Separate Account A

The Variable Annuity Life Insurance Company

2020

Annual Report

December 31, 2020

Report of Independent Registered Public Accounting Firm

To the Board of Directors of The Variable Annuity Life Insurance Company and The Variable Annuity Life Insurance Company Contract Owners of Separate Account A.

Opinions on the Financial Statements

We have audited the accompanying statements of assets and liabilities, including the schedules of portfolio investments, of each of the sub-accounts of The Variable Annuity Life Insurance Company Separate Account A (“Separate Account A”) indicated in the table below as of December 31, 2020, and the related statements of operations and changes in net assets for each of the two years in the period then ended or each of the periods indicated in the table below, including the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of each of the sub-accounts of the Separate Account A as of December 31, 2020, and the results of each of their operations and the changes in each of their net assets for the two years in the period then ended or each of the periods indicated in the table below, in conformity with accounting principles generally accepted in the United States of America.

American Beacon Bridgeway Large Cap Growth Fund Investor Class	AST SA Wellington Government and Quality Bond Portfolio Class 3
AST SA BlackRock Multi-Asset Income Portfolio Class 3 (1) (3)	AST SA Wellington Strategic Multi-Asset Portfolio Class 3
AST SA PGI Asset Allocation Portfolio Class 3	Ariel Fund Investor Class
AST SA Wellington Capital Appreciation Portfolio Class 3	FTVIP Franklin Income VIP Fund Class 2
Ariel Appreciation Fund Investor Class	Invesco V.I. Comstock Fund Series II
FTVIP Franklin Allocation VIP Fund Class 2	Invesco V.I. Growth and Income Fund Series II
Goldman Sachs VIT Government Money Market Fund Service Shares	PIMCO Total Return Portfolio Institutional Class (4)
Invesco V.I. American Franchise Fund Series II	SST SA Allocation Moderate Portfolio Class 3
Invesco V.I. Balanced-Risk Commodity Strategy Fund Class R5	SST SA Putnam Asset Allocation Diversified Growth Portfolio Class 3
Lord Abbett Growth and Income Portfolio Class VC	SST SA Wellington Real Return Portfolio Class 3
PIMCO Emerging Markets Bond Portfolio Advisor Class (2)	SAST SA Invesco Main Street Large Cap Portfolio Class 3
PIMCO Total Return Portfolio Advisor Class	SAST SA Invesco VCP Equity-Income Portfolio Class 3
SST SA Allocation Balanced Portfolio Class 3	SAST SA Janus Focused Growth Portfolio Class 3
SST SA Allocation Growth Portfolio Class 3	SAST SA JPMorgan Diversified Balanced Portfolio Class 3
SST SA Allocation Moderate Growth Portfolio Class 3	SAST SA JPMorgan Emerging Markets Portfolio Class 3
SAST SA AB Growth Portfolio Class 3	SAST SA JPMorgan Equity-Income Portfolio Class 3
SAST SA AB Small & Mid Cap Value Portfolio Class 3	SAST SA JPMorgan Global Equities Portfolio Class 3
SAST SA American Funds Asset Allocation Portfolio Class 3	SAST SA JPMorgan MFS Core Bond Portfolio Class 3
SAST SA American Funds Global Growth Portfolio Class 3	SAST SA JPMorgan Mid-Cap Growth Portfolio Class 3
SAST SA American Funds Growth Portfolio Class 3	SAST SA Large Cap Growth Index Portfolio Class 3
SAST SA American Funds Growth-Income Portfolio Class 3	SAST SA Large Cap Index Portfolio Class 3
SAST SA American Funds VCP Managed Allocation Portfolio Class 3	SAST SA Large Cap Value Index Portfolio Class 3
SAST SA BlackRock Multi-Factor 70/30 Portfolio Class 3 (2)	SAST SA Legg Mason BW Large Cap Value Portfolio Class 3
SAST SA BlackRock VCP Global Multi Asset Portfolio Class 3	SAST SA Legg Mason Tactical Opportunities Class 3
SAST SA Columbia Technology Portfolio Class 3	SAST SA MFS Blue Chip Growth Portfolio Class 3

SAST SA DFA Ultra Short Bond Portfolio Class 3	SAST SA MFS Massachusetts Investors Trust Portfolio Class 3
SAST SA Dogs of Wall Street Portfolio Class 3	SAST SA MFS Total Return Portfolio Class 3
SAST SA Emerging Markets Equity Index Portfolio Class 3	SAST SA Mid Cap Index Portfolio Class 3
SAST SA Federated Hermes Corporate Bond Portfolio Class 3	SAST SA Morgan Stanley International Equities Portfolio Class 3
SAST SA Fidelity Institutional AM® International Growth Class 1 (4)	SAST SA PIMCO VCP Tactical Balanced Portfolio Class 3
SAST SA Fidelity Institutional AM® International Growth Class 3	SAST SA PineBridge High-Yield Bond Portfolio Class 3
SAST SA Fidelity Institutional AM® Real Estate Portfolio Class 3	SAST SA Putnam International Growth and Income Portfolio Class 3
SAST SA Fixed Income Index Portfolio Class 3	SAST SA Schroders VCP Global Allocation Portfolio Class 3
SAST SA Fixed Income Intermediate Index Portfolio Class 3	SAST SA Small Cap Index Portfolio Class 3
SAST SA Franklin Small Company Value Portfolio Class 3	SAST SA T. Rowe Price Asset Allocation Growth Portfolio Class 3
SAST SA Franklin U.S. Equity Smart Beta Portfolio Class 1 (4)	SAST SA T. Rowe Price VCP Balanced Portfolio Class 3
SAST SA Franklin U.S. Equity Smart Beta Portfolio Class 3 (4)	SAST SA Templeton Foreign Value Portfolio Class 3
SAST SA Global Index Allocation 60/40 Portfolio Class 3	SAST SA VCP Dynamic Allocation Portfolio Class 3
SAST SA Global Index Allocation 75/25 Portfolio Class 3	SAST SA VCP Dynamic Strategy Portfolio Class 3
SAST SA Global Index Allocation 90/10 Portfolio Class 3	SAST SA VCP Index Allocation Portfolio Class 3
SAST SA Goldman Sachs Global Bond Portfolio Class 3	SAST SA WellsCap Aggressive Growth Portfolio Class 3
SAST SA Goldman Sachs Multi-Asset Insights Portfolio Class 3	T Rowe Price Retirement 2040 Advisor Class
SAST SA Index Allocation 60/40 Portfolio Class 3	T Rowe Price Retirement 2045 Advisor Class
SAST SA Index Allocation 80/20 Portfolio Class 3	T Rowe Price Retirement 2050 Advisor Class
SAST SA Index Allocation 90/10 Portfolio Class 3	T Rowe Price Retirement 2055 Advisor Class
SAST SA International Index Portfolio Class 3	T Rowe Price Retirement 2060 Advisor Class
SAST SA Invesco Growth Opportunities Portfolio Class 3	VALIC Company I International Socially Responsible Fund
T Rowe Price Retirement 2015 Advisor Class	VALIC Company I International Value Fund
T Rowe Price Retirement 2020 Advisor Class	VALIC Company I Large Cap Core Fund
T Rowe Price Retirement 2025 Advisor Class	VALIC Company I Large Capital Growth Fund
T Rowe Price Retirement 2030 Advisor Class	VALIC Company I Mid Cap Index Fund
T Rowe Price Retirement 2035 Advisor Class	VALIC Company I Mid Cap Strategic Growth Fund
VALIC Company I Asset Allocation Fund	VALIC Company I Nasdaq-100 Index Fund
VALIC Company I Blue Chip Growth Fund	VALIC Company I Science & Technology Fund
VALIC Company I Capital Conservation Fund	VALIC Company I Small Cap Aggressive Growth Fund
VALIC Company I Core Equity Fund	VALIC Company I Small Cap Fund
VALIC Company I Dividend Value Fund	VALIC Company I Small Cap Index Fund
VALIC Company I Dynamic Allocation Fund	VALIC Company I Small Cap Special Values Fund
VALIC Company I Emerging Economies Fund	VALIC Company I Small Mid Growth Fund
VALIC Company I Global Real Estate Fund	VALIC Company I Stock Index Fund
VALIC Company I Global Strategy Fund	VALIC Company I Systematic Core Fund
VALIC Company I Government Money Market I Fund	VALIC Company I Systematic Value Fund
VALIC Company I Government Securities Fund	VALIC Company I Value Fund
VALIC Company I Growth Fund	VALIC Company II Mid Cap Growth Fund
VALIC Company I Health Sciences Fund	VALIC Company II Mid Cap Value Fund
VALIC Company I Inflation Protected Fund	VALIC Company II Moderate Growth Lifestyle Fund
VALIC Company I International Equities Index Fund	VALIC Company II Small Cap Growth Fund
VALIC Company I International Government Bond Fund	VALIC Company II Small Cap Value Fund
VALIC Company I International Growth Fund	VALIC Company II Strategic Bond Fund
VALIC Company II Aggressive Growth Lifestyle Fund	VALIC Company II U.S. Socially Responsible Fund

2

VALIC Company II Capital Appreciation Fund	Vanguard Long-Term Treasury Fund Investor Shares
VALIC Company II Conservative Growth Lifestyle Fund	Vanguard Wellington Fund Investor Shares
VALIC Company II Core Bond Fund	Vanguard Windsor II Fund Investor Shares
VALIC Company II Government Money Market II Fund	Vanguard LifeStrategy Conservative Growth Fund Investor Shares
VALIC Company II High Yield Bond Fund	Vanguard LifeStrategy Growth Fund Investor Shares
VALIC Company II International Opportunities Fund	Vanguard LifeStrategy Moderate Growth Fund Investor Shares
VALIC Company II Large Cap Value Fund	Vanguard Long-Term Investment-Grade Fund Investor Shares

(1)	For the period January 1, 2019 to December 31, 2019 and January 1, 2020 to January 31, 2020 (cessation of operations).
(2)	For the period October 13, 2020 (commencement of operations) to December 31, 2020.
(3)	Where there was a cessation of operations, only a statement of operations and changes in net assets is included for the respective periods presented.
(4)	There is no respective statement of assets and liabilities and statement of operations and changes in net assets, since there was no activity for the periods presented.

Basis for Opinions

These financial statements are the responsibility of The Variable Annuity Life Insurance Company management. Our responsibility is to express an opinion on the financial statements of each of the sub-accounts of Separate Account A based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to each of the sub-accounts of Separate Account A in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of investments owned as of December 31, 2020 by correspondence with the transfer agents of the investee mutual funds and the custodians. We believe that our audits provide a reasonable basis for our opinions.

/s/ PricewaterhouseCoopers LLP

Houston, Texas

April 23, 2021

We have served as the auditor of one or more of the sub-accounts of The Variable Annuity Life Insurance Company since at least 1994. We have not been able to determine the specific year we began serving as auditor.

3

SEPARATE ACCOUNT A

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2020

Sub-accounts	Investments at Fair Value		Due from (to) General Account, Net			Net Assets		Contract Owners - Annuity Reserves		Contract Owners - Accumulation Reserves		Net Assets Attributable to Contract Owner Reserves
American Beacon Bridgeway Large Cap Growth Fund Investor Class	$	78,189,024	$	(4,204	)	$	78,184,820	$	11,115	$	78,173,705	$	78,184,820
AST SA PGI Asset Allocation Portfolio Class 3		96,398		-			96,398		-		96,398		96,398
AST SA Wellington Capital Appreciation Portfolio Class 3		5,483,895		-			5,483,895		-		5,483,895		5,483,895
AST SA Wellington Government and Quality Bond Portfolio Class 3		6,959,679		-			6,959,679		-		6,959,679		6,959,679
AST SA Wellington Strategic Multi-Asset Portfolio Class 3		2,188,843		-			2,188,843		-		2,188,843		2,188,843
Ariel Appreciation Fund Investor Class		266,205,979		34,721			266,240,700		321,191		265,919,509		266,240,700
Ariel Fund Investor Class		367,797,555		(20,030	)		367,777,525		178,644		367,598,881		367,777,525
FTVIP Franklin Allocation VIP Fund Class 2		565,486		-			565,486		-		565,486		565,486
FTVIP Franklin Income VIP Fund Class 2		4,992,944		-			4,992,944		-		4,992,944		4,992,944
Goldman Sachs VIT Government Money Market Fund Service Shares		3,707,724		-			3,707,724		-		3,707,724		3,707,724
Invesco V.I. American Franchise Fund Series II		1,012,451		-			1,012,451		-		1,012,451		1,012,451
Invesco V.I. Balanced-Risk Commodity Strategy Fund Class R5		163,420,017		(4,841	)		163,415,176		33,959		163,381,217		163,415,176
Invesco V.I. Comstock Fund Series II		1,340,865		-			1,340,865		-		1,340,865		1,340,865
Invesco V.I. Growth and Income Fund Series II		1,445,793		-			1,445,793		-		1,445,793		1,445,793
Lord Abbett Growth and Income Portfolio Class VC		416,892		-			416,892		-		416,892		416,892
PIMCO Emerging Markets Bond Portfolio Advisor Class		5,880		-			5,880		-		5,880		5,880
PIMCO Total Return Portfolio Advisor Class		2,818,893		-			2,818,893		-		2,818,893		2,818,893
SST SA Allocation Balanced Portfolio Class 3		3,570,276		-			3,570,276		-		3,570,276		3,570,276
SST SA Allocation Growth Portfolio Class 3		6,046,197		-			6,046,197		-		6,046,197		6,046,197
SST SA Allocation Moderate Growth Portfolio Class 3		5,374,503		-			5,374,503		-		5,374,503		5,374,503
SST SA Allocation Moderate Portfolio Class 3		6,391,311		-			6,391,311		-		6,391,311		6,391,311
SST SA Putnam Asset Allocation Diversified Growth Portfolio Class 3		2,511,577		-			2,511,577		-		2,511,577		2,511,577
SST SA Wellington Real Return Portfolio Class 3		3,920,875		-			3,920,875		-		3,920,875		3,920,875
SAST SA AB Growth Portfolio Class 3		3,551,922		-			3,551,922		-		3,551,922		3,551,922
SAST SA AB Small & Mid Cap Value Portfolio Class 3		1,327,632		-			1,327,632		-		1,327,632		1,327,632
SAST SA American Funds Asset Allocation Portfolio Class 3		61,011,205		-			61,011,205		-		61,011,205		61,011,205
SAST SA American Funds Global Growth Portfolio Class 3		3,185,452		-			3,185,452		-		3,185,452		3,185,452
SAST SA American Funds Growth Portfolio Class 3		8,929,204		-			8,929,204		-		8,929,204		8,929,204
SAST SA American Funds Growth-Income Portfolio Class 3		5,879,480		-			5,879,480		-		5,879,480		5,879,480
SAST SA American Funds VCP Managed Allocation Portfolio Class 3		75,189,138		-			75,189,138		-		75,189,138		75,189,138
SAST SA BlackRock Multi-Factor 70/30 Portfolio Class 3		39,918		-			39,918		-		39,918		39,918
SAST SA BlackRock VCP Global Multi Asset Portfolio Class 3		34,934,269		-			34,934,269		-		34,934,269		34,934,269
SAST SA Columbia Technology Portfolio Class 3		3,284,898		-			3,284,898		-		3,284,898		3,284,898
SAST SA DFA Ultra Short Bond Portfolio Class 3		1,686,378		-			1,686,378		-		1,686,378		1,686,378
SAST SA Dogs of Wall Street Portfolio Class 3		4,019,451		-			4,019,451		-		4,019,451		4,019,451
SAST SA Emerging Markets Equity Index Portfolio Class 3		104,419		-			104,419		-		104,419		104,419
SAST SA Federated Hermes Corporate Bond Portfolio Class 3		6,328,782		-			6,328,782		-		6,328,782		6,328,782
SAST SA Fidelity Institutional AM® International Growth Class 3		24,099		-			24,099		-		24,099		24,099
SAST SA Fidelity Institutional AM® Real Estate Portfolio Class 3		304,179		-			304,179		-		304,179		304,179
SAST SA Fixed Income Index Portfolio Class 3		4,227,984		-			4,227,984		-		4,227,984		4,227,984
SAST SA Fixed Income Intermediate Index Portfolio Class 3		669,775		-			669,775		-		669,775		669,775
SAST SA Franklin Small Company Value Portfolio Class 3		742,234		-			742,234		-		742,234		742,234
SAST SA Global Index Allocation 60/40 Portfolio Class 3		2,339,802		-			2,339,802		-		2,339,802		2,339,802
SAST SA Global Index Allocation 75/25 Portfolio Class 3		2,354,954		-			2,354,954		-		2,354,954		2,354,954
SAST SA Global Index Allocation 90/10 Portfolio Class 3		6,705,266		-			6,705,266		-		6,705,266		6,705,266
SAST SA Goldman Sachs Global Bond Portfolio Class 3		2,771,166		-			2,771,166		-		2,771,166		2,771,166
SAST SA Goldman Sachs Multi-Asset Insights Portfolio Class 3		2,744,191		-			2,744,191		-		2,744,191		2,744,191
SAST SA Index Allocation 60/40 Portfolio Class 3		7,429,714		-			7,429,714		-		7,429,714		7,429,714
SAST SA Index Allocation 80/20 Portfolio Class 3		12,567,691		-			12,567,691		-		12,567,691		12,567,691
SAST SA Index Allocation 90/10 Portfolio Class 3		42,740,274		-			42,740,274		-		42,740,274		42,740,274
SAST SA International Index Portfolio Class 3		349,901		-			349,901		-		349,901		349,901
SAST SA Invesco Growth Opportunities Portfolio Class 3		326,064		-			326,064		-		326,064		326,064
SAST SA Invesco Main Street Large Cap Portfolio Class 3		1,291,782		-			1,291,782		-		1,291,782		1,291,782
SAST SA Invesco VCP Equity-Income Portfolio Class 3		26,933,715		-			26,933,715		-		26,933,715		26,933,715
SAST SA Janus Focused Growth Portfolio Class 3		929,107		-			929,107		-		929,107		929,107
SAST SA JPMorgan Diversified Balanced Portfolio Class 3		2,917,560		-			2,917,560		-		2,917,560		2,917,560
SAST SA JPMorgan Emerging Markets Portfolio Class 3		635,119		-			635,119		-		635,119		635,119
SAST SA JPMorgan Equity-Income Portfolio Class 3		1,624,490		-			1,624,490		-		1,624,490		1,624,490
SAST SA JPMorgan Global Equities Portfolio Class 3		52,735		-			52,735		-		52,735		52,735
SAST SA JPMorgan MFS Core Bond Portfolio Class 3		7,588,526		-			7,588,526		-		7,588,526		7,588,526
SAST SA JPMorgan Mid-Cap Growth Portfolio Class 3		908,072		-			908,072		-		908,072		908,072
SAST SA Large Cap Growth Index Portfolio Class 3		799,299		-			799,299		-		799,299		799,299
SAST SA Large Cap Index Portfolio Class 3		1,256,907		-			1,256,907		-		1,256,907		1,256,907
SAST SA Large Cap Value Index Portfolio Class 3		365,473		-			365,473		-		365,473		365,473
SAST SA Legg Mason BW Large Cap Value Portfolio Class 3		1,145,633		-			1,145,633		-		1,145,633		1,145,633
SAST SA Legg Mason Tactical Opportunities Class 3		625,305		-			625,305		-		625,305		625,305
SAST SA MFS Blue Chip Growth Portfolio Class 3		1,448,812		-			1,448,812		-		1,448,812		1,448,812
SAST SA MFS Massachusetts Investors Trust Portfolio Class 3		1,594,858		-			1,594,858		-		1,594,858		1,594,858
SAST SA MFS Total Return Portfolio Class 3		1,373,906		-			1,373,906		-		1,373,906		1,373,906
SAST SA Mid Cap Index Portfolio Class 3		1,101,640		-			1,101,640		-		1,101,640		1,101,640
SAST SA Morgan Stanley International Equities Portfolio Class 3		995,085		-			995,085		-		995,085		995,085
SAST SA PIMCO VCP Tactical Balanced Portfolio Class 3		32,471,518		-			32,471,518		-		32,471,518		32,471,518
SAST SA PineBridge High-Yield Bond Portfolio Class 3		1,700,887		-			1,700,887		-		1,700,887		1,700,887
SAST SA Putnam International Growth and Income Portfolio Class 3		122,645		-			122,645		-		122,645		122,645
SAST SA Schroders VCP Global Allocation Portfolio Class 3		19,721,639		-			19,721,639		-		19,721,639		19,721,639
SAST SA Small Cap Index Portfolio Class 3		859,617		-			859,617		-		859,617		859,617
SAST SA T. Rowe Price Asset Allocation Growth Portfolio Class 3		3,204,236		-			3,204,236		-		3,204,236		3,204,236

 The accompanying Notes to Financial Statements are an integral part of this statement.

1

SEPARATE ACCOUNT A

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2020

Sub-accounts	Investments at Fair Value		Due from (to) General Account, Net			Net Assets		Contract Owners - Annuity Reserves		Contract Owners - Accumulation Reserves		Net Assets Attributable to Contract Owner Reserves
SAST SA T. Rowe Price VCP Balanced Portfolio Class 3	$	42,654,805	$	-		$	42,654,805	$	-	$	42,654,805	$	42,654,805
SAST SA Templeton Foreign Value Portfolio Class 3		702,566		-			702,566		-		702,566		702,566
SAST SA VCP Dynamic Allocation Portfolio Class 3		89,543,143		-			89,543,143		-		89,543,143		89,543,143
SAST SA VCP Dynamic Strategy Portfolio Class 3		72,493,299		-			72,493,299		-		72,493,299		72,493,299
SAST SA VCP Index Allocation Portfolio Class 3		23,261,161		-			23,261,161		-		23,261,161		23,261,161
SAST SA WellsCap Aggressive Growth Portfolio Class 3		911,088		-			911,088		-		911,088		911,088
T Rowe Price Retirement 2015 Advisor Class		16,017,098		(276	)		16,016,822		-		16,016,822		16,016,822
T Rowe Price Retirement 2020 Advisor Class		41,690,605		(738	)		41,689,867		-		41,689,867		41,689,867
T Rowe Price Retirement 2025 Advisor Class		57,654,801		(1,412	)		57,653,389		-		57,653,389		57,653,389
T Rowe Price Retirement 2030 Advisor Class		59,927,557		(2,125	)		59,925,432		-		59,925,432		59,925,432
T Rowe Price Retirement 2035 Advisor Class		46,456,627		(1,972	)		46,454,655		-		46,454,655		46,454,655
T Rowe Price Retirement 2040 Advisor Class		47,696,688		(2,350	)		47,694,338		-		47,694,338		47,694,338
T Rowe Price Retirement 2045 Advisor Class		37,195,094		(2,034	)		37,193,060		-		37,193,060		37,193,060
T Rowe Price Retirement 2050 Advisor Class		31,473,032		(2,222	)		31,470,810		-		31,470,810		31,470,810
T Rowe Price Retirement 2055 Advisor Class		15,241,295		(2,344	)		15,238,951		-		15,238,951		15,238,951
T Rowe Price Retirement 2060 Advisor Class		11,854,856		(1,184	)		11,853,672		-		11,853,672		11,853,672
VALIC Company I Asset Allocation Fund		147,455,227		(33,675	)		147,421,552		83,633		147,337,919		147,421,552
VALIC Company I Blue Chip Growth Fund		975,354,338		(57,943	)		975,296,395		138,686		975,157,709		975,296,395
VALIC Company I Capital Conservation Fund		227,021,900		(6,035	)		227,015,865		133,232		226,882,633		227,015,865
VALIC Company I Core Equity Fund		266,495,677		(10,290	)		266,485,387		232,546		266,252,841		266,485,387
VALIC Company I Dividend Value Fund		857,367,694		(50,823	)		857,316,871		201,149		857,115,722		857,316,871
VALIC Company I Dynamic Allocation Fund		190,626,104		(57,029	)		190,569,075		-		190,569,075		190,569,075
VALIC Company I Emerging Economies Fund		913,773,707		(38,827	)		913,734,880		58,603		913,676,277		913,734,880
VALIC Company I Global Real Estate Fund		298,242,696		(16,774	)		298,225,922		4,414		298,221,508		298,225,922
VALIC Company I Global Strategy Fund		298,652,274		(20,291	)		298,631,983		121,822		298,510,161		298,631,983
VALIC Company I Government Money Market I Fund		367,635,605		(30,352	)		367,605,253		9,211		367,596,042		367,605,253
VALIC Company I Government Securities Fund		117,887,759		(3,630	)		117,884,129		76,851		117,807,278		117,884,129
VALIC Company I Growth Fund		1,684,547,473		(69,516	)		1,684,477,957		483,818		1,683,994,139		1,684,477,957
VALIC Company I Health Sciences Fund		978,188,326		(29,789	)		978,158,537		207,422		977,951,115		978,158,537
VALIC Company I Inflation Protected Fund		757,711,313		(49,122	)		757,662,191		94,833		757,567,358		757,662,191
VALIC Company I International Equities Index Fund		1,507,557,452		(73,526	)		1,507,483,926		136,423		1,507,347,503		1,507,483,926
VALIC Company I International Government Bond Fund		135,141,535		(13,190	)		135,128,345		21,514		135,106,831		135,128,345
VALIC Company I International Growth Fund		560,869,622		(15,494	)		560,854,128		534,785		560,319,343		560,854,128
VALIC Company I International Socially Responsible Fund		367,322,062		(13,351	)		367,308,711		335,859		366,972,852		367,308,711
VALIC Company I International Value Fund		667,329,513		(37,628	)		667,291,885		61,190		667,230,695		667,291,885
VALIC Company I Large Cap Core Fund		167,132,452		(5,319	)		167,127,133		26,735		167,100,398		167,127,133
VALIC Company I Large Capital Growth Fund		574,909,140		(19,631	)		574,889,509		142,734		574,746,775		574,889,509
VALIC Company I Mid Cap Index Fund		3,255,952,024		(145,107	)		3,255,806,917		1,514,460		3,254,292,457		3,255,806,917
VALIC Company I Mid Cap Strategic Growth Fund		373,333,405		(11,927	)		373,321,478		73,405		373,248,073		373,321,478
VALIC Company I Nasdaq-100 Index Fund		760,833,010		(24,759	)		760,808,251		162,308		760,645,943		760,808,251
VALIC Company I Science & Technology Fund		2,109,388,678		(42,344	)		2,109,346,334		1,454,676		2,107,891,658		2,109,346,334
VALIC Company I Small Cap Aggressive Growth Fund		202,956,571		(5,251	)		202,951,320		18,101		202,933,219		202,951,320
VALIC Company I Small Cap Fund		341,734,614		(55,537	)		341,679,077		274,082		341,404,995		341,679,077
VALIC Company I Small Cap Index Fund		1,188,017,806		(96,230	)		1,187,921,576		706,329		1,187,215,247		1,187,921,576
VALIC Company I Small Cap Special Values Fund		198,523,366		(5,049	)		198,518,317		55,038		198,463,279		198,518,317
VALIC Company I Small Mid Growth Fund		176,620,441		(6,601	)		176,613,840		17,132		176,596,708		176,613,840
VALIC Company I Stock Index Fund		5,159,021,615		(270,243	)		5,158,751,372		5,025,424		5,153,725,948		5,158,751,372
VALIC Company I Systematic Core Fund		143,773,964		(3,987	)		143,769,977		80,004		143,689,973		143,769,977
VALIC Company I Systematic Value Fund		39,737,461		(2,488	)		39,734,973		-		39,734,973		39,734,973
VALIC Company I Value Fund		82,477,455		(7,721	)		82,469,734		4,073		82,465,661		82,469,734
VALIC Company II Aggressive Growth Lifestyle Fund		669,182,849		(37,852	)		669,144,997		52,636		669,092,361		669,144,997
VALIC Company II Capital Appreciation Fund		50,883,763		(3,204	)		50,880,559		-		50,880,559		50,880,559
VALIC Company II Conservative Growth Lifestyle Fund		354,626,344		(16,529	)		354,609,815		368,770		354,241,045		354,609,815
VALIC Company II Core Bond Fund		1,400,830,642		(59,392	)		1,400,771,250		9,115		1,400,762,135		1,400,771,250
VALIC Company II Government Money Market II Fund		134,722,269		(4,999	)		134,717,270		18,614		134,698,656		134,717,270
VALIC Company II High Yield Bond Fund		457,561,349		(21,714	)		457,539,635		29,946		457,509,689		457,539,635
VALIC Company II International Opportunities Fund		640,420,612		(26,864	)		640,393,748		85,695		640,308,053		640,393,748
VALIC Company II Large Cap Value Fund		183,583,780		(38,784	)		183,544,996		-		183,544,996		183,544,996
VALIC Company II Mid Cap Growth Fund		251,273,687		(22,129	)		251,251,558		21,797		251,229,761		251,251,558
VALIC Company II Mid Cap Value Fund		726,042,789		(36,191	)		726,006,598		154,205		725,852,393		726,006,598
VALIC Company II Moderate Growth Lifestyle Fund		1,085,453,072		(55,342	)		1,085,397,730		127,347		1,085,270,383		1,085,397,730
VALIC Company II Small Cap Growth Fund		258,437,125		(13,876	)		258,423,249		15,543		258,407,706		258,423,249
VALIC Company II Small Cap Value Fund		334,365,765		(15,588	)		334,350,177		136,101		334,214,076		334,350,177
VALIC Company II Strategic Bond Fund		725,229,842		(50,206	)		725,179,636		126,959		725,052,677		725,179,636
VALIC Company II U.S. Socially Responsible Fund		744,058,171		(52,553	)		744,005,618		63,043		743,942,575		744,005,618
Vanguard LifeStrategy Conservative Growth Fund Investor Shares		120,637,620		(5,585	)		120,632,035		-		120,632,035		120,632,035
Vanguard LifeStrategy Growth Fund Investor Shares		314,995,103		(14,901	)		314,980,202		10,041		314,970,161		314,980,202
Vanguard LifeStrategy Moderate Growth Fund Investor Shares		309,176,107		(15,387	)		309,160,720		10,314		309,150,406		309,160,720
Vanguard Long-Term Investment-Grade Fund Investor Shares		282,363,976		(22,586	)		282,341,390		6,083		282,335,307		282,341,390
Vanguard Long-Term Treasury Fund Investor Shares		252,399,093		(12,953	)		252,386,140		55,051		252,331,089		252,386,140
Vanguard Wellington Fund Investor Shares		2,061,351,812		(109,474	)		2,061,242,338		11,180,296		2,050,062,042		2,061,242,338
Vanguard Windsor II Fund Investor Shares		1,785,933,304		(89,211	)		1,785,844,093		680,444		1,785,163,649		1,785,844,093

 The accompanying Notes to Financial Statements are an integral part of this statement.

