,231			65,248			21,410
Units redeemed		0			0			(76	)		(1,089	)		(256	)		(552	)		(379	)		(84	)
Units transferred		0			0			1,596			(3,385	)		6,324			24,820			23,508			5,308
Increase in units outstanding		0			0			1,639			72,699			64,030			55,499			88,377			26,634
Beginning units		0			0			6,689			0			0			0			0			0
Ending units		0			0			8,328			72,699			64,030			55,499			88,377			26,634

** Increase relates to net assets retained in Variable Annuity Account Nine by AIG SunAmerica Life Assurance Company.

See accompanying notes to financial statements.

21

VARIABLE ANNUITY ACCOUNT NINE

OF

AIG SUNAMERICA LIFE ASSURANCE COMPANY

STATEMENT OF CHANGES IN NET ASSETS

FOR THE YEAR ENDED

DECEMBER 31, 2003

(continued)

		AllianceBernstein Value Portfolio (Class B	)		AllianceBernstein Global Bond Portfolio (Class B	)		AllianceBernstein Global Dollar Government Portfolio (Class B	)		AllianceBernstein Growth Portfolio (Class B	)		AllianceBernstein Growth and Income Portfolio (Class B	)		AllianceBernstein High-Yield Portfolio (Class B	)		AllianceBernstein International Portfolio (Class B	)		AllianceBernstein Money Market Portfolio (Class B	)
INCREASE IN NET ASSETS:
From operations:
Net investment income (loss)	$	(70,049	)	$	125,816		$	41,563		$	(52,829	)	$	(128,827	)	$	100,782		$	(16,010	)	$	(92,303	)
Net realized gains (losses)		86,867			(33,496	)		7,231			25,654			83,692			42,075			305,547			0
Change in net unrealized appreciation (depreciation) of investments		2,315,645			163,819			268,063			1,011,223			4,586,773			437,477			313,396			0
Increase (decrease) in net assets from operations		2,332,463			256,139			316,857			984,048			4,541,638			580,334			602,933			(92,303	)
From capital transactions:
Net proceeds from units sold		7,008,374			1,819,962			1,645,204			4,187,485			15,838,524			4,150,093			3,239,612			18,700,796
Cost of units redeemed		(977,512	)		(1,722,933	)		(20,305	)		(416,966	)		(824,370	)		(1,760,192	)		(73,586	)		(4,559,376	)
Optional enhanced death benefits		(15,685	)		(2,471	)		(2,825	)		(7,097	)		(35,375	)		(6,243	)		(1,970	)		(6,912	)
Net transfers		6,068,830			2,757,118			996,876			3,132,273			13,342,538			4,636,872			(1,565,794	)		(6,298,910	)
Contract maintenance charge		(291	)		(67	)		(28	)		(218	)		(898	)		(66	)		(31	)		(153	)
Increase in net assets from capital transactions		12,083,716			2,851,609			2,618,922			6,895,477			28,320,419			7,020,464			1,598,231			7,835,445
Increase in net assets		14,416,179			3,107,748			2,935,779			7,879,525			32,862,057			7,600,798			2,201,164			7,743,142
Net assets at beginning of period		2,177,267			414,313			225,827			587,822			2,111,729			366,151			136,421			2,039,175
Net assets at end of period	$	16,593,446		$	3,522,061		$	3,161,606		$	8,467,347		$	34,973,786		$	7,966,949		$	2,337,585		$	9,782,317
ANALYSIS OF INCREASE IN UNITS OUTSTANDING:
Contracts with total expenses of .25% :
Units sold		0			0			0			0			0			0			0			0
Units redeemed		0			0			0			0			0			0			0			0
Units transferred		0			0			0			0			0			0			0			0
Increase in units outstanding		0			0			0			0			0			0			0			0
Beginning units		0			0			0			0			0			0			0			0
Ending units		0			0			0			0			0			0			0			0
Contracts with total expenses of 1.40% :
Units sold		471,413			71,553			30,490			144,124			339,169			156,971			86,818			130,361
Units redeemed		(82,305	)		(5,475	)		(318	)		(20,456	)		(19,112	)		(15,916	)		(5,953	)		(89,973	)
Units transferred		403,265			77,848			32,839			125,364			262,287			270,439			34,519			163,411
Increase in units outstanding		792,373			143,926			63,011			249,032			582,344			411,494			115,384			203,799
Beginning units		177,927			4,081			7,896			21,284			32,240			32,777			4,607			62,727
Ending units		970,300			148,007			70,907			270,316			614,584			444,271			119,991			266,526
Contracts with total expenses of 1.60% :
Units sold		190,191			37,199			29,862			52,573			126,316			224,680			194,781			1,265,289
Units redeemed		(2,450	)		(96,920	)		(466	)		(867	)		(1,958	)		(167,951	)		(1,345	)		(266,984	)
Units transferred		151,695			81,948			2,306			16,762			80,554			175,118			(151,230	)		(626,561	)
Increase in units outstanding		339,436			22,227			31,702			68,468			204,912			231,847			42,206			371,744
Beginning units		15,443			22,924			2,590			626			3,366			10,233			9,522			82,799
Ending units		354,879			45,151			34,292			69,094			208,278			242,080			51,728			454,543
Contracts with total expenses of 1.65% :
Units sold		82,122			5,505			8,465			41,439			179,377			45,093			17,139			99,438
Units redeemed		(16,046	)		(58	)		(60	)		(1,172	)		(20,843	)		(641	)		(37	)		(284	)
Units transferred		80,345			12,155			5,038			30,908			280,756			35,833			1,178			(45,255	)
Increase in units outstanding		146,421			17,602			13,443			71,175			439,290			80,285			18,280			53,899
Beginning units		60,980			0			0			27,829			139,185			0			0			18,284
Ending units		207,401			17,602			13,443			99,004			578,475			80,285			18,280			72,183

See accompanying notes to financial statements.

22

VARIABLE ANNUITY ACCOUNT NINE

OF

AIG SUNAMERICA LIFE ASSURANCE COMPANY

STATEMENT OF CHANGES IN NET ASSETS

FOR THE YEAR ENDED

DECEMBER 31, 2003

(continued)