2

SEPARATE ACCOUNT A

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

SCHEDULE OF PORTFOLIO INVESTMENTS

December 31, 2020

Sub-accounts	Shares		Net Asset Value per Share		Shares at Fair Value		Cost of Shares Held		Level*
American Beacon Bridgeway Large Cap Growth Fund Investor Class		2,195,704	$	35.61	$	78,189,024	$	65,976,256	1
AST SA PGI Asset Allocation Portfolio Class 3		6,630		14.54		96,398		93,150	1
AST SA Wellington Capital Appreciation Portfolio Class 3		95,372		57.50		5,483,895		4,126,210	1
AST SA Wellington Government and Quality Bond Portfolio Class 3		432,547		16.09		6,959,679		6,790,729	1
AST SA Wellington Strategic Multi-Asset Portfolio Class 3		224,958		9.73		2,188,843		1,922,158	1
Ariel Appreciation Fund Investor Class		6,145,106		43.32		266,205,979		281,035,832	1
Ariel Fund Investor Class		5,440,792		67.60		367,797,555		340,604,307	1
FTVIP Franklin Allocation VIP Fund Class 2		104,141		5.43		565,486		627,133	1
FTVIP Franklin Income VIP Fund Class 2		331,978		15.04		4,992,944		4,998,609	1
Goldman Sachs VIT Government Money Market Fund Service Shares		3,707,724		1.00		3,707,724		3,707,724	1
Invesco V.I. American Franchise Fund Series II		12,009		84.31		1,012,451		778,346	1
Invesco V.I. Balanced-Risk Commodity Strategy Fund Class R5		23,345,717		7.00		163,420,017		163,710,114	1
Invesco V.I. Comstock Fund Series II		83,439		16.07		1,340,865		1,373,270	1
Invesco V.I. Growth and Income Fund Series II		77,315		18.70		1,445,793		1,469,793	1
Lord Abbett Growth and Income Portfolio Class VC		11,932		34.94		416,892		383,471	1
PIMCO Emerging Markets Bond Portfolio Advisor Class		437		13.44		5,880		5,619	1
PIMCO Total Return Portfolio Advisor Class		243,218		11.59		2,818,893		2,774,865	1
SST SA Allocation Balanced Portfolio Class 3		332,119		10.75		3,570,276		3,418,736	1
SST SA Allocation Growth Portfolio Class 3		364,888		16.57		6,046,197		5,046,789	1
SST SA Allocation Moderate Growth Portfolio Class 3		444,909		12.08		5,374,503		4,746,802	1
SST SA Allocation Moderate Portfolio Class 3		529,082		12.08		6,391,311		5,644,657	1
SST SA Putnam Asset Allocation Diversified Growth Portfolio Class 3		181,998		13.80		2,511,577		2,160,443	1
SST SA Wellington Real Return Portfolio Class 3		377,370		10.39		3,920,875		3,679,996	1
SAST SA AB Growth Portfolio Class 3		58,584		60.63		3,551,922		2,897,329	1
SAST SA AB Small & Mid Cap Value Portfolio Class 3		89,766		14.79		1,327,632		1,272,592	1
SAST SA American Funds Asset Allocation Portfolio Class 3		3,706,635		16.46		61,011,205		53,826,441	1
SAST SA American Funds Global Growth Portfolio Class 3		240,411		13.25		3,185,452		2,690,742	1
SAST SA American Funds Growth Portfolio Class 3		548,814		16.27		8,929,204		6,620,596	1
SAST SA American Funds Growth-Income Portfolio Class 3		500,381		11.75		5,879,480		5,730,045	1
SAST SA American Funds VCP Managed Allocation Portfolio Class 3		4,661,447		16.13		75,189,138		64,431,848	1
SAST SA BlackRock Multi-Factor 70/30 Portfolio Class 3		2,506		15.93		39,918		38,280	1
SAST SA BlackRock VCP Global Multi Asset Portfolio Class 3		3,040,406		11.49		34,934,269		33,257,342	1
SAST SA Columbia Technology Portfolio Class 3		334,511		9.82		3,284,898		2,433,070	1
SAST SA DFA Ultra Short Bond Portfolio Class 3		164,204		10.27		1,686,378		1,710,702	1
SAST SA Dogs of Wall Street Portfolio Class 3		308,951		13.01		4,019,451		4,002,888	1
SAST SA Emerging Markets Equity Index Portfolio Class 3		6,046		17.27		104,419		88,538	1
SAST SA Federated Hermes Corporate Bond Portfolio Class 3		455,964		13.88		6,328,782		6,111,789	1
SAST SA Fidelity Institutional AM® International Growth Class 3		1,218		19.79		24,099		20,089	1
SAST SA Fidelity Institutional AM® Real Estate Portfolio Class 3		23,876		12.74		304,179		307,311	1
SAST SA Fixed Income Index Portfolio Class 3		372,510		11.35		4,227,984		4,135,023	1
SAST SA Fixed Income Intermediate Index Portfolio Class 3		62,189		10.77		669,775		652,103	1
SAST SA Franklin Small Company Value Portfolio Class 3		40,295		18.42		742,234		741,228	1
SAST SA Global Index Allocation 60/40 Portfolio Class 3		133,246		17.56		2,339,802		2,016,107	1
SAST SA Global Index Allocation 75/25 Portfolio Class 3		132,748		17.74		2,354,954		2,028,640	1
SAST SA Global Index Allocation 90/10 Portfolio Class 3		372,722		17.99		6,705,266		5,639,491	1
SAST SA Goldman Sachs Global Bond Portfolio Class 3		227,331		12.19		2,771,166		2,478,286	1
SAST SA Goldman Sachs Multi-Asset Insights Portfolio Class 3		233,548		11.75		2,744,191		2,454,875	1
SAST SA Index Allocation 60/40 Portfolio Class 3		564,568		13.16		7,429,714		6,422,593	1
SAST SA Index Allocation 80/20 Portfolio Class 3		892,592		14.08		12,567,691		10,288,817	1
SAST SA Index Allocation 90/10 Portfolio Class 3		2,984,656		14.32		42,740,274		34,489,057	1
SAST SA International Index Portfolio Class 3		28,447		12.30		349,901		314,013	1
SAST SA Invesco Growth Opportunities Portfolio Class 3		29,778		10.95		326,064		256,909	1
SAST SA Invesco Main Street Large Cap Portfolio Class 3		54,923		23.52		1,291,782		1,113,987	1
SAST SA Invesco VCP Equity-Income Portfolio Class 3		2,100,914		12.82		26,933,715		25,985,536	1
SAST SA Janus Focused Growth Portfolio Class 3		45,814		20.28		929,107		669,576	1
SAST SA JPMorgan Diversified Balanced Portfolio Class 3		141,150		20.67		2,917,560		2,687,067	1
SAST SA JPMorgan Emerging Markets Portfolio Class 3		65,611		9.68		635,119		503,159	1
SAST SA JPMorgan Equity-Income Portfolio Class 3		47,934		33.89		1,624,490		1,566,646	1
SAST SA JPMorgan Global Equities Portfolio Class 3		2,696		19.56		52,735		48,118	1
SAST SA JPMorgan MFS Core Bond Portfolio Class 3		788,009		9.63		7,588,526		7,198,185	1
SAST SA JPMorgan Mid-Cap Growth Portfolio Class 3		37,931		23.94		908,072		738,251	1
SAST SA Large Cap Growth Index Portfolio Class 3		33,304		24.00		799,299		591,072	1
SAST SA Large Cap Index Portfolio Class 3		42,079		29.87		1,256,907		1,056,703	1
SAST SA Large Cap Value Index Portfolio Class 3		22,353		16.35		365,473		346,963	1
SAST SA Legg Mason BW Large Cap Value Portfolio Class 3		60,776		18.85		1,145,633		1,184,047	1
SAST SA Legg Mason Tactical Opportunities Class 3		52,858		11.83		625,305		563,367	1
SAST SA MFS Blue Chip Growth Portfolio Class 3		91,408		15.85		1,448,812		1,157,804	1
SAST SA MFS Massachusetts Investors Trust Portfolio Class 3		64,283		24.81		1,594,858		1,399,529	1
SAST SA MFS Total Return Portfolio Class 3		68,627		20.02		1,373,906		1,301,503	1
SAST SA Mid Cap Index Portfolio Class 3		83,839		13.14		1,101,640		898,228	1

* Represents the level within the fair value hierarchy under which the portfolio is classified as defined in ASC 820 and described in Note 3 to the financial statements.

The accompanying Notes to Financial Statements are an integral part of this statement.

3

SEPARATE ACCOUNT A

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

SCHEDULE OF PORTFOLIO INVESTMENTS

December 31, 2020

Sub-accounts	Shares		Net Asset Value per Share		Shares at Fair Value		Cost of Shares Held		Level*
SAST SA Morgan Stanley International Equities Portfolio Class 3		90,875	$	10.95	$	995,085	$	865,025	1
SAST SA PIMCO VCP Tactical Balanced Portfolio Class 3		2,855,894		11.37		32,471,518		31,352,830	1
SAST SA PineBridge High-Yield Bond Portfolio Class 3		308,132		5.52		1,700,887		1,691,297	1
SAST SA Putnam International Growth and Income Portfolio Class 3		12,048		10.18		122,645		114,824	1
SAST SA Schroders VCP Global Allocation Portfolio Class 3		1,749,924		11.27		19,721,639		19,544,193	1
SAST SA Small Cap Index Portfolio Class 3		63,394		13.56		859,617		682,884	1
SAST SA T. Rowe Price Asset Allocation Growth Portfolio Class 3		235,779		13.59		3,204,236		2,635,251	1
SAST SA T. Rowe Price VCP Balanced Portfolio Class 3		3,214,379		13.27		42,654,805		37,861,624	1
SAST SA Templeton Foreign Value Portfolio Class 3		50,727		13.85		702,566		725,046	1
SAST SA VCP Dynamic Allocation Portfolio Class 3		6,483,935		13.81		89,543,143		82,020,900	1
SAST SA VCP Dynamic Strategy Portfolio Class 3		5,249,334		13.81		72,493,299		66,444,101	1
SAST SA VCP Index Allocation Portfolio Class 3		1,946,541		11.95		23,261,161		20,766,024	1
SAST SA WellsCap Aggressive Growth Portfolio Class 3		26,726		34.09		911,088		641,836	1
T Rowe Price Retirement 2015 Advisor Class		1,074,252		14.91		16,017,098		15,529,847	1
T Rowe Price Retirement 2020 Advisor Class		1,848,807		22.55		41,690,605		40,286,705	1
T Rowe Price Retirement 2025 Advisor Class		2,995,055		19.25		57,654,801		51,934,791	1
T Rowe Price Retirement 2030 Advisor Class		2,128,109		28.16		59,927,557		53,889,042	1
T Rowe Price Retirement 2035 Advisor Class		2,200,693		21.11		46,456,627		40,570,211	1
T Rowe Price Retirement 2040 Advisor Class		1,584,081		30.11		47,696,688		41,387,856	1
T Rowe Price Retirement 2045 Advisor Class		1,784,793		20.84		37,195,094		32,019,059	1
T Rowe Price Retirement 2050 Advisor Class		1,790,275		17.58		31,473,032		26,939,361	1
T Rowe Price Retirement 2055 Advisor Class		843,926		18.06		15,241,295		12,863,788	1
T Rowe Price Retirement 2060 Advisor Class		811,976		14.60		11,854,856		9,796,730	1
VALIC Company I Asset Allocation Fund		12,603,011		11.70		147,455,227		135,856,261	1
VALIC Company I Blue Chip Growth Fund		37,198,869		26.22		975,354,338		617,046,194	1
VALIC Company I Capital Conservation Fund		21,001,101		10.81		227,021,900		212,978,614	1
VALIC Company I Core Equity Fund		10,491,956		25.40		266,495,677		157,987,234	1
VALIC Company I Dividend Value Fund		72,719,906		11.79		857,367,694		860,503,799	1
VALIC Company I Dynamic Allocation Fund		14,236,453		13.39		190,626,104		164,078,956	1
VALIC Company I Emerging Economies Fund		91,377,371		10.00		913,773,707		704,566,506	1
VALIC Company I Global Real Estate Fund		38,187,285		7.81		298,242,696		295,357,009	1
VALIC Company I Global Strategy Fund		29,955,093		9.97		298,652,274		327,278,123	1
VALIC Company I Government Money Market I Fund		367,635,605		1.00		367,635,605		367,635,607	1
VALIC Company I Government Securities Fund		10,451,043		11.28		117,887,759		113,133,754	1
VALIC Company I Growth Fund		68,925,838		24.44		1,684,547,473		1,078,387,206	1
VALIC Company I Health Sciences Fund		35,351,945		27.67		978,188,326		738,493,387	1
VALIC Company I Inflation Protected Fund		62,209,467		12.18		757,711,313		694,486,636	1
VALIC Company I International Equities Index Fund		194,523,542		7.75		1,507,557,452		1,300,602,612	1
VALIC Company I International Government Bond Fund		10,107,819		13.37		135,141,535		122,664,676	1
VALIC Company I International Growth Fund		32,476,527		17.27		560,869,622		367,517,891	1
VALIC Company I International Socially Responsible Fund		12,207,446		30.09		367,322,062		226,338,449	1
VALIC Company I International Value Fund		64,789,273		10.30		667,329,513		549,224,948	1
VALIC Company I Large Cap Core Fund		11,408,358		14.65		167,132,452		126,085,338	1
VALIC Company I Large Capital Growth Fund		27,156,785		21.17		574,909,140		339,285,633	1
VALIC Company I Mid Cap Index Fund		119,091,149		27.34		3,255,952,024		2,861,536,341	1
VALIC Company I Mid Cap Strategic Growth Fund		16,541,134		22.57		373,333,405		214,359,982	1
VALIC Company I Nasdaq-100 Index Fund		30,827,918		24.68		760,833,010		339,052,783	1
VALIC Company I Science & Technology Fund		50,021,074		42.17		2,109,388,678		1,069,328,443	1
VALIC Company I Small Cap Aggressive Growth Fund		10,778,363		18.83		202,956,571		143,607,253	1
VALIC Company I Small Cap Fund		25,928,271		13.18		341,734,614		276,353,924	1
VALIC Company I Small Cap Index Fund		55,308,092		21.48		1,188,017,806		1,007,515,438	1
VALIC Company I Small Cap Special Values Fund		17,026,018		11.66		198,523,366		201,257,509	1
VALIC Company I Small Mid Growth Fund		8,893,275		19.86		176,620,441		110,669,942	1
VALIC Company I Stock Index Fund		102,995,041		50.09		5,159,021,615		3,383,897,246	1
VALIC Company I Systematic Core Fund		5,493,847		26.17		143,773,964		96,965,592	1
VALIC Company I Systematic Value Fund		2,969,915		13.38		39,737,461		42,617,702	1
VALIC Company I Value Fund		4,455,832		18.51		82,477,455		56,828,409	1
VALIC Company II Aggressive Growth Lifestyle Fund		58,443,917		11.45		669,182,849		603,469,701	1
VALIC Company II Capital Appreciation Fund		2,532,791		20.09		50,883,763		40,909,550	1
VALIC Company II Conservative Growth Lifestyle Fund		26,824,988		13.22		354,626,344		326,993,937	1
VALIC Company II Core Bond Fund		115,010,726		12.18		1,400,830,642		1,297,288,962	1
VALIC Company II Government Money Market II Fund		134,722,269		1.00		134,722,269		134,722,262	1
VALIC Company II High Yield Bond Fund		58,288,070		7.85		457,561,349		439,995,830	1
VALIC Company II International Opportunities Fund		27,124,973		23.61		640,420,612		437,453,148	1
VALIC Company II Large Cap Value Fund		8,511,070		21.57		183,583,780		147,376,357	1
VALIC Company II Mid Cap Growth Fund		18,836,108		13.34		251,273,687		188,222,017	1
VALIC Company II Mid Cap Value Fund		39,245,556		18.50		726,042,789		764,645,522	1
VALIC Company II Moderate Growth Lifestyle Fund		69,848,975		15.54		1,085,453,072		980,085,724	1
VALIC Company II Small Cap Growth Fund		9,792,995		26.39		258,437,125		183,272,803	1
VALIC Company II Small Cap Value Fund		27,565,191		12.13		334,365,765		346,881,745	1

* Represents the level within the fair value hierarchy under which the portfolio is classified as defined in ASC 820 and described in Note 3 to the financial statements.

The accompanying Notes to Financial Statements are an integral part of this statement.

4

SEPARATE ACCOUNT A

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

SCHEDULE OF PORTFOLIO INVESTMENTS

December 31, 2020

Sub-accounts	Shares		Net Asset Value per Share		Shares at Fair Value		Cost of Shares Held		Level*
VALIC Company II Strategic Bond Fund		61,149,228	$	11.86	$	725,229,842	$	689,217,070	1
VALIC Company II U.S. Socially Responsible Fund		32,648,450		22.79		744,058,171		529,429,042	1
Vanguard LifeStrategy Conservative Growth Fund Investor Shares		5,321,465		22.67		120,637,620		103,304,370	1
Vanguard LifeStrategy Growth Fund Investor Shares		7,827,910		40.24		314,995,103		211,179,477	1
Vanguard LifeStrategy Moderate Growth Fund Investor Shares		9,768,597		31.65		309,176,107		233,486,470	1
Vanguard Long-Term Investment-Grade Fund Investor Shares		23,949,447		11.79		282,363,976		252,560,599	1
Vanguard Long-Term Treasury Fund Investor Shares		17,964,348		14.05		252,399,093		238,557,283	1
Vanguard Wellington Fund Investor Shares		46,468,706		44.36		2,061,351,812		1,618,285,151	1
Vanguard Windsor II Fund Investor Shares		46,124,311		38.72		1,785,933,304		1,446,198,196	1

* Represents the level within the fair value hierarchy under which the portfolio is classified as defined in ASC 820 and described in Note 3 to the financial statements.

The accompanying Notes to Financial Statements are an integral part of this statement.

5

SEPARATE ACCOUNT A

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS

	American Beacon Bridgeway Large Cap Growth Fund Investor Class			AST SA BlackRock Multi-Asset Income Portfolio Class 3			AST SA PGI Asset Allocation Portfolio Class 3			AST SA Wellington Capital Appreciation Portfolio Class 3			AST SA Wellington Government and Quality Bond Portfolio Class 3
For the Year Ended December 31, 2020
From operations:
Dividends	$	-		$	-		$	3,796		$	-		$	121,494
Mortality and expense risk and administrative charges		(946,008	)		(1,692	)		(1,803	)		(52,974	)		(70,463	)
Reimbursements of expenses		354,891			-			-			-			-
Net investment income (loss)		(591,117	)		(1,692	)		1,993			(52,974	)		51,031
Net realized gain (loss)		216,256			60,797			(717	)		89,825			46,458
Capital gain distribution from mutual funds		7,565,884			-			4,329			522,517			8,027
Change in unrealized appreciation (depreciation) of investments		12,163,877			(60,573	)		6,418			1,417,382			109,897
Increase (decrease) in net assets from operations		19,354,900			(1,468	)		12,023			1,976,750			215,413
From contract transactions:
Payments received from contract owners		1,180,621			-			1			865,908			2,718,647
Payments for contract benefits or terminations		(5,349,573	)		(5,147	)		-			(172,112	)		(260,045	)
Transfers between sub-accounts (including fixed account), net		(2,542,689	)		(1,594,697	)		(75,652	)		247,969			788,130
Contract maintenance charges		(51,673	)		(1,788	)		(2,304	)		(7,960	)		(46,604	)
Adjustments to net assets allocated to contracts in payout period		278			-			-			-			-
Increase (decrease) in net assets from contract transactions		(6,763,036	)		(1,601,632	)		(77,955	)		933,805			3,200,128
Increase (decrease) in net assets		12,591,864			(1,603,100	)		(65,932	)		2,910,555			3,415,541
Net assets at beginning of period		65,592,956			1,603,100			162,330			2,573,340			3,544,138
Net assets at end of period	$	78,184,820		$	-		$	96,398		$	5,483,895		$	6,959,679
Beginning units		54,236,421			126,755			7,778			65,939			274,099
Units issued		1,956,439			-			1,012			38,240			301,560
Units redeemed		(7,519,180	)		(126,755	)		(4,499	)		(17,508	)		(67,379	)
Ending units		48,673,680			-			4,291			86,671			508,280
For the Year Ended December 31, 2019
From operations:
Dividends	$	-		$	-		$	3,797		$	-		$	75,135
Mortality and expense risk and administrative charges		(739,039	)		(15,568	)		(900	)		(28,028	)		(39,292	)
Reimbursements of expenses		160,990			-			-			-			-
Net investment income (loss)		(578,049	)		(15,568	)		2,897			(28,028	)		35,843
Net realized gain (loss)		(65,554	)		(4,221	)		(104	)		42,120			(2,269	)
Capital gain distribution from mutual funds		6,273,956			-			6,285			406,590			-
Change in unrealized appreciation (depreciation) of investments		10,065,578			149,678			3,475			13,793			118,970
Increase (decrease) in net assets from operations		15,695,931			129,889			12,553			434,475			152,544
From contract transactions:
Payments received from contract owners		1,312,677			455,299			20,170			915,116			549,060
Payments for contract benefits or terminations		(5,984,870	)		(23,427	)		-			(61,912	)		(179,421	)
Transfers between sub-accounts (including fixed account), net		(2,618,132	)		95,937			88,733			20,874			385,880
Contract maintenance charges		(54,582	)		(12,850	)		(785	)		(2,859	)		(18,610	)
Adjustments to net assets allocated to contracts in payout period		187			-			-			-			-
Increase (decrease) in net assets from contract transactions		(7,344,720	)		514,959			108,118			871,219			736,909
Increase (decrease) in net assets		8,351,211			644,848			120,671			1,305,694			889,453
Net assets at beginning of period		57,241,745			958,252			41,659			1,267,646			2,654,685
Net assets at end of period	$	65,592,956		$	1,603,100		$	162,330		$	2,573,340		$	3,544,138
Beginning units		60,869,212			84,845			2,397			42,219			217,264
Units issued		1,786,810			46,705			5,468			30,364			76,329
Units redeemed		(8,419,601	)		(4,795	)		(87	)		(6,644	)		(19,494	)
Ending units		54,236,421			126,755			7,778			65,939			274,099

 The accompanying Notes to Financial Statements are an integral part of this statement.

6

SEPARATE ACCOUNT A

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS

	AST SA Wellington Strategic Multi- Asset Portfolio Class 3			Ariel Appreciation Fund Investor Class			Ariel Fund Investor Class			FTVIP Franklin Allocation VIP Fund Class 2			FTVIP Franklin Income VIP Fund Class 2
For the Year Ended December 31, 2020
From operations:
Dividends	$	15,817		$	1,494,636		$	1,099,865		$	6,514		$	256,139
Mortality and expense risk and administrative charges		(19,558	)		(2,719,678	)		(3,552,894	)		(7,005	)		(55,417	)
Reimbursements of expenses		-			560,725			733,526			-			-
Net investment income (loss)		(3,741	)		(664,317	)		(1,719,503	)		(491	)		200,722
Net realized gain (loss)		33,243			(12,852,535	)		14,908,880			(4,231	)		(5,369	)
Capital gain distribution from mutual funds		21,918			22,391,333			17,681,032			116,064			3,628
Change in unrealized appreciation (depreciation) of investments		201,084			2,424,159			(6,822,268	)		(62,176	)		(116,943	)
Increase (decrease) in net assets from operations		252,504			11,298,640			24,048,141			49,166			82,038
From contract transactions:
Payments received from contract owners		414,855			6,238,174			7,795,941			33,999			744,746
Payments for contract benefits or terminations		(149,023	)		(19,061,353	)		(24,367,023	)		-			(79,366	)
Transfers between sub-accounts (including fixed account), net		375,867			(14,864,023	)		(21,680,311	)		42,916			246,662
Contract maintenance charges		(16,335	)		(64,947	)		(126,534	)		(289	)		(9,238	)
Adjustments to net assets allocated to contracts in payout period		-			(11,640	)		2,797			-			-
Increase (decrease) in net assets from contract transactions		625,364			(27,763,789	)		(38,375,130	)		76,626			902,804
Increase (decrease) in net assets		877,868			(16,465,149	)		(14,326,989	)		125,792			984,842
Net assets at beginning of period		1,310,975			282,705,849			382,104,514			439,694			4,008,102
Net assets at end of period	$	2,188,843		$	266,240,700		$	367,777,525		$	565,486		$	4,992,944
Beginning units		108,020			71,845,502			92,770,396			29,436			233,941
Units issued		78,229			7,533,300			8,846,521			5,675			67,515
Units redeemed		(31,434	)		(15,522,800	)		(19,459,571	)		(814	)		(6,578	)
Ending units		154,815			63,856,002			82,157,346			34,297			294,878
For the Year Ended December 31, 2019
From operations:
Dividends	$	-		$	2,580,432		$	3,192,362		$	382		$	158,712
Mortality and expense risk and administrative charges		(11,645	)		(3,203,274	)		(4,402,633	)		(155	)		(39,522	)
Reimbursements of expenses		-			672,323			937,088			-			-
Net investment income (loss)		(11,645	)		49,481			(273,183	)		227			119,190
Net realized gain (loss)		225			(8,550,821	)		28,728,922			(399	)		4,670
Capital gain distribution from mutual funds		27			17,249,972			18,297,912			704			47,969
Change in unrealized appreciation (depreciation) of investments		146,449			47,984,290			32,200,773			1,640			136,551
Increase (decrease) in net assets from operations		135,056			56,732,922			78,954,424			2,172			308,380
From contract transactions:
Payments received from contract owners		522,978			7,614,698			10,039,800			432,140			2,858,319
Payments for contract benefits or terminations		(8,519	)		(24,784,278	)		(35,646,175	)		(4,505	)		(72,780	)
Transfers between sub-accounts (including fixed account), net		77,258			(13,632,727	)		(21,112,156	)		381			38,994
Contract maintenance charges		(9,021	)		(77,680	)		(151,454	)		(12	)		(1,801	)
Adjustments to net assets allocated to contracts in payout period		-			(34,264	)		4,034			-			-
Increase (decrease) in net assets from contract transactions		582,696			(30,914,251	)		(46,865,951	)		428,004			2,822,732
Increase (decrease) in net assets		717,752			25,818,671			32,088,473			430,176			3,131,112
Net assets at beginning of period		593,223			256,887,178			350,016,041			9,518			876,990
Net assets at end of period	$	1,310,975		$	282,705,849		$	382,104,514		$	439,694		$	4,008,102
Beginning units		57,254			80,852,269			104,627,173			731			53,392
Units issued		54,785			3,477,134			4,564,505			29,015			187,552
Units redeemed		(4,019	)		(12,483,901	)		(16,421,282	)		(310	)		(7,003	)
Ending units		108,020			71,845,502			92,770,396			29,436			233,941

 The accompanying Notes to Financial Statements are an integral part of this statement.

7

SEPARATE ACCOUNT A

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS

	Goldman Sachs VIT Government Money Market Fund Service Shares			Invesco V.I. American Franchise Fund Series II			Invesco V.I. Balanced-Risk Commodity Strategy Fund Class R5			Invesco V.I. Comstock Fund Series II			Invesco V.I. Growth and Income Fund Series II
For the Year Ended December 31, 2020
From operations:
Dividends	$	6,289		$	-		$	-		$	26,373		$	25,794
Mortality and expense risk and administrative charges		(48,151	)		(8,381	)		(1,342,739	)		(16,071	)		(17,471	)
Net investment income (loss)		(41,862	)		(8,381	)		(1,342,739	)		10,302			8,323
Net realized gain (loss)		-			1,565			(6,240,335	)		(35,325	)		(42,587	)
Capital gain distribution from mutual funds		-			61,939			-			32,792			21,774
Change in unrealized appreciation (depreciation) of investments		-			214,063			22,339,987			10,109			50,468
Increase (decrease) in net assets from operations		(41,862	)		269,186			14,756,913			17,878			37,978
From contract transactions:
Payments received from contract owners		2,298,586			183,543			9,132,208			64,031			22,772
Payments for contract benefits or terminations		(257,789	)		(6,930	)		(13,572,228	)		(40,486	)		(48,749	)
Transfers between sub-accounts (including fixed account), net		966,423			13,436			11,950,638			90,141			57,022
Contract maintenance charges		(38,711	)		(242	)		(45,939	)		(6,532	)		(6,001	)
Adjustments to net assets allocated to contracts in payout period		-			-			232			-			-
Increase (decrease) in net assets from contract transactions		2,968,509			189,807			7,464,911			107,154			25,044
Increase (decrease) in net assets		2,926,647			458,993			22,221,824			125,032			63,022
Net assets at beginning of period		781,077			553,458			141,193,352			1,215,833			1,382,771
Net assets at end of period	$	3,707,724		$	1,012,451		$	163,415,176		$	1,340,865		$	1,445,793
Beginning units		78,636			18,066			232,675,521			59,621			67,847
Units issued		715,716			7,854			43,217,338			15,185			10,828
Units redeemed		(416,493	)		(2,362	)		(24,174,944	)		(7,446	)		(8,047	)
Ending units		377,859			23,558			251,717,915			67,360			70,628
For the Year Ended December 31, 2019
From operations:
Dividends	$	10,346		$	-		$	1,261,679		$	19,302		$	21,363
Mortality and expense risk and administrative charges		(7,368	)		(4,835	)		(1,345,737	)		(15,955	)		(18,845	)
Net investment income (loss)		2,978			(4,835	)		(84,058	)		3,347			2,518
Net realized gain (loss)		-			240			(2,485,409	)		753			(8,409	)
Capital gain distribution from mutual funds		-			70,937			-			147,386			151,140
Change in unrealized appreciation (depreciation) of investments		-			20,041			7,330,336			80,296			125,527
Increase (decrease) in net assets from operations		2,978			86,383			4,760,869			231,782			270,776
From contract transactions:
Payments received from contract owners		42,142			464,336			9,741,477			54,260			79,703
Payments for contract benefits or terminations		(44,625	)		-			(14,085,730	)		(70,154	)		(142,256	)
Transfers between sub-accounts (including fixed account), net		486,837			2,742			3,455,125			(4,310	)		(23,121	)
Contract maintenance charges		(4,752	)		(3	)		(43,993	)		(4,558	)		(5,154	)
Adjustments to net assets allocated to contracts in payout period		-			-			337			-			-
Increase (decrease) in net assets from contract transactions		479,602			467,075			(932,784	)		(24,762	)		(90,828	)
Increase (decrease) in net assets		482,580			553,458			3,828,085			207,020			179,948
Net assets at beginning of period		298,497			-			137,365,267			1,008,813			1,202,823
Net assets at end of period	$	781,077		$	553,458		$	141,193,352		$	1,215,833		$	1,382,771
Beginning units		30,319			-			234,224,055			60,912			72,603
Units issued		97,683			18,093			9,312,653			4,078			4,346
Units redeemed		(49,366	)		(27	)		(10,861,187	)		(5,369	)		(9,102	)
Ending units		78,636			18,066			232,675,521			59,621			67,847

 The accompanying Notes to Financial Statements are an integral part of this statement.

8

SEPARATE ACCOUNT A

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS

	Lord Abbett Growth and Income Portfolio Class VC			PIMCO Emerging Markets Bond Portfolio Advisor Class			PIMCO Total Return Portfolio Advisor Class			SST SA Allocation Balanced Portfolio Class 3			SST SA Allocation Growth Portfolio Class 3
For the Year Ended December 31, 2020
From operations:
Dividends	$	6,306		$	45		$	25,950		$	39,389		$	-
Mortality and expense risk and administrative charges		(4,237	)		(12	)		(16,412	)		(36,674	)		(64,979	)
Net investment income (loss)		2,069			33			9,538			2,715			(64,979	)
Net realized gain (loss)		(11,909	)		-			1,670			(4,622	)		87,615
Capital gain distribution from mutual funds		-			-			15,038			123,170			-
Change in unrealized appreciation (depreciation) of investments		31,586			260			44,028			194,480			840,026
Increase (decrease) in net assets from operations		21,746			293			70,274			315,743			862,662
From contract transactions:
Payments received from contract owners		123,321			5,373			2,212,867			1,022,047			1,217,637
Payments for contract benefits or terminations		(3,415	)		-			(21,074	)		(76,684	)		(312,928	)
Transfers between sub-accounts (including fixed account), net		(24,356	)		214			570,939			104,266			(443,862	)
Contract maintenance charges		(458	)		-			(14,113	)		(17,394	)		(50,588	)
Increase (decrease) in net assets from contract transactions		95,092			5,587			2,748,619			1,032,235			410,259
Increase (decrease) in net assets		116,838			5,880			2,818,893			1,347,978			1,272,921
Net assets at beginning of period		300,054			-			-			2,222,298			4,773,276
Net assets at end of period	$	416,892		$	5,880		$	2,818,893		$	3,570,276		$	6,046,197
Beginning units		15,498			-			-			130,238			242,140
Units issued		11,313			544			273,934			67,870			84,639
Units redeemed		(5,150	)		-			(10,963	)		(9,547	)		(59,685	)
Ending units		21,661			544			262,971			188,561			267,094
For the Year Ended December 31, 2019
From operations:
Dividends	$	4,739		$	-		$	-		$	33,833		$	426
Mortality and expense risk and administrative charges		(3,606	)		-			-			(25,147	)		(49,264	)
Net investment income (loss)		1,133			-			-			8,686			(48,838	)
Net realized gain (loss)		2,830			-			-			(2,946	)		(22,029	)
Capital gain distribution from mutual funds		19,359			-			-			42,814			134,068
Change in unrealized appreciation (depreciation) of investments		25,227			-			-			183,795			677,233
Increase (decrease) in net assets from operations		48,549			-			-			232,349			740,434
From contract transactions:
Payments received from contract owners		147,137			-			-			527,411			1,093,816
Payments for contract benefits or terminations		(707	)		-			-			(37,616	)		(189,958	)
Transfers between sub-accounts (including fixed account), net		(79,351	)		-			-			96,670			135,432
Contract maintenance charges		(60	)		-			-			(4,750	)		(30,322	)
Increase (decrease) in net assets from contract transactions		67,019			-			-			581,715			1,008,968
Increase (decrease) in net assets		115,568			-			-			814,064			1,749,402
Net assets at beginning of period		184,486			-			-			1,408,234			3,023,874
Net assets at end of period	$	300,054		$	-		$	-		$	2,222,298		$	4,773,276
Beginning units		11,248			-			-			95,373			187,555
Units issued		9,181			-			-			37,485			69,346
Units redeemed		(4,931	)		-			-			(2,620	)		(14,761	)
Ending units		15,498			-			-			130,238			242,140

 The accompanying Notes to Financial Statements are an integral part of this statement.

9

SEPARATE ACCOUNT A

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS

	SST SA Allocation Moderate Growth Portfolio Class 3			SST SA Allocation Moderate Portfolio Class 3			SST SA Putnam Asset Allocation Diversified Growth Portfolio Class 3			SST SA Wellington Real Return Portfolio Class 3			SAST SA AB Growth Portfolio Class 3
For the Year Ended December 31, 2020
From operations:
Mortality and expense risk and administrative charges	$	(58,151	)	$	(68,023	)	$	(26,096	)	$	(40,079	)	$	(34,053	)
Net investment income (loss)		(58,151	)		(68,023	)		(26,096	)		(40,079	)		(34,053	)
Net realized gain (loss)		(153,517	)		(12,349	)		(6,634	)		3,666			132,813
Capital gain distribution from mutual funds		-			-			-			-			290,409
Change in unrealized appreciation (depreciation) of investments		778,311			707,827			333,837			201,354			417,017
Increase (decrease) in net assets from operations		566,643			627,455			301,107			164,941			806,186
From contract transactions:
Payments received from contract owners		1,339,673			1,019,962			247,838			701,795			1,139,660
Payments for contract benefits or terminations		(622,565	)		(171,321	)		(42,959	)		(102,449	)		(258,819	)
Transfers between sub-accounts (including fixed account), net		(219,270	)		404,645			(25,211	)		335,825			74,637
Contract maintenance charges		(34,268	)		(40,908	)		(31,333	)		(36,719	)		(11,822	)
Increase (decrease) in net assets from contract transactions		463,570			1,212,378			148,335			898,452			943,656
Increase (decrease) in net assets		1,030,213			1,839,833			449,442			1,063,393			1,749,842
Net assets at beginning of period		4,344,290			4,551,478			2,062,135			2,857,482			1,802,080
Net assets at end of period	$	5,374,503		$	6,391,311		$	2,511,577		$	3,920,875		$	3,551,922
Beginning units		240,684			255,905			158,590			239,106			52,961
Units issued		87,186			107,259			27,718			103,697			44,837
Units redeemed		(64,444	)		(42,832	)		(14,527	)		(33,172	)		(20,579	)
Ending units		263,426			320,332			171,781			309,631			77,219
For the Year Ended December 31, 2019
From operations:
Dividends	$	57,489		$	64,074		$	22,699		$	8,572		$	-
Mortality and expense risk and administrative charges		(45,869	)		(50,788	)		(20,373	)		(27,838	)		(22,329	)
Net investment income (loss)		11,620			13,286			2,326			(19,266	)		(22,329	)
Net realized gain (loss)		(49,303	)		(112,994	)		(39,423	)		(235	)		16,773
Capital gain distribution from mutual funds		150,727			137,651			66,462			-			109,397
Change in unrealized appreciation (depreciation) of investments		434,593			536,902			219,936			101,681			332,021
Increase (decrease) in net assets from operations		547,637			574,845			249,301			82,180			435,862
From contract transactions:
Payments received from contract owners		1,530,800			1,687,898			910,423			923,715			358,904
Payments for contract benefits or terminations		(250,288	)		(186,693	)		(302,086	)		(86,291	)		(101,953	)
Transfers between sub-accounts (including fixed account), net		7,715			(498,944	)		3,117			352,327			(140,673	)
Contract maintenance charges		(15,884	)		(19,665	)		(19,817	)		(18,738	)		(3,599	)
Increase (decrease) in net assets from contract transactions		1,272,343			982,596			591,637			1,171,013			112,679
Increase (decrease) in net assets		1,819,980			1,557,441			840,938			1,253,193			548,541
Net assets at beginning of period		2,524,310			2,994,037			1,221,197			1,604,289			1,253,539
Net assets at end of period	$	4,344,290		$	4,551,478		$	2,062,135		$	2,857,482		$	1,802,080
Beginning units		167,186			197,036			111,204			140,655			49,051
Units issued		89,553			121,824			81,452			108,249			12,591
Units redeemed		(16,055	)		(62,955	)		(34,066	)		(9,798	)		(8,681	)
Ending units		240,684			255,905			158,590			239,106			52,961

 The accompanying Notes to Financial Statements are an integral part of this statement.

10

SEPARATE ACCOUNT A

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS

	SAST SA AB Small & Mid Cap Value Portfolio Class 3			SAST SA American Funds Asset Allocation Portfolio Class 3			SAST SA American Funds Global Growth Portfolio Class 3			SAST SA American Funds Growth Portfolio Class 3			SAST SA American Funds Growth- Income Portfolio Class 3
For the Year Ended December 31, 2020
From operations:
Dividends	$	6,085		$	-		$	1,595		$	54,855		$	85,200
Mortality and expense risk and administrative charges		(13,553	)		(610,561	)		(37,220	)		(87,932	)		(66,822	)
Net investment income (loss)		(7,468	)		(610,561	)		(35,625	)		(33,077	)		18,378
Net realized gain (loss)		(72,655	)		127,660			(56,223	)		34,758			(47,177	)
Capital gain distribution from mutual funds		27,076			43,390			216,938			739,282			601,066
Change in unrealized appreciation (depreciation) of investments		142,805			6,398,532			582,645			2,095,783			72,422
Increase (decrease) in net assets from operations		89,758			5,959,021			707,735			2,836,746			644,689
From contract transactions:
Payments received from contract owners		137,297			11,145,538			276,003			1,313,968			308,809
Payments for contract benefits or terminations		(85,428	)		(1,442,783	)		(136,594	)		(169,325	)		(207,748	)
Transfers between sub-accounts (including fixed account), net		19,695			1,193,247			(142,779	)		(57,639	)		240,157
Contract maintenance charges		(1,783	)		(575,954	)		(5,668	)		(8,599	)		(4,286	)
Increase (decrease) in net assets from contract transactions		69,781			10,320,048			(9,038	)		1,078,405			336,932
Increase (decrease) in net assets		159,539			16,279,069			698,697			3,915,151			981,621
Net assets at beginning of period		1,168,093			44,732,136			2,486,755			5,014,053			4,897,859
Net assets at end of period	$	1,327,632		$	61,011,205		$	3,185,452		$	8,929,204		$	5,879,480
Beginning units		49,557			2,188,805			99,238			181,574			204,012
Units issued		14,035			719,989			21,414			63,769			25,963
Units redeemed		(8,827	)		(214,958	)		(21,557	)		(29,776	)		(10,828	)
Ending units		54,765			2,693,836			99,095			215,567			219,147
For the Year Ended December 31, 2019
From operations:
Dividends	$	-		$	676,750		$	18,587		$	-		$	-
Mortality and expense risk and administrative charges		(12,443	)		(423,342	)		(27,715	)		(50,522	)		(52,508	)
Net investment income (loss)		(12,443	)		253,408			(9,128	)		(50,522	)		(52,508	)
Net realized gain (loss)		(39,844	)		37,390			(68,212	)		(45,671	)		(40,794	)
Capital gain distribution from mutual funds		17,477			1,989,007			266,876			19,803			19,600
Change in unrealized appreciation (depreciation) of investments		184,479			3,523,522			376,452			930,435			901,697
Increase (decrease) in net assets from operations		149,669			5,803,327			565,988			854,045			827,995
From contract transactions:
Payments received from contract owners		391,584			14,442,827			442,791			2,026,109			919,414
Payments for contract benefits or terminations		(99,830	)		(715,225	)		(94,070	)		(169,617	)		(80,025	)
Transfers between sub-accounts (including fixed account), net		(18,003	)		823,517			(37,117	)		196,194			93,833
Contract maintenance charges		(1,136	)		(340,302	)		(3,017	)		(1,101	)		(1,558	)
Increase (decrease) in net assets from contract transactions		272,615			14,210,817			308,587			2,051,585			931,664
Increase (decrease) in net assets		422,284			20,014,144			874,575			2,905,630			1,759,659
Net assets at beginning of period		745,809			24,717,992			1,612,180			2,108,423			3,138,200
Net assets at end of period	$	1,168,093		$	44,732,136		$	2,486,755		$	5,014,053		$	4,897,859
Beginning units		37,544			1,443,527			85,656			98,686			162,174
Units issued		19,218			820,297			28,166			94,121			47,359
Units redeemed		(7,205	)		(75,019	)		(14,584	)		(11,233	)		(5,521	)
Ending units		49,557			2,188,805			99,238			181,574			204,012

 The accompanying Notes to Financial Statements are an integral part of this statement.

11

SEPARATE ACCOUNT A

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS

		SAST SA American Funds VCP Managed Allocation Portfolio Class 3			SAST SA BlackRock Multi-Factor 70/30 Portfolio Class 3			SAST SA BlackRock VCP Global Multi Asset Portfolio Class 3			SAST SA Columbia Technology Portfolio Class 3			SAST SA DFA Ultra Short Bond Portfolio Class 3
For the Year Ended December 31, 2020
From operations:
Dividends	$	-		$	197		$	13,044		$	9,807		$	23,633
Mortality and expense risk and administrative charges		(838,846	)		(63	)		(404,925	)		(28,410	)		(16,363	)
Net investment income (loss)		(838,846	)		134			(391,881	)		(18,603	)		7,270
Net realized gain (loss)		630,698			2			44,135			80,869			2,105
Capital gain distribution from mutual funds		164,376			-			743,501			239,638			-
Change in unrealized appreciation (depreciation) of investments		5,398,659			1,637			1,109,633			686,984			(24,719	)
Increase (decrease) in net assets from operations		5,354,887			1,773			1,505,388			988,888			(15,344	)
From contract transactions:
Payments received from contract owners		8,039,507			37,942			2,115,819			692,427			57,016
Payments for contract benefits or terminations		(1,641,957	)		-			(780,873	)		(47,033	)		(103,340	)
Transfers between sub-accounts (including fixed account), net		1,060,883			203			787,536			230,318			595,711
Contract maintenance charges		(815,085	)		-			(406,231	)		(6,856	)		(16,697	)
Increase (decrease) in net assets from contract transactions		6,643,348			38,145			1,716,251			868,856			532,690
Increase (decrease) in net assets		11,998,235			39,918			3,221,639			1,857,744			517,346
Net assets at beginning of period		63,190,903			-			31,712,630			1,427,154			1,169,032
Net assets at end of period	$	75,189,138		$	39,918		$	34,934,269		$	3,284,898		$	1,686,378
Beginning units		4,094,908			-			2,591,951			37,853			128,938
Units issued		752,154			3,750			313,953			34,118			94,236
Units redeemed		(336,109	)		(1	)		(165,471	)		(11,150	)		(34,820	)
Ending units		4,510,953			3,749			2,740,433			60,821			188,354
For the Year Ended December 31, 2019
From operations:
Dividends	$	155,298		$	-		$	241,103		$	-		$	18,408
Mortality and expense risk and administrative charges		(697,354	)		-			(361,794	)		(13,902	)		(11,701	)
Net investment income (loss)		(542,056	)		-			(120,691	)		(13,902	)		6,707
Net realized gain (loss)		280,830			-			79,930			2,375			1,070
Capital gain distribution from mutual funds		760,416			-			1,152,485			138,306			-
Change in unrealized appreciation (depreciation) of investments		8,000,385			-			2,562,135			270,336			(1,259	)
Increase (decrease) in net assets from operations		8,499,575			-			3,673,859			397,115			6,518
From contract transactions:
Payments received from contract owners		9,146,241			-			4,013,103			803,715			257,637
Payments for contract benefits or terminations		(1,490,948	)		-			(716,390	)		(30,199	)		(58,737	)
Transfers between sub-accounts (including fixed account), net		1,571,593			-			537,216			(139,251	)		167,447
Contract maintenance charges		(562,942	)		-			(300,115	)		(1,488	)		(9,965	)
Increase (decrease) in net assets from contract transactions		8,663,944			-			3,533,814			632,777			356,382
Increase (decrease) in net assets		17,163,519			-			7,207,673			1,029,892			362,900
Net assets at beginning of period		46,027,384			-			24,504,957			397,262			806,132
Net assets at end of period	$	63,190,903		$	-		$	31,712,630		$	1,427,154		$	1,169,032
Beginning units		3,491,629			-			2,288,575			16,285			89,646
Units issued		819,672			-			466,317			27,298			47,034
Units redeemed		(216,393	)		-			(162,941	)		(5,730	)		(7,742	)
Ending units		4,094,908			-			2,591,951			37,853			128,938

 The accompanying Notes to Financial Statements are an integral part of this statement.

12

SEPARATE ACCOUNT A

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS

	SAST SA Dogs of Wall Street Portfolio Class 3			SAST SA Emerging Markets Equity Index Portfolio Class 3			SAST SA Federated Hermes Corporate Bond Portfolio Class 3			SAST SA Fidelity Institutional AM® International Growth Class 3			SAST SA Fidelity Institutional AM® Real Estate Portfolio Class 3
For the Year Ended December 31, 2020
From operations:
Dividends	$	75,594		$	1,754		$	214,724		$	37		$	4,503
Mortality and expense risk and administrative charges		(44,107	)		(665	)		(69,418	)		(128	)		(2,810	)
Net investment income (loss)		31,487			1,089			145,306			(91	)		1,693
Net realized gain (loss)		(15,915	)		584			8,678			269			(15,803	)
Capital gain distribution from mutual funds		465,839			-			78,197			683			11,681
Change in unrealized appreciation (depreciation) of investments		(57,501	)		13,566			156,259			4,010			(4,604	)
Increase (decrease) in net assets from operations		423,910			15,239			388,440			4,871			(7,033	)
From contract transactions:
Payments received from contract owners		1,028,906			63,625			999,656			20,620			99,546
Payments for contract benefits or terminations		(150,540	)		(71	)		(196,926	)		-			(2,907	)
Transfers between sub-accounts (including fixed account), net		52,868			3,980			459,798			(1,314	)		52,975
Contract maintenance charges		(11,146	)		(39	)		(45,615	)		(78	)		(1,309	)
Increase (decrease) in net assets from contract transactions		920,088			67,495			1,216,913			19,228			148,305
Increase (decrease) in net assets		1,343,998			82,734			1,605,353			24,099			141,272
Net assets at beginning of period		2,675,453			21,685			4,723,429			-			162,907
Net assets at end of period	$	4,019,451		$	104,419		$	6,328,782		$	24,099		$	304,179
Beginning units		85,765			2,188			246,195			-			10,944
Units issued		50,486			7,264			98,218			1,917			14,218
Units redeemed		(14,813	)		(354	)		(37,946	)		(118	)		(4,366	)
Ending units		121,438			9,098			306,467			1,799			20,796
For the Year Ended December 31, 2019
From operations:
Dividends	$	59,133		$	-		$	216,412		$	-		$	3,152
Mortality and expense risk and administrative charges		(31,437	)		(199	)		(50,268	)		-			(1,665	)
Net investment income (loss)		27,696			(199	)		166,144			-			1,487
Net realized gain (loss)		(6,575	)		137			(4,583	)		-			(2,729	)
Capital gain distribution from mutual funds		158,311			-			-			-			423
Change in unrealized appreciation (depreciation) of investments		282,195			2,315			281,622			-			22,594
Increase (decrease) in net assets from operations		461,627			2,253			443,183			-			21,775
From contract transactions:
Payments received from contract owners		408,731			20,000			1,015,310			-			60,428
Payments for contract benefits or terminations		(169,181	)		-			(241,148	)		-			(3,276	)
Transfers between sub-accounts (including fixed account), net		(10,471	)		(568	)		452,879			-			(1,920	)
Contract maintenance charges		(3,046	)		-			(25,174	)		-			(473	)
Increase (decrease) in net assets from contract transactions		226,033			19,432			1,201,867			-			54,759
Increase (decrease) in net assets		687,660			21,685			1,645,050			-			76,534
Net assets at beginning of period		1,987,793			-			3,078,379			-			86,373
Net assets at end of period	$	2,675,453		$	21,685		$	4,723,429		$	-		$	162,907
Beginning units		78,312			-			181,803			-			7,210
Units issued		16,866			2,340			84,339			-			4,991
Units redeemed		(9,413	)		(152	)		(19,947	)		-			(1,257	)
Ending units		85,765			2,188			246,195			-			10,944

 The accompanying Notes to Financial Statements are an integral part of this statement.

13

SEPARATE ACCOUNT A

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS

	SAST SA Fixed Income Index Portfolio Class 3			SAST SA Fixed Income Intermediate Index Portfolio Class 3			SAST SA Franklin Small Company Value Portfolio Class 3			SAST SA Global Index Allocation 60/40 Portfolio Class 3			SAST SA Global Index Allocation 75/25 Portfolio Class 3
For the Year Ended December 31, 2020
From operations:
Dividends	$	80,223		$	11,150		$	6,495		$	31,831		$	28,623
Mortality and expense risk and administrative charges		(35,230	)		(5,995	)		(7,544	)		(20,686	)		(25,226	)
Net investment income (loss)		44,993			5,155			(1,049	)		11,145			3,397
Net realized gain (loss)		49,179			6,150			(33,476	)		3,064			8,191
Capital gain distribution from mutual funds		12,725			-			35,755			23,341			19,224
Change in unrealized appreciation (depreciation) of investments		34,571			6,352			73,549			245,314			218,386
Increase (decrease) in net assets from operations		141,468			17,657			74,779			282,864			249,198
From contract transactions:
Payments received from contract owners		1,756,713			181,481			162,651			1,040,271			417,450
Payments for contract benefits or terminations		(47,423	)		(14,704	)		(15,614	)		(5,724	)		(23,252	)
Transfers between sub-accounts (including fixed account), net		973,453			185,058			11,828			(22,635	)		(14,171	)
Contract maintenance charges		(27,551	)		(5,695	)		(2,957	)		(17,559	)		(26,866	)
Increase (decrease) in net assets from contract transactions		2,655,192			346,140			155,908			994,353			353,161
Increase (decrease) in net assets		2,796,660			363,797			230,687			1,277,217			602,359
Net assets at beginning of period		1,431,324			305,978			511,547			1,062,585			1,752,595
Net assets at end of period	$	4,227,984		$	669,775		$	742,234		$	2,339,802		$	2,354,954
Beginning units		135,790			29,759			24,604			97,722			161,157
Units issued		279,689			39,921			14,280			102,743			43,695
Units redeemed		(40,842	)		(7,432	)		(4,722	)		(5,179	)		(9,388	)
Ending units		374,637			62,248			34,162			195,286			195,464
For the Year Ended December 31, 2019
From operations:
Dividends	$	2,120		$	394		$	3,398		$	-		$	-
Mortality and expense risk and administrative charges		(11,679	)		(2,947	)		(6,160	)		(8,858	)		(13,053	)
Net investment income (loss)		(9,559	)		(2,553	)		(2,762	)		(8,858	)		(13,053	)
Net realized gain (loss)		2,631			672			(5,717	)		955			525
Capital gain distribution from mutual funds		-			-			70,771			2,646			5,513
Change in unrealized appreciation (depreciation) of investments		67,960			11,973			32,906			84,947			151,255
Increase (decrease) in net assets from operations		61,032			10,092			95,198			79,690			144,240
From contract transactions:
Payments received from contract owners		507,754			80,179			65,347			806,584			1,192,585
Payments for contract benefits or terminations		(21,124	)		(11,123	)		(25,732	)		(1,116	)		(15,193	)
Transfers between sub-accounts (including fixed account), net		240,197			39,528			14,383			41,855			54,548
Contract maintenance charges		(5,741	)		(2,415	)		(1,282	)		(7,361	)		(9,939	)
Increase (decrease) in net assets from contract transactions		721,086			106,169			52,716			839,962			1,222,001
Increase (decrease) in net assets		782,118			116,261			147,914			919,652			1,366,241
Net assets at beginning of period		649,206			189,717			363,633			142,933			386,354
Net assets at end of period	$	1,431,324		$	305,978		$	511,547		$	1,062,585		$	1,752,595
Beginning units		66,202			19,301			21,772			15,315			42,213
Units issued		75,265			11,916			5,177			83,393			123,369
Units redeemed		(5,677	)		(1,458	)		(2,345	)		(986	)		(4,425	)
Ending units		135,790			29,759			24,604			97,722			161,157
The accompanying Notes to Financial Statements are an integral part of this statement.

14

SEPARATE ACCOUNT A

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS

	SAST SA Global Index Allocation 90/10 Portfolio Class 3			SAST SA Goldman Sachs Global Bond Portfolio Class 3			SAST SA Goldman Sachs Multi- Asset Insights Portfolio Class 3			SAST SA Index Allocation 60/40 Portfolio Class 3			SAST SA Index Allocation 80/20 Portfolio Class 3
For the Year Ended December 31, 2020
From operations:
Dividends	$	-		$	9,985		$	3,904		$	90,016		$	-
Mortality and expense risk and administrative charges		(66,009	)		(31,098	)		(19,801	)		(75,238	)		(136,322	)
Net investment income (loss)		(66,009	)		(21,113	)		(15,897	)		14,778			(136,322	)
Net realized gain (loss)		30,943			5,406			5,348			18,679			177,890
Capital gain distribution from mutual funds		-			-			25,760			115,045			65,392
Change in unrealized appreciation (depreciation) of investments		703,376			249,524			244,268			630,976			1,426,686
Increase (decrease) in net assets from operations		668,310			233,817			259,479			779,478			1,533,646
From contract transactions:
Payments received from contract owners		1,018,259			198,688			1,448,372			1,394,726			2,021,780
Payments for contract benefits or terminations		(205,887	)		(114,697	)		(20,414	)		(283,519	)		(352,422	)
Transfers between sub-accounts (including fixed account), net		(100,111	)		195,104			3,345			386,707			(611,914	)
Contract maintenance charges		(62,685	)		(27,265	)		(19,229	)		(60,827	)		(140,639	)
Increase (decrease) in net assets from contract transactions		649,576			251,830			1,412,074			1,437,087			916,805
Increase (decrease) in net assets		1,317,886			485,647			1,671,553			2,216,565			2,450,451
Net assets at beginning of period		5,387,380			2,285,519			1,072,638			5,213,149			10,117,240
Net assets at end of period	$	6,705,266		$	2,771,166		$	2,744,191		$	7,429,714		$	12,567,691
Beginning units		495,267			178,347			98,344			426,910			796,622
Units issued		117,690			43,894			138,845			151,049			168,589
Units redeemed		(56,470	)		(26,088	)		(8,121	)		(35,062	)		(89,504	)
Ending units		556,487			196,153			229,068			542,897			875,707
For the Year Ended December 31, 2019
From operations:
Dividends	$	-		$	-		$	18,776		$	-		$	-
Mortality and expense risk and administrative charges		(30,988	)		(26,203	)		(7,277	)		(45,101	)		(100,834	)
Net investment income (loss)		(30,988	)		(26,203	)		11,499			(45,101	)		(100,834	)
Net realized gain (loss)		(569	)		(15,643	)		287			10,905			28,840
Capital gain distribution from mutual funds		41,268			-			3,930			36,101			81,641
Change in unrealized appreciation (depreciation) of investments		459,239			143,125			55,897			555,187			1,488,951
Increase (decrease) in net assets from operations		468,950			101,279			71,613			557,092			1,498,598
From contract transactions:
Payments received from contract owners		3,664,832			479,893			790,232			2,758,785			2,883,979
Payments for contract benefits or terminations		(17,703	)		(143,997	)		(3,428	)		(229,699	)		(119,494	)
Transfers between sub-accounts (including fixed account), net		453,903			196,361			83,660			186,041			168,007
Contract maintenance charges		(20,511	)		(16,764	)		(6,134	)		(31,301	)		(82,312	)
Increase (decrease) in net assets from contract transactions		4,080,521			515,493			864,330			2,683,826			2,850,180
Increase (decrease) in net assets		4,549,471			616,772			935,943			3,240,918			4,348,778
Net assets at beginning of period		837,909			1,668,747			136,695			1,972,231			5,768,462
Net assets at end of period	$	5,387,380		$	2,285,519		$	1,072,638		$	5,213,149		$	10,117,240
Beginning units		93,570			137,340			14,683			190,847			554,493
Units issued		406,736			56,545			84,665			258,836			271,279
Units redeemed		(5,039	)		(15,538	)		(1,004	)		(22,773	)		(29,150	)
Ending units		495,267			178,347			98,344			426,910			796,622
The accompanying Notes to Financial Statements are an integral part of this statement.

15

SEPARATE ACCOUNT A

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS

	SAST SA Index Allocation 90/10 Portfolio Class 3			SAST SA International Index Portfolio Class 3			SAST SA Invesco Growth Opportunities Portfolio Class 3			SAST SA Invesco Main Street Large Cap Portfolio Class 3			SAST SA Invesco VCP Equity-Income Portfolio Class 3
For the Year Ended December 31, 2020
From operations:
Dividends	$	-		$	5,744		$	-		$	9,748		$	19,681
Mortality and expense risk and administrative charges		(441,345	)		(3,531	)		(3,171	)		(15,692	)		(308,785	)
Net investment income (loss)		(441,345	)		2,213			(3,171	)		(5,944	)		(289,104	)
Net realized gain (loss)		174,597			8,798			6,021			8,510			62,534
Capital gain distribution from mutual funds		192,425			-			34,183			81,465			445,743
Change in unrealized appreciation (depreciation) of investments		5,210,557			24,997			82,956			48,600			(432,289	)
Increase (decrease) in net assets from operations		5,136,234			36,008			119,989			132,631			(213,116	)
From contract transactions:
Payments received from contract owners		3,196,629			170,403			66,287			3,208			2,285,659
Payments for contract benefits or terminations		(473,762	)		(3,917	)		(8,116	)		(28,505	)		(571,615	)
Transfers between sub-accounts (including fixed account), net		727,182			(51,424	)		(27,939	)		2,264			1,881,650
Contract maintenance charges		(488,929	)		(786	)		(313	)		(4,037	)		(320,006	)
Increase (decrease) in net assets from contract transactions		2,961,120			114,276			29,919			(27,070	)		3,275,688
Increase (decrease) in net assets		8,097,354			150,284			149,908			105,561			3,062,572
Net assets at beginning of period		34,642,920			199,617			176,156			1,186,221			23,871,143
Net assets at end of period	$	42,740,274		$	349,901		$	326,064		$	1,291,782		$	26,933,715
Beginning units		2,672,142			19,163			6,776			50,924			1,740,968
Units issued		408,037			25,381			2,566			1,566			389,480
Units redeemed		(165,075	)		(12,842	)		(1,170	)		(2,828	)		(119,170	)
Ending units		2,915,104			31,702			8,172			49,662			2,011,278
For the Year Ended December 31, 2019
From operations:
Dividends	$	-		$	138		$	-		$	11,112		$	331,041
Mortality and expense risk and administrative charges		(354,128	)		(2,000	)		(2,080	)		(15,070	)		(279,712	)
Net investment income (loss)		(354,128	)		(1,862	)		(2,080	)		(3,958	)		51,329
Net realized gain (loss)		77,900			(205	)		1,936			19,907			107,400
Capital gain distribution from mutual funds		303,945			-			23,428			123,460			187,821
Change in unrealized appreciation (depreciation) of investments		5,924,631			26,433			10,521			139,451			2,706,910
Increase (decrease) in net assets from operations		5,952,348			24,366			33,805			278,860			3,053,460
From contract transactions:
Payments received from contract owners		5,180,683			60,665			38,850			62,883			2,370,712
Payments for contract benefits or terminations		(336,706	)		(3,263	)		(21,327	)		(63,490	)		(783,466	)
Transfers between sub-accounts (including fixed account), net		1,453,293			28,328			959			(34,979	)		536,581
Contract maintenance charges		(329,427	)		(14	)		(49	)		(3,334	)		(236,852	)
Increase (decrease) in net assets from contract transactions		5,967,843			85,716			18,433			(38,920	)		1,886,975
Increase (decrease) in net assets		11,920,191			110,082			52,238			239,940			4,940,435
Net assets at beginning of period		22,722,729			89,535			123,918			946,281			18,930,708
Net assets at end of period	$	34,642,920		$	199,617		$	176,156		$	1,186,221		$	23,871,143
Beginning units		2,173,097			10,230			6,039			52,694			1,594,555
Units issued		570,259			9,566			1,771			3,015			247,607
Units redeemed		(71,214	)		(633	)		(1,034	)		(4,785	)		(101,194	)
Ending units		2,672,142			19,163			6,776			50,924			1,740,968
The accompanying Notes to Financial Statements are an integral part of this statement.

16

SEPARATE ACCOUNT A

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS

	SAST SA Janus Focused Growth Portfolio Class 3			SAST SA JPMorgan Diversified Balanced Portfolio Class 3			SAST SA JPMorgan Emerging Markets Portfolio Class 3			SAST SA JPMorgan Equity-Income Portfolio Class 3			SAST SA JPMorgan Global Equities Portfolio Class 3
For the Year Ended December 31, 2020
From operations:
Dividends	$	-		$	52,260		$	9,334		$	27,589		$	608
Mortality and expense risk and administrative charges		(9,953	)		(30,449	)		(7,396	)		(19,619	)		(495	)
Net investment income (loss)		(9,953	)		21,811			1,938			7,970			113
Net realized gain (loss)		21,034			(20,024	)		1,415			(3,436	)		(2	)
Capital gain distribution from mutual funds		59,721			68,486			-			109,124			1,313
Change in unrealized appreciation (depreciation) of investments		157,101			277,481			86,543			(79,202	)		3,961
Increase (decrease) in net assets from operations		227,903			347,754			89,896			34,456			5,385
From contract transactions:
Payments received from contract owners		235,472			420,283			48,028			118,575			17,744
Payments for contract benefits or terminations		(18,123	)		(106,250	)		(13,292	)		(54,773	)		(51	)
Transfers between sub-accounts (including fixed account), net		(90,257	)		70,453			50,131			62,815			3,889
Contract maintenance charges		(2,740	)		(29,644	)		(2,802	)		(7,619	)		(525	)
Increase (decrease) in net assets from contract transactions		124,352			354,842			82,065			118,998			21,057
Increase (decrease) in net assets		352,255			702,596			171,961			153,454			26,442
Net assets at beginning of period		576,852			2,214,964			463,158			1,471,036			26,293
Net assets at end of period	$	929,107		$	2,917,560		$	635,119		$	1,624,490		$	52,735
Beginning units		21,235			112,789			35,962			62,931			1,591
Units issued		9,088			32,927			19,230			10,521			1,500
Units redeemed		(5,452	)		(14,138	)		(12,011	)		(5,225	)		(146	)
Ending units		24,871			131,578			43,181			68,227			2,945
For the Year Ended December 31, 2019
From operations:
Dividends	$	-		$	41,856		$	12,027		$	32,736		$	57
Mortality and expense risk and administrative charges		(6,612	)		(24,546	)		(5,656	)		(19,797	)		(212	)
Net investment income (loss)		(6,612	)		17,310			6,371			12,939			(155	)
Net realized gain (loss)		10,166			(1,795	)		10,143			29,606			(7,462	)
Capital gain distribution from mutual funds		28,886			112,682			-			99,523			224
Change in unrealized appreciation (depreciation) of investments		98,002			176,350			55,586			169,266			12,649
Increase (decrease) in net assets from operations		130,442			304,547			72,100			311,334			5,256
From contract transactions:
Payments received from contract owners		139,365			468,171			35,251			55,791			22,500
Payments for contract benefits or terminations		(30,714	)		(70,956	)		(20,200	)		(139,903	)		-
Transfers between sub-accounts (including fixed account), net		(12,603	)		(56,722	)		16,645			(30,843	)		(44,741	)
Contract maintenance charges		(1,069	)		(19,023	)		(1,135	)		(5,390	)		(13	)
Increase (decrease) in net assets from contract transactions		94,979			321,470			30,561			(120,345	)		(22,254	)
Increase (decrease) in net assets		225,421			626,017			102,661			190,989			(16,998	)
Net assets at beginning of period		351,431			1,588,947			360,497			1,280,047			43,291
Net assets at end of period	$	576,852		$	2,214,964		$	463,158		$	1,471,036		$	26,293
Beginning units		17,461			94,608			33,321			68,443			3,244
Units issued		5,872			27,944			6,588			2,843			1,435
Units redeemed		(2,098	)		(9,763	)		(3,947	)		(8,355	)		(3,088	)
Ending units		21,235			112,789			35,962			62,931			1,591
The accompanying Notes to Financial Statements are an integral part of this statement.