		AllianceBernstein Premier Growth Portfolio (Class B	)		AllianceBernstein Quasar Portfolio (Class B	)		AllianceBernstein Technology Portfolio (Class B	)		AllianceBernstein Total Return Portfolio (Class B	)		AllianceBernstein U.S. Government/High Grade Securities Portfolio (Class B	)		AllianceBernstein U.S. Large Cap Blended Style Portfolio (Class B	)		AllianceBernstein Worldwide Privatization Portfolio (Class B	)
INCREASE IN NET ASSETS:
From operations:
Net investment income (loss)	$	(117,124	)	$	(30,115	)	$	(24,692	)	$	47,317		$	61,908		$	(21,411	)	$	(4,058	)
Net realized gains (losses)		92,190			32,630			6,402			121,300			8,106			1,819			79,640
Change in net unrealized appreciation (depreciation) of investments		1,598,516			805,123			548,774			1,643,890			78,360			310,822			184,000
Increase (decrease) in net assets from operations		1,573,582			807,638			530,484			1,812,507			148,374			291,230			259,582
From capital transactions:
Net proceeds from units sold		7,337,519			2,826,178			1,996,960			9,280,211			5,480,495			2,904,903			733,032
Cost of units redeemed		(692,368	)		(224,897	)		(211,506	)		(594,709	)		(1,581,371	)		(10,468	)		(58,837	)
Optional enhanced death benefits		(19,915	)		(5,665	)		(3,963	)		(21,458	)		(15,008	)		(3,232	)		(835	)
Net transfers		6,887,561			2,113,809			1,381,189			8,779,689			8,438,220			2,222,886			52,969
Contract maintenance charge		(401	)		(105	)		(58	)		(675	)		(726	)		(3	)		(133	)
Increase in net assets from capital transactions		13,512,396			4,709,320			3,162,622			17,443,058			12,321,610			5,114,086			726,196
Increase in net assets		15,085,978			5,516,958			3,693,106			19,255,565			12,469,984			5,405,316			985,778
Net assets at beginning of period		1,279,184			155,184			233,241			1,819,314			1,490,023			0			169,530
Net assets at end of period	$	16,365,162		$	5,672,142		$	3,926,347		$	21,074,879		$	13,960,007		$	5,405,316		$	1,155,308
ANALYSIS OF INCREASE IN UNITS OUTSTANDING:
Contracts with total expenses of .25% :
Units sold		0			0			0			0			0			15			0
Units redeemed		0			0			0			0			0			0			0
Units transferred		0			0			0			0			0			0			0
Increase in units outstanding		0			0			0			0			0			15			0
Beginning units		0			0			0			0			0			0			0
Ending units		0			0			0			0			0			15			0
Contracts with total expenses of 1.40% :
Units sold		190,160			125,016			92,007			207,494			173,335			142,835			22,556
Units redeemed		(28,194	)		(25,969	)		(16,394	)		(20,915	)		(36,267	)		(1,044	)		(3,360	)
Units transferred		193,312			210,655			60,102			284,457			375,965			141,729			7,880
Increase in units outstanding		355,278			309,702			135,715			471,036			513,033			283,520			27,076
Beginning units		38,807			19,691			14,426			20,172			18,727			0			5,663
Ending units		394,085			329,393			150,141			491,208			531,760			283,520			32,739
Contracts with total expenses of 1.60% :
Units sold		92,033			136,890			52,777			163,971			108,895			129,680			21,980
Units redeemed		(1,266	)		(1,440	)		(281	)		(1,617	)		(60,385	)		(236	)		(727	)
Units transferred		78,972			14,733			28,839			90,969			152,044			62,949			(4,606	)
Increase in units outstanding		169,739			150,183			81,335			253,323			200,554			192,393			16,647
Beginning units		6,518			1,991			93			6,016			31,337			0			6,505
Ending units		176,257			152,174			81,428			259,339			231,891			192,393			23,152
Contracts with total expenses of 1.65% :
Units sold		118,869			50,767			14,815			167,382			104,977			11,394			3,217
Units redeemed		(4,372	)		(100	)		(589	)		(15,620	)		(7,601	)		(47	)		(42	)
Units transferred		86,321			5,030			24,729			112,153			33,282			13,351			1,785
Increase in units outstanding		200,818			55,697			38,955			263,915			130,658			24,698			4,960
Beginning units		45,019			0			11,196			143,153			69,892			0			0
Ending units		245,837			55,697			50,151			407,068			200,550			24,698			4,960

(1) For the period from May 1, 2003 (inception) to December 31, 2003.

See accompanying notes to financial statements.

23

VARIABLE ANNUITY ACCOUNT NINE

OF

AIG SUNAMERICA LIFE ASSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS

1. ORGANIZATION

Variable Annuity Account Nine of AIG SunAmerica Life Assurance Company (the “Separate Account”) is an investment account of AIG SunAmerica Life Assurance Company (FKA Anchor National Life Insurance Company), (the “Company”). The Company is a direct wholly owned subsidiary of SunAmerica Life Insurance Company, which is a subsidiary of AIG Retirement Services, Inc., the retirement services and asset management organization within American International Group, Inc. (“AIG”). AIG is a holding company which through its subsidiaries is engaged in a broad range of insurance and insurance-related activities, financial services, retirement savings and asset management. The Company changed its name to SunAmerica National Life Insurance Company on October 5, 2001 and further changed its name to AIG SunAmerica Life Assurance Company on January 24, 2002. The Company continued to do business as Anchor National Life Insurance Company for 2002. Effective March 1, 2003, the Company is using its new name exclusively. The Separate Account is registered as a unit investment trust pursuant to the provisions of the Investment Company Act of 1940, as amended.

The Separate Account offers the following products: Ovation Advantage, Ovation, Ovation Advisor, and Ovation Plus. Ovation Advantage was launched on June 3, 2002, Ovation was launched on August 14, 2002, Ovation Advisor was launched on August 6, 2002, and Ovation Plus was launched on December 17, 2002.

On April 1, 2004, the Securities and Exchange Commission granted an order for the withdrawal of the registration of the Ovation Access Variable Annuity (the “Product”). The Product was not marketed and no securities were sold in the offering. Therefore, the Company redeemed all units from the Product.

The Separate Account contracts are sold through the Company’s affiliated broker-dealers, independent broker-dealers, full-service securities firms and financial institutions. The distributor of these contracts is AIG SunAmerica Capital Services, Inc., an affiliate of the Company. No underwriting fees are paid in connection with the distribution of the contracts.

The Separate Account is composed of thirty-three Class A or Class B variable investment portfolios (the “Variable Accounts”). Each of the Variable Accounts is invested solely in the shares of one of the currently available investment portfolios of the AllianceBernstein Variable Products Series Fund, Inc. (the “AllianceBernstein Trust”). The products offer investments in different classes of shares of the portfolios of the AllianceBernstein Trust. The primary difference between the classes is that the Class B shares in the AllianceBernstein Trust are subject to 12b-1 fees of 0.25%, of each class’ average daily net assets, while the Class A shares are not subject to 12b-1 fees. The AllianceBernstein Trust is a diversified open-ended investment company, which retains an investment adviser to assist in the investment

24

VARIABLE ANNUITY ACCOUNT NINE

OF

AIG SUNAMERICA LIFE ASSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS

1. ORGANIZATION (continued)

activities of the Trust. Participants may elect to have investments allocated to one of the offered guaranteed-interest funds of the Company (the “General Account”), which are not a part of the Separate Account. The financial statements include balances allocated by the participants to the Variable Accounts and do not include balances allocated to the General Account.

Prior to May 1, 2004, the AllianceBernstein Small Cap Growth Portfolio was named AllianceBernstein Quasar Portfolio.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Investment Accounting and Valuation: The investments are stated at the net asset value of each of the portfolios of the Trust as determined at the close of the business day. Purchases and sales of shares of the portfolios are valued at the net asset values of such portfolios, which value their investment securities at fair value, on the date the shares are purchased or sold. Dividends and capital gains distributions are recorded on the ex-distribution date. Realized gains and losses on the sale of investments in the Trust are recognized at the date of sale and are determined on an average cost basis. Accumulation unit values are computed daily based on total net assets of the portfolios.

Federal Income Taxes: The Company qualifies for federal income tax treatment granted to life insurance companies under subchapter L of the Internal Revenue Service Code (the “Code”). The operations of the Separate Account are part of the total operations of the Company and are not taxed separately. Under the current provisions of the Code, the Company does not expect to incur federal income taxes on the earnings of the Separate Account to the extent that the earnings are credited under the contracts. Based on this, no charge is being made currently to the Separate Account for federal income taxes. The Separate Account is not treated as a regulated investment company under the Code.

Use of Estimates: The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect amounts reported therein. Actual results could differ from these estimates.

Reserves for Contracts in Payout (Annuitization) Period: For contract owners who select a variable payout option, reserves are initially established based on estimated mortality (where applicable) and other assumptions, including provisions for the risk of adverse deviation from assumptions. An assumed interest rate of 3.5% is used in determining annuity payments.

25

VARIABLE ANNUITY ACCOUNT NINE

OF

AIG SUNAMERICA LIFE ASSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

At each reporting period, the assumptions must be evaluated based on current experience, and the reserves must be adjusted accordingly. To the extent additional reserves are established due to mortality risk experience, the Company makes payments to the Separate Account. If there are excess reserves remaining at the time annuity payments cease, the assets supporting those reserves are transferred from the Separate Account to the Company.

Annuity reserves are calculated according to the Annuity 2000 Mortality Table, the 1971 Individual Annuity Mortality Table, and the 1983(a) Individual Mortality Table depending on the calendar year of annuitization.

3. CHARGES AND DEDUCTIONS

Charges and deductions are applied against the current value of the Separate Account and are paid as follows:

Withdrawal Charge: The contract provides that in the event that a contract holder withdraws all or a portion of the contract value during the surrender charge period, withdrawal charges may be assessed on the excess of the free withdrawal amounts as defined in the contract. The withdrawal charges are based on tables of charges applicable to the specific contracts, with a maximum charge of 6% of any amount withdrawn that exceeds the free withdrawal amount, and are recorded as redemptions in the accompanying Statement of Changes in Net Assets.

Contract Maintenance Charge: An annual contract maintenance charge of $30 is charged against certain contracts, which reimburses the Company for expenses incurred in establishing and maintaining records relating to the contract. The contract maintenance charge is assessed on each anniversary during the accumulation phase. In the event that a total surrender of contract value is made, the entire charge is assessed as of the date of surrender, and deducted from that withdrawal. The contract maintenance fee is recorded in the accompanying Statement of Changes in Net Assets.

Mortality and Expense Risk Charge: The Company deducts a mortality and expense risk charge, computed on a daily basis as a percentage of the net asset value. The total annual rate of the net asset value of each portfolio is as follows: Ovation Plus, 1.40% or 1.50%; Ovation Advantage, 1.40% or 1.50%; Ovation, 1.40% or 1.50%; Ovation Access, 0.25%; and Ovation Advisor, 1.40% or 1.50%. For the Ovation Plus, Ovation Advantage, Ovation and the Ovation Advisor products, the above mentioned annual rate is 1.40% if the contract holder is under 66 years of age and 1.50% if the contract holder is 66 years of age or older at the time of the purchase of the contract. The mortality risk charge is compensation for the mortality risks assumed by the Company from its contractual obligations to make annuity payments after the contract has annuitized for the life of the annuitant and to provide the

26

VARIABLE ANNUITY ACCOUNT NINE

OF

AIG SUNAMERICA LIFE ASSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS

3. CHARGES AND DEDUCTIONS (continued)

standard death benefit. The expense risk charge is compensation for assuming the risk that the current contract administration charges will be insufficient in the future to cover the cost of administering the contract.

Distribution Expense Charge: The Company deducts a distribution expense charge at an annual rate of the net asset value of each portfolio, computed on a daily basis as follows: Ovation Advisor, 0.20%; Ovation Plus, 0.20%; Ovation Advantage, 0.25%. This charge is for all expenses associated with the distribution of the contract. If this charge is not sufficient to cover the cost of distributing the contract, the Company will bear the excess cost. There are not any distribution expense charges associated with the Ovation and Ovation Access contracts.

Optional enhanced death benefits: The optional enhanced death benefit may increase the death benefit paid. The charges for these options range from an annual rate of 0.05% to 0.30% of the average daily net asset value. The fee is deducted monthly from the contract value and is recorded as a redemption in the accompanying Statement of Changes in Net Assets.

Transfer Fee: A transfer fee of $10, depending on the contract provisions, may be assessed on each transfer of funds in excess of the maximum transactions allowed within a contract year and is recorded as a redemption in the accompanying Statement of Changes in Net Assets.

Capital Protector Fee: The optional Capital Protector Program offered in Ovation, Ovation Plus and Ovation Advantage provides a guaranteed minimum contract value at the end of an applicable waiting period. The fee is from 0.15% to 0.60% of the contract value including purchase payments received prior to the 90^th day from the contract issue date. The fee is deducted quarterly from the contract value during the waiting period, and is recorded as a redemption in the accompanying Statement of Changes in Net Assets.

Access Protector Fee: The optional Access Protector feature offered in Ovation, Ovation Plus, Ovation Advantage provides guaranteed withdrawals over a minimum number of years that, in total, equal at least the initial purchase payment adjusted for withdrawals. The fee is from 0.45% to 0.65% of the contract value including purchase payments received prior to the 90^th day from the contract issue date. The fee is deducted quarterly from the contract value and is recorded as a redemption in the accompanying Statement of Changes in Net Assets.

Premium Taxes: Premium taxes or other taxes payable to a state or other governmental entity will be charged against the contract values. The rate will range from 0% to 3.5%. Some states assess premium taxes at the time purchase payments are made; others assess premium taxes at the time annuity payments begin or at the time of surrender. The Company currently deducts

27

VARIABLE ANNUITY ACCOUNT NINE

OF

AIG SUNAMERICA LIFE ASSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS

3. CHARGES AND DEDUCTIONS (continued)

premium taxes at the time of surrender or upon annuitization; however, it reserves the right to deduct any premium taxes when incurred or upon payment of the death benefit.

Separate Account Income Taxes: The Company currently does not maintain a provision for taxes, but has reserved the right to establish such a provision for taxes in the future if it determines, in its sole discretion, that it will incur a tax as a result of the operation of the Separate Account.

4 PURCHASES AND SALES OF INVESTMENTS

The aggregate cost of the AllianceBernstein Trust’s shares acquired and the aggregate proceeds from shares sold during the period ended December 31, 2004 consist of the following:

Variable Accounts		Cost of Shares Acquired		Proceeds from Shares Sold
ALLIANCEBERNSTEIN TRUST:
AllianceBernstein Americas Government Income Portfolio (Class A)	$	1,718,046	$	1,837,547
AllianceBernstein International Value Portfolio (Class A)		503,956		80,523
AllianceBernstein Real Estate Investment Portfolio (Class A		301,966		608,593
AllianceBernstein Small Cap Value Portfolio (Class A)		171,070		209,797
AllianceBernstein Utility Income Portfolio (Class A)		312,184		99,468
AllianceBernstein Value Portfolio (Class A)		0		237
AllianceBernstein Global Bond Portfolio (Class A)		85,845		60,653
AllianceBernstein Global Dollar Government Portfolio (Class A)		140,662		81,483
AllianceBernstein Growth Portfolio (Class A)		0		211
AllianceBernstein Growth and Income Portfolio (Class A)		0		199
AllianceBernstein High Yield Portfolio (Class A)		347,405		755,970
AllianceBernstein International Portfolio (Class A)		60,822		19,166
AllianceBernstein Money Market Portfolio (Class A)		0		142
AllianceBernstein Premier Growth Portfolio (Class A)		0		179
AllianceBernstein Small Cap Growth Portfolio (Class A)		37,984		91,192
AllianceBernstein Technology Portfolio (Class A)		1		181
AllianceBernstein Total Return Portfolio (Class A)		1		177
AllianceBernstein U.S. Government/High Grade Securities Portfolio (Class A)		0		151