17

SEPARATE ACCOUNT A

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS

	SAST SA JPMorgan MFS Core Bond Portfolio Class 3			SAST SA JPMorgan Mid- Cap Growth Portfolio Class 3			SAST SA Large Cap Growth Index Portfolio Class 3			SAST SA Large Cap Index Portfolio Class 3			SAST SA Large Cap Value Index Portfolio Class 3
For the Year Ended December 31, 2020
From operations:
Dividends	$	167,926		$	-		$	6,765		$	15,664		$	6,021
Mortality and expense risk and administrative charges		(81,547	)		(8,256	)		(7,692	)		(11,530	)		(2,723	)
Net investment income (loss)		86,379			(8,256	)		(927	)		4,134			3,298
Net realized gain (loss)		22,393			9,982			16,167			11,041			548
Capital gain distribution from mutual funds		-			96,803			16,034			15,864			25,367
Change in unrealized appreciation (depreciation) of investments		264,536			152,011			167,336			137,745			1,084
Increase (decrease) in net assets from operations		373,308			250,540			198,610			168,784			30,297
From contract transactions:
Payments received from contract owners		975,988			347,002			207,689			338,254			120,098
Payments for contract benefits or terminations		(179,636	)		(44,606	)		(20,837	)		(42,140	)		(6,199	)
Transfers between sub-accounts (including fixed account), net		1,585,950			(43,855	)		(16,315	)		121,434			77,710
Contract maintenance charges		(60,524	)		(3,502	)		(5,221	)		(3,494	)		(2,325	)
Increase (decrease) in net assets from contract transactions		2,321,778			255,039			165,316			414,054			189,284
Increase (decrease) in net assets		2,695,086			505,579			363,926			582,838			219,581
Net assets at beginning of period		4,893,440			402,493			435,373			674,069			145,892
Net assets at end of period	$	7,588,526		$	908,072		$	799,299		$	1,256,907		$	365,473
Beginning units		325,865			12,526			35,266			53,213			12,110
Units issued		190,588			13,091			20,366			37,355			19,247
Units redeemed		(46,753	)		(6,529	)		(6,030	)		(5,245	)		(992	)
Ending units		469,700			19,088			49,602			85,323			30,365
For the Year Ended December 31, 2019
From operations:
Dividends	$	124,779		$	-		$	48		$	95		$	35
Mortality and expense risk and administrative charges		(57,053	)		(4,429	)		(2,316	)		(4,305	)		(977	)
Net investment income (loss)		67,726			(4,429	)		(2,268	)		(4,210	)		(942	)
Net realized gain (loss)		5,865			2,337			633			1,150			785
Capital gain distribution from mutual funds		-			32,704			127			1,542			85
Change in unrealized appreciation (depreciation) of investments		231,080			61,324			40,890			78,986			18,130
Increase (decrease) in net assets from operations		304,671			91,936			39,382			77,468			18,058
From contract transactions:
Payments received from contract owners		708,740			94,232			353,320			363,524			118,991
Payments for contract benefits or terminations		(197,325	)		(11,264	)		(4,246	)		(26,425	)		(2,243	)
Transfers between sub-accounts (including fixed account), net		276,444			(3,040	)		41,483			136,485			4,982
Contract maintenance charges		(30,111	)		(215	)		(816	)		(430	)		(555	)
Increase (decrease) in net assets from contract transactions		757,748			79,713			389,741			473,154			121,175
Increase (decrease) in net assets		1,062,419			171,649			429,123			550,622			139,233
Net assets at beginning of period		3,831,021			230,844			6,250			123,447			6,659
Net assets at end of period	$	4,893,440		$	402,493		$	435,373		$	674,069		$	145,892
Beginning units		274,751			9,913			653			12,567			717
Units issued		73,967			3,811			35,472			45,083			12,116
Units redeemed		(22,853	)		(1,198	)		(859	)		(4,437	)		(723	)
Ending units		325,865			12,526			35,266			53,213			12,110
The accompanying Notes to Financial Statements are an integral part of this statement.

18

SEPARATE ACCOUNT A

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS

	SAST SA Legg Mason BW Large Cap Value Portfolio Class 3			SAST SA Legg Mason Tactical Opportunities Class 3			SAST SA MFS Blue Chip Growth Portfolio Class 3			SAST SA MFS Massachusetts Investors Trust Portfolio Class 3			SAST SA MFS Total Return Portfolio Class 3
For the Year Ended December 31, 2020
From operations:
Dividends	$	19,011		$	6,652		$	4,814		$	6,169		$	23,081
Mortality and expense risk and administrative charges		(13,045	)		(5,977	)		(16,280	)		(20,129	)		(16,279	)
Net investment income (loss)		5,966			675			(11,466	)		(13,960	)		6,802
Net realized gain (loss)		(27,686	)		842			36,143			2,168			(6,642	)
Capital gain distribution from mutual funds		63,246			2,126			117,360			127,983			39,050
Change in unrealized appreciation (depreciation) of investments		(48,037	)		42,548			175,402			54,536			59,002
Increase (decrease) in net assets from operations		(6,511	)		46,191			317,439			170,727			98,212
From contract transactions:
Payments received from contract owners		130,206			130,748			161,781			16,851			59,279
Payments for contract benefits or terminations		(37,826	)		(4,387	)		(38,801	)		(83,452	)		(19,499	)
Transfers between sub-accounts (including fixed account), net		59,631			71,823			(31,935	)		(10,760	)		(63,898	)
Contract maintenance charges		(3,589	)		(5,558	)		(5,056	)		(6,293	)		(12,217	)
Increase (decrease) in net assets from contract transactions		148,422			192,626			85,989			(83,654	)		(36,335	)
Increase (decrease) in net assets		141,911			238,817			403,428			87,073			61,877
Net assets at beginning of period		1,003,722			386,488			1,045,384			1,507,785			1,312,029
Net assets at end of period	$	1,145,633		$	625,305		$	1,448,812		$	1,594,858		$	1,373,906
Beginning units		47,439			34,644			40,610			57,678			70,234
Units issued		11,803			19,503			8,428			2,640			7,148
Units redeemed		(3,725	)		(1,707	)		(5,296	)		(6,083	)		(9,341	)
Ending units		55,517			52,440			43,742			54,235			68,041
For the Year Ended December 31, 2019
From operations:
Dividends	$	17,648		$	5,052		$	3,598		$	9,296		$	26,410
Mortality and expense risk and administrative charges		(12,843	)		(2,882	)		(11,773	)		(19,876	)		(13,279	)
Net investment income (loss)		4,805			2,170			(8,175	)		(10,580	)		13,131
Net realized gain (loss)		(13,609	)		195			22,127			22,005			(3,072	)
Capital gain distribution from mutual funds		82,721			589			106,134			165,752			38,058
Change in unrealized appreciation (depreciation) of investments		117,389			28,687			95,012			177,533			127,014
Increase (decrease) in net assets from operations		191,306			31,641			215,098			354,710			175,131
From contract transactions:
Payments received from contract owners		35,369			244,930			223,201			76,169			143,403
Payments for contract benefits or terminations		(49,060	)		(4,006	)		(55,768	)		(100,312	)		(12,568	)
Transfers between sub-accounts (including fixed account), net		30,613			2,532			16,176			(54,610	)		148,641
Contract maintenance charges		(3,033	)		(2,232	)		(2,901	)		(5,024	)		(9,593	)
Increase (decrease) in net assets from contract transactions		13,889			241,224			180,708			(83,777	)		269,883
Increase (decrease) in net assets		205,195			272,865			395,806			270,933			445,014
Net assets at beginning of period		798,527			113,623			649,578			1,236,852			867,015
Net assets at end of period	$	1,003,722		$	386,488		$	1,045,384		$	1,507,785		$	1,312,029
Beginning units		46,645			11,891			32,938			61,293			54,826
Units issued		4,730			23,555			11,915			3,316			17,948
Units redeemed		(3,936	)		(802	)		(4,243	)		(6,931	)		(2,540	)
Ending units		47,439			34,644			40,610			57,678			70,234
The accompanying Notes to Financial Statements are an integral part of this statement.

19

SEPARATE ACCOUNT A

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS

	SAST SA Mid Cap Index Portfolio Class 3			SAST SA Morgan Stanley International Equities Portfolio Class 3			SAST SA PIMCO VCP Tactical Balanced Portfolio Class 3			SAST SA PineBridge High-Yield Bond Portfolio Class 3			SAST SA Putnam International Growth and Income Portfolio Class 3
For the Year Ended December 31, 2020
From operations:
Dividends	$	10,202		$	14,721		$	140,631		$	91,024		$	2,355
Mortality and expense risk and administrative charges		(9,905	)		(11,853	)		(377,081	)		(19,173	)		(1,316	)
Net investment income (loss)		297			2,868			(236,450	)		71,851			1,039
Net realized gain (loss)		10,159			3,691			19,219			(16,113	)		1,049
Capital gain distribution from mutual funds		9,635			14,315			1,778,854			-			185
Change in unrealized appreciation (depreciation) of investments		166,906			72,218			590,866			53,847			6,041
Increase (decrease) in net assets from operations		186,997			93,092			2,152,489			109,585			8,314
From contract transactions:
Payments received from contract owners		235,235			18,733			2,871,500			238,602			-
Payments for contract benefits or terminations		(23,490	)		(31,974	)		(699,145	)		(99,738	)		(8,796	)
Transfers between sub-accounts (including fixed account), net		104,780			37,140			494,745			99,771			27,724
Contract maintenance charges		(6,047	)		(3,950	)		(366,694	)		(3,464	)		(297	)
Increase (decrease) in net assets from contract transactions		310,478			19,949			2,300,406			235,171			18,631
Increase (decrease) in net assets		497,475			113,041			4,452,895			344,756			26,945
Net assets at beginning of period		604,165			882,044			28,018,623			1,356,131			95,700
Net assets at end of period	$	1,101,640		$	995,085		$	32,471,518		$	1,700,887		$	122,645
Beginning units		53,774			72,409			1,998,682			78,265			9,441
Units issued		46,870			7,107			324,464			24,586			3,719
Units redeemed		(12,657	)		(5,156	)		(164,713	)		(10,484	)		(1,259	)
Ending units		87,987			74,360			2,158,433			92,367			11,901
For the Year Ended December 31, 2019
From operations:
Dividends	$	-		$	19,479		$	-		$	92,488		$	1,968
Mortality and expense risk and administrative charges		(4,728	)		(10,984	)		(331,665	)		(12,986	)		(1,176	)
Net investment income (loss)		(4,728	)		8,495			(331,665	)		79,502			792
Net realized gain (loss)		340			4,879			(28,209	)		(6,943	)		646
Capital gain distribution from mutual funds		962			32,879			152,568			-			3,795
Change in unrealized appreciation (depreciation) of investments		70,106			82,224			4,230,067			29,911			9,841
Increase (decrease) in net assets from operations		66,680			128,477			4,022,761			102,470			15,074
From contract transactions:
Payments received from contract owners		315,885			127,187			2,111,694			551,186			-
Payments for contract benefits or terminations		(11,192	)		(41,270	)		(814,398	)		(71,308	)		(8,900	)
Transfers between sub-accounts (including fixed account), net		54,257			(8,722	)		240,703			73,115			(10,170	)
Contract maintenance charges		(1,293	)		(2,873	)		(272,906	)		(1,607	)		(33	)
Increase (decrease) in net assets from contract transactions		357,657			74,322			1,265,093			551,386			(19,103	)
Increase (decrease) in net assets		424,337			202,799			5,287,854			653,856			(4,029	)
Net assets at beginning of period		179,828			679,245			22,730,769			702,275			99,729
Net assets at end of period	$	604,165		$	882,044		$	28,018,623		$	1,356,131		$	95,700
Beginning units		19,785			66,183			1,901,937			46,106			11,624
Units issued		36,157			12,605			212,728			37,307			782
Units redeemed		(2,168	)		(6,379	)		(115,983	)		(5,148	)		(2,965	)
Ending units		53,774			72,409			1,998,682			78,265			9,441
The accompanying Notes to Financial Statements are an integral part of this statement.

20

SEPARATE ACCOUNT A

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS

	SAST SA Schroders VCP Global Allocation Portfolio Class 3			SAST SA Small Cap Index Portfolio Class 3			SAST SA T. Rowe Price Asset Allocation Growth Portfolio Class 3			SAST SA T. Rowe Price VCP Balanced Portfolio Class 3			SAST SA Templeton Foreign Value Portfolio Class 3
For the Year Ended December 31, 2020
From operations:
Dividends	$	22,881		$	5,372		$	16,907		$	37,816		$	15,708
Mortality and expense risk and administrative charges		(231,855	)		(7,762	)		(29,142	)		(478,577	)		(8,594	)
Net investment income (loss)		(208,974	)		(2,390	)		(12,235	)		(440,761	)		7,114
Net realized gain (loss)		(26,268	)		9,399			44,809			351,309			(6,898	)
Capital gain distribution from mutual funds		297,760			29,498			17,901			924,530			-
Change in unrealized appreciation (depreciation) of investments		(138,527	)		156,302			422,624			2,607,944			(23,417	)
Increase (decrease) in net assets from operations		(76,009	)		192,809			473,099			3,443,022			(23,201	)
From contract transactions:
Payments received from contract owners		773,113			195,301			969,493			4,903,060			29,871
Payments for contract benefits or terminations		(386,358	)		(14,542	)		(51,836	)		(825,513	)		(22,266	)
Transfers between sub-accounts (including fixed account), net		913,559			30,130			109,708			1,409,054			47,761
Contract maintenance charges		(239,731	)		(3,402	)		(28,071	)		(478,396	)		(2,639	)
Increase (decrease) in net assets from contract transactions		1,060,583			207,487			999,294			5,008,205			52,727
Increase (decrease) in net assets		984,574			400,296			1,472,393			8,451,227			29,526
Net assets at beginning of period		18,737,065			459,321			1,731,843			34,203,578			673,040
Net assets at end of period	$	19,721,639		$	859,617		$	3,204,236		$	42,654,805		$	702,566
Beginning units		1,466,446			42,366			147,229			2,483,361			60,833
Units issued		167,491			37,658			119,077			652,264			9,644
Units redeemed		(76,709	)		(12,590	)		(30,695	)		(254,922	)		(3,946	)
Ending units		1,557,228			67,434			235,611			2,880,703			66,531
For the Year Ended December 31, 2019
From operations:
Dividends	$	241,716		$	-		$	14,134		$	441,490		$	532
Mortality and expense risk and administrative charges		(216,173	)		(3,909	)		(14,716	)		(381,529	)		(8,623	)
Net investment income (loss)		25,543			(3,909	)		(582	)		59,961			(8,091	)
Net realized gain (loss)		15,474			(175	)		8,662			223,277			(1,708	)
Capital gain distribution from mutual funds		383,128			-			11,219			1,028,128			-
Change in unrealized appreciation (depreciation) of investments		2,245,675			62,094			203,413			4,184,264			69,787
Increase (decrease) in net assets from operations		2,669,820			58,010			222,712			5,495,630			59,988
From contract transactions:
Payments received from contract owners		1,370,035			191,562			884,020			4,485,095			32,702
Payments for contract benefits or terminations		(373,223	)		(6,586	)		(29,634	)		(605,572	)		(31,851	)
Transfers between sub-accounts (including fixed account), net		258,644			31,727			37,459			119,528			55,472
Contract maintenance charges		(184,120	)		(455	)		(11,972	)		(316,032	)		(2,277	)
Increase (decrease) in net assets from contract transactions		1,071,336			216,248			879,873			3,683,019			54,046
Increase (decrease) in net assets		3,741,156			274,258			1,102,585			9,178,649			114,034
Net assets at beginning of period		14,995,909			185,063			629,258			25,024,929			559,006
Net assets at end of period	$	18,737,065		$	459,321		$	1,731,843		$	34,203,578		$	673,040
Beginning units		1,378,326			20,974			65,641			2,194,174			55,686
Units issued		158,895			23,140			93,925			473,320			9,092
Units redeemed		(70,775	)		(1,748	)		(12,337	)		(184,133	)		(3,945	)
Ending units		1,466,446			42,366			147,229			2,483,361			60,833
The accompanying Notes to Financial Statements are an integral part of this statement.

21

SEPARATE ACCOUNT A

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS

	SAST SA VCP Dynamic Allocation Portfolio Class 3			SAST SA VCP Dynamic Strategy Portfolio Class 3			SAST SA VCP Index Allocation Portfolio Class 3			SAST SA WellsCap Aggressive Growth Portfolio Class 3			T Rowe Price Retirement 2015 Advisor Class
For the Year Ended December 31, 2020
From operations:
Dividends	$	964,051		$	807,174		$	247,122		$	-		$	214,444
Mortality and expense risk and administrative charges		(1,029,686	)		(851,521	)		(230,934	)		(8,430	)		(142,214	)
Net investment income (loss)		(65,635	)		(44,347	)		16,188			(8,430	)		72,230
Net realized gain (loss)		335,969			252,647			29,664			40,613			(153,865	)
Capital gain distribution from mutual funds		4,565,809			2,885,829			330,962			48,134			1,072,218
Change in unrealized appreciation (depreciation) of investments		4,351,353			2,765,989			1,128,031			245,479			674,561
Increase (decrease) in net assets from operations		9,187,496			5,860,118			1,504,845			325,796			1,665,144
From contract transactions:
Payments received from contract owners		5,445,019			3,682,379			5,786,041			105,152			1,853,301
Payments for contract benefits or terminations		(2,039,311	)		(1,709,332	)		(245,807	)		(12,938	)		(1,822,232	)
Transfers between sub-accounts (including fixed account), net		362,747			224,195			(560,454	)		24,068			488,525
Contract maintenance charges		(993,458	)		(817,132	)		(242,399	)		(1,809	)		(9,648	)
Increase (decrease) in net assets from contract transactions		2,774,997			1,380,110			4,737,381			114,473			509,946
Increase (decrease) in net assets		11,962,493			7,240,228			6,242,226			440,269			2,175,090
Net assets at beginning of period		77,580,650			65,253,071			17,018,935			470,819			13,841,732
Net assets at end of period	$	89,543,143		$	72,493,299		$	23,261,161		$	911,088		$	16,016,822
Beginning units		4,939,157			4,280,853			1,474,484			22,068			10,854,083
Units issued		528,965			323,190			611,021			9,789			16,378,353
Units redeemed		(364,317	)		(233,262	)		(190,917	)		(5,213	)		(15,940,116	)
Ending units		5,103,805			4,370,781			1,894,588			26,644			11,292,320
For the Year Ended December 31, 2019
From operations:
Dividends	$	-		$	-		$	10,077		$	-		$	254,912
Mortality and expense risk and administrative charges		(916,765	)		(775,328	)		(156,529	)		(5,097	)		(119,534	)
Net investment income (loss)		(916,765	)		(775,328	)		(146,452	)		(5,097	)		135,378
Net realized gain (loss)		50,247			7,370			24,628			6,616			(118,470	)
Capital gain distribution from mutual funds		2,864,974			2,036,254			97,170			26,224			400,576
Change in unrealized appreciation (depreciation) of investments		10,046,134			8,439,383			2,313,314			66,323			1,344,685
Increase (decrease) in net assets from operations		12,044,590			9,707,679			2,288,660			94,066			1,762,169
From contract transactions:
Payments received from contract owners		5,239,530			4,042,755			6,410,963			140,972			2,074,541
Payments for contract benefits or terminations		(2,445,810	)		(1,986,345	)		(180,412	)		(12,826	)		(1,856,299	)
Transfers between sub-accounts (including fixed account), net		418,611			278,705			884,527			18,433			1,655,125
Contract maintenance charges		(762,319	)		(639,844	)		(130,743	)		(151	)		(960	)
Increase (decrease) in net assets from contract transactions		2,450,012			1,695,271			6,984,335			146,428			1,872,407
Increase (decrease) in net assets		14,494,602			11,402,950			9,272,995			240,494			3,634,576
Net assets at beginning of period		63,086,048			53,850,121			7,745,940			230,325			10,207,156
Net assets at end of period	$	77,580,650		$	65,253,071		$	17,018,935		$	470,819		$	13,841,732
Beginning units		4,775,221			4,165,149			815,049			14,942			9,280,225
Units issued		445,141			337,499			743,823			8,322			3,620,707
Units redeemed		(281,205	)		(221,795	)		(84,388	)		(1,196	)		(2,046,849	)
Ending units		4,939,157			4,280,853			1,474,484			22,068			10,854,083
The accompanying Notes to Financial Statements are an integral part of this statement.

22

SEPARATE ACCOUNT A

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS

	T Rowe Price Retirement 2020 Advisor Class			T Rowe Price Retirement 2025 Advisor Class			T Rowe Price Retirement 2030 Advisor Class			T Rowe Price Retirement 2035 Advisor Class			T Rowe Price Retirement 2040 Advisor Class
For the Year Ended December 31, 2020
From operations:
Dividends	$	504,862		$	602,634		$	545,686		$	355,262		$	300,502
Mortality and expense risk and administrative charges		(362,984	)		(467,068	)		(484,094	)		(361,753	)		(364,467	)
Net investment income (loss)		141,878			135,566			61,592			(6,491	)		(63,965	)
Net realized gain (loss)		(203,275	)		645,058			582,931			246,558			236,236
Capital gain distribution from mutual funds		3,180,629			2,180,962			2,506,112			1,713,618			1,893,160
Change in unrealized appreciation (depreciation) of investments		1,184,470			3,954,492			4,561,010			4,257,940			4,730,523
Increase (decrease) in net assets from operations		4,303,702			6,916,078			7,711,645			6,211,625			6,795,954
From contract transactions:
Payments received from contract owners		4,533,397			7,038,510			8,655,334			7,724,443			7,995,508
Payments for contract benefits or terminations		(4,694,467	)		(3,849,886	)		(3,403,070	)		(2,141,809	)		(2,792,828	)
Transfers between sub-accounts (including fixed account), net		(959,724	)		2,025,079			8,406			158,329			456,343
Contract maintenance charges		(3,029	)		(6,185	)		(9,268	)		(7,554	)		(9,049	)
Increase (decrease) in net assets from contract transactions		(1,123,823	)		5,207,518			5,251,402			5,733,409			5,649,974
Increase (decrease) in net assets		3,179,879			12,123,596			12,963,047			11,945,034			12,445,928
Net assets at beginning of period		38,509,988			45,529,793			46,962,385			34,509,621			35,248,410
Net assets at end of period	$	41,689,867		$	57,653,389		$	59,925,432		$	46,454,655		$	47,694,338
Beginning units		29,266,464			33,703,359			33,984,792			24,574,806			24,778,213
Units issued		7,222,926			8,384,956			8,094,044			6,097,593			5,485,295
Units redeemed		(8,170,541	)		(4,428,496	)		(4,205,992	)		(2,068,659	)		(1,532,052	)
Ending units		28,318,849			37,659,819			37,872,844			28,603,740			28,731,456
For the Year Ended December 31, 2019
From operations:
Dividends	$	693,529		$	759,110		$	725,177		$	498,854		$	469,035
Mortality and expense risk and administrative charges		(328,720	)		(371,592	)		(377,922	)		(280,112	)		(285,376	)
Net investment income (loss)		364,809			387,518			347,255			218,742			183,659
Net realized gain (loss)		260,375			393,782			497,730			310,709			272,105
Capital gain distribution from mutual funds		1,221,931			1,273,346			1,588,483			1,272,937			1,481,164
Change in unrealized appreciation (depreciation) of investments		3,489,336			4,410,061			4,654,325			3,782,378			3,956,906
Increase (decrease) in net assets from operations		5,336,451			6,464,707			7,087,793			5,584,766			5,893,834
From contract transactions:
Payments received from contract owners		8,355,176			8,857,073			10,429,165			7,626,565			7,940,759
Payments for contract benefits or terminations		(3,874,510	)		(2,808,536	)		(3,435,015	)		(1,476,723	)		(2,119,274	)
Transfers between sub-accounts (including fixed account), net		574,432			3,626,187			3,222,922			(251,565	)		451,836
Contract maintenance charges		(3,323	)		(5,519	)		(7,428	)		(5,986	)		(7,185	)
Increase (decrease) in net assets from contract transactions		5,051,775			9,669,205			10,209,644			5,892,291			6,266,136
Increase (decrease) in net assets		10,388,226			16,133,912			17,297,437			11,477,057			12,159,970
Net assets at beginning of period		28,121,762			29,395,881			29,664,948			23,032,564			23,088,440
Net assets at end of period	$	38,509,988		$	45,529,793		$	46,962,385		$	34,509,621		$	35,248,410
Beginning units		25,200,911			26,008,930			25,988,743			20,055,154			19,993,530
Units issued		9,235,698			10,306,628			10,412,324			5,922,595			6,106,245
Units redeemed		(5,170,145	)		(2,612,199	)		(2,416,275	)		(1,402,943	)		(1,321,562	)
Ending units		29,266,464			33,703,359			33,984,792			24,574,806			24,778,213
The accompanying Notes to Financial Statements are an integral part of this statement.

23

SEPARATE ACCOUNT A

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS

	T Rowe Price Retirement 2045 Advisor Class			T Rowe Price Retirement 2050 Advisor Class			T Rowe Price Retirement 2055 Advisor Class			T Rowe Price Retirement 2060 Advisor Class			VALIC Company I Asset Allocation Fund
For the Year Ended December 31, 2020
From operations:
Dividends	$	221,287		$	187,984		$	89,068		$	71,025		$	1,689,485
Mortality and expense risk and administrative charges		(276,666	)		(231,871	)		(111,062	)		(81,051	)		(1,321,050	)
Net investment income (loss)		(55,379	)		(43,887	)		(21,994	)		(10,026	)		368,435
Net realized gain (loss)		282,777			171,215			82,294			23,399			(2,544,176	)
Capital gain distribution from mutual funds		1,344,747			1,093,726			396,756			189,400			2,503,872
Change in unrealized appreciation (depreciation) of investments		4,020,070			3,498,991			1,870,666			1,715,989			12,933,230
Increase (decrease) in net assets from operations		5,592,215			4,720,045			2,327,722			1,918,762			13,261,361
From contract transactions:
Payments received from contract owners		6,979,655			6,658,095			3,712,830			3,344,600			5,801,896
Payments for contract benefits or terminations		(2,125,441	)		(1,541,009	)		(960,151	)		(743,259	)		(12,652,110	)
Transfers between sub-accounts (including fixed account), net		347,035			(445,335	)		(225,226	)		454,503			(10,950,968	)
Contract maintenance charges		(7,963	)		(7,998	)		(6,099	)		(5,357	)		(76,100	)
Adjustments to net assets allocated to contracts in payout period		-			(108	)		(122	)		-			871
Increase (decrease) in net assets from contract transactions		5,193,286			4,663,645			2,521,232			3,050,487			(17,876,411	)
Increase (decrease) in net assets		10,785,501			9,383,690			4,848,954			4,969,249			(4,615,050	)
Net assets at beginning of period		26,407,559			22,087,120			10,389,997			6,884,423			152,036,602
Net assets at end of period	$	37,193,060		$	31,470,810		$	15,238,951		$	11,853,672		$	147,421,552
Beginning units		18,428,906			15,419,391			7,256,580			4,805,934			17,063,207
Units issued		5,202,905			4,363,180			2,286,468			3,049,450			505,025
Units redeemed		(1,493,216	)		(1,047,247	)		(457,308	)		(792,795	)		(2,558,490	)
Ending units		22,138,595			18,735,324			9,085,740			7,062,589			15,009,742
For the Year Ended December 31, 2019
From operations:
Dividends	$	321,761		$	267,300		$	130,721		$	82,422		$	2,270,535
Mortality and expense risk and administrative charges		(199,317	)		(170,275	)		(76,642	)		(48,543	)		(1,456,355	)
Net investment income (loss)		122,444			97,025			54,079			33,879			814,180
Net realized gain (loss)		138,630			138,889			58,933			22,269			(1,257,975	)
Capital gain distribution from mutual funds		1,085,945			882,091			379,713			185,449			11,951,780
Change in unrealized appreciation (depreciation) of investments		2,916,148			2,515,029			1,141,896			775,331			8,291,114
Increase (decrease) in net assets from operations		4,263,167			3,633,034			1,634,621			1,016,928			19,799,099
From contract transactions:
Payments received from contract owners		7,027,543			6,264,179			3,505,799			2,541,563			7,340,966
Payments for contract benefits or terminations		(908,931	)		(1,551,224	)		(640,807	)		(402,411	)		(13,897,428	)
Transfers between sub-accounts (including fixed account), net		522,778			229,753			111,261			325,264			(4,485,414	)
Contract maintenance charges		(6,427	)		(6,150	)		(4,469	)		(7,054	)		(102,374	)
Adjustments to net assets allocated to contracts in payout period		-			-			-			-			7,547
Increase (decrease) in net assets from contract transactions		6,634,963			4,936,558			2,971,784			2,457,362			(11,136,703	)
Increase (decrease) in net assets		10,898,130			8,569,592			4,606,405			3,474,290			8,662,396
Net assets at beginning of period		15,509,429			13,517,528			5,783,592			3,410,133			143,374,206
Net assets at end of period	$	26,407,559		$	22,087,120		$	10,389,997		$	6,884,423		$	152,036,602
Beginning units		13,405,587			11,694,837			5,005,564			2,949,718			18,369,939
Units issued		5,725,806			4,417,449			2,562,349			2,056,989			3,797,217
Units redeemed		(702,487	)		(692,895	)		(311,333	)		(200,773	)		(5,103,949	)
Ending units		18,428,906			15,419,391			7,256,580			4,805,934			17,063,207

 The accompanying Notes to Financial Statements are an integral part of this statement.

24

SEPARATE ACCOUNT A

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS

	VALIC Company I Blue Chip Growth Fund			VALIC Company I Capital Conservation Fund			VALIC Company I Core Equity Fund			VALIC Company I Dividend Value Fund			VALIC Company I Dynamic Allocation Fund
For the Year Ended December 31, 2020
From operations:
Dividends	$	-		$	4,891,969		$	3,215,442		$	20,882,014		$	3,810,274
Mortality and expense risk and administrative charges		(8,197,802	)		(1,879,186	)		(2,260,658	)		(7,490,526	)		(1,951,899	)
Net investment income (loss)		(8,197,802	)		3,012,783			954,784			13,391,488			1,858,375
Net realized gain (loss)		82,636,433			2,686,624			17,740,214			(46,448,653	)		2,040,921
Capital gain distribution from mutual funds		84,914,862			-			19,923,122			46,078,643			7,103,741
Change in unrealized appreciation (depreciation) of investments		86,760,687			6,793,325			1,935,242			(56,475,336	)		6,606,134
Increase (decrease) in net assets from operations		246,114,180			12,492,732			40,553,362			(43,453,858	)		17,609,171
From contract transactions:
Payments received from contract owners		55,096,167			7,221,640			3,302,080			50,806,782			2,299,341
Payments for contract benefits or terminations		(69,843,402	)		(19,521,964	)		(18,289,692	)		(55,599,328	)		(18,292,852	)
Transfers between sub-accounts (including fixed account), net		(98,961,536	)		76,671,948			(13,499,113	)		(92,817,263	)		(4,111,160	)
Contract maintenance charges		(615,960	)		(102,839	)		(70,717	)		(466,919	)		(2,180,531	)
Adjustments to net assets allocated to contracts in payout period		(398	)		(3,816	)		1,485			(12,151	)		(1,070	)
Increase (decrease) in net assets from contract transactions		(114,325,129	)		64,264,969			(28,555,957	)		(98,088,879	)		(22,286,272	)
Increase (decrease) in net assets		131,789,051			76,757,701			11,997,405			(141,542,737	)		(4,677,101	)
Net assets at beginning of period		843,507,344			150,258,164			254,487,982			998,859,608			195,246,176
Net assets at end of period	$	975,296,395		$	227,015,865		$	266,485,387		$	857,316,871		$	190,569,075
Beginning units		256,689,601			37,622,298			49,830,334			250,653,175			127,676,637
Units issued		6,385,426			34,186,824			1,155,871			63,889,531			8,143,543
Units redeemed		(39,618,726	)		(17,110,399	)		(7,384,293	)		(99,616,556	)		(22,402,076	)
Ending units		223,456,301			54,698,723			43,601,912			214,926,150			113,418,104
For the Year Ended December 31, 2019
From operations:
Dividends	$	-		$	3,823,719		$	2,783,388		$	14,869,217		$	2,698,973
Mortality and expense risk and administrative charges		(7,580,841	)		(1,492,901	)		(2,303,015	)		(7,892,999	)		(2,154,816	)
Net investment income (loss)		(7,580,841	)		2,330,818			480,373			6,976,218			544,157
Net realized gain (loss)		38,839,221			484,376			16,787,383			(4,834,782	)		4,486,282
Capital gain distribution from mutual funds		89,239,739			-			28,828,584			83,554,722			12,667,539
Change in unrealized appreciation (depreciation) of investments		72,109,437			10,433,050			11,197,183			81,550,046			18,554,173
Increase (decrease) in net assets from operations		192,607,556			13,248,244			57,293,523			167,246,204			36,252,151
From contract transactions:
Payments received from contract owners		64,883,716			6,242,697			3,967,624			56,894,019			3,707,936
Payments for contract benefits or terminations		(76,919,228	)		(17,898,703	)		(21,365,860	)		(60,202,387	)		(41,414,667	)
Transfers between sub-accounts (including fixed account), net		(16,733,279	)		(3,212,999	)		(4,685,368	)		124,489,358			(9,286,343	)
Contract maintenance charges		(597,254	)		(84,351	)		(78,860	)		(589,064	)		(2,209,901	)
Adjustments to net assets allocated to contracts in payout period		(419	)		70,911			(9,069	)		(7,706	)		-
Increase (decrease) in net assets from contract transactions		(29,366,464	)		(14,882,445	)		(22,171,533	)		120,584,220			(49,202,975	)
Increase (decrease) in net assets		163,241,092			(1,634,201	)		35,121,990			287,830,424			(12,950,824	)
Net assets at beginning of period		680,266,252			151,892,365			219,365,992			711,029,184			208,197,000
Net assets at end of period	$	843,507,344		$	150,258,164		$	254,487,982		$	998,859,608		$	195,246,176
Beginning units		265,270,445			41,178,080			53,956,824			220,684,362			162,080,959
Units issued		9,917,180			11,070,001			1,413,479			71,883,480			1,077,570
Units redeemed		(18,498,024	)		(14,625,783	)		(5,539,969	)		(41,914,667	)		(35,481,892	)
Ending units		256,689,601			37,622,298			49,830,334			250,653,175			127,676,637

 The accompanying Notes to Financial Statements are an integral part of this statement.

25

SEPARATE ACCOUNT A

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS

	VALIC Company I Emerging Economies Fund			VALIC Company I Global Real Estate Fund			VALIC Company I Global Strategy Fund			VALIC Company I Government Money Market I Fund			VALIC Company I Government Securities Fund
For the Year Ended December 31, 2020
From operations:
Dividends	$	16,734,046		$	12,088,149		$	18,410,247		$	652,495		$	2,534,094
Mortality and expense risk and administrative charges		(6,729,108	)		(3,008,137	)		(2,768,485	)		(3,375,699	)		(1,049,692	)
Net investment income (loss)		10,004,938			9,080,012			15,641,762			(2,723,204	)		1,484,402
Net realized gain (loss)		14,054,558			(25,269,925	)		(7,419,674	)		(1	)		899,585
Capital gain distribution from mutual funds		-			6,265,141			18,444,735			-			-
Change in unrealized appreciation (depreciation) of investments		99,933,131			(35,129,038	)		(20,947,269	)		—			3,496,370
Increase (decrease) in net assets from operations		123,992,627			(45,053,810	)		5,719,554			(2,723,205	)		5,880,357
From contract transactions:
Payments received from contract owners		44,567,999			21,766,166			9,483,942			69,891,648			5,447,673
Payments for contract benefits or terminations		(59,175,370	)		(22,493,596	)		(24,672,101	)		(69,143,720	)		(11,439,834	)
Transfers between sub-accounts (including fixed account), net		43,471,850			(117,565,673	)		(15,706,491	)		74,959,237			15,395,941
Contract maintenance charges		(243,257	)		(131,376	)		(233,309	)		(134,273	)		(56,232	)
Adjustments to net assets allocated to contracts in payout period		(751	)		206			688			2			(614	)
Increase (decrease) in net assets from contract transactions		28,620,471			(118,424,273	)		(31,127,271	)		75,572,894			9,346,934
Increase (decrease) in net assets		152,613,098			(163,478,083	)		(25,407,717	)		72,849,689			15,227,291
Net assets at beginning of period		761,121,782			461,704,005			324,039,700			294,755,564			102,656,838
Net assets at end of period	$	913,734,880		$	298,225,922		$	298,631,983		$	367,605,253		$	117,884,129
Beginning units		680,723,908			264,357,969			154,123,488			149,254,389			27,421,737
Units issued		189,006,649			19,776,580			11,801,116			126,551,391			19,636,926
Units redeemed		(158,690,391	)		(100,236,767	)		(27,439,820	)		(86,064,529	)		(16,851,889	)
Ending units		711,040,166			183,897,782			138,484,784			189,741,251			30,206,774
For the Year Ended December 31, 2019
From operations:
Dividends	$	11,688,955		$	13,737,719		$	7,664,343		$	5,611,501		$	2,331,867
Mortality and expense risk and administrative charges		(6,775,534	)		(3,739,980	)		(3,166,674	)		(3,110,549	)		(966,571	)
Net investment income (loss)		4,913,421			9,997,739			4,497,669			2,500,952			1,365,296
Net realized gain (loss)		3,262,546			1,850,598			1,882,064			(1	)		(476,466	)
Capital gain distribution from mutual funds		-			-			27,282,571			-			-
Change in unrealized appreciation (depreciation) of investments		117,611,961			67,782,168			(5,446,900	)		(2	)		4,587,114
Increase (decrease) in net assets from operations		125,787,928			79,630,505			28,215,404			2,500,949			5,475,944
From contract transactions:
Payments received from contract owners		47,464,317			29,364,102			11,357,803			54,239,473			4,417,739
Payments for contract benefits or terminations		(62,819,834	)		(25,809,619	)		(34,305,526	)		(51,930,386	)		(12,382,659	)
Transfers between sub-accounts (including fixed account), net		17,022,696			61,170,014			(12,611,316	)		(36,648,279	)		3,346,494
Contract maintenance charges		(147,080	)		(123,205	)		(239,349	)		(147,782	)		(75,344	)
Adjustments to net assets allocated to contracts in payout period		(3,430	)		263			(3,572	)		(7	)		(763	)
Increase (decrease) in net assets from contract transactions		1,516,669			64,601,555			(35,801,960	)		(34,486,981	)		(4,694,533	)
Increase (decrease) in net assets		127,304,597			144,232,060			(7,586,556	)		(31,986,032	)		781,411
Net assets at beginning of period		633,817,185			317,471,945			331,626,256			326,741,596			101,875,427
Net assets at end of period	$	761,121,782		$	461,704,005		$	324,039,700		$	294,755,564		$	102,656,838
Beginning units		676,229,784			225,115,274			171,661,237			165,491,511			29,661,020
Units issued		152,974,372			71,655,448			2,088,767			65,621,050			5,817,880
Units redeemed		(148,480,248	)		(32,412,753	)		(19,626,516	)		(81,858,172	)		(8,057,163	)
Ending units		680,723,908			264,357,969			154,123,488			149,254,389			27,421,737

 The accompanying Notes to Financial Statements are an integral part of this statement.

26

SEPARATE ACCOUNT A

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS

	VALIC Company I Growth Fund			VALIC Company I Health Sciences Fund			VALIC Company I Inflation Protected Fund			VALIC Company I International Equities Index Fund			VALIC Company I International Government Bond Fund
For the Year Ended December 31, 2020
From operations:
Dividends	$	4,777,146		$	-		$	13,749,911		$	28,968,048		$	1,885,585
Mortality and expense risk and administrative charges		(12,906,009	)		(8,069,910	)		(6,409,061	)		(10,833,492	)		(1,103,535	)
Net investment income (loss)		(8,128,863	)		(8,069,910	)		7,340,850			18,134,556			782,050
Net realized gain (loss)		66,566,668			16,146,794			4,584,377			(4,390,322	)		2,663,896
Capital gain distribution from mutual funds		116,428,154			54,955,897			-			19,814,296			-
Change in unrealized appreciation (depreciation) of investments		320,563,843			156,306,122			42,783,350			89,624,130			6,625,839
Increase (decrease) in net assets from operations		495,429,802			219,338,903			54,708,577			123,182,660			10,071,785
From contract transactions:
Payments received from contract owners		41,515,340			35,810,459			41,217,384			76,055,054			4,880,727
Payments for contract benefits or terminations		(94,132,617	)		(67,478,813	)		(61,377,883	)		(90,156,159	)		(8,727,048	)
Transfers between sub-accounts (including fixed account), net		(143,900,380	)		(30,656,603	)		114,039,590			227,744,315			17,249,026
Contract maintenance charges		(440,734	)		(286,217	)		(575,682	)		(563,379	)		(125,384	)
Adjustments to net assets allocated to contracts in payout period		(14,395	)		18,659			(6,735	)		953			493
Increase (decrease) in net assets from contract transactions		(196,972,786	)		(62,592,515	)		93,296,674			213,080,784			13,277,814
Increase (decrease) in net assets		298,457,016			156,746,388			148,005,251			336,263,444			23,349,599
Net assets at beginning of period		1,386,020,941			821,412,149			609,656,940			1,171,220,482			111,778,746
Net assets at end of period	$	1,684,477,957		$	978,158,537		$	757,662,191		$	1,507,483,926		$	135,128,345
Beginning units		473,995,472			125,570,637			436,272,703			508,291,382			34,050,414
Units issued		23,263,827			3,292,677			174,001,885			210,044,926			21,645,575
Units redeemed		(87,499,132	)		(12,322,994	)		(108,849,011	)		(106,524,736	)		(18,483,393	)
Ending units		409,760,167			116,540,320			501,425,577			611,811,572			37,212,596
For the Year Ended December 31, 2019
From operations:
Dividends	$	4,775,019		$	-		$	9,916,373		$	32,641,580		$	1,940,390
Mortality and expense risk and administrative charges		(11,087,556	)		(7,402,489	)		(5,661,010	)		(9,840,968	)		(1,173,844	)
Net investment income (loss)		(6,312,537	)		(7,402,489	)		4,255,363			22,800,612			766,546
Net realized gain (loss)		87,405,363			24,461,682			(1,652,620	)		6,000,126			3,207,830
Capital gain distribution from mutual funds		88,768,401			64,940,564			566,982			-			147,539
Change in unrealized appreciation (depreciation) of investments		154,838,018			104,475,884			41,704,822			161,396,469			5,635,183
Increase (decrease) in net assets from operations		324,699,245			186,475,641			44,874,547			190,197,207			9,757,098
From contract transactions:
Payments received from contract owners		39,423,720			43,154,328			36,927,881			73,008,747			4,969,299
Payments for contract benefits or terminations		(83,290,346	)		(72,663,047	)		(59,286,742	)		(94,802,792	)		(11,486,310	)
Transfers between sub-accounts (including fixed account), net		(24,627,004	)		(42,122,874	)		(7,745,035	)		91,780,562			(15,901,147	)
Contract maintenance charges		(377,682	)		(297,550	)		(484,080	)		(582,336	)		(141,276	)
Adjustments to net assets allocated to contracts in payout period		(11,866	)		15,359			(5,570	)		1,607			(820	)
Increase (decrease) in net assets from contract transactions		(68,883,178	)		(71,913,784	)		(30,593,546	)		69,405,788			(22,560,254	)
Increase (decrease) in net assets		255,816,067			114,561,857			14,281,001			259,602,995			(12,803,156	)
Net assets at beginning of period		1,130,204,874			706,850,292			595,375,939			911,617,487			124,581,902
Net assets at end of period	$	1,386,020,941		$	821,412,149		$	609,656,940		$	1,171,220,482		$	111,778,746
Beginning units		506,233,283			137,982,912			459,866,794			478,200,717			41,596,081
Units issued		96,624,426			2,286,499			81,346,517			119,461,094			9,163,778
Units redeemed		(128,862,237	)		(14,698,774	)		(104,940,608	)		(89,370,429	)		(16,709,445	)
Ending units		473,995,472			125,570,637			436,272,703			508,291,382			34,050,414

 The accompanying Notes to Financial Statements are an integral part of this statement.

27

SEPARATE ACCOUNT A

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS

	VALIC Company I International Growth Fund			VALIC Company I International Socially Responsible Fund			VALIC Company I International Value Fund			VALIC Company I Large Cap Core Fund			VALIC Company I Large Capital Growth Fund
For the Year Ended December 31, 2020
From operations:
Dividends	$	504,115		$	6,678,994		$	14,945,947		$	1,638,536		$	3,512,756
Mortality and expense risk and administrative charges		(4,392,779	)		(3,151,063	)		(5,557,209	)		(1,424,123	)		(4,791,017	)
Net investment income (loss)		(3,888,664	)		3,527,931			9,388,738			214,413			(1,278,261	)
Net realized gain (loss)		22,292,136			24,841,363			21,975,509			(3,397,369	)		35,751,958
Capital gain distribution from mutual funds		-			11,663,730			880,968			9,630,617			35,215,906
Change in unrealized appreciation (depreciation) of investments		122,199,025			(19,309,686	)		2,382,664			22,206,463			32,040,430
Increase (decrease) in net assets from operations		140,602,497			20,723,338			34,627,879			28,654,124			101,730,033
From contract transactions:
Payments received from contract owners		15,397,558			15,842,514			33,375,414			5,816,782			9,946,407
Payments for contract benefits or terminations		(35,912,411	)		(25,848,490	)		(63,377,303	)		(15,392,708	)		(35,801,163	)
Transfers between sub-accounts (including fixed account), net		(36,141,787	)		(32,358,067	)		(1,048,009	)		(8,027,775	)		(24,797,322	)
Contract maintenance charges		(282,491	)		(104,000	)		(351,012	)		(139,268	)		(135,729	)
Adjustments to net assets allocated to contracts in payout period		1,621			(6,148	)		(704	)		66			(151	)
Increase (decrease) in net assets from contract transactions		(56,937,510	)		(42,474,191	)		(31,401,614	)		(17,742,903	)		(50,787,958	)
Increase (decrease) in net assets		83,664,987			(21,750,853	)		3,226,265			10,911,221			50,942,075
Net assets at beginning of period		477,189,141			389,059,564			664,065,620			156,215,912			523,947,434
Net assets at end of period	$	560,854,128		$	367,308,711		$	667,291,885		$	167,127,133		$	574,889,509
Beginning units		119,937,045			49,476,454			473,244,377			46,117,162			167,843,700
Units issued		17,598,141			15,653,892			74,781,251			1,408,204			3,398,251
Units redeemed		(30,494,194	)		(20,753,598	)		(90,241,180	)		(6,710,370	)		(19,266,239	)
Ending units		107,040,992			44,376,748			457,784,448			40,814,996			151,975,712
For the Year Ended December 31, 2019
From operations:
Dividends	$	2,867,069		$	6,613,774		$	19,031,755		$	1,329,658		$	2,626,702
Mortality and expense risk and administrative charges		(4,141,285	)		(3,431,968	)		(6,121,633	)		(1,401,985	)		(4,447,922	)
Net investment income (loss)		(1,274,216	)		3,181,806			12,910,122			(72,327	)		(1,821,220	)
Net realized gain (loss)		12,562,075			16,106,090			16,997,951			(421,788	)		20,871,529
Capital gain distribution from mutual funds		102,573,727			-			-			11,145,184			29,022,979
Change in unrealized appreciation (depreciation) of investments		5,619,423			61,362,755			61,988,955			28,499,801			101,849,768
Increase (decrease) in net assets from operations		119,481,009			80,650,651			91,897,028			39,150,870			149,923,056
From contract transactions:
Payments received from contract owners		18,657,270			16,593,405			36,527,090			7,582,254			10,538,140
Payments for contract benefits or terminations		(40,701,536	)		(32,529,367	)		(72,687,676	)		(15,396,503	)		(39,377,912	)
Transfers between sub-accounts (including fixed account), net		(11,281,597	)		(9,691,163	)		(9,361,029	)		(5,666,897	)		3,838,625
Contract maintenance charges		(285,482	)		(118,412	)		(342,761	)		(138,417	)		(130,217	)
Adjustments to net assets allocated to contracts in payout period		(8,904	)		(6,938	)		166			372			(8,048	)
Increase (decrease) in net assets from contract transactions		(33,620,249	)		(25,752,475	)		(45,864,210	)		(13,619,191	)		(25,139,412	)
Increase (decrease) in net assets		85,860,760			54,898,176			46,032,818			25,531,679			124,783,644
Net assets at beginning of period		391,328,381			334,161,388			618,032,802			130,684,233			399,163,790
Net assets at end of period	$	477,189,141		$	389,059,564		$	664,065,620		$	156,215,912		$	523,947,434
Beginning units		128,742,665			52,724,451			507,208,049			50,661,879			177,173,043
Units issued		11,087,251			1,173,562			29,902,931			1,042,254			3,878,966
Units redeemed		(19,892,871	)		(4,421,559	)		(63,866,603	)		(5,586,971	)		(13,208,309	)
Ending units		119,937,045			49,476,454			473,244,377			46,117,162			167,843,700

 The accompanying Notes to Financial Statements are an integral part of this statement.

28

SEPARATE ACCOUNT A

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS

	VALIC Company I Mid Cap Index Fund			VALIC Company I Mid Cap Strategic Growth Fund			VALIC Company I Nasdaq-100 Index Fund			VALIC Company I Science & Technology Fund			VALIC Company I Small Cap Aggressive Growth Fund
For the Year Ended December 31, 2020
From operations:
Dividends	$	43,600,469		$	-		$	4,333,216		$	-		$	-
Mortality and expense risk and administrative charges		(26,413,201	)		(2,896,110	)		(5,904,664	)		(15,543,085	)		(1,562,217	)
Net investment income (loss)		17,187,268			(2,896,110	)		(1,571,448	)		(15,543,085	)		(1,562,217	)
Net realized gain (loss)		65,352,380			20,788,044			40,241,313			104,699,666			1,430,600
Capital gain distribution from mutual funds		243,222,049			14,961,868			13,627,168			160,465,865			20,913,250
Change in unrealized appreciation (depreciation) of investments		(26,079,899	)		60,269,527			188,986,732			512,135,478			31,826,021
Increase (decrease) in net assets from operations		299,681,798			93,123,329			241,283,765			761,757,924			52,607,654
From contract transactions:
Payments received from contract owners		119,799,081			8,378,359			34,674,654			38,114,225			8,396,139
Payments for contract benefits or terminations		(227,434,739	)		(20,395,347	)		(48,308,848	)		(109,066,112	)		(12,451,931	)
Transfers between sub-accounts (including fixed account), net		(241,686,309	)		(18,570,693	)		7,834,883			(42,070,658	)		(18,102,946	)
Contract maintenance charges		(1,457,997	)		(64,319	)		(169,080	)		(329,222	)		(41,890	)
Adjustments to net assets allocated to contracts in payout period		(5,836	)		159			(4,433	)		(81,716	)		1,525
Increase (decrease) in net assets from contract transactions		(350,785,800	)		(30,651,841	)		(5,972,824	)		(113,433,483	)		(22,199,103	)
Increase (decrease) in net assets		(51,104,002	)		62,471,488			235,310,941			648,324,441			30,408,551
Net assets at beginning of period		3,306,910,919			310,849,990			525,497,310			1,461,021,893			172,542,769
Net assets at end of period	$	3,255,806,917		$	373,321,478		$	760,808,251		$	2,109,346,334		$	202,951,320
Beginning units		138,158,296			92,728,090			224,185,309			151,321,215			47,022,685
Units issued		8,020,539			2,827,348			20,063,293			3,228,340			3,333,554
Units redeemed		(23,732,495	)		(11,773,795	)		(22,730,740	)		(13,674,655	)		(9,722,646	)
Ending units		122,446,340			83,781,643			221,517,862			140,874,900			40,633,593
For the Year Ended December 31, 2019
From operations:
Dividends	$	41,641,045		$	38,826		$	1,844,844		$	-		$	-
Mortality and expense risk and administrative charges		(28,865,390	)		(2,746,689	)		(4,493,550	)		(12,864,104	)		(1,550,913	)
Net investment income (loss)		12,775,655			(2,707,863	)		(2,648,706	)		(12,864,104	)		(1,550,913	)
Net realized gain (loss)		226,359,772			10,854,880			21,813,357			89,520,204			4,303,228
Capital gain distribution from mutual funds		289,911,916			24,944,385			6,479,076			251,089,795			21,781,487
Change in unrealized appreciation (depreciation) of investments		142,283,348			52,749,895			119,260,246			96,454,245			24,517,826
Increase (decrease) in net assets from operations		671,330,691			85,841,297			144,903,973			424,200,140			49,051,628
From contract transactions:
Payments received from contract owners		135,176,457			8,476,402			34,033,148			39,081,876			9,787,428
Payments for contract benefits or terminations		(279,124,572	)		(22,584,205	)		(41,831,852	)		(108,447,453	)		(13,946,710	)
Transfers between sub-accounts (including fixed account), net		(37,422,219	)		(768,783	)		(5,385,462	)		(35,164,882	)		(5,710,973	)
Contract maintenance charges		(1,688,189	)		(63,505	)		(145,595	)		(310,212	)		(36,835	)
Adjustments to net assets allocated to contracts in payout period		(18,441	)		137			(3,509	)		(38,882	)		1,108
Increase (decrease) in net assets from contract transactions		(183,076,964	)		(14,939,954	)		(13,333,270	)		(104,879,553	)		(9,905,982	)
Increase (decrease) in net assets		488,253,727			70,901,343			131,570,703			319,320,587			39,145,646
Net assets at beginning of period		2,818,657,192			239,948,647			393,926,607			1,141,701,306			133,397,123
Net assets at end of period	$	3,306,910,919		$	310,849,990		$	525,497,310		$	1,461,021,893		$	172,542,769
Beginning units		144,874,750			97,574,698			230,853,988			162,973,839			49,862,408
Units issued		13,130,596			2,734,059			9,909,226			1,842,161			5,672,143
Units redeemed		(19,847,050	)		(7,580,667	)		(16,577,905	)		(13,494,785	)		(8,511,866	)
Ending units		138,158,296			92,728,090			224,185,309			151,321,215			47,022,685

 The accompanying Notes to Financial Statements are an integral part of this statement.

29

SEPARATE ACCOUNT A

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS

		VALIC Company I Small Cap Fund			VALIC Company I Small Cap Index Fund			VALIC Company I Small Cap Special Values Fund			VALIC Company I Small Mid Growth Fund			VALIC Company I Stock Index Fund
For the Year Ended December 31, 2020
From operations:
Dividends	$	1,002,043		$	14,577,107		$	2,519,137		$	-		$	87,895,867
Mortality and expense risk and administrative charges		(2,676,371	)		(8,761,677	)		(1,596,464	)		(1,284,589	)		(42,480,001	)
Net investment income (loss)		(1,674,328	)		5,815,430			922,673			(1,284,589	)		45,415,866
Net realized gain (loss)		10,263,517			55,822,512			4,971,958			2,353,615			340,828,859
Capital gain distribution from mutual funds		22,322,817			117,167,188			16,694,832			13,814,032			281,086,550
Change in unrealized appreciation (depreciation) of investments		31,010,480			13,007,635			(25,513,720	)		44,503,495			62,516,641
Increase (decrease) in net assets from operations		61,922,486			191,812,765			(2,924,257	)		59,386,553			729,847,916
From contract transactions:
Payments received from contract owners		4,996,706			40,737,266			4,961,098			3,236,973			160,360,194
Payments for contract benefits or terminations		(20,106,373	)		(73,448,731	)		(13,934,458	)		(11,132,745	)		(347,396,836	)
Transfers between sub-accounts (including fixed account), net		(7,519,977	)		(39,451,971	)		(10,979,984	)		(2,289,365	)		(144,115,960	)
Contract maintenance charges		(79,858	)		(396,532	)		(31,566	)		(26,566	)		(1,716,455	)
Adjustments to net assets allocated to contracts in payout period		3,883			4,506			(1,251	)		195			36,984
Increase (decrease) in net assets from contract transactions		(22,705,619	)		(72,555,462	)		(19,986,161	)		(10,211,508	)		(332,832,073	)
Increase (decrease) in net assets		39,216,867			119,257,303			(22,910,418	)		49,175,045			397,015,843
Net assets at beginning of period		302,462,210			1,068,664,273			221,428,735			127,438,795			4,761,735,529
Net assets at end of period	$	341,679,077		$	1,187,921,576		$	198,518,317		$	176,613,840		$	5,158,751,372
Beginning units		45,798,527			132,602,546			93,293,434			49,449,062			357,451,782
Units issued		1,869,050			14,201,843			3,930,774			2,865,982			22,302,754
Units redeemed		(4,887,388	)		(22,603,982	)		(13,969,412	)		(6,850,462	)		(47,945,308	)
Ending units		42,780,189			124,200,407			83,254,796			45,464,582			331,809,228
For the Year Ended December 31, 2019
From operations:
Dividends	$	1,329,280		$	12,191,308		$	2,786,244		$	-		$	70,527,880
Mortality and expense risk and administrative charges		(2,825,529	)		(9,965,606	)		(1,948,749	)		(1,134,636	)		(42,265,941	)
Net investment income (loss)		(1,496,249	)		2,225,702			837,495			(1,134,636	)		28,261,939
Net realized gain (loss)		14,629,671			119,045,711			10,995,719			4,360,556			358,644,460
Capital gain distribution from mutual funds		24,937,705			90,729,238			26,271,874			14,969,590			101,520,733
Change in unrealized appreciation (depreciation) of investments		33,316,163			19,869,207			12,592,026			17,697,792			678,761,487
Increase (decrease) in net assets from operations		71,387,290			231,869,858			50,697,114			35,893,302			1,167,188,619
From contract transactions:
Payments received from contract owners		5,019,962			51,778,623			6,557,181			3,361,121			172,086,561
Payments for contract benefits or terminations		(26,417,119	)		(96,205,819	)		(18,904,378	)		(10,188,808	)		(417,449,154	)
Transfers between sub-accounts (including fixed account), net		(10,122,208	)		(129,104,912	)		(8,826,797	)		(2,576,259	)		(271,289,129	)
Contract maintenance charges		(91,450	)		(476,804	)		(24,422	)		(22,586	)		(1,942,852	)
Adjustments to net assets allocated to contracts in payout period		2,551			(5,886	)		(21,234	)		(227	)		(192,694	)
Increase (decrease) in net assets from contract transactions		(31,608,264	)		(174,014,798	)		(21,219,650	)		(9,426,759	)		(518,787,268	)
Increase (decrease) in net assets		39,779,026			57,855,060			29,477,464			26,466,543			648,401,351
Net assets at beginning of period		262,683,184			1,010,809,213			191,951,271			100,972,252			4,113,334,178
Net assets at end of period	$	302,462,210		$	1,068,664,273		$	221,428,735		$	127,438,795		$	4,761,735,529
Beginning units		50,949,880			154,248,615			103,110,708			53,515,518			399,373,399
Units issued		420,186			13,137,861			2,429,933			1,515,438			10,661,896
Units redeemed		(5,571,539	)		(34,783,930	)		(12,247,207	)		(5,581,894	)		(52,583,513	)
Ending units		45,798,527			132,602,546			93,293,434			49,449,062			357,451,782
The accompanying Notes to Financial Statements are an integral part of this statement.

30

SEPARATE ACCOUNT A

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS

		VALIC Company I Systematic Core Fund			VALIC Company I Systematic Value Fund			VALIC Company I Value Fund			VALIC Company II Aggressive Growth Lifestyle Fund			VALIC Company II Capital Appreciation Fund
For the Year Ended December 31, 2020
From operations:
Dividends	$	1,234,598		$	1,087,667		$	1,353,342		$	14,321,350		$	155,359
Mortality and expense risk and administrative charges		(1,173,530	)		(374,933	)		(705,333	)		(5,563,402	)		(497,457	)
Reimbursements of expenses		-			-			-			1,384,206			185,950
Net investment income (loss)		61,068			712,734			648,009			10,142,154			(156,148	)
Net realized gain (loss)		8,871,058			(1,324,275	)		4,739,921			6,379,129			1,626,483
Capital gain distribution from mutual funds		12,181,104			4,100,631			6,537,333			31,408,469			1,325,505
Change in unrealized appreciation (depreciation) of investments		4,405,350			(5,598,225	)		(10,459,012	)		27,072,338			8,348,456
Increase (decrease) in net assets from operations		25,518,580			(2,109,135	)		1,466,251			75,002,090			11,144,296
From contract transactions:
Payments received from contract owners		3,391,048			1,466,248			3,182,863			54,623,164			1,379,896
Payments for contract benefits or terminations		(10,155,501	)		(3,251,024	)		(7,610,759	)		(45,718,140	)		(4,058,076	)
Transfers between sub-accounts (including fixed account), net		(210,290	)		(1,915,592	)		3,234,118			(25,780,105	)		(2,086,828	)
Contract maintenance charges		(183,808	)		(45,488	)		(70,076	)		(945,791	)		(34,564	)
Adjustments to net assets allocated to contracts in payout period		(266	)		(13	)		47			641			-
Increase (decrease) in net assets from contract transactions		(7,158,817	)		(3,745,869	)		(1,263,807	)		(17,820,231	)		(4,799,572	)
Increase (decrease) in net assets		18,359,763			(5,855,004	)		202,444			57,181,859			6,344,724
Net assets at beginning of period		125,410,214			45,589,977			82,267,290			611,963,138			44,535,835
Net assets at end of period	$	143,769,977		$	39,734,973		$	82,469,734		$	669,144,997		$	50,880,559
Beginning units		22,687,108			18,994,803			29,361,473			161,797,511			16,287,052
Units issued		3,273,584			1,300,259			4,100,306			8,329,195			1,122,908
Units redeemed		(4,681,129	)		(3,080,927	)		(4,421,540	)		(13,033,197	)		(2,852,444	)
Ending units		21,279,563			17,214,135			29,040,239			157,093,509			14,557,516
For the Year Ended December 31, 2019
From operations:
Dividends	$	1,050,051		$	602,802		$	1,053,711		$	11,208,238		$	102,667
Mortality and expense risk and administrative charges		(1,136,876	)		(440,308	)		(746,499	)		(5,610,624	)		(426,730	)
Reimbursements of expenses		-			-			-			1,448,671			108,187
Net investment income (loss)		(86,825	)		162,494			307,212			7,046,285			(215,876	)
Net realized gain (loss)		8,193,591			594,033			5,241,756			8,435,785			3,221,242
Capital gain distribution from mutual funds		11,554,647			4,176,900			-			50,000,411			11,082,075
Change in unrealized appreciation (depreciation) of investments		10,421,951			4,032,516			12,330,363			48,986,717			(3,693,339	)
Increase (decrease) in net assets from operations		30,083,364			8,965,943			17,879,331			114,469,198			10,394,102
From contract transactions:
Payments received from contract owners		4,352,573			3,600,887			3,327,475			57,618,456			2,056,498
Payments for contract benefits or terminations		(12,080,047	)		(5,748,475	)		(7,609,230	)		(55,717,508	)		(5,500,152	)
Transfers between sub-accounts (including fixed account), net		(2,148,228	)		(2,312,754	)		(2,334,897	)		(32,351,759	)		(3,585,439	)
Contract maintenance charges		(304,093	)		(35,428	)		(81,195	)		(947,809	)		(46,484	)
Adjustments to net assets allocated to contracts in payout period		(953	)		-			46			(14,219	)		-
Increase (decrease) in net assets from contract transactions		(10,180,748	)		(4,495,770	)		(6,697,801	)		(31,412,839	)		(7,075,577	)
Increase (decrease) in net assets		19,902,616			4,470,173			11,181,530			83,056,359			3,318,525
Net assets at beginning of period		105,507,598			41,119,804			71,085,760			528,906,779			41,217,310
Net assets at end of period	$	125,410,214		$	45,589,977		$	82,267,290		$	611,963,138		$	44,535,835
Beginning units		24,676,192			21,004,389			32,021,641			170,804,741			19,162,320
Units issued		869,158			1,020,905			1,319,957			5,868,394			1,154,344
Units redeemed		(2,858,242	)		(3,030,491	)		(3,980,125	)		(14,875,624	)		(4,029,612	)
Ending units		22,687,108			18,994,803			29,361,473			161,797,511			16,287,052
The accompanying Notes to Financial Statements are an integral part of this statement.