28

VARIABLE ANNUITY ACCOUNT NINE

OF

AIG SUNAMERICA LIFE ASSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS

4. PURCHASES AND SALES OF INVESTMENTS (continued)

Variable Accounts		Cost of Shares Acquired		Proceeds from Shares Sold
AllianceBernstein Worldwide Privatization Portfolio (Class A)		181,057		9,067
AllianceBernstein Americas Government Income Portfolio (Class B)		8,431,820		4,553,804
AllianceBernstein International Value Portfolio (Class B)		11,021,936		4,423,799
AllianceBernstein Real Estate Investment Portfolio (Class B)	$	6,090,167	$	2,788,691
AllianceBernstein Small Cap Value Portfolio (Class B)		11,083,177		2,861,771
AllianceBernstein Utility Income Portfolio (Class B)		3,302,354		620,044
AllianceBernstein Value Portfolio (Class B)		11,937,922		2,978,636
AllianceBernstein Global Bond Portfolio (Class B)		3,778,494		1,441,241
AllianceBernstein Global Dollar Government Portfolio (Class B)		3,196,806		1,499,240
AllianceBernstein Growth Portfolio (Class B)		8,585,010		1,835,027
AllianceBernstein Growth and Income Portfolio (Class B)		28,697,934		9,808,954
AllianceBernstein High Yield Portfolio (Class B)		7,913,579		3,493,260
AllianceBernstein International Portfolio (Class B)		4,477,647		1,202,454
AllianceBernstein Money Market Portfolio (Class B)		31,211,926		31,586,306
AllianceBernstein Premier Growth Portfolio (Class B)		9,375,661		4,229,109
AllianceBernstein Small Cap Growth Portfolio (Class B)		5,043,153		1,517,205
AllianceBernstein Technology Portfolio (Class B)		3,570,727		1,045,917
AllianceBernstein Total Return Portfolio (Class B)		23,288,330		5,088,977
AllianceBernstein U.S. Government/High Grade Securities Portfolio (Class B)		9,345,647		4,599,745
AllianceBernstein U.S. Large Cap Blended Style Portfolio (Class B)		8,035,806		1,412,535
AllianceBernstein Worldwide Privatization Portfolio (Class B)		3,473,108		1,105,982
AllianceBernstein Wealth Appreciation Strategy Portfolio (Class B)*		9,993,357		435,082
AllianceBernstein Balanced Wealth Strategy Portfolio (Class B)*		17,697,931		820,665

* For the period from July 1, 2004 (inception) to December 31, 2004

29

VARIABLE ANNUITY ACCOUNT NINE

OF

AIG SUNAMERICA LIFE ASSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS

5. UNIT VALUES

A summary of unit values and units outstanding for the variable accounts and the expense ratios, excluding expenses of the underlying funds, total return and investment income ratios for the periods ended December 31, 2004, 2003 and 2002, follows:

	At December 31			For the Year Ended December 31
Year	Units	Unit Fair Value Lowest to Highest ($) (4)	Net Assets ($)	Expense Ratio Lowest to Highest (1)	Investment Income Ratio (2)	Total Return Lowest to Highest (3)
AllianceBernstein Americas Government Income Portfolio (Class A)
2004 2003 2002	78,848 97,579 32,196	11.63 11.28 10.51 to 10.68	917,137 1,100,229 343,745	1.65% 0.25% to 1.65% 0.25% to 1.65%	2.22% 6.96% 0.01%	3.16% 5.61% to 7.32% 5.07% (6) to 6.77% (5)
AllianceBernstein International Value Portfolio (Class A)
2004 2003 2002	73,487 41,243 21,149	14.38 11.68 to 14.00 8.23 to 9.70	1,057,089 481,774 173,977	1.65% 0.25% to 1.65% 0.25% to 1.65%	0.46% 0.34% 0.00%	23.15% 42.01% to 44.35% -17.75% (5) to 0.86% (6)
AllianceBernstein Real Estate Investment Portfolio (Class A)
2004 2003 2002	57,507 80,369 30,605	16.89 12.66 to 14.60 9.24 to 10.48	971,266 1,017,516 282,788	1.65% 0.25% to 1.65% 0.25% to 1.65%	1.68% 1.75% 0.00%	33.41% 37.03% to 39.31% -7.61% (5) to 0.78% (6)
AllianceBernstein Small Cap Value Portfolio (Class A)
2004 2003 2002	104,889 108,773 64,697	13.81 11.77 to 15.15 8.47 to 10.73	1,448,803 1,280,342 548,059	1.65% 0.25% to 1.65% 0.25% to 1.65%	0.19% 0.55% 0.00%	17.35% 38.96% to 41.20% -15.29% (5) to 4.07% (6)
AllianceBernstein Utility Income Portfolio (Class A)
2004 2003 2002	46,222 27,441 12,462	12.97 10.61 to 13.52 9.00 to 11.28	599,658 291,159 112,146	1.65% 0.25% to 1.65% 0.25% to 1.65%	1.57% 3.14% 0.01%	22.30% 17.93% to 19.84% -10.04% (5) to 4.04% (6)
AllianceBernstein Value Portfolio (Class A)(11)
2004 2003 2002	—   17 17	—   14.11 10.95	—   239 187	—   0.25% 0.25%	—   0.97% 0.00%	—   28.84% 4.03% (6)
AllianceBernstein Global Bond Portfolio (Class A)
2004 2003 2002	17,242 16,380 8,382	13.29 11.81 to 12.32 10.43 to 11.06	229,082 201,797 92,678	1.65% 0.25% to 1.65% 0.25% to 1.65%	5.96% 5.20% 0.00%	7.84% 11.41% to 13.22% 7.03% (6) to 10.58% (5)
AllianceBernstein Global Dollar Government Portfolio (Class A)
2004 2003 2002	22,863 19,387 6,185	14.95 13.80 to 14.94 10.51 to 11.21	341,691 267,514 65,032	1.65% 0.25% to 1.65% 0.25% to 1.65%	5.37% 5.86% 0.03%	8.32% 31.24% to 33.36% 5.14% (5) to 16.99% (6)

30

VARIABLE ANNUITY ACCOUNT NINE

OF

AIG SUNAMERICA LIFE ASSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS

5. UNIT VALUES (Continued)

	At December 31				For the Year Ended December 31
Year	Units		Unit Fair Value Lowest to Highest ($) (4)	Net Assets ($)	Expense Ratio Lowest to Highest (1)	Investment Income Ratio (2)	Total Return Lowest to Highest (3)
AllianceBernstein Growth Portfolio (Class A)(11)
2004     2003     2002	—   14 14		—   14.31 10.60	—   202 151	—   0.25% 0.25%	—   0.00% 0.00%	—   35.05% 2.07% (6)
AllianceBernstein Growth and Income Portfolio (Class A) (11)
2004     2003     2002	—   14 14		—   14.03 10.59	—   198 151	—   0.25% 0.25%	—   1.17% 0.00%	—   32.44% 2.46% (6)
AllianceBernstein High-Yield Portfolio (Class A)
2004     2003     2002		53,518 91,395 11,377	12.37 11.65 to 12.96 9.67 to 10.59	662,103 1,064,614 110,029	1.65% 0.25% to 1.65% 0.25% to 1.65%	6.42% 5.31% 0.02%	6.21% 20.46% to 22.42% -3.30% (5) to 8.58%(6)
AllianceBernstein International Portfolio (Class A)
2004     2003     2002		34,866 30,765 21,816	12.40 10.72 to 12.97 8.28 to 9.86	432,391 329,806 180,675	1.65% 0.25% to 1.65% 0.25% to 1.65%	0.26% 0.13% 0.00%	15.69% 29.45% to 31.62% -17.19% (5) to 3.01% (6)
AllianceBernstein Money Market Portfolio (Class A)(11)
2004     2003     2002		—   14 14	—   10.08 10.02	—   142 143	—   0.25% 0.25%	—   0.70% 0.00%	—   0.57% 0.18% (6)
AllianceBernstein Premier Growth Portfolio (Class A)(11)
2004     2003     2002		—   14 14	—   12.92 10.45	—   183 149	—   0.25% 0.25%	—   0.00% 0.00%	—   23.71% 0.17% (6)
AllianceBernstein Small Cap Growth Portfolio (Class A)
2004     2003     2002		50,435 54,360 29,734	12.63 11.21 to 15.09 7.65 to 10.13	637,200 609,561 227,650	1.65% 0.25% to 1.65% 0.25% to 1.65%	0.00% 0.00% 0.00%	12.68% 46.47% to 48.90% -23.45% (5) to 1.49% (6)
AllianceBernstein Technology Portfolio (Class A) (11)
2004     2003     2002		—   14 14	—   13.40 9.30	—   189 132	—   0.25% 0.25%	—   0.00% 0.00%	—   44.11% 0.40% (6)