31

SEPARATE ACCOUNT A

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS

	VALIC Company II Conservative Growth Lifestyle Fund			VALIC Company II Core Bond Fund			VALIC Company II Government Money Market II Fund			VALIC Company II High Yield Bond Fund			VALIC Company II International Opportunities Fund
For the Year Ended December 31, 2020
From operations:
Dividends	$	8,098,050		$	43,518,810		$	246,656		$	31,529,759		$	3,594,266
Mortality and expense risk and administrative charges		(3,178,270	)		(12,180,080	)		(1,229,154	)		(4,178,603	)		(5,120,593	)
Reimbursements of expenses		795,387			3,214,014			362,806			1,056,746			1,359,819
Net investment income (loss)		5,715,167			34,552,744			(619,692	)		28,407,902			(166,508	)
Net realized gain (loss)		(856,689	)		31,736,225			(2	)		(3,336,614	)		37,784,571
Capital gain distribution from mutual funds		4,676,971			9,175			-			-			8,688,767
Change in unrealized appreciation (depreciation) of investments		22,149,502			38,946,091			-			(2,855,832	)		41,389,255
Increase (decrease) in net assets from operations		31,684,951			105,244,235			(619,694	)		22,215,456			87,696,085
From contract transactions:
Payments received from contract owners		26,361,262			95,368,142			18,879,994			22,630,358			31,160,780
Payments for contract benefits or terminations		(40,104,651	)		(118,968,751	)		(21,496,430	)		(46,292,221	)		(49,434,826	)
Transfers between sub-accounts (including fixed account), net		(6,249,133	)		5,274,820			22,138,976			(40,649,831	)		(7,449,324	)
Contract maintenance charges		(205,928	)		(574,383	)		(35,457	)		(212,391	)		(166,157	)
Adjustments to net assets allocated to contracts in payout period		(26,996	)		511			601			(7	)		(7,237	)
Increase (decrease) in net assets from contract transactions		(20,225,446	)		(18,899,661	)		19,487,684			(64,524,092	)		(25,896,764	)
Increase (decrease) in net assets		11,459,505			86,344,574			18,867,990			(42,308,636	)		61,799,321
Net assets at beginning of period		343,150,310			1,314,426,676			115,849,280			499,848,271			578,594,427
Net assets at end of period	$	354,609,815		$	1,400,771,250		$	134,717,270		$	457,539,635		$	640,393,748
Beginning units		106,296,074			592,998,639			93,350,480			159,313,150			186,737,772
Units issued		5,571,110			163,315,458			54,415,351			15,507,113			32,396,267
Units redeemed		(11,908,745	)		(172,064,851	)		(38,628,610	)		(37,522,569	)		(42,245,101	)
Ending units		99,958,439			584,249,246			109,137,221			137,297,694			176,888,938
For the Year Ended December 31, 2019
From operations:
Dividends	$	9,122,850		$	32,467,868		$	1,889,820		$	25,056,644		$	5,271,802
Mortality and expense risk and administrative charges		(3,161,382	)		(12,839,979	)		(1,066,434	)		(4,990,449	)		(5,216,873	)
Reimbursements of expenses		805,029			3,416,107			285,448			1,294,909			1,361,074
Net investment income (loss)		6,766,497			23,043,996			1,108,834			21,361,104			1,416,003
Net realized gain (loss)		230,969			16,332,411			(1	)		(235,877	)		26,565,510
Capital gain distribution from mutual funds		13,434,188			-			-			-			20,559,662
Change in unrealized appreciation (depreciation) of investments		26,423,676			93,546,364			-			44,866,371			71,596,842
Increase (decrease) in net assets from operations		46,855,330			132,922,771			1,108,833			65,991,598			120,138,017
From contract transactions:
Payments received from contract owners		35,988,139			99,068,952			17,830,288			31,296,691			32,026,687
Payments for contract benefits or terminations		(43,304,176	)		(127,172,516	)		(17,309,929	)		(54,552,702	)		(54,067,700	)
Transfers between sub-accounts (including fixed account), net		(530,698	)		(49,752,021	)		(2,578,165	)		20,201,136			(19,634,697	)
Contract maintenance charges		(223,002	)		(597,115	)		(37,890	)		(269,121	)		(185,680	)
Adjustments to net assets allocated to contracts in payout period		(26,755	)		455			597			107			1,310
Increase (decrease) in net assets from contract transactions		(8,096,492	)		(78,452,245	)		(2,095,099	)		(3,323,889	)		(41,860,080	)
Increase (decrease) in net assets		38,758,838			54,470,526			(986,266	)		62,667,709			78,277,937
Net assets at beginning of period		304,391,472			1,259,956,150			116,835,546			437,180,562			500,316,490
Net assets at end of period	$	343,150,310		$	1,314,426,676		$	115,849,280		$	499,848,271		$	578,594,427
Beginning units		109,128,260			625,807,737			95,047,022			159,619,662			201,525,007
Units issued		8,618,119			189,377,107			31,223,279			40,926,936			6,230,583
Units redeemed		(11,450,305	)		(222,186,205	)		(32,919,821	)		(41,233,448	)		(21,017,818	)
Ending units		106,296,074			592,998,639			93,350,480			159,313,150			186,737,772
The accompanying Notes to Financial Statements are an integral part of this statement.

32

SEPARATE ACCOUNT A

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS

	VALIC Company II Large Cap Value Fund			VALIC Company II Mid Cap Growth Fund			VALIC Company II Mid Cap Value Fund			VALIC Company II Moderate Growth Lifestyle Fund			VALIC Company II Small Cap Growth Fund
For the Year Ended December 31, 2020
From operations:
Dividends	$	3,015,579		$	-		$	5,747,319		$	22,538,228		$	-
Mortality and expense risk and administrative charges		(1,620,388	)		(1,882,469	)		(5,939,710	)		(9,249,640	)		(1,811,367	)
Reimbursements of expenses		428,232			599,529			1,524,085			2,248,499			548,106
Net investment income (loss)		1,823,423			(1,282,940	)		1,331,694			15,537,087			(1,263,261	)
Net realized gain (loss)		8,071,232			3,264,788			(5,338,608	)		7,500,112			5,706,011
Capital gain distribution from mutual funds		8,178,296			8,540,165			38,617,779			41,206,652			21,027,536
Change in unrealized appreciation (depreciation) of investments		(14,322,768	)		38,915,711			(11,617,302	)		46,711,648			66,466,688
Increase (decrease) in net assets from operations		3,750,183			49,437,724			22,993,563			110,955,499			91,936,974
From contract transactions:
Payments received from contract owners		8,324,769			13,052,978			30,592,227			87,659,992			8,849,129
Payments for contract benefits or terminations		(14,545,197	)		(11,425,130	)		(60,108,245	)		(90,045,763	)		(12,996,616	)
Transfers between sub-accounts (including fixed account), net		(490,676	)		(26,585,675	)		(18,322,859	)		(40,088,829	)		(8,934,328	)
Contract maintenance charges		(203,875	)		(50,389	)		(284,615	)		(695,610	)		(70,748	)
Adjustments to net assets allocated to contracts in payout period		(3,359	)		(1,155	)		219			225			(1,305	)
Increase (decrease) in net assets from contract transactions		(6,918,338	)		(25,009,371	)		(48,123,273	)		(43,169,985	)		(13,153,868	)
Increase (decrease) in net assets		(3,168,155	)		24,428,353			(25,129,710	)		67,785,514			78,783,106
Net assets at beginning of period		186,713,151			226,823,205			751,136,308			1,017,612,216			179,640,143
Net assets at end of period	$	183,544,996		$	251,251,558		$	726,006,598		$	1,085,397,730		$	258,423,249
Beginning units		47,788,470			73,336,174			106,331,804			272,037,544			35,238,378
Units issued		3,919,250			7,389,360			8,206,965			10,497,663			3,930,701
Units redeemed		(5,638,037	)		(15,218,774	)		(14,318,464	)		(22,694,034	)		(7,087,453	)
Ending units		46,069,683			65,506,760			100,220,305			259,841,173			32,081,626
For the Year Ended December 31, 2019
From operations:
Dividends	$	2,140,842		$	-		$	3,660,072		$	19,473,367		$	-
Mortality and expense risk and administrative charges		(1,702,299	)		(1,831,507	)		(6,607,998	)		(9,106,914	)		(1,604,504	)
Reimbursements of expenses		424,190			514,313			1,728,216			2,334,517			425,310
Net investment income (loss)		862,733			(1,317,194	)		(1,219,710	)		12,700,970			(1,179,194	)
Net realized gain (loss)		10,367,169			2,622,672			10,625,969			9,809,265			5,339,895
Capital gain distribution from mutual funds		14,369,113			7,288,393			126,447,588			64,354,946			39,377,473
Change in unrealized appreciation (depreciation) of investments		14,108,975			46,943,105			39,426,996			79,702,067			7,851,663
Increase (decrease) in net assets from operations		39,707,990			55,536,976			175,280,843			166,567,248			51,389,837
From contract transactions:
Payments received from contract owners		10,139,910			16,820,692			32,814,516			125,696,442			10,369,966
Payments for contract benefits or terminations		(18,723,932	)		(8,395,675	)		(71,707,488	)		(110,383,434	)		(13,547,129	)
Transfers between sub-accounts (including fixed account), net		(386,110	)		(13,708,171	)		(2,690,288	)		(17,194,753	)		(11,835,001	)
Contract maintenance charges		(196,045	)		(63,596	)		(344,367	)		(713,153	)		(70,351	)
Adjustments to net assets allocated to contracts in payout period		861			31			20			378			(843	)
Increase (decrease) in net assets from contract transactions		(9,165,316	)		(5,346,719	)		(41,927,607	)		(2,594,520	)		(15,083,358	)
Increase (decrease) in net assets		30,542,674			50,190,257			133,353,236			163,972,728			36,306,479
Net assets at beginning of period		156,170,477			176,632,948			617,783,072			853,639,488			143,333,664
Net assets at end of period	$	186,713,151		$	226,823,205		$	751,136,308		$	1,017,612,216		$	179,640,143
Beginning units		49,226,087			75,450,644			113,038,656			273,159,524			38,452,313
Units issued		3,480,653			9,545,089			3,654,951			18,414,570			4,081,080
Units redeemed		(4,918,270	)		(11,659,559	)		(10,361,803	)		(19,536,550	)		(7,295,015	)
Ending units		47,788,470			73,336,174			106,331,804			272,037,544			35,238,378
The accompanying Notes to Financial Statements are an integral part of this statement.

33

SEPARATE ACCOUNT A

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS

	VALIC Company II Small Cap Value Fund			VALIC Company II Strategic Bond Fund			VALIC Company II U.S. Socially Responsible Fund			Vanguard LifeStrategy Conservative Growth Fund Investor Shares			Vanguard LifeStrategy Growth Fund Investor Shares
For the Year Ended December 31, 2020
From operations:
Dividends	$	4,124,704		$	31,815,096		$	9,449,210		$	2,012,717		$	5,147,437
Mortality and expense risk and administrative charges		(2,703,316	)		(6,164,894	)		(6,500,776	)		(1,332,640	)		(3,327,634	)
Reimbursements of expenses		752,262			1,636,724			1,625,030			-			-
Net investment income (loss)		2,173,650			27,286,926			4,573,464			680,077			1,819,803
Net realized gain (loss)		(23,715,177	)		3,290,363			64,856,967			2,058,047			9,615,017
Capital gain distribution from mutual funds		8,579,223			-			120,508,271			1,833,867			5,705,539
Change in unrealized appreciation (depreciation) of investments		33,195,064			22,788,922			(92,940,973	)		6,205,290			21,982,632
Increase (decrease) in net assets from operations		20,232,760			53,366,211			96,997,729			10,777,281			39,122,991
From contract transactions:
Payments received from contract owners		13,958,258			51,621,517			39,559,897			10,969,539			27,561,322
Payments for contract benefits or terminations		(26,747,241	)		(44,038,891	)		(70,843,314	)		(11,579,738	)		(18,684,413	)
Transfers between sub-accounts (including fixed account), net		3,131,504			(866,733	)		(71,058,598	)		4,747,251			(10,378,439	)
Contract maintenance charges		(100,341	)		(879,203	)		(392,482	)		(41,753	)		(100,789	)
Adjustments to net assets allocated to contracts in payout period		(2,796	)		(15,192	)		504			492			172
Increase (decrease) in net assets from contract transactions		(9,760,616	)		5,821,498			(102,733,993	)		4,095,791			(1,602,147	)
Increase (decrease) in net assets		10,472,144			59,187,709			(5,736,264	)		14,873,072			37,520,844
Net assets at beginning of period		323,878,033			665,991,927			749,741,882			105,758,963			277,459,358
Net assets at end of period	$	334,350,177		$	725,179,636		$	744,005,618		$	120,632,035		$	314,980,202
Beginning units		73,282,087			209,755,874			185,821,391			43,157,078			93,285,134
Units issued		12,072,257			41,683,138			2,158,095			6,793,884			5,749,255
Units redeemed		(12,676,104	)		(40,040,169	)		(27,659,209	)		(5,210,421	)		(6,131,599	)
Ending units		72,678,240			211,398,843			160,320,277			44,740,541			92,902,790
For the Year Ended December 31, 2019
From operations:
Dividends	$	4,929,416		$	23,851,413		$	10,152,910		$	2,628,954		$	6,338,764
Mortality and expense risk and administrative charges		(3,063,927	)		(6,052,520	)		(6,762,297	)		(1,184,204	)		(3,115,142	)
Reimbursements of expenses		803,953			1,617,739			1,749,581			-			-
Net investment income (loss)		2,669,442			19,416,632			5,140,194			1,444,750			3,223,622
Net realized gain (loss)		(10,768,040	)		4,521,308			41,830,463			1,406,742			9,608,628
Capital gain distribution from mutual funds		49,156,505			-			51,267,611			43,061			53,730
Change in unrealized appreciation (depreciation) of investments		15,182,565			42,092,205			88,112,547			9,844,461			36,460,759
Increase (decrease) in net assets from operations		56,240,472			66,030,145			186,350,815			12,739,014			49,346,739
From contract transactions:
Payments received from contract owners		15,976,352			57,548,591			42,853,375			10,834,856			28,905,864
Payments for contract benefits or terminations		(34,581,312	)		(55,591,176	)		(82,728,888	)		(12,341,517	)		(23,371,399	)
Transfers between sub-accounts (including fixed account), net		(37,194,651	)		(5,376,685	)		(23,347,250	)		6,378,380			(7,419,617	)
Contract maintenance charges		(124,493	)		(932,925	)		(440,853	)		(45,354	)		(108,336	)
Adjustments to net assets allocated to contracts in payout period		(1,373	)		(5,095	)		766			489			164
Increase (decrease) in net assets from contract transactions		(55,925,477	)		(4,357,290	)		(63,662,850	)		4,826,854			(1,993,324	)
Increase (decrease) in net assets		314,995			61,672,855			122,687,965			17,565,868			47,353,415
Net assets at beginning of period		323,563,038			604,319,072			627,053,917			88,193,095			230,105,943
Net assets at end of period	$	323,878,033		$	665,991,927		$	749,741,882		$	105,758,963		$	277,459,358
Beginning units		86,223,508			211,254,188			205,040,616			41,125,525			94,046,683
Units issued		2,777,814			36,520,965			2,163,572			6,617,257			6,093,923
Units redeemed		(15,719,235	)		(38,019,279	)		(21,382,797	)		(4,585,704	)		(6,855,472	)
Ending units		73,282,087			209,755,874			185,821,391			43,157,078			93,285,134
The accompanying Notes to Financial Statements are an integral part of this statement.

34

SEPARATE ACCOUNT A

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS

	Vanguard LifeStrategy Moderate Growth Fund Investor Shares				Vanguard Long-Term Investment- Grade Fund Investor Shares				Vanguard Long-Term Treasury Fund Investor Shares				Vanguard Wellington Fund Investor Shares				Vanguard Windsor II Fund Investor Shares
For the Year Ended December 31, 2020
From operations:
Dividends		$	5,143,266			$	11,104,280			$	4,617,031			$	41,218,707			$	22,393,894
Mortality and expense risk and administrative charges			(3,362,335	)			(4,421,890	)			(3,160,024	)			(22,898,012	)			(18,580,569	)
Reimbursements of expenses			-				1,035,864				742,217				-				-
Net investment income (loss)			1,780,931				7,718,254				2,199,224				18,320,695				3,813,325
Net realized gain (loss)			8,810,918				14,695,248				4,784,304				67,390,968				83,942,095
Capital gain distribution from mutual funds			5,271,480				10,653,899				19,592,820				110,680,534				100,763,530
Change in unrealized appreciation (depreciation) of investments			17,644,894				13,194,827				9,086,734				(24,705,786	)			13,330,902
Increase (decrease) in net assets from operations			33,508,223				46,262,228				35,663,082				171,686,411				201,849,852
From contract transactions:
Payments received from contract owners			31,434,450				14,687,012				11,582,232				104,296,598				53,585,076
Payments for contract benefits or terminations			(23,518,305	)			(33,923,672	)			(22,216,190	)			(175,097,592	)			(129,120,250	)
Transfers between sub-accounts (including fixed account), net			(7,352,642	)			(87,560,792	)			16,523,076				(54,617,621	)			(69,031,833	)
Contract maintenance charges			(154,960	)			(296,203	)			(175,099	)			(703,473	)			(581,618	)
Adjustments to net assets allocated to contracts in payout period			74				196				(1,243	)			(759,565	)			(10,990	)
Increase (decrease) in net assets from contract transactions			408,617				(107,093,459	)			5,712,776				(126,881,653	)			(145,159,615	)
Increase (decrease) in net assets			33,916,840				(60,831,231	)			41,375,858				44,804,758				56,690,237
Net assets at beginning of period			275,243,880				343,172,621				211,010,282				2,016,437,580				1,729,153,856
Net assets at end of period		$	309,160,720			$	282,341,390			$	252,386,140			$	2,061,242,338			$	1,785,844,093
Beginning units			99,358,657				81,725,783				54,380,180				378,315,651				333,368,130
Units issued			8,127,998				10,145,426				14,247,322				16,127,286				4,021,301
Units redeemed			(8,067,263	)			(33,133,317	)			(12,976,430	)			(35,807,528	)			(32,071,060	)
Ending units			99,419,392				58,737,892				55,651,072				358,635,409				305,318,371
For the Year Ended December 31, 2019
From operations:
Dividends		$	6,647,842			$	11,420,574			$	5,383,002			$	50,576,985			$	34,430,868
Mortality and expense risk and administrative charges			(3,139,735	)			(3,663,218	)			(2,475,898	)			(22,740,530	)			(19,360,653	)
Reimbursements of expenses			-				753,745				514,889				-				-
Net investment income (loss)			3,508,107				8,511,101				3,421,993				27,836,455				15,070,215
Net realized gain (loss)			7,998,626				2,579,826				1,788,729				58,739,245				79,483,858
Capital gain distribution from mutual funds			172,043				4,522,586				578,558				41,912,405				126,461,920
Change in unrealized appreciation (depreciation) of investments			30,095,802				36,334,806				18,888,845				234,405,252				169,953,252
Increase (decrease) in net assets from operations			41,774,578				51,948,319				24,678,125				362,893,357				390,969,245
From contract transactions:
Payments received from contract owners			30,597,515				15,146,526				8,662,234				112,834,613				58,165,282
Payments for contract benefits or terminations			(29,516,556	)			(34,323,614	)			(21,353,959	)			(203,778,628	)			(154,068,180	)
Transfers between sub-accounts (including fixed account), net			(1,167,673	)			97,021,784				5,313,326				(23,439,896	)			(38,730,382	)
Contract maintenance charges			(160,201	)			(284,302	)			(173,084	)			(789,085	)			(637,998	)
Adjustments to net assets allocated to contracts in payout period			66				156				356				(823,302	)			(14,240	)
Increase (decrease) in net assets from contract transactions			(246,849	)			77,560,550				(7,551,127	)			(115,996,298	)			(135,285,518	)
Increase (decrease) in net assets			41,527,729				129,508,869				17,126,998				246,897,059				255,683,727
Net assets at beginning of period			233,716,151				213,663,752				193,883,284				1,769,540,521				1,473,470,129
Net assets at end of period		$	275,243,880			$	343,172,621			$	211,010,282			$	2,016,437,580			$	1,729,153,856
Beginning units			99,419,127				60,322,265				56,477,321				400,037,303				361,271,823
Units issued			6,704,018				30,990,304				5,827,071				8,362,996				1,637,673
Units redeemed			(6,764,488	)			(9,586,786	)			(7,924,212	)			(30,084,648	)			(29,541,366	)
Ending units			99,358,657				81,725,783				54,380,180				378,315,651				333,368,130
The accompanying Notes to Financial Statements are an integral part of this statement.

35

SEPARATE ACCOUNT A

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS

1. Organization

The Variable Annuity Life Insurance Company Separate Account A (the Separate Account) is a segregated investment account established by The Variable Annuity Life Insurance Company (the Company) to receive and invest premium payments from variable annuity contracts issued by the Company. The Company is a wholly owned subsidiary of AGC Life Insurance Company, an indirect, wholly owned subsidiary of American International Group, Inc. (AIG).

The Separate Account includes the following variable annuity products:

Equity Director	Polaris Platinum Elite
Group Fixed and Variable Annuity (GTS-VA)	Portfolio Director
Group Unit Purchase (GUP)	Portfolio Director Freedom Advisor
IMPACT	Portfolio Director Plus
Independence Plus	Potentia
Polaris Choice Elite

The Separate Account contracts are sold primarily through the Company’s captive sales force. The distributor of the Separate Account is AIG Capital Services, Inc., an affiliate of the Company; however, all commissions are paid by the Company. No underwriting fees are paid in connection with the distribution of these contracts.

The Separate Account is registered with the Securities and Exchange Commission as a Unit Investment Trust under the Investment Company Act of 1940, as amended. The Separate Account consists of various sub-accounts. Each sub-account invests all its investible assets in a corresponding eligible mutual fund, which is registered under the 1940 Act as an open-ended management investment company. The names in bold in the table below are the diversified, open-ended management investment companies and the names below them are the names of the sub-accounts/corresponding eligible mutual funds. Collectively, all of the mutual funds are referred to as “Funds” throughout these financial statements.

For each sub-account, the financial statements are comprised of a Statement of Assets and Liabilities, including a Schedule of Portfolio Investments, as of December 31, 2020 and related Statements of Operations and Changes in Net Assets for each of the years in the period then ended, all periods to reflect a full twelve month period, except as noted below.

American Beacon Funds (American Beacon)
American Beacon Bridgeway Large Cap Growth Fund Investor Class
Anchor Series Trust (AST)(a)
AST SA BlackRock Multi-Asset Income Portfolio Class 3(d)	AST SA Wellington Government and Quality Bond Portfolio Class 3
AST SA PGI Asset Allocation Portfolio Class 3	AST SA Wellington Strategic Multi-Asset Portfolio Class 3
AST SA Wellington Capital Appreciation Portfolio Class 3
Ariel Investment Trust (Ariel)
Ariel Appreciation Fund Investor Class	Ariel Fund Investor Class
Franklin Templeton Variable Insurance Products Trust (FTVIP)
FTVIP Franklin Allocation VIP Fund Class 2	FTVIP Franklin Income VIP Fund Class 2
Goldman Sachs Variable Insurance Trust (Goldman Sachs VIT)
Goldman Sachs VIT Government Money Market Fund Service Shares
Invesco Variable Insurance Funds (Invesco V.I.)
Invesco V.I. American Franchise Fund Series II	Invesco V.I. Comstock Fund Series II
Invesco V.I. Balanced-Risk Commodity Strategy Fund Class R5	Invesco V.I. Growth and Income Fund Series II
Lord Abbett Series Fund, Inc. (Lord Abbett)
Lord Abbett Growth and Income Portfolio Class VC

36

SEPARATE ACCOUNT A

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

PIMCO Variable Insurance Trust (PIMCO)
PIMCO Emerging Markets Bond Portfolio Advisor Class(h)	PIMCO Total Return Portfolio Institutional Class(c)
PIMCO Total Return Portfolio Advisor Class
Seasons Series Trust (SST)(a)
SST SA Allocation Balanced Portfolio Class 3	SST SA Allocation Moderate Portfolio Class 3
SST SA Allocation Growth Portfolio Class 3	SST SA Putnam Asset Allocation Diversified Growth Portfolio Class 3
SST SA Allocation Moderate Growth Portfolio Class 3	SST SA Wellington Real Return Portfolio Class 3
SunAmerica Series Trust (SAST)(a)
SAST SA AB Growth Portfolio Class 3	SAST SA Invesco Main Street Large Cap Portfolio Class 3(f)
SAST SA AB Small & Mid Cap Value Portfolio Class 3	SAST SA Invesco VCP Equity-Income Portfolio Class 3
SAST SA American Funds Asset Allocation Portfolio Class 3	SAST SA Janus Focused Growth Portfolio Class 3
SAST SA American Funds Global Growth Portfolio Class 3	SAST SA JPMorgan Diversified Balanced Portfolio Class 3
SAST SA American Funds Growth Portfolio Class 3	SAST SA JPMorgan Emerging Markets Portfolio Class 3
SAST SA American Funds Growth-Income Portfolio Class 3	SAST SA JPMorgan Equity-Income Portfolio Class 3
SAST SA American Funds VCP Managed Allocation Portfolio Class 3	SAST SA JPMorgan Global Equities Portfolio Class 3
SAST SA BlackRock Multi-Factor 70/30 Portfolio Class 3(h)	SAST SA JPMorgan MFS Core Bond Portfolio Class 3
SAST SA BlackRock VCP Global Multi Asset Portfolio Class 3	SAST SA JPMorgan Mid-Cap Growth Portfolio Class 3
SAST SA Columbia Technology Portfolio Class 3	SAST SA Large Cap Growth Index Portfolio Class 3
SAST SA DFA Ultra Short Bond Portfolio Class 3	SAST SA Large Cap Index Portfolio Class 3
SAST SA Dogs of Wall Street Portfolio Class 3	SAST SA Large Cap Value Index Portfolio Class 3
SAST SA Emerging Markets Equity Index Portfolio Class 3	SAST SA Legg Mason BW Large Cap Value Portfolio Class 3
SAST SA Federated Hermes Corporate Bond Portfolio Class 3(e)	SAST SA Legg Mason Tactical Opportunities Class 3
SAST SA Fidelity Institutional AM® International Growth Class 1(c)	SAST SA MFS Blue Chip Growth Portfolio Class 3
SAST SA Fidelity Institutional AM® International Growth Class 3	SAST SA MFS Massachusetts Investors Trust Portfolio Class 3
SAST SA Fidelity Institutional AM® Real Estate Portfolio Class 3	SAST SA MFS Total Return Portfolio Class 3
SAST SA Fixed Income Index Portfolio Class 3	SAST SA Mid Cap Index Portfolio Class 3
SAST SA Fixed Income Intermediate Index Portfolio Class 3	SAST SA Morgan Stanley International Equities Portfolio Class 3
SAST SA Franklin Small Company Value Portfolio Class 3	SAST SA PIMCO VCP Tactical Balanced Portfolio Class 3
SAST SA Franklin U.S. Equity Smart Beta Portfolio Class 1(c)	SAST SA PineBridge High-Yield Bond Portfolio Class 3
SAST SA Franklin U.S. Equity Smart Beta Portfolio Class 3(c)	SAST SA Putnam International Growth and Income Portfolio Class 3
SAST SA Global Index Allocation 60/40 Portfolio Class 3	SAST SA Schroders VCP Global Allocation Portfolio Class 3
SAST SA Global Index Allocation 75/25 Portfolio Class 3	SAST SA Small Cap Index Portfolio Class 3
SAST SA Global Index Allocation 90/10 Portfolio Class 3	SAST SA T. Rowe Price Asset Allocation Growth Portfolio Class 3
SAST SA Goldman Sachs Global Bond Portfolio Class 3	SAST SA T. Rowe Price VCP Balanced Portfolio Class 3
SAST SA Goldman Sachs Multi-Asset Insights Portfolio Class 3	SAST SA Templeton Foreign Value Portfolio Class 3
SAST SA Index Allocation 60/40 Portfolio Class 3	SAST SA VCP Dynamic Allocation Portfolio Class 3
SAST SA Index Allocation 80/20 Portfolio Class 3	SAST SA VCP Dynamic Strategy Portfolio Class 3
SAST SA Index Allocation 90/10 Portfolio Class 3	SAST SA VCP Index Allocation Portfolio Class 3
SAST SA International Index Portfolio Class 3	SAST SA WellsCap Aggressive Growth Portfolio Class 3
SAST SA Invesco Growth Opportunities Portfolio Class 3
T. Rowe Price Retirement Funds, Inc. (T. Rowe Price)
T Rowe Price Retirement 2015 Advisor Class	T Rowe Price Retirement 2040 Advisor Class
T Rowe Price Retirement 2020 Advisor Class	T Rowe Price Retirement 2045 Advisor Class
T Rowe Price Retirement 2025 Advisor Class	T Rowe Price Retirement 2050 Advisor Class
T Rowe Price Retirement 2030 Advisor Class	T Rowe Price Retirement 2055 Advisor Class
T Rowe Price Retirement 2035 Advisor Class	T Rowe Price Retirement 2060 Advisor Class
VALIC Company I(b)
VALIC Company I Asset Allocation Fund	VALIC Company I International Socially Responsible Fund
VALIC Company I Blue Chip Growth Fund	VALIC Company I International Value Fund
VALIC Company I Capital Conservation Fund	VALIC Company I Large Cap Core Fund
VALIC Company I Core Equity Fund	VALIC Company I Large Capital Growth Fund
VALIC Company I Dividend Value Fund	VALIC Company I Mid Cap Index Fund
VALIC Company I Dynamic Allocation Fund	VALIC Company I Mid Cap Strategic Growth Fund
VALIC Company I Emerging Economies Fund	VALIC Company I Nasdaq-100 Index Fund
VALIC Company I Global Real Estate Fund	VALIC Company I Science & Technology Fund

37

SEPARATE ACCOUNT A

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

VALIC Company I(b)
VALIC Company I Global Strategy Fund	VALIC Company I Small Cap Aggressive Growth Fund
VALIC Company I Government Money Market I Fund	VALIC Company I Small Cap Fund
VALIC Company I Government Securities Fund	VALIC Company I Small Cap Index Fund
VALIC Company I Growth Fund	VALIC Company I Small Cap Special Values Fund
VALIC Company I Health Sciences Fund	VALIC Company I Small Mid Growth Fund
VALIC Company I Inflation Protected Fund	VALIC Company I Stock Index Fund
VALIC Company I International Equities Index Fund	VALIC Company I Systematic Core Fund(g)
VALIC Company I International Government Bond Fund	VALIC Company I Systematic Value Fund
VALIC Company I International Growth Fund	VALIC Company I Value Fund
VALIC Company II(b)
VALIC Company II Aggressive Growth Lifestyle Fund	VALIC Company II Mid Cap Growth Fund
VALIC Company II Capital Appreciation Fund	VALIC Company II Mid Cap Value Fund
VALIC Company II Conservative Growth Lifestyle Fund	VALIC Company II Moderate Growth Lifestyle Fund
VALIC Company II Core Bond Fund	VALIC Company II Small Cap Growth Fund
VALIC Company II Government Money Market II Fund	VALIC Company II Small Cap Value Fund
VALIC Company II High Yield Bond Fund	VALIC Company II Strategic Bond Fund
VALIC Company II International Opportunities Fund	VALIC Company II U.S. Socially Responsible Fund
VALIC Company II Large Cap Value Fund
The Vanguard Group, Inc. (Vanguard)
Vanguard LifeStrategy Conservative Growth Fund Investor Shares	Vanguard Long-Term Treasury Fund Investor Shares
Vanguard LifeStrategy Growth Fund Investor Shares	Vanguard Wellington Fund Investor Shares
Vanguard LifeStrategy Moderate Growth Fund Investor Shares	Vanguard Windsor II Fund Investor Shares
Vanguard Long-Term Investment-Grade Fund Investor Shares

(a) These are affiliated investment companies. SunAmerica Asset Management Corp., an affiliate of the Company, serves as the investment advisor to Anchor Series Trust, Seasons Series Trust, SunAmerica Mutual Funds and SunAmerica Series Trust.