31

VARIABLE ANNUITY ACCOUNT NINE

OF

AIG SUNAMERICA LIFE ASSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS

5. UNIT VALUES (Continued)

	At December 31			For the Year Ended December 31
Year	Units	Unit Fair Value Lowest to Highest ($) (4)	Net Assets ($)	Expense Ratio Lowest to Highest (1)	Investment Income Ratio (2)	Total Return Lowest to Highest (3)
AllianceBernstein Total Return Portfolio (Class A) (11)
2004     2003     2002	—   14 14	—   12.56 10.55	—   177 150	—   0.25% 0.25%	—   2.47% 0.00%	—   18.98% 4.08% (6)
AllianceBernstein U.S. Government/High Grade Securities Portfolio (Class A)(11)
2004     2003     2002	—   14 14	—   10.87 10.47	—   154 149	—   0.25% 0.25%	—   2.64% 0.00%	—   3.82% 4.94% (6)
AllianceBernstein Worldwide Privatization Portfolio (Class A)
2004     2003     2002	22,138 8,342 6,703	15.21 12.44 to 14.13 8.82 to 9.85	336,775 103,838 59,123	1.65% 0.25% to 1.65% 0.25% to 1.65%	0.14% 1.13% 0.01%	22.24% 41.12% to 43.40% -11.82% (5) to 2.59% (6)
AllianceBernstein Americas Government Income Portfolio (Class B)
2004     2003     2002	513,866 327,417 12,989	11.58 to 19.80 11.27 to 19.19 18.13 to 18.15	9,395,876 5,698,466 235,654	1.40% to 1.75% 1.40% to 1.65% 1.40% to 1.60%	4.33% 4.17% 0.00%	3.22% to 3.71%(9)(12) 1.82% (8) to 5.71% 2.32% (7) to 4.16% (6)
AllianceBernstein International Value Portfolio (Class B)
2004     2003     2002	1,213,119 699,881 34,428	14.30 to 15.94 11.66 to 12.94 9.09 to 9.11	18,894,736 8,950,815 313,240	1.40% to 1.75% 1.40% to 1.65% 1.40% to 1.60%	0.41% 0.15% 0.00%	19.62%(12) to 23.16% 34.12% (8) to 42.10% -1.88% (7) to -0.25% (6)
AllianceBernstein Real Estate Investment Portfolio (Class B)
2004     2003     2002	486,517 292,051 12,427	16.79 to 22.83 12.65 to 17.11 12.48	10,458,724 4,746,663 155,110	1.40% to 1.75% 1.40% to 1.65% 1.40% to 1.60%	2.01% 1.18% 0.00%	33.40% to 36.54%(9)(12) 29.03% (8) to 37.11% -1.12% (7) to -0.29% (6)
AllianceBernstein Small Cap Value Portfolio (Class B)
2004     2003     2002	1,475,577 900,473 65,664	13.73 to 16.63 11.75 to 14.16 10.17 to 10.19	23,828,338 12,528,762 669,079	1.40% to 1.75% 1.40% to 1.65% 1.40% to 1.60%	0.08% 0.31% 0.00%	15.37%(12) to 17.42% 36.21% (8) to 38.95% -0.16% (7) to 2.96% (6)
AllianceBernstein Utility Income Portfolio (Class B)
2004     2003     2002	339,625 175,085 2,732	12.90 to 20.79 10.59 to 17.00 14.36 to 14.41	6,515,588 2,802,320 39,320	1.40% to 1.75% 1.40% to 1.65% 1.40% to 1.60%	1.83% 1.96% 0.00%	19.63%(12) to 22.30% 16.85% (8) to 18.00% -0.98% (7) to 2.78% (6)

32

VARIABLE ANNUITY ACCOUNT NINE

OF

AIG SUNAMERICA LIFE ASSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS

5. UNIT VALUES (Continued)

	At December 31			For the Year Ended December 31
Year	Units	Unit Fair Value Lowest to Highest ($) (4)	Net Assets ($)	Expense Ratio Lowest to Highest (1)	Investment Income Ratio (2)	Total Return Lowest to Highest (3)
AllianceBernstein Value Portfolio (Class B)
2004     2003     2002	2,359,230 1,532,580 254,350	12.03 to 12.11 (10) 10.83 to 10.87 (10) 8.54 to 8.60	28,535,952 16,593,446 2,177,267	1.40% to 1.75% 1.40% to 1.65% 1.40% to 1.65%	0.86% 0.53% 0.00%	10.17%(12) to 11.80% 26.37% to 26.69% -14.01% (5) to 3.07% (6)
AllianceBernstein Global Bond Portfolio (Class B)
2004     2003     2002	346,017 210,760 27,005	13.19 to 18.51 12.29 to 17.16 15.33 to 15.39	6,018,887 3,522,061 414,313	1.40% to 1.75% 1.40% to 1.65% 1.40% to 1.60%	5.45% 8.62% 0.00%	7.82% to 10.37%(9)(12) 7.04% (8) to 11.53% 3.07% (7) to 5.46% (6)
AllianceBernstein Global Dollar Government Portfolio (Class B)
2004     2003     2002	200,920 118,642 10,486	14.82 to 30.69 13.77 to 28.35 21.48 to 21.56	4,977,466 3,161,606 225,827	1.40% to 1.75% 1.40% to 1.65% 1.40% to 1.60%	7.07% 3.99% 0.00%	8.28% to 12.91%(9)(12) 13.33% (8) to 31.50% 15.39% (6) to 15.45% (7)
AllianceBernstein Growth Portfolio (Class B)
2004     2003     2002	780,560 438,414 49,739	12.23 to 24.60 10.88 to 21.78 8.21 to 16.40	17,058,444 8,467,347 587,822	1.40% to 1.75% 1.40% to 1.65% 1.40% to 1.65%	0.00% 0.00% 0.00%	7.35%(12) to 12.94% 32.51% to 32.85% -17.88% (5) to 0.86% (6)
AllianceBernstein Growth and Income Portfolio (Class B)
2004     2003     2002	2,169,320 1,401,337 174,791	11.79 to 38.29 10.82 to 34.91 8.32 to 26.78	59,091,230 34,973,786 2,111,729	1.40% to 1.75% 1.40% to 1.65% 1.40% to 1.65%	0.72% 0.59% 0.00%	7.01%(12) to 9.68% 30.03% to 30.37% -16.79% (5) to 1.25% (6)
AllianceBernstein High-Yield Portfolio (Class B)
2004     2003     2002	1,141,149 766,636 43,010	10.90 to 12.28(10) 10.27 to 11.64(10) 8.50 to 8.52	12,553,907 7,966,949 366,151	1.40% to 1.75% 1.40% to 1.65% 1.40% to 1.60%	6.18% 4.02% 9.14%	5.34%(12) to 6.13% 9.31% (8) to 20.56% 7.46% (6) to 8.56% (7)
AllianceBernstein International Portfolio (Class B)
2004     2003     2002	462,028 189,999 14,129	12.31 to 14.51 10.70 to 12.53 9.64 to 9.69	6,525,104 2,337,585 136,421	1.40% to 1.75% 1.40% to 1.65% 1.40% to 1.60%	0.19% 0.11% 0.00%	15.78% to 16.24%(9)(12) 29.15%(8) to 29.31% (9) -1.22% (7) to 1.40% (6)
AllianceBernstein Money Market Portfolio (Class B)
2004     2003     2002	787,337 793,252 163,810	9.68 to 12.52 9.81 to 12.64 9.94 to 12.78	9,415,513 9,782,317 2,039,175	1.40% to 1.75% 1.40% to 1.65% 1.40% to 1.65%	0.47% 0.24% 0.30%	-0.95% to-0.85%(9)(12) -1.35% to-1.10% (9) -0.63% (6) to-0.37% (7)

33

VARIABLE ANNUITY ACCOUNT NINE

OF

AIG SUNAMERICA LIFE ASSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS

5. UNIT VALUES (Continued)

	At December 31			For the Year Ended December 31
Year	Units	Unit Fair Value Lowest to Highest ($) (4)	Net Assets ($)	Expense Ratio Lowest to Highest (1)	Investment Income Ratio (2)	Total Return Lowest to Highest (3)
AllianceBernstein Premier Growth Portfolio (Class B)
2004     2003     2002	1,108,343 816,179 90,344	10.58 to 26.09 9.96 to 24.42 8.21 to 20.07	23,314,959 16,365,162 1,279,184	1.40% to 1.75% 1.40% to 1.65% 1.40% to 1.65%	0.00% 0.00% 0.00%	6.84% to 8.05%(9)(12) 21.36% to 21.67% -17.91% (5) to-0.95% (6)
AllianceBernstein Small Cap Growth Portfolio (Class B)
2004     2003     2002	875,143 537,264 21,682	11.84 to 12.57 (10) 10.50 to 11.20 (10) 7.15 to 7.16	10,453,525 5,672,142 155,184	1.40% to 1.75% 1.40% to 1.65% 1.40% to 1.60%	0.00% 0.00% 0.00%	12.13%(12) to 12.80% 38.96% (8) to 46.63% -2.03% (7) to0.19% (6)
AllianceBernstein Technology Portfolio (Class B)
2004     2003     2002	471,463 281,720 25,715	10.72 to 15.29 10.39 to 14.75 7.34 to 10.40	6,826,481 3,926,347 233,241	1.40% to 1.75% 1.40% to 1.65% 1.40% to 1.65%	0.00% 0.00% 0.00%	3.63% to 9.60%(9)(12) 41.45%to 41.81% -26.58% (5) to-1.00% (6)
AllianceBernstein Total Return Portfolio (Class B)
2004     2003     2002	2,037,825 1,157,615 169,341	11.51 to 23.87 10.79 to 22.25 9.24 to 18.99	41,605,523 21,074,879 1,819,314	1.40% to 1.75% 1.40% to 1.65% 1.40% to 1.65%	2.11% 1.84% 9.14%	5.99%(12)to 7.29% 16.84% to 17.15% -7.65% (5) to 2.94% (6)
AllianceBernstein U.S. Government/High Grade Securities Portfolio (Class B)
2004     2003     2002	1,241,230 964,201 119,956	10.84 to 15.82 10.66 to 15.50 10.46 to 15.17	18,378,555 13,960,007 1,490,023	1.40% to 1.75% 1.40% to 1.65% 1.40% to 1.65%	2.64% 2.13% 0.00%	2.08% to 2.27%(9)(12) 1.92% to 2.18% 2.81% (7) to 4.64% (5)
AllianceBernstein U.S. Large Cap Blended Style Portfolio (Class B)
2004     2003     2002	1,125,777 500,626 —	11.50 to 11.63 10.77 to 10.90 —	13,073,820 5,405,316 —	1.40% to 1.75% 0.25% to 1.65% —	0.07% 0.00% —	7.65% to 8.49%(9)(12) 7.72% (8) to 8.98% (8) —
AllianceBernstein Worldwide Privatization Portfolio (Class B)
2004     2003     2002	194,928 60,851 12,168	15.04 to 24.12 12.37 to 19.73 13.89 to 13.98	4,250,880 1,155,308 169,530	1.40% to 1.75% 1.40% to 1.65% 1.40% to 1.60%	0.10% 0.64% 0.00%	19.75% to 22.26%(12) 39.48% (8) to 41.10% (9) -1.18% (7) to 1.02% (6)
AllianceBernstein Wealth Appreciation Strategey (Class B)
2004     2003     2002	974,118 —   —	10.56 to 10.60 —   —	10,308,032 —   —	1.40% to 1.75% —   —	0.00% —   —	5.63%(13) to 5.99%(13) —   —

34

VARIABLE ANNUITY ACCOUNT NINE

OF

AIG SUNAMERICA LIFE ASSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS

5. UNIT VALUES (Continued)

	At December 31			For the Year Ended December 31
Year	Units	Unit Fair Value Lowest to Highest ($) (4)	Net Assets ($)	Expense Ratio Lowest to Highest (1)	Investment Income Ratio (2)	Total Return Lowest to Highest (3)
AllianceBernstein Balanced Wealth Strategy Portfolio (Class B)
2004 2003 2002	1,677,266 —   —	10.55 to 10.57 —   —	17,719,108 —   —	1.40% to 1.75% —   —	0.00% —   —	5.50%(13) to 5.74%(13) —   —

(1) These amounts represent the annualized contract expenses of the variable account, consisting primarily of mortality and expense charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit values. Charges made directly to contract owner accounts through the redemption of units and expenses of the underlying investment portfolios have been excluded. For additional information on charges and deductions see footnote 3.

(2) These amounts represent the dividends, excluding distributions of capital gains, received by the variable account from the underlying investment portfolio, net of management fees assessed by the portfolio manager, divided by the average net assets. These ratios exclude those expenses, such as mortality and expense charges, that are assessed against contract owner accounts either through reductions in the unit values or the redemption of units. The recognition of investment income by the variable account is affected by the timing of the declaration of dividends by the underlying investment portfolio in which the variable account invests.

(3) These amounts represent the total return for the periods indicated, including changes in the value of the underlying fund, and expenses assessed through the reduction of unit values. These ratios do not include any expenses assessed through the redemption of units. Investment options with a date notation indicate the effective date of that investment option in the variable account. The total return is calculated for each period indicated or from the effective date through the end of the reporting period. In 2003, the Separate Account adopted SOP 03-5, Financial Highlights of Separate Accounts: An Amendment to the Audit and Accounting Guide Audits of Investment Companies (the “SOP”). In accordance with the SOP, the total return range is presented as a range of minimum to maximum values, based on the product grouping representing the minimum and maximum expense ratio. As such, some individual contract total returns are not within the range presented due to a variable account being added to a product during the year. Prior to 2003, the total return range of minimum and maximum values was calculated independently of the product groupings that produced the lowest and highest expense ratio.