(b) These are affiliated investment companies. The Company serves as the investment advisor to VALIC Company I and II series. VALIC Retirement Services Company, a direct, wholly owned subsidiary of the Company, serves as the transfer agent and accounting services agent to VALIC Company I, and VALIC Company II, Anchor Series Trust, Seasons Series Trust and SunAmerica Series Trust series. SunAmerica Asset Management LLC (SAAMCO), an affiliate of the Company, serves as the administrator to all funds in the VALIC Company I and II series, the investment sub-advisor to certain underlying mutual funds of each VALIC Company I and II series, and is the investment adviser to the mutual funds in the Anchor Series Trust, Seasons Series Trust and SunAmerica Series Trust.

(c) Fund had no activity during the current year.

(d) For the period January 1, 2019 to December 31, 2019 and January 1, 2020 to January 31, 2020 (cessation of operations).

(e) Formerly SAST SA Federated Corporate Bond Portfolio.

(f) Formerly SAST SA Oppenheimer Main Street Large Cap Portfolio.

(g) Formerly VALIC Company I Growth and Income Fund.

(h) For the period October 13, 2020 (commencement of operations) to December 31, 2020.

In addition to the sub-accounts above, a contract owner may allocate contract funds to a fixed account, which is part of the Company’s General Account and not included in these financial statements. Contract owners should refer to the product prospectus for the available Funds and fixed account.

The assets of the Separate Account are segregated from the Company’s assets. The operations of the Separate Account are part of the Company. Net premiums from the contracts are allocated to the sub-accounts and invested in the Funds in accordance with contract owner instructions and are recorded as contract transactions in the Statements of Operations and Changes in Net Assets.

38

SEPARATE ACCOUNT A

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

2. Summary of Significant Accounting Policy

The financial statements of the Separate Account have been prepared in conformity with accounting principles generally accepted in the United States (GAAP). The following is a summary of significant accounting policies consistently followed by the Separate Account in the preparation of its financial statements.

Use of Estimates: The preparation of financial statements in conformity with GAAP requires the application of accounting policies that often involve a significant degree of judgment. These accounting estimates require the use of assumptions about matters, some of which are highly uncertain at the time of estimation. To the extent actual experience differs from assumptions used, the financial statements of the Separate Account could be materially affected.

Investments: Investments in mutual funds are valued at their closing net asset value per share as determined by the respective mutual funds, which generally value their securities at fair value. Purchases and sales of shares of the Funds are made at the net asset values of such Funds. Transactions are recorded on a trade date basis. Realized gains and losses on the sales of investments are recognized at the date of sale and are determined on a first-in, first-out basis. Dividends and capital gain distributions from the Funds are recorded on the ex-dividend date and reinvested upon receipt.

Reserves for Annuity Contracts in Payout: Net assets allocated to contracts in the payout period are based on industry standard mortality tables depending on the calendar year of annuitization as well as other assumptions, including provisions for the risk of adverse deviation from assumptions.

Participants are able to elect assumed interest rates between 3.00 and 6.00 percent in determining annuity payments for all contracts.

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 General Account. Transfers between the General Account and the Separate Account, if any, are disclosed as adjustments to net assets allocated to contracts in payout period in the Statements of Operations and Changes in Net Assets. Annuity benefit payments are recorded as payments for contract benefits or terminations in the Statements of Operations and Changes in Net Assets.

Accumulation Unit: This is the basic valuation unit used to calculate the contract owner’s interest. Such units are valued daily to reflect investment performance and the prorated daily deduction for expense charges.

Income Taxes: The operations of the Separate Account are included in the federal income tax return of the Company, which is taxed as a life insurance company under the provision of the Internal Revenue Code (the Code). 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. As a result, no charge is currently made to the Separate Account for federal income taxes. The Separate Account is not treated as a regulated investment company under the Code. The Company will periodically review changes in the tax law. A charge may be made in future years for any federal income taxes that would be attributable to the contracts.

39

SEPARATE ACCOUNT A

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

3. Fair Value Measurements

Assets recorded at fair value in the Separate Account’s Statement of Assets and Liabilities are measured and classified in a hierarchy for disclosure purposes consisting of three “levels” based on the observability of valuation inputs:

● Level 1— Fair value measurements based on quoted prices (unadjusted) in active markets that the Separate Account has the ability to access for identical assets or liabilities. Market price data generally is obtained from exchange or dealer markets. The Separate Account does not adjust the quoted price for such instruments.

● Level 2— Fair value measurements based on inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs other than quoted prices that are observable for the asset or liability, such as interest rates and yield curves that are observable at commonly quoted intervals.

● Level 3— Fair value measurements based on valuation techniques that use significant inputs that are unobservable. Both observable and unobservable inputs may be used to determine the fair value positions in Level 3. The circumstances in which there is little, if any, market activity for the asset or liability. Therefore, the Separate Account makes certain assumptions about the inputs a hypothetical market participant would use to value that asset or liability.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

The Separate Account assets measured at fair value as of December 31, 2020 consist of investments in registered mutual funds that generally trade daily and are measured at fair value using quoted prices in active markets for identical assets, which are classified as Level 1 throughout the year. As such, no transfers between fair value hierarchy levels occurred during the year. See the Schedule of Portfolio Investments for the table presenting information about assets measured at fair value on a recurring basis at December 31, 2020, and respective hierarchy levels.

4. Expenses

Expense charges are applied against the current value of the Separate Account and are paid as follows:

Separate Account Annual Charges: Deductions for the mortality and expense risk charges are calculated daily, at an annual rate, on the actual prior day’s net asset value of the underlying Funds comprising the sub-accounts attributable to the contract owners and are paid to the Company. The mortality risk charge represents compensation to the Company for the mortality risks assumed under the contract, which is the obligation to provide payments during the payout period for the life of the contract and to provide the standard death benefit. The expense risk charge represents compensation to the Company for assuming the risk that the current contract administration charges will be insufficient to cover the cost of administering the contract in the future. These charges are included on the mortality and expense risk and administrative charges line in the Statements of Operations and Changes in Net Assets.

40

SEPARATE ACCOUNT A

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

The exact rate depends on the particular product issued and funds selected. Expense charges for each product are as follows:

Products	Separate Account Annual Charges
Equity Director	1.60% - 2.10%
GTS-VA	0.85% on the first $10 million
	0.425% on the next $90 million
	0.21% on the excess over $100 million
GUP	1.00%
IMPACT	1.00%
Independence Plus	1.00%
Polaris Choice Elite	1.65% - 1.90%
Polaris Platinum Elite	1.30% - 1.55% prior to May 1, 2017
Polaris Platinum Elite	1.15% - 1.55% on or after May 1, 2017
Portfolio Director	0.15% - 1.25%
Portfolio Director Freedom Plus	0.35% - 0.60%
Portfolio Director Plus	0.00%
Potentia	1.45%

Mortality and expense risk charges of the Separate Account products (as defined to include underlying Fund expenses) are limited to the following rates based on average daily net assets:

Products	Expense Limitations
GTS-VA	0.6966% on the first $25,434,267
	0.50% on the next $74,565,733
	0.25% on the excess over $100 million
GUP	1.4157% on the first $359,065,787
	1.36% on the next $40,934,213
	1.32% on the excess over $400 million

Contract Maintenance Charge: During the accumulation phase, an annual contract maintenance charge is assessed by the Company on the contract anniversary. In the event of a full surrender, a contract maintenance charge is assessed at the date of surrender and deducted from the withdrawal proceeds. The contract maintenance charge represents a reimbursement of administrative expenses incurred by the Company related to the establishment and maintenance of the record keeping function for the sub-accounts. These charges are included as part of the contract maintenance charges line in the Statements of Operations and Changes in Net Assets.

A contract maintenance charge of $3.75 is assessed on each contract (except those relating to GUP and GTS- VA, contracts within the Impact product are assessed a $30 annual maintenance charge and contracts within the Polaris Platinum Elite product are assessed a $50 annual maintenance charge) by the Company on the last day of the calendar quarter in which the Company receives the first purchase payment, and in quarterly installments thereafter during the accumulation period.

Withdrawal Charge: A withdrawal charge is applicable to certain contract withdrawals pursuant to the contract and is payable to the Company. The withdrawal charges are included as part of the payments for contract benefits or terminations line in the Statements of Operations and Changes in Net Assets.

Separate Account Expense Reimbursements or Credits: Certain of the Funds or their affiliates have an agreement with the Company to pay the Company for administrative and shareholder services provided to the underlying Fund. The Company applied these payments to reduce its charges to the sub-account investing in that Fund. In addition, the Company currently reimburses or credits certain sub-accounts a portion of the Company’s mortality and expense risk charges. Such crediting arrangements are voluntary, and may be changed by the Company at any time. The reimbursements are included on the reimbursements of expenses line of the Statements of Operations and Changes in Net Assets.

41

SEPARATE ACCOUNT A

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

The expense reimbursements are credited at the annual rate of 0.25 percent.

Sales and Administrative Charge: Certain purchase payments to certain products are subject to a sales and administrative charge. The percentage rate charged is based on the amount of purchase payments received. These charges are included as part of the payments received from contract owners line in the Statements of Operations and Changes in Net Assets.

Premium Tax Charge: Certain states charge taxes on purchase payments up to a maximum of 3.50 percent. Some states assess premium taxes at the time of purchase payments, while some other states assess premium taxes when annuity payments begin or upon surrender. There are certain states that do not assess premium taxes. If the law of the state requires premium taxes to be paid when purchase payments are made, the Company will deduct the tax from such payments prior to depositing the payments into the Separate Account. Otherwise, such tax will be deducted from the account value when annuity payments begin. Premium taxes are included as part of the payments received from contract owners line in the Statements of Operations and Changes in Net Assets.

Guaranteed Minimum Withdrawal Benefit (GMWB) Charge: The charges for the GMWB riders are assessed quarterly on all policies that have elected this option. The annualized charges by GMWB rider and by product are as follows:

		Annualized GMWB Charge for Contracts Issued:
GMWB Rider	Products	Before October 9, 2017	On or After October 9, 2017
Polaris Income Builder	Polaris Choice Elite Polaris Platinum Elite	0.60% to 2.20% for one covered person 0.60% to 2.70% for two covered persons	0.60% to 2.20% for one covered person 0.60% to 2.70% for two covered persons
Polaris Income Plus	Polaris Choice Elite Polaris Platinum Elite	0.60% to 2.20% for one covered person 0.60% to 2.70% for two covered persons	0.60% to 2.50% for one covered person 0.60% to 2.50% for two covered persons
Polaris Income Plus Daily	Polaris Choice Elite Polaris Platinum Elite	0.60% to 2.20% for one covered person 0.60% to 2.70% for two covered persons	0.60% to 2.50% for one covered person 0.60% to 2.50% for two covered persons
IncomeLock (1)	Portfolio Director Equity Director	0.60% to 0.90% for one covered person Not available for two covered persons	Not applicable
IncomeLock Plus (2)	Portfolio Director Equity Director	0.60% to 2.20% for one covered person 0.60% to 2.70% for two covered persons	Not applicable
(1) IncomeLock was not available to contracts issued after July 2, 2012.
(2) IncomeLock Plus was not available to contracts issued after January 2, 2017.

5. Purchases and Sales of Investments

For the year ended December 31, 2020, the aggregate cost of purchases and proceeds from the sales of investments were:

Sub-accounts	Cost of Purchases		Proceeds from Sales
American Beacon Bridgeway Large Cap Growth Fund Investor Class	$	10,059,259	$	9,847,815
AST SA BlackRock Multi-Asset Income Portfolio Class 3		-		1,603,324
AST SA PGI Asset Allocation Portfolio Class 3		28,903		100,536
AST SA Wellington Capital Appreciation Portfolio Class 3		2,256,433		853,087
AST SA Wellington Government and Quality Bond Portfolio Class 3		4,181,545		922,359
AST SA Wellington Strategic Multi-Asset Portfolio Class 3		1,040,330		396,789
Ariel Appreciation Fund Investor Class		42,507,305		48,592,418
Ariel Fund Investor Class		37,332,753		59,746,769
FTVIP Franklin Allocation VIP Fund Class 2		211,742		19,542
FTVIP Franklin Income VIP Fund Class 2		1,245,885		138,730
Goldman Sachs VIT Government Money Market Fund Service Shares		6,936,798		4,010,150
Invesco V.I. American Franchise Fund Series II		318,158		74,794
Invesco V.I. Balanced-Risk Commodity Strategy Fund Class R5		20,831,353		14,709,763
Invesco V.I. Comstock Fund Series II		289,278		139,030
Invesco V.I. Growth and Income Fund Series II		210,407		155,266
Lord Abbett Growth and Income Portfolio Class VC		182,953		85,793
PIMCO Emerging Markets Bond Portfolio Advisor Class		5,631		12
PIMCO Total Return Portfolio Advisor Class		2,884,390		111,195
SST SA Allocation Balanced Portfolio Class 3		1,336,007		177,886

42

SEPARATE ACCOUNT A

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

Sub-accounts	Cost of Purchases		Proceeds from Sales
SST SA Allocation Growth Portfolio Class 3	$	1,531,268	$	1,185,989
SST SA Allocation Moderate Growth Portfolio Class 3		1,545,572		1,140,152
SST SA Allocation Moderate Portfolio Class 3		1,884,904		740,548
SST SA Putnam Asset Allocation Diversified Growth Portfolio Class 3		322,994		200,756
SST SA Wellington Real Return Portfolio Class 3		1,264,225		405,853
SAST SA AB Growth Portfolio Class 3		1,952,215		752,204
SAST SA AB Small & Mid Cap Value Portfolio Class 3		276,870		187,480
SAST SA American Funds Asset Allocation Portfolio Class 3		13,440,060		3,687,183
SAST SA American Funds Global Growth Portfolio Class 3		745,153		572,879
SAST SA American Funds Growth Portfolio Class 3		2,812,194		1,027,584
SAST SA American Funds Growth-Income Portfolio Class 3		1,251,926		295,551
SAST SA American Funds VCP Managed Allocation Portfolio Class 3		10,179,380		4,210,502
SAST SA BlackRock Multi-Factor 70/30 Portfolio Class 3		38,340		62
SAST SA BlackRock VCP Global Multi Asset Portfolio Class 3		3,902,762		1,834,890
SAST SA Columbia Technology Portfolio Class 3		1,557,923		468,032
SAST SA DFA Ultra Short Bond Portfolio Class 3		868,616		328,656
SAST SA Dogs of Wall Street Portfolio Class 3		1,825,502		408,087
SAST SA Emerging Markets Equity Index Portfolio Class 3		72,923		4,339
SAST SA Federated Hermes Corporate Bond Portfolio Class 3		2,098,306		657,890
SAST SA Fidelity Institutional AM® International Growth Class 3		21,340		1,520
SAST SA Fidelity Institutional AM® Real Estate Portfolio Class 3		216,458		54,779
SAST SA Fixed Income Index Portfolio Class 3		3,160,596		447,686
SAST SA Fixed Income Intermediate Index Portfolio Class 3		433,091		81,796
SAST SA Franklin Small Company Value Portfolio Class 3		283,194		92,580
SAST SA Global Index Allocation 60/40 Portfolio Class 3		1,098,825		69,985
SAST SA Global Index Allocation 75/25 Portfolio Class 3		487,876		112,093
SAST SA Global Index Allocation 90/10 Portfolio Class 3		1,217,495		633,928
SAST SA Goldman Sachs Global Bond Portfolio Class 3		586,002		355,285
SAST SA Goldman Sachs Multi-Asset Insights Portfolio Class 3		1,512,775		90,839
SAST SA Index Allocation 60/40 Portfolio Class 3		1,978,409		411,499
SAST SA Index Allocation 80/20 Portfolio Class 3		2,145,160		1,299,285
SAST SA Index Allocation 90/10 Portfolio Class 3		4,758,387		2,046,188
SAST SA International Index Portfolio Class 3		239,174		122,685
SAST SA Invesco Growth Opportunities Portfolio Class 3		104,382		43,450
SAST SA Invesco Main Street Large Cap Portfolio Class 3		122,338		73,886
SAST SA Invesco VCP Equity-Income Portfolio Class 3		4,994,599		1,562,272
SAST SA Janus Focused Growth Portfolio Class 3		324,077		149,957
SAST SA JPMorgan Diversified Balanced Portfolio Class 3		729,975		284,835
SAST SA JPMorgan Emerging Markets Portfolio Class 3		226,913		142,910
SAST SA JPMorgan Equity-Income Portfolio Class 3		346,886		110,792
SAST SA JPMorgan Global Equities Portfolio Class 3		25,113		2,630
SAST SA JPMorgan MFS Core Bond Portfolio Class 3		3,131,069		722,913
SAST SA JPMorgan Mid-Cap Growth Portfolio Class 3		570,258		226,672
SAST SA Large Cap Growth Index Portfolio Class 3		265,145		84,723
SAST SA Large Cap Index Portfolio Class 3		503,197		69,145
SAST SA Large Cap Value Index Portfolio Class 3		228,447		10,498
SAST SA Legg Mason BW Large Cap Value Portfolio Class 3		287,872		70,239
SAST SA Legg Mason Tactical Opportunities Class 3		216,166		20,739
SAST SA MFS Blue Chip Growth Portfolio Class 3		334,163		142,280
SAST SA MFS Massachusetts Investors Trust Portfolio Class 3		192,843		162,475
SAST SA MFS Total Return Portfolio Class 3		182,960		173,443
SAST SA Mid Cap Index Portfolio Class 3		466,304		145,894
SAST SA Morgan Stanley International Equities Portfolio Class 3		103,067		65,936
SAST SA PIMCO VCP Tactical Balanced Portfolio Class 3		5,953,197		2,110,387
SAST SA PineBridge High-Yield Bond Portfolio Class 3		487,323		180,301
SAST SA Putnam International Growth and Income Portfolio Class 3		33,395		13,540
SAST SA Schroders VCP Global Allocation Portfolio Class 3		2,107,355		957,986
SAST SA Small Cap Index Portfolio Class 3		383,577		148,981
SAST SA T. Rowe Price Asset Allocation Growth Portfolio Class 3		1,335,147		330,187
SAST SA T. Rowe Price VCP Balanced Portfolio Class 3		8,843,258		3,351,285
SAST SA Templeton Foreign Value Portfolio Class 3		103,442		43,600
SAST SA VCP Dynamic Allocation Portfolio Class 3		12,719,901		5,444,730
SAST SA VCP Dynamic Strategy Portfolio Class 3		7,571,774		3,350,182
SAST SA VCP Index Allocation Portfolio Class 3		6,942,900		1,858,369
SAST SA WellsCap Aggressive Growth Portfolio Class 3		289,698		135,520
T Rowe Price Retirement 2015 Advisor Class		22,338,749		20,684,333
T Rowe Price Retirement 2020 Advisor Class		12,935,831		10,737,165
T Rowe Price Retirement 2025 Advisor Class		13,717,350		6,193,360
T Rowe Price Retirement 2030 Advisor Class		13,725,994		5,906,609

43

SEPARATE ACCOUNT A

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

Sub-accounts	Cost of Purchases		Proceeds from Sales
T Rowe Price Retirement 2035 Advisor Class	$	10,240,445	$	2,799,566
T Rowe Price Retirement 2040 Advisor Class		9,609,208		2,129,683
T Rowe Price Retirement 2045 Advisor Class		8,643,423		2,160,502
T Rowe Price Retirement 2050 Advisor Class		7,201,141		1,487,178
T Rowe Price Retirement 2055 Advisor Class		3,556,022		658,760
T Rowe Price Retirement 2060 Advisor Class		4,331,996		1,101,764
VALIC Company I Asset Allocation Fund		7,756,166		22,735,898
VALIC Company I Blue Chip Growth Fund		104,733,587		142,341,482
VALIC Company I Capital Conservation Fund		118,451,810		51,174,334
VALIC Company I Core Equity Fund		26,050,181		33,731,652
VALIC Company I Dividend Value Fund		310,509,407		349,142,394
VALIC Company I Dynamic Allocation Fund		23,275,836		36,545,566
VALIC Company I Emerging Economies Fund		210,435,142		171,803,493
VALIC Company I Global Real Estate Fund		47,903,609		150,993,102
VALIC Company I Global Strategy Fund		55,779,210		52,827,712
VALIC Company I Government Money Market I Fund		238,234,299		165,383,448
VALIC Company I Government Securities Fund		54,782,787		43,952,183
VALIC Company I Growth Fund		205,003,953		293,687,161
VALIC Company I Health Sciences Fund		75,030,735		90,745,111
VALIC Company I Inflation Protected Fund		265,301,738		164,661,721
VALIC Company I International Equities Index Fund		451,443,044		200,422,885
VALIC Company I International Government Bond Fund		59,275,856		45,211,289
VALIC Company I International Growth Fund		31,806,435		92,655,888
VALIC Company I International Socially Responsible Fund		50,863,007		78,148,883
VALIC Company I International Value Fund		86,633,845		107,771,309
VALIC Company I Large Cap Core Fund		15,794,091		23,698,102
VALIC Company I Large Capital Growth Fund		48,000,608		64,854,246
VALIC Company I Mid Cap Index Fund		464,866,228		555,337,230
VALIC Company I Mid Cap Strategic Growth Fund		23,461,948		42,049,541
VALIC Company I Nasdaq-100 Index Fund		70,290,236		64,204,943
VALIC Company I Science & Technology Fund		189,963,578		158,489,714
VALIC Company I Small Cap Aggressive Growth Fund		33,941,191		36,790,961
VALIC Company I Small Cap Fund		31,630,767		33,650,349
VALIC Company I Small Cap Index Fund		236,827,455		186,385,486
VALIC Company I Small Cap Special Values Fund		26,001,086		28,372,494
VALIC Company I Small Mid Growth Fund		22,058,460		19,739,316
VALIC Company I Stock Index Fund		686,419,386		693,425,690
VALIC Company I Systematic Core Fund		31,316,957		26,238,940
VALIC Company I Systematic Value Fund		7,568,478		6,501,596
VALIC Company I Value Fund		17,250,236		11,331,721
VALIC Company II Aggressive Growth Lifestyle Fund		71,461,155		47,735,817
VALIC Company II Capital Appreciation Fund		4,518,708		8,149,438
VALIC Company II Conservative Growth Lifestyle Fund		29,131,639		38,967,798
VALIC Company II Core Bond Fund		429,469,121		413,814,829
VALIC Company II Government Money Market II Fund		66,980,123		48,111,757
VALIC Company II High Yield Bond Fund		71,848,855		107,968,586
VALIC Company II International Opportunities Fund		106,942,344		124,323,205
VALIC Company II Large Cap Value Fund		23,079,407		19,975,458
VALIC Company II Mid Cap Growth Fund		30,137,043		47,876,061
VALIC Company II Mid Cap Value Fund		84,732,103		92,913,737
VALIC Company II Moderate Growth Lifestyle Fund		96,700,203		83,127,853
VALIC Company II Small Cap Growth Fund		45,160,196		38,546,240
VALIC Company II Small Cap Value Fund		47,207,791		46,220,739
VALIC Company II Strategic Bond Fund		168,948,744		135,855,910
VALIC Company II U.S. Socially Responsible Fund		136,932,631		114,598,726
Vanguard LifeStrategy Conservative Growth Fund Investor Shares		19,856,570		13,246,523
Vanguard LifeStrategy Growth Fund Investor Shares		25,325,763		19,403,556
Vanguard LifeStrategy Moderate Growth Fund Investor Shares		31,072,501		23,613,532
Vanguard Long-Term Investment-Grade Fund Investor Shares		61,240,417		149,969,342
Vanguard Long-Term Treasury Fund Investor Shares		77,139,743		49,634,891
Vanguard Wellington Fund Investor Shares		189,091,834		186,889,655
Vanguard Windsor II Fund Investor Shares		135,246,633		175,836,998

44

SEPARATE ACCOUNT A

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

6. Financial Highlights

The summary of unit values and units outstanding for sub-accounts, investment income ratios, total return and expense ratios, excluding expenses of the underlying mutual funds, for each of the five years in the period ended December 31, 2020, follows:

	December 31, 2020								For the Year Ended December 31, 2020
									Investment		Expense				Total
			Unit Value ($)(a)				Net		Income		Ratio (%)(d)				Return (%)(e)
Sub-accounts	Units		Lowest		Highest		Assets ($)(b)		Ratio (%)(c)		Lowest		Highest		Lowest		Highest
American Beacon Bridgeway Large Cap Growth Fund Investor Class		48,673,680		1.56		1.63		78,184,820		0.00		0.40		1.85		31.57		33.49
AST SA BlackRock Multi-Asset Income Portfolio Class 3		-		12.38		12.72		-		0.00		1.15		1.55		-0.13		-0.09
AST SA PGI Asset Allocation Portfolio Class 3		4,291		22.17		22.80		96,398		2.93		1.15		1.30		8.23		8.39
AST SA Wellington Capital Appreciation Portfolio Class 3		86,671		58.32		65.24		5,483,895		0.00		1.15		1.90		61.03		62.24
AST SA Wellington Government and Quality Bond Portfolio Class 3		508,280		12.62		14.02		6,959,679		2.31		1.15		1.90		4.86		5.65
AST SA Wellington Strategic Multi-Asset Portfolio Class 3		154,815		13.95		14.19		2,188,843		0.90		1.15		1.55		15.99		16.45
Ariel Appreciation Fund Investor Class		63,856,002		2.03		2.50		266,240,700		0.54		0.40		1.85		5.39		6.93
Ariel Fund Investor Class		82,157,346		2.16		2.44		367,777,525		0.29		0.40		1.85		8.00		9.58
FTVIP Franklin Allocation VIP Fund Class 2		34,297		16.43		17.28		565,486		1.30		1.15		1.55		10.02		10.47
FTVIP Franklin Income VIP Fund Class 2		294,878		15.77		16.82		4,992,944		5.69		1.15		1.65		-0.95		-0.46
Goldman Sachs VIT Government Money Market Fund Service Shares		377,859		9.65		9.88		3,707,724		0.28		1.15		1.65		-1.38		-0.88
Invesco V.I. American Franchise Fund Series II		23,558		41.01		43.43		1,012,451		0.00		1.15		1.55		39.81		40.37
Invesco V.I. Balanced-Risk Commodity Strategy Fund Class R5		251,717,915		0.60		0.68		163,415,176		0.00		0.40		1.85		6.04		7.59
Invesco V.I. Comstock Fund Series II		67,360		18.67		20.74		1,340,865		2.06		1.15		1.90		-2.95		-2.22
Invesco V.I. Growth and Income Fund Series II		70,628		19.19		21.34		1,445,793		1.82		1.15		1.90		-0.07		0.68
Lord Abbett Growth and Income Portfolio Class VC		21,661		17.95		19.06		416,892		1.76		1.15		1.55		1.12		1.52
PIMCO Emerging Markets Bond Portfolio Advisor Class		544				10.80		5,880		0.77				1.15				5.38
PIMCO Total Return Portfolio Advisor Class		262,971		10.65		10.73		2,818,893		0.92		1.15		1.55		6.87		7.30
SST SA Allocation Balanced Portfolio Class 3		188,561		18.31		19.40		3,570,276		1.36		1.15		1.55		10.10		10.54
SST SA Allocation Growth Portfolio Class 3		267,094		21.66		22.99		6,046,197		0.00		1.15		1.55		14.33		14.79
SST SA Allocation Moderate Growth Portfolio Class 3		263,426		19.59		21.12		5,374,503		0.00		1.15		1.65		12.84		13.41
SST SA Allocation Moderate Portfolio Class 3		320,332		19.44		20.63		6,391,311		0.00		1.15		1.55		11.89		12.34
SST SA Putnam Asset Allocation Diversified Growth Portfolio Class 3		171,781		14.39		14.64		2,511,577		0.00		1.15		1.55		12.02		12.47
SST SA Wellington Real Return Portfolio Class 3		309,631		11.66		12.87		3,920,875		0.00		1.15		1.90		4.77		5.56
SAST SA AB Growth Portfolio Class 3		77,219		42.08		46.98		3,551,922		0.00		1.15		1.90		32.74		33.74
SAST SA AB Small & Mid Cap Value Portfolio Class 3		54,765		22.46		24.95		1,327,632		0.49		1.15		1.90		2.02		2.79
SAST SA American Funds Asset Allocation Portfolio Class 3		2,693,836		21.45		23.02		61,011,205		0.00		1.15		1.65		10.30		10.86
SAST SA American Funds Global Growth Portfolio Class 3		99,095		30.06		33.42		3,185,452		0.06		1.15		1.90		27.64		28.60
SAST SA American Funds Growth Portfolio Class 3		215,567		38.55		42.80		8,929,204		0.79		1.15		1.90		48.87		49.98
SAST SA American Funds Growth-Income Portfolio Class 3		219,147		25.84		27.74		5,879,480		1.58		1.15		1.65		11.39		11.95
SAST SA American Funds VCP Managed Allocation Portfolio Class 3		4,510,953		16.15		16.82		75,189,138		0.00		1.15		1.65		7.53		8.07
SAST SA BlackRock Multi-Factor 70/30 Portfolio Class 3		3,749				10.65		39,918		0.49				1.15				6.47
SAST SA BlackRock VCP Global Multi Asset Portfolio Class 3		2,740,433		12.51		12.82		34,934,269		0.04		1.15		1.65		3.78		4.30
SAST SA Columbia Technology Portfolio Class 3		60,821		52.19		55.21		3,284,898		0.42		1.15		1.55		43.29		43.87
SAST SA DFA Ultra Short Bond Portfolio Class 3		188,354		8.45		9.08		1,686,378		1.66		1.15		1.65		-1.53		-1.03
SAST SA Dogs of Wall Street Portfolio Class 3		121,438		30.68		34.00		4,019,451		2.26		1.15		1.90		5.20		5.99
SAST SA Emerging Markets Equity Index Portfolio Class 3		9,098		11.41		11.53		104,419		2.78		1.15		1.55		15.08		15.54
SAST SA Federated Hermes Corporate Bond Portfolio Class 3		306,467		19.02		21.16		6,328,782		3.89		1.15		1.90		6.71		7.51
SAST SA Fidelity Institutional AM® International Growth Class 3		1,799		13.38		13.41		24,099		0.15		1.15		1.30		20.77		20.95
SAST SA Fidelity Institutional AM® Real Estate Portfolio Class 3		20,796		14.20		15.05		304,179		1.93		1.15		1.55		-2.90		-2.51
SAST SA Fixed Income Index Portfolio Class 3		374,637		11.17		11.32		4,227,984		2.84		1.15		1.55		6.76		7.19
SAST SA Fixed Income Intermediate Index Portfolio Class 3		62,248		10.65		10.79		669,775		2.29		1.15		1.55		4.26		4.67
SAST SA Franklin Small Company Value Portfolio Class 3		34,162		20.15		22.37		742,234		1.04		1.15		1.90		2.99		3.77
SAST SA Global Index Allocation 60/40 Portfolio Class 3		195,286		11.87		12.00		2,339,802		1.87		1.15		1.55		9.75		10.19
SAST SA Global Index Allocation 75/25 Portfolio Class 3		195,464		11.96		12.09		2,354,954		1.39		1.15		1.55		10.49		10.93
SAST SA Global Index Allocation 90/10 Portfolio Class 3		556,487		11.95		12.08		6,705,266		0.00		1.15		1.55		10.43		10.88
SAST SA Goldman Sachs Global Bond Portfolio Class 3		196,153		13.03		14.46		2,771,166		0.39		1.15		1.90		9.45		10.28
SAST SA Goldman Sachs Multi-Asset Insights Portfolio Class 3		229,068		11.87		12.03		2,744,191		0.20		1.15		1.55		9.52		9.96
SAST SA Index Allocation 60/40 Portfolio Class 3		542,897		13.51		13.72		7,429,714		1.42		1.15		1.55		11.74		12.19
SAST SA Index Allocation 80/20 Portfolio Class 3		875,707		14.19		14.41		12,567,691		0.00		1.15		1.55		12.67		13.12
SAST SA Index Allocation 90/10 Portfolio Class 3		2,915,104		14.48		14.71		42,740,274		0.00		1.15		1.55		12.71		13.16
SAST SA International Index Portfolio Class 3		31,702		10.98		11.12		349,901		2.09		1.15		1.55		5.71		6.13
SAST SA Invesco Growth Opportunities Portfolio Class 3		8,172		39.24		41.54		326,064		0.00		1.15		1.55		53.02		53.64
SAST SA Invesco Main Street Large Cap Portfolio Class 3		49,662		24.23		26.98		1,291,782		0.79		1.15		1.90		11.01		11.85
SAST SA Invesco VCP Equity-Income Portfolio Class 3		2,011,278		13.10		13.51		26,933,715		0.08		1.15		1.55		-2.66		-2.27
SAST SA Janus Focused Growth Portfolio Class 3		24,871		34.47		38.42		929,107		0.00		1.15		1.90		35.99		37.01
SAST SA JPMorgan Diversified Balanced Portfolio Class 3		131,578		21.30		22.49		2,917,560		2.04		1.15		1.55		12.28		12.73
SAST SA JPMorgan Emerging Markets Portfolio Class 3		43,181		13.77		15.35		635,119		1.70		1.15		1.90		13.92		14.78