(4) In 2003, in accordance with the SOP, the unit fair value range is presented as a range of minimum to maximum values, based on the product grouping representing the minimum and maximum expense ratio. As such, some individual contract unit values are not within the range presented due to differences in the unit fair value at the products launch date and other market conditions. Prior to 2003, the unit fair value range of minimum and maximum values was calculated independently of the product grouping that produced the lowest and highest expense ratio.

(5) For the period from June 3, 2002 (effective date) to December 31, 2002.

(6) For the period from August 6, 2002 (effective date) to December 31, 2002.

(7) For the period from August 14, 2002 (effective date) to December 31, 2002.

(8) For the period from May 1, 2003 (effective date) to December 31, 2003.

(9) Individual contract total returns are not all within the total return range presented due to a variable account being added to a product during the year.

(10) Individual contract unit fair values are not all within the range presented due to differences in the unit fair value at a product’s launch date and other market conditions.

35

VARIABLE ANNUITY ACCOUNT NINE

OF

AIG SUNAMERICA LIFE ASSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS

5. UNIT VALUES (Continued)

(11) Retained in Variable Annuity Account Nine by AIG SunAmerica Life Assurance Company.

(12) For the period from May 3, 2004 (effective date) to December 31, 2004.

(13) For the period from July 1, 2004 (effective date) to December 31, 2004.

36

PART C — OTHER INFORMATION

Item 24. Financial Statements and Exhibits

(a) Financial Statements

The following financial statements are included in Part B of the Registration Statement:

The consolidated financial statements of AIG SunAmerica Life Assurance Company at December 31, 2004 and 2003, and for each of the three years in the period ended December 31, 2004.

The financial statements of Variable Annuity Account Nine at December 31, 2004, and for each of the two years in the period ended December 31, 2004.

(b) Exhibits

(1)	Resolutions Establishing Separate Account	*
(2)	Custody Agreements	Not Applicable
(3)	(a)    Form of Distribution Contract	*
	(b)    Form of Selling Agreement	*
(4)	Variable Annuity Contract
	(a)    Group Annuity Certificate	**
	(b)    Individual Annuity Contract	**
	(c)    Annual Ratchet Plan (Optional Death Benefit Endorsement)	**
	(d)    Estate Benefit Plan	*
	(e)    Accidental Death Plan Benefit	*
	(f)     Enhanced Equity Assurance Plan	*
	(g)    Equity Assurance Plan	*
	(h)    IRA Endorsement	*
	(i)     SIMPLE IRA Endorsement	*
	(j)     Tax-Sheltered Annuity Endorsement	*
	(k)    Capital Protector Endorsement	*****
	(l)     Guaranteed Minimum Withdrawal Benefit Endorsement	+
	(m)   Standard Death Benefit Endorsement	+
	(n)    Annual Rachet Plan Endorsement (2004)	+
	(o)    Equity Assurance Plan Endorsement	+
	(p)    Enhanced Equity Assurance Plan Endorsement	+
(5)	Application for Contract
	(a)    Participant Enrollment Form	*
	(b)    Annuity Application	*
(6)	Depositor — Corporate Documents
	(a)    Articles of Incorporation	*
	(a)(1)Restated Articles of Incorporation	****
	(b)    By-Laws	*
(7)	Reinsurance Contract	Not Applicable
(8)	Form of Fund Participation Agreements
	(a)    Alliance Variable Products Series Fund, Inc	*
(9)	Opinion and Consent of Counsel	**
(10)	Consent of Independent Registered Public Accounting Firm	Filed Herewith
(11)	Financial Statements Omitted from Item 23	Not Applicable
(12)	Initial Capitalization Agreement	Not Applicable
(13)	Performance Computations	***
(14)	Diagram and Listing of All Persons Directly or Indirectly Controlled By or
	Under Common Control with AIG SunAmerica, the Depositor of Registrant	Filed Herewith
(15)	Power of Attorney
	(a)    June 2002	**
	(b)    April 2004	******

*	Incorporated by reference to Pre-Effective Amendment No. 1 to File Nos. 333-333-88414 and 811-21096, filed on Form N-4 on May 16, 2002, Accession No. 0001172804-02-000005.
**	Incorporated by reference to Initial Registration Statement to File Nos. 333-90324 and 811-21096, filed Form N-4 on June 12, 2002, Accession No. 0000928389-02-000214.
***	Incorporated by reference to Pre-Effective Amendment No. 1 to File Nos. 333-90324 and 811-21096, filed Form N-4 on December 5, 2002, Accession No. 0000928389-02-000306.
****	Incorporated by reference to Post-Effective Amendment Nos. 16 and 17 to File Nos. 033-88642 and 811-08874, filed Form N-4 on April 7, 2003, Accession No. 0000950148-03-000786.
*****	Incorporated by reference to Post-Effective Amendment Nos. 4 and 5 to File Nos. 333-90324 and 811-21096, filed Form N-4 on October 20, 2003, Accession No. 0001193125-03-064116.
******	Incorporated by reference to Post-Effective Amendment Nos. 5 and 6 to File Nos. 333-90324 and 811-21096, filed Form N-4 on February 24, 2004, Accession No. 0001193125-04-028761.
+	Incorporated by reference to Post-Effective Amendment Nos. 7 and 8 to File Nos. 333-90324 and 811-21096, filed on April 19, 2004, Accession No. 0001193125-04-064649.

Item 25. Directors and Officers of the Depositor

The officers and directors of AIG SunAmerica Life Assurance Company are listed below. Their principal business address is 1 SunAmerica Center, Los Angeles, California 90067-6022, unless otherwise noted.

NAME	POSITION
Jay S. Wintrob	Director, Chief Executive Officer
Jana W. Greer*	Director and President
James R. Belardi	Director and Senior Vice President
Marc H. Gamsin	Director and Senior Vice President
N. Scott Gillis*	Director, Senior Vice President and Chief Financial Officer
Gregory M. Outcalt	Senior Vice President
Edwin R. Raquel*	Senior Vice President and Chief Actuary
Christine A. Nixon	Senior Vice President and Secretary
Stewart R. Polakov*	Senior Vice President and Controller
Michael J. Akers**	Senior Vice President
Mallary L. Reznik	Vice President
Edward T. Texeria*	Vice President
Stephen Stone*	Vice President
Virginia N. Puzon	Assistant Secretary

* 21650 Oxnard Street, Woodland Hills, CA 91367

** 2919 Allen Parkway, Houston, TX 77019

Item 26. Persons Controlled By or Under Common Control With Depositor or Registrant

The Registrant is a separate account of AIG SunAmerica Life (Depositor). Depositor is a subsidiary of American International Group, Inc. (“AIG”). 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 filed herewith. An organizational chart can be found in the Company’s Form 10-K, SEC file number 811-21039, accession number 0000950148-05-000049, filed April 18, 2005. An organization chart for AIG can also be found in Form 10K, SEC file number 001-08787, accession number 0000950123-04-00330, filed March 15, 2004. That organization chart is current as of December 2003. As of the date of this filing, AIG has not yet filed its 2004 Form 10-K.

Item 27. Number of Contract owners

As of February 28, 2005, the number of AllianceBernstein Ovation Plus contracts funded by Variable Annuity Account Nine was 412 of which 172 were qualified contracts and 240 were non-qualified contracts.

Item 28. Indemnification

Section 10-851 of the Arizona Corporations and Associations law permits the indemnification of directors, officers, employees and agents of Arizona corporations. Article Eight of the Company’s Restated Articles of Incorporation, as amended and restated (the “Articles”) and Article Five of the Company’s By-Laws (“By-Laws”) authorize the indemnification of directors and officers to the full extent required or permitted by the Laws of the State of Arizona, now or hereafter in force, whether such persons are serving the Company, or, at its request, any other entity, which indemnification shall include the advance of expenses under the procedures and to the full extent permitted by law. In addition, the Company’s officers and directors are covered by certain directors’ and officers’ liability insurance policies maintained by the Company’s parent. Reference is made to section 10-851 of the Arizona Corporations and Associations Law, Article Eight of the Articles, and Article Five of the By-Laws, which are incorporated herein by reference.

Additionally, pursuant to the Distribution Agreement filed as Exhibit 3(a) to this Registration Statement, Depositor has agreed to indemnify and hold harmless AIG SunAmerica Capital Services, Inc. (“Distributor”) for damages and expenses arising out of (1) any untrue statement or alleged untrue statement of a material fact contained in materials prepared by Depositor in conjunction with the offer and sale of the contracts, or (2) Depositor’s failure to comply with applicable law or other material breach of the Distribution Agreement. Likewise, the Distributor has agreed to indemnify and hold harmless Depositor and its affiliates, including its officers, directors and the separate account, for damages and expenses arising out of any untrue statement or alleged untrue statement of a material fact contained in materials prepared by Distributor in conjunction with the offer and sale of the contracts, or Distributor’s failure to comply with applicable law or other material breach of the Distribution Agreement.

Pursuant to the Selling Agreement, a form of which is filed as Exhibit 3(b) to this Registration Statement, Depositor and Distributor are generally indemnified by selling broker/dealers firms from wrongful conduct or omissions in conjunction with the sale of the contracts.

Item 29 Principal Underwriter

(a) AIG SunAmerica Capital Services, Inc. acts as distributor for the following investment companies:

AIG SunAmerica Life Assurance Company - Variable Separate Account

AIG SunAmerica Life Assurance Company - Variable Annuity Account One

AIG SunAmerica Life Assurance Company - Variable Annuity Account Seven

AIG SunAmerica Life Assurance Company - Variable Annuity Account Nine

First SunAmerica Life Insurance Company - FS Variable Separate Account

First SunAmerica Life Insurance Company - FS Variable Annuity Account One

First SunAmerica Life Insurance Company - FS Variable Annuity Account Two

First SunAmerica Life Insurance Company - FS Variable Annuity Account Five

First SunAmerica Life Insurance Company - FS Variable Annuity Account Nine

Presidential Life Insurance Company - Variable Account One

Anchor Series Trust

Seasons Series Trust

SunAmerica Series Trust

SunAmerica Equity Funds issued by AIG SunAmerica Asset Management Corp. (AIG SAAMCo)

SunAmerica Income Funds issued by AIG SAAMCo

SunAmerica Money Market Funds, Inc. issued by AIG SAAMCo

SunAmerica Senior Floating Rate Fund, issued by AIG SAAMCo

SunAmerica Strategic Investment Series, Inc. issued by AIG SAAMCo

SunAmerica Style Select Series, Inc. issued by AIG SAAMCo

VALIC Company I and

VALIC Company II

(b) Directors, Officers and principal place of business:

Officer/Directors*	Position
Peter A. Harbeck	Director
J. Steven Neamtz	Director, President & Chief Executive Officer
Debbie Potash-Turner	Senior Vice President, Chief Financial Officer & Controller
John T. Genoy	Vice President
James Nichols	Vice President
Thomas Lynch	Chief Compliance Officer
Christine A. Nixon**	Secretary
Virginia N. Puzon**	Assistant Secretary

* Unless otherwise indicated, the principal business address of AIG SunAmerica Capital Services, Inc. and of each of the above individuals is Harborside Financial Center, 3200 Plaza 5, Jersey City, New Jersey 07311.

** Principal business address is 1 SunAmerica Center, Los Angeles, California 90067.

(c) AIG SunAmerica Capital Services, Inc. retains no compensation or commissions from the Registrant.

(c) Not Applicable.

Item 30. Location of Accounts and Records

All of the accounts, books, records or other documents required to be kept by Section 31(a) of the investment Company Act of 1940 and its rules are maintained by Depositor at 21650 Oxnard Ave., Woodland Hills, California 91367 or its record keeper, Delaware Valley Financial Services, LLC, P.O. Box 3031, Berwyn, PA 19312-0031, which provides certain servicing for the Depositor.

Item 31. Management Services

Not Applicable.

Item 32. Undertakings

Registrant undertakes to: (a) 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; (b) include either (1) 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 (2) 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 (c) 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.

The Registrant hereby represents that it is relying on the No-Action Letter issued by the Division of Investment Management to the American Council of Life Insurance dated November 28, 1988 (Commission Ref. No. IP-6-88). Registrant has complied with conditions one through four on the No-Action Letter.

The Registrant and its Depositor are relying upon Rule 6c-7 of the Investment Company Act of 1940 with respect to annuity contracts offered as funding vehicles to participants in the Texas Optional Retirement Program, and the provisions of Paragraphs (a) – (d) of the Rule have been complied with.

Insofar as indemnification for liability arising under the Securities Act of 1933 (“Act”) may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

The Depositor represents that the fees and charges to be deducted under the variable annuity contract described in the prospectus contained in this registration statement are, in the aggregate, reasonable in relation to the services rendered, the expenses expected to be incurred, and the risks assumed in connection with the contract.

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(b) for effectiveness of this Registration Statement and has caused this Post-Effective Amendment Nos. 8 and 9; File Nos. 333-90324 and 811-21096, to be signed on its behalf, in the City of Los Angeles, and the State of California, on this 25^th day of April, 2005.

Variable Annuity Account Nine
(Registrant)
By:	AIG SUNAMERICA LIFE ASSURANCE COMPANY
By:	/s/ JAY S. WINTROB
	Jay S. Wintrob, Chief Executive Officer
By:	AIG SUNAMERICA LIFE ASSURANCE COMPANY (Depositor)
By:	/s/ JAY S. WINTROB
	Jay S. Wintrob, Chief Executive Officer

As required by the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

SIGNATURE	TITLE	DATE
JAY S. WINTROB* Jay S. Wintrob	Chief Executive Officer, & Director (Principal Executive Officer)	April 25, 2005
JAMES R. BELARDI* James R. Belardi	Director	April 25, 2005
MARC H. GAMSIN* Marc H. Gamsin	Director	April 25, 2005
N. SCOTT GILLIS* N. Scott Gillis	Senior Vice President, Chief Financial Officer & Director (Principal Financial Officer)	April 25, 2005
JANA W. GREER* Jana W. Greer	Director	April 25, 2005
STEWART R. POLAKOV* Stewart R. Polakov	Senior Vice President & Controller (Principal Accounting Officer)	April 25, 2005
* By: /s/ MALLARY L. REZNIK Mallary L. Reznik Attorney-In-Fact		April 25, 2005

EXHIBIT INDEX

EXHIBIT NO.	DESCRIPTION
(10)	Consent of Independent Registered Public Accounting Firm
(14)	Diagram and Listing of All Persons Directly or Indirectly Controlled by or Under Common owner Control with AIG SunAmerica Life Assurance Company, the Depositor of Registrant