45

SEPARATE ACCOUNT A

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

	December 31, 2020								For the Year Ended December 31, 2020
									Investment		Expense				Total
			Unit Value ($)(a)				Net		Income		Ratio (%)(d)				Return (%)(e)
Sub-accounts	Units		Lowest		Highest		Assets ($)(b)		Ratio (%)(c)		Lowest		Highest		Lowest		Highest
SAST SA JPMorgan Equity-Income Portfolio Class 3		68,227		22.29		24.86		1,624,490		1.78		1.15		1.90		1.01		1.77
SAST SA JPMorgan Global Equities Portfolio Class 3		2,945		16.90		18.01		52,735		1.54		1.15		1.55		7.87		8.31
SAST SA JPMorgan MFS Core Bond Portfolio Class 3		469,700		14.87		16.59		7,588,526		2.69		1.15		1.90		6.17		6.97
SAST SA JPMorgan Mid-Cap Growth Portfolio Class 3		19,088		45.41		48.72		908,072		0.00		1.15		1.65		45.76		46.49
SAST SA Large Cap Growth Index Portfolio Class 3		49,602		15.99		16.16		799,299		1.10		1.15		1.55		30.16		30.68
SAST SA Large Cap Index Portfolio Class 3		85,323		14.62		14.81		1,256,907		1.62		1.15		1.55		15.92		16.38
SAST SA Large Cap Value Index Portfolio Class 3		30,365		11.93		12.06		365,473		2.35		1.15		1.55		-0.44		-0.04
SAST SA Legg Mason BW Large Cap Value Portfolio Class 3		55,517		19.29		21.43		1,145,633		1.77		1.15		1.90		-3.39		-2.67
SAST SA Legg Mason Tactical Opportunities Class 3		52,440		11.81		11.96		625,305		1.31		1.15		1.55		6.58		7.01
SAST SA MFS Blue Chip Growth Portfolio Class 3		43,742		30.73		34.41		1,448,812		0.39		1.15		1.90		27.86		28.82
SAST SA MFS Massachusetts Investors Trust Portfolio Class 3		54,235		27.43		30.58		1,594,858		0.40		1.15		1.90		11.89		12.73
SAST SA MFS Total Return Portfolio Class 3		68,041		19.50		20.64		1,373,906		1.72		1.15		1.55		7.63		8.07
SAST SA Mid Cap Index Portfolio Class 3		87,987		12.42		12.58		1,101,640		1.20		1.15		1.55		11.16		11.60
SAST SA Morgan Stanley International Equities Portfolio Class 3		74,360		12.50		13.93		995,085		1.57		1.15		1.90		9.21		10.03
SAST SA PIMCO VCP Tactical Balanced Portfolio Class 3		2,158,433		14.62		15.19		32,471,518		0.46		1.15		1.65		6.88		7.42
SAST SA PineBridge High-Yield Bond Portfolio Class 3		92,367		16.98		19.03		1,700,887		5.96		1.15		1.90		5.81		6.60
SAST SA Putnam International Growth and Income Portfolio Class 3		11,901		9.97		10.46		122,645		2.16		1.30		1.65		1.77		2.13
SAST SA Schroders VCP Global Allocation Portfolio Class 3		1,557,228		12.49		12.74		19,721,639		0.12		1.15		1.55		-1.17		-0.78
SAST SA Small Cap Index Portfolio Class 3		67,434		12.65		12.82		859,617		0.81		1.15		1.55		17.24		17.71
SAST SA T. Rowe Price Asset Allocation Growth Portfolio Class 3		235,611		13.46		13.63		3,204,236		0.69		1.15		1.55		15.25		15.71
SAST SA T. Rowe Price VCP Balanced Portfolio Class 3		2,880,703		14.53		14.89		42,654,805		0.10		1.15		1.65		7.08		7.62
SAST SA Templeton Foreign Value Portfolio Class 3		66,531		9.89		10.98		702,566		2.28		1.15		1.90		-5.22		-4.50
SAST SA VCP Dynamic Allocation Portfolio Class 3		5,103,805		16.59		17.75		89,543,143		1.15		1.15		1.90		10.97		11.81
SAST SA VCP Dynamic Strategy Portfolio Class 3		4,370,781		15.74		16.78		72,493,299		1.17		1.15		1.90		8.12		8.93
SAST SA VCP Index Allocation Portfolio Class 3		1,894,588		12.16		12.31		23,261,161		1.23		1.15		1.55		6.04		6.47
SAST SA WellsCap Aggressive Growth Portfolio Class 3		26,644		33.29		35.55		911,088		0.00		1.15		1.55		60.03		60.67
T Rowe Price Retirement 2015 Advisor Class		11,292,320		1.42		1.47		16,016,822		1.44		0.40		1.00		11.21		11.88
T Rowe Price Retirement 2020 Advisor Class		28,318,849		1.47		1.52		41,689,867		1.26		0.40		1.00		11.84		12.52
T Rowe Price Retirement 2025 Advisor Class		37,659,819		1.53		1.58		57,653,389		1.17		0.40		1.00		13.23		13.91
T Rowe Price Retirement 2030 Advisor Class		37,872,844		1.58		1.64		59,925,432		1.02		0.40		1.00		14.46		15.15
T Rowe Price Retirement 2035 Advisor Class		28,603,740		1.62		1.68		46,454,655		0.88		0.40		1.00		15.59		16.29
T Rowe Price Retirement 2040 Advisor Class		28,731,456		1.66		1.72		47,694,338		0.72		0.40		1.00		16.62		17.32
T Rowe Price Retirement 2045 Advisor Class		22,138,595		1.67		1.74		37,193,060		0.70		0.40		1.00		17.16		17.86
T Rowe Price Retirement 2050 Advisor Class		18,735,324		1.39		1.74		31,470,810		0.70		0.40		1.00		13.73		17.86
T Rowe Price Retirement 2055 Advisor Class		9,085,740		1.38		1.73		15,238,951		0.70		0.40		1.00		13.64		17.76
T Rowe Price Retirement 2060 Advisor Class		7,062,589		1.32		1.73		11,853,672		0.76		0.40		1.00		13.66		17.78
VALIC Company I Asset Allocation Fund		15,009,742		1.65		2.01		147,421,552		1.13		0.40		1.85		9.69		11.29
VALIC Company I Blue Chip Growth Fund		223,456,301		2.51		4.17		975,296,395		0.00		0.00		1.85		31.91		34.37
VALIC Company I Capital Conservation Fund		54,698,723		1.21		1.61		227,015,865		2.59		0.40		1.85		6.20		7.75
VALIC Company I Core Equity Fund		43,601,912		2.59		2.72		266,485,387		1.23		0.40		1.85		17.18		18.89
VALIC Company I Dividend Value Fund		214,926,150		2.09		2.22		857,316,871		2.25		0.40		1.85		-1.31		0.13
VALIC Company I Dynamic Allocation Fund		113,418,104		1.58		1.77		190,569,075		1.98		0.40		1.85		9.05		10.64
VALIC Company I Emerging Economies Fund		711,040,166		0.97		1.19		913,734,880		2.00		0.40		1.85		13.35		15.01
VALIC Company I Global Real Estate Fund		183,897,782		1.50		1.73		298,225,922		3.18		0.40		1.85		-7.86		-6.52
VALIC Company I Global Strategy Fund		138,484,784		1.40		1.68		298,631,983		5.91		0.40		1.85		1.72		3.21
VALIC Company I Government Money Market I Fund		189,741,251		0.86		1.02		367,605,253		0.20		0.40		1.85		-1.62		-0.18
VALIC Company I Government Securities Fund		30,206,774		1.14		1.47		117,884,129		2.30		0.40		1.85		4.68		6.21
VALIC Company I Growth Fund		409,760,167		3.52		3.85		1,684,477,957		0.31		0.40		1.85		39.20		41.23
VALIC Company I Health Sciences Fund		116,540,320		5.22		6.33		978,158,537		0.00		0.40		1.85		27.23		29.09
VALIC Company I Inflation Protected Fund		501,425,577		1.16		1.21		757,662,191		2.01		0.00		1.85		6.82		8.81
VALIC Company I International Equities Index Fund		611,811,572		1.13		1.33		1,507,483,926		2.16		0.40		1.85		5.41		6.95
VALIC Company I International Government Bond Fund		37,212,596		1.14		1.56		135,128,345		1.53		0.40		1.85		8.24		9.82
VALIC Company I International Growth Fund		107,040,992		2.01		2.12		560,854,128		0.10		0.40		1.85		31.68		33.60
VALIC Company I International Socially Responsible Fund		44,376,748		1.96		2.08		367,308,711		1.77		0.40		1.85		6.38		7.93
VALIC Company I International Value Fund		457,784,448		1.08		1.17		667,291,885		2.25		0.00		1.85		3.02		4.95
VALIC Company I Large Cap Core Fund		40,814,996		3.02		3.55		167,127,133		1.01		0.40		1.85		19.84		21.59
VALIC Company I Large Capital Growth Fund		151,975,712		3.03		3.12		574,889,509		0.64		0.40		1.85		20.20		21.96
VALIC Company I Mid Cap Index Fund		122,446,340		2.40		2.86		3,255,806,917		1.33		0.40		1.85		11.22		12.85
VALIC Company I Mid Cap Strategic Growth Fund		83,781,643		2.88		3.04		373,321,478		0.00		0.40		1.85		31.77		33.69
VALIC Company I Nasdaq-100 Index Fund		221,517,862		5.13		5.84		760,808,251		0.67		0.40		1.85		45.23		47.35
VALIC Company I Science & Technology Fund		140,874,900		5.04		5.81		2,109,346,334		0.00		0.40		1.85		53.95		56.19
VALIC Company I Small Cap Aggressive Growth Fund		40,633,593		3.52		4.33		202,951,320		0.00		0.40		1.85		35.25		37.22
VALIC Company I Small Cap Fund		42,780,189		2.58		2.96		341,679,077		0.31		0.40		1.85		20.66		22.43
VALIC Company I Small Cap Index Fund		124,200,407		2.36		2.65		1,187,921,576		1.29		0.40		1.85		17.29		19.01
VALIC Company I Small Cap Special Values Fund		83,254,796		2.10		2.26		198,518,317		1.20		0.40		1.85		-0.44		1.02

46

SEPARATE ACCOUNT A

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

	December 31, 2020								For the Year Ended December 31, 2020
									Investment		Expense				Total
			Unit Value ($)(a)				Net		Income		Ratio (%)(d)				Return (%)(e)
Sub-accounts	Units		Lowest		Highest		Assets ($)(b)		Ratio (%)(c)		Lowest		Highest		Lowest		Highest
VALIC Company I Small Mid Growth Fund		45,464,582		3.36		3.72		176,613,840		0.00		0.40		1.85		49.35		51.53
VALIC Company I Stock Index Fund		331,809,228		2.95		144.20		5,158,751,372		1.77		0.33		1.85		15.82		17.60
VALIC Company I Systematic Core Fund		21,279,563		2.62		2.78		143,769,977		0.92		0.40		1.85		20.96		22.72
VALIC Company I Systematic Value Fund		17,214,135		2.00		2.05		39,734,973		2.55		0.40		1.85		-4.68		-3.29
VALIC Company I Value Fund		29,040,239		1.95		2.06		82,469,734		1.64		0.40		1.85		0.33		1.80
VALIC Company II Aggressive Growth Lifestyle Fund		157,093,509		1.99		2.19		669,144,997		2.24		0.15		1.60		11.67		13.30
VALIC Company II Capital Appreciation Fund		14,557,516		3.07		3.23		50,880,559		0.33		0.15		1.60		26.72		28.57
VALIC Company II Conservative Growth Lifestyle Fund		99,958,439		1.57		1.98		354,609,815		2.32		0.15		1.60		9.13		10.73
VALIC Company II Core Bond Fund		584,249,246		1.25		1.28		1,400,771,250		3.21		0.00		1.60		7.00		8.73
VALIC Company II Government Money Market II Fund		109,137,221		0.88		1.05		134,717,270		0.20		0.15		1.60		-1.38		0.06
VALIC Company II High Yield Bond Fund		137,297,694		1.53		1.93		457,539,635		6.59		0.15		1.60		5.04		6.57
VALIC Company II International Opportunities Fund		176,888,938		1.59		1.75		640,393,748		0.59		0.15		1.60		15.02		16.70
VALIC Company II Large Cap Value Fund		46,069,683		1.94		2.20		183,544,996		1.63		0.15		1.60		1.42		2.90
VALIC Company II Mid Cap Growth Fund		65,506,760		2.52		2.59		251,251,558		0.00		0.15		1.60		22.78		24.58
VALIC Company II Mid Cap Value Fund		100,220,305		2.00		2.19		726,006,598		0.78		0.15		1.60		1.99		3.48
VALIC Company II Moderate Growth Lifestyle Fund		259,841,173		1.83		2.19		1,085,397,730		2.14		0.15		1.60		10.67		12.28
VALIC Company II Small Cap Growth Fund		32,081,626		4.29		4.72		258,423,249		0.00		0.15		1.60		57.29		59.58
VALIC Company II Small Cap Value Fund		72,678,240		1.75		2.03		334,350,177		1.25		0.15		1.60		3.00		4.51
VALIC Company II Strategic Bond Fund		211,398,843		1.37		1.89		725,179,636		4.57		0.15		1.60		6.66		8.22
VALIC Company II U.S. Socially Responsible Fund		160,320,277		1.89		3.04		744,005,618		1.27		0.00		1.60		14.01		15.85
Vanguard LifeStrategy Conservative Growth Fund Investor Shares		44,740,541		1.54		1.81		120,632,035		1.78		0.65		2.10		9.20		10.79
Vanguard LifeStrategy Growth Fund Investor Shares		92,902,790		1.99		2.03		314,980,202		1.74		0.65		2.10		13.06		14.71
Vanguard LifeStrategy Moderate Growth Fund Investor Shares		99,419,392		1.77		1.95		309,160,720		1.76		0.65		2.10		11.23		12.86
Vanguard Long-Term Investment-Grade Fund Investor Shares		58,737,892		1.86		2.65		282,341,390		3.55		0.40		1.85		13.22		14.87
Vanguard Long-Term Treasury Fund Investor Shares		55,651,072		1.73		2.42		252,386,140		1.99		0.40		1.85		16.02		17.71
Vanguard Wellington Fund Investor Shares		358,635,409		1.62		2.08		2,061,242,338		2.02		0.00		2.10		8.30		10.60
Vanguard Windsor II Fund Investor Shares		305,318,371		2.29		2.44		1,785,844,093		1.27		0.65		2.10		12.07		13.71

	December 31, 2019								For the Year Ended December 31 2019
									Investment		Expense				Total
			Unit Value ($)(a)				Net		Income		Ratio (%)(d)				Return (%)(e)
Sub-accounts	Units		Lowest		Highest		Assets ($)(b)		Ratio (%)(c)		Lowest		Highest		Lowest		Highest
American Beacon Bridgeway Large Cap Growth Fund Investor Class		54,236,421		1.19		1.22		65,592,956		0.00		0.40		1.85		26.81		29.54
AST SA BlackRock Multi-Asset Income Portfolio Class 3		126,755		12.40		12.73		1,603,100		0.00		1.15		1.55		11.74		12.18
AST SA PGI Asset Allocation Portfolio Class 3		7,778		20.48		21.03		162,330		3.72		1.15		1.30		18.66		18.83
AST SA Wellington Capital Appreciation Portfolio Class 3		65,939		36.21		40.21		2,573,340		0.00		1.15		1.90		28.38		29.34
AST SA Wellington Government and Quality Bond Portfolio Class 3		274,099		12.03		13.27		3,544,138		2.42		1.15		1.90		5.04		5.83
AST SA Wellington Strategic Multi-Asset Portfolio Class 3		108,020		12.03		12.19		1,310,975		0.00		1.15		1.55		17.05		17.52
Ariel Appreciation Fund Investor Class		71,845,502		1.93		2.33		282,705,849		0.96		0.40		1.85		22.31		24.10
Ariel Fund Investor Class		92,770,396		2.00		2.23		382,104,514		0.87		0.40		1.85		22.39		24.17
FTVIP Franklin Allocation VIP Fund Class 2		29,436		14.93		15.64		439,694		0.17		1.15		1.55		18.02		18.49
FTVIP Franklin Income VIP Fund Class 2		233,941		15.92		16.89		4,008,102		6.50		1.15		1.65		14.16		14.73
Goldman Sachs VIT Government Money Market Fund Service Shares		78,636		9.82		9.96		781,077		1.92		1.15		1.55		0.31		0.71
Invesco V.I. American Franchise Fund Series II		18,066		29.33		30.94		553,458		0.00		1.15		1.55		34.33		34.87
Invesco V.I. Balanced-Risk Commodity Strategy Fund Class R5		232,675,521		0.56		0.64		141,193,352		0.91		0.40		1.85		2.55		4.05
Invesco V.I. Comstock Fund Series II		59,621		19.24		21.21		1,215,833		1.74		1.15		1.90		22.59		23.51
Invesco V.I. Growth and Income Fund Series II		67,847		19.21		20.65		1,382,771		1.65		1.30		1.90		22.50		23.24
Lord Abbett Growth and Income Portfolio Class VC		15,498		17.75		18.77		300,054		1.96		1.15		1.55		20.61		21.09
SST SA Allocation Balanced Portfolio Class 3		130,238		16.63		17.55		2,222,298		1.86		1.15		1.55		14.24		14.70
SST SA Allocation Growth Portfolio Class 3		242,140		18.94		20.03		4,773,276		0.01		1.15		1.55		21.60		22.09
SST SA Allocation Moderate Growth Portfolio Class 3		240,684		17.36		18.62		4,344,290		1.67		1.15		1.65		18.63		19.23
SST SA Allocation Moderate Portfolio Class 3		255,905		17.38		18.37		4,551,478		1.70		1.15		1.55		16.92		17.39
SST SA Putnam Asset Allocation Diversified Growth Portfolio Class 3		158,590		12.85		13.02		2,062,135		1.38		1.15		1.55		17.96		18.44
SST SA Wellington Real Return Portfolio Class 3		239,106		11.13		12.19		2,857,482		0.38		1.15		1.90		3.55		4.33
SAST SA AB Growth Portfolio Class 3		52,961		31.70		35.13		1,802,080		0.00		1.15		1.90		32.01		33.01
SAST SA AB Small & Mid Cap Value Portfolio Class 3		49,557		22.01		24.27		1,168,093		0.00		1.15		1.90		17.47		18.35
SAST SA American Funds Asset Allocation Portfolio Class 3		2,188,805		19.44		20.77		44,732,136		1.95		1.15		1.65		18.93		19.53
SAST SA American Funds Global Growth Portfolio Class 3		99,238		23.55		25.99		2,486,755		0.91		1.15		1.90		32.39		33.39
SAST SA American Funds Growth Portfolio Class 3		181,574		25.90		28.54		5,014,053		0.00		1.15		1.90		27.94		28.90
SAST SA American Funds Growth-Income Portfolio Class 3		204,012		23.20		24.77		4,897,859		0.00		1.15		1.65		23.69		24.31
SAST SA American Funds VCP Managed Allocation Portfolio Class 3		4,094,908		15.02		15.56		63,190,903		0.28		1.15		1.65		16.55		17.13
SAST SA BlackRock VCP Global Multi Asset Portfolio Class 3		2,591,951		12.05		12.29		31,712,630		0.86		1.15		1.65		13.79		14.36
SAST SA Columbia Technology Portfolio Class 3		37,853		36.42		38.38		1,427,154		0.00		1.15		1.55		52.72		53.33
SAST SA DFA Ultra Short Bond Portfolio Class 3		128,938		8.58		9.18		1,169,032		1.86		1.15		1.65		0.32		0.83

47

SEPARATE ACCOUNT A

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

	December 31, 2019								For the Year Ended December 31 2019
									Investment		Expense				Total
			Unit Value ($)(a)				Net		Income		Ratio (%)(d)				Return (%)(e)
Sub-accounts	Units		Lowest		Highest		Assets ($)(b)		Ratio (%)(c)		Lowest		Highest		Lowest		Highest
SAST SA Dogs of Wall Street Portfolio Class 3		85,765		29.16		32.08		2,675,453		2.54		1.15		1.90		22.16		23.08
SAST SA Emerging Markets Equity Index Portfolio Class 3		2,188				9.91		21,685		0.00				1.55				16.56
SAST SA Federated Hermes Corporate Bond Portfolio Class 3		246,195		17.83		19.69		4,723,429		5.55		1.15		1.90		12.44		13.28
SAST SA Fidelity Institutional AM® Real Estate Portfolio Class 3		10,944		14.63		15.03		162,907		2.53		1.30		1.55		24.03		24.34
SAST SA Fixed Income Index Portfolio Class 3		135,790		10.47		10.56		1,431,324		0.20		1.15		1.55		7.13		7.56
SAST SA Fixed Income Intermediate Index Portfolio Class 3		29,759		10.22		10.31		305,978		0.16		1.15		1.55		4.35		4.77
SAST SA Franklin Small Company Value Portfolio Class 3		24,604		19.56		21.56		511,547		0.78		1.15		1.90		23.81		24.74
SAST SA Global Index Allocation 60/40 Portfolio Class 3		97,722		10.82		10.89		1,062,585		0.00		1.15		1.55		16.06		16.52
SAST SA Global Index Allocation 75/25 Portfolio Class 3		161,157		10.83		10.90		1,752,595		0.00		1.15		1.55		18.53		19.00
SAST SA Global Index Allocation 90/10 Portfolio Class 3		495,267		10.82		10.89		5,387,380		0.00		1.15		1.55		21.11		21.59
SAST SA Goldman Sachs Global Bond Portfolio Class 3		178,347		11.90		13.12		2,285,519		0.00		1.15		1.90		4.60		5.39
SAST SA Goldman Sachs Multi-Asset Insights Portfolio Class 3		98,344		10.84		10.94		1,072,638		3.11		1.15		1.55		16.99		17.46
SAST SA Index Allocation 60/40 Portfolio Class 3		426,910		12.09		12.23		5,213,149		0.00		1.15		1.55		17.73		18.20
SAST SA Index Allocation 80/20 Portfolio Class 3		796,622		12.59		12.74		10,117,240		0.00		1.15		1.55		21.75		22.23
SAST SA Index Allocation 90/10 Portfolio Class 3		2,672,142		12.85		13.00		34,642,920		0.00		1.15		1.55		23.60		24.10
SAST SA International Index Portfolio Class 3		19,163		10.38		10.44		199,617		0.10		1.30		1.55		18.99		19.29
SAST SA Invesco Growth Opportunities Portfolio Class 3		6,776		25.64		27.04		176,156		0.00		1.15		1.55		26.71		27.22
SAST SA Invesco Main Street Large Cap Portfolio Class 3		50,924		21.82		24.13		1,186,221		1.04		1.15		1.90		29.10		30.07
SAST SA Invesco VCP Equity-Income Portfolio Class 3		1,740,968		13.46		13.83		23,871,143		1.55		1.15		1.55		15.16		15.62
SAST SA Janus Focused Growth Portfolio Class 3		21,235		25.35		28.04		576,852		0.00		1.15		1.90		33.39		34.40
SAST SA JPMorgan Diversified Balanced Portfolio Class 3		112,789		18.97		19.95		2,214,964		2.20		1.15		1.55		16.89		17.36
SAST SA JPMorgan Emerging Markets Portfolio Class 3		35,962		12.09		13.37		463,158		2.92		1.15		1.90		18.53		19.42
SAST SA JPMorgan Equity-Income Portfolio Class 3		62,931		22.06		24.43		1,471,036		2.38		1.15		1.90		24.45		25.39
SAST SA JPMorgan Global Equities Portfolio Class 3		1,591		15.67		16.63		26,293		0.16		1.15		1.55		17.74		18.21
SAST SA JPMorgan MFS Core Bond Portfolio Class 3		325,865		14.00		15.51		4,893,440		2.86		1.15		1.90		6.98		7.79
SAST SA JPMorgan Mid-Cap Growth Portfolio Class 3		12,526		31.15		33.26		402,493		0.00		1.15		1.65		36.97		37.66
SAST SA Large Cap Growth Index Portfolio Class 3		35,266		12.28		12.36		435,373		0.02		1.15		1.55		28.39		28.91
SAST SA Large Cap Index Portfolio Class 3		53,213		12.61		12.72		674,069		0.02		1.15		1.55		28.61		29.12
SAST SA Large Cap Value Index Portfolio Class 3		12,110		11.99		12.07		145,892		0.05		1.15		1.55		29.22		29.74
SAST SA Legg Mason BW Large Cap Value Portfolio Class 3		47,439		19.97		21.45		1,003,722		1.96		1.30		1.90		23.03		23.77
SAST SA Legg Mason Tactical Opportunities Class 3		34,644		11.08		11.18		386,488		2.02		1.15		1.55		16.47		16.94
SAST SA MFS Blue Chip Growth Portfolio Class 3		40,610		24.03		26.71		1,045,384		0.42		1.15		1.90		29.39		30.36
SAST SA MFS Massachusetts Investors Trust Portfolio Class 3		57,678		24.51		27.12		1,507,785		0.68		1.15		1.90		29.03		30.00
SAST SA MFS Total Return Portfolio Class 3		70,234		18.12		19.10		1,312,029		2.42		1.15		1.55		18.21		18.68
SAST SA Mid Cap Index Portfolio Class 3		53,774		11.17		11.27		604,165		0.00		1.15		1.55		23.27		23.76
SAST SA Morgan Stanley International Equities Portfolio Class 3		72,409		11.44		12.66		882,044		2.50		1.15		1.90		17.93		18.82
SAST SA PIMCO VCP Tactical Balanced Portfolio Class 3		1,998,682		13.68		14.14		28,018,623		0.00		1.15		1.65		16.82		17.40
SAST SA PineBridge High-Yield Bond Portfolio Class 3		78,265		16.05		17.85		1,356,131		8.99		1.15		1.90		12.31		13.15
SAST SA Putnam International Growth and Income Portfolio Class 3		9,441		9.80		10.24		95,700		2.01		1.30		1.65		18.07		18.48
SAST SA Schroders VCP Global Allocation Portfolio Class 3		1,466,446		12.64		12.84		18,737,065		1.43		1.15		1.55		17.09		17.56
SAST SA Small Cap Index Portfolio Class 3		42,366		10.79		10.89		459,321		0.00		1.15		1.55		22.59		23.08
SAST SA T. Rowe Price Asset Allocation Growth Portfolio Class 3		147,229		11.68		11.78		1,731,843		1.20		1.15		1.55		22.35		22.84
SAST SA T. Rowe Price VCP Balanced Portfolio Class 3		2,483,361		13.57		13.84		34,203,578		1.49		1.15		1.65		20.27		20.88
SAST SA Templeton Foreign Value Portfolio Class 3		60,833		10.43		11.50		673,040		0.09		1.15		1.90		9.79		10.62
SAST SA VCP Dynamic Allocation Portfolio Class 3		4,939,157		14.95		15.87		77,580,650		0.00		1.15		1.90		18.13		19.02
SAST SA VCP Dynamic Strategy Portfolio Class 3		4,280,853		14.55		15.40		65,253,071		0.00		1.15		1.90		17.16		18.04
SAST SA VCP Index Allocation Portfolio Class 3		1,474,484		11.46		11.57		17,018,935		0.08		1.15		1.55		21.10		21.59
SAST SA WellsCap Aggressive Growth Portfolio Class 3		22,068		20.80		22.12		470,819		0.00		1.15		1.55		36.80		37.34
T Rowe Price Retirement 2015 Advisor Class		10,854,083		1.27		1.31		13,841,732		2.12		0.40		1.00		15.89		16.59
T Rowe Price Retirement 2020 Advisor Class		29,266,464		1.31		1.35		38,509,988		2.08		0.40		1.00		17.86		18.57
T Rowe Price Retirement 2025 Advisor Class		33,703,359		1.35		1.39		45,529,793		2.03		0.40		1.00		19.47		20.18
T Rowe Price Retirement 2030 Advisor Class		33,984,792		1.38		1.42		46,962,385		1.89		0.40		1.00		21.01		21.74
T Rowe Price Retirement 2035 Advisor Class		24,574,806		1.40		1.44		34,509,621		1.73		0.40		1.00		22.22		22.95
T Rowe Price Retirement 2040 Advisor Class		24,778,213		1.42		1.46		35,248,410		1.61		0.40		1.00		23.13		23.87
T Rowe Price Retirement 2045 Advisor Class		18,428,906		1.43		1.47		26,407,559		1.54		0.40		1.00		23.78		24.52
T Rowe Price Retirement 2050 Advisor Class		15,419,391		1.43		1.47		22,087,120		1.50		0.40		1.00		23.85		24.60
T Rowe Price Retirement 2055 Advisor Class		7,256,580		1.43		1.47		10,389,997		1.62		0.40		1.00		23.85		24.60
T Rowe Price Retirement 2060 Advisor Class		4,805,934		1.43		1.47		6,884,423		1.60		0.40		1.00		23.77		24.52
VALIC Company I Asset Allocation Fund		17,063,207		1.50		1.81		152,036,602		1.54		0.40		1.85		13.21		14.86
VALIC Company I Blue Chip Growth Fund		256,689,601		1.87		3.16		843,507,344		0.00		0.00		1.85		27.46		29.84
VALIC Company I Capital Conservation Fund		37,622,298		1.14		1.50		150,258,164		2.53		0.40		1.85		7.57		9.14
VALIC Company I Core Equity Fund		49,830,334		2.18		2.32		254,487,982		1.17		0.40		1.85		26.18		28.02
VALIC Company I Dividend Value Fund		250,653,175		2.09		2.25		998,859,608		1.74		0.40		1.85		21.25		23.02
VALIC Company I Dynamic Allocation Fund		127,676,637		1.45		1.60		195,246,176		1.34		0.40		1.85		18.16		19.83
VALIC Company I Emerging Economies Fund		680,723,908		0.84		1.05		761,121,782		1.68		0.40		1.85		18.09		19.82
VALIC Company I Global Real Estate Fund		264,357,969		1.63		1.85		461,704,005		3.53		0.40		1.85		22.22		24.01

48

SEPARATE ACCOUNT A

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

	December 31, 2019								For the Year Ended December 31 2019
									Investment		Expense				Total
			Unit Value ($)(a)				Net		Income		Ratio (%)(d)				Return (%)(e)
Sub-accounts	Units		Lowest		Highest		Assets ($)(b)		Ratio (%)(c)		Lowest		Highest		Lowest		Highest
VALIC Company I Global Strategy Fund		154,123,488		1.37		1.63		324,039,700		2.34		0.40		1.85		7.89		9.46
VALIC Company I Government Money Market I Fund		149,254,389		0.88		1.02		294,755,564		1.81		0.40		1.85		-0.19		1.27
VALIC Company I Government Securities Fund		27,421,737		1.09		1.38		102,656,838		2.28		0.40		1.85		4.55		6.07
VALIC Company I Growth Fund		473,995,472		2.53		2.73		1,386,020,941		0.38		0.40		1.85		29.46		31.35
VALIC Company I Health Sciences Fund		125,570,637		4.10		4.91		821,412,149		0.00		0.40		1.85		26.48		28.33
VALIC Company I Inflation Protected Fund		436,272,703		1.08		1.12		609,656,940		1.65		0.00		1.85		6.67		8.66
VALIC Company I International Equities Index Fund		508,291,382		1.06		1.26		1,171,220,482		3.13		0.40		1.85		19.07		20.81
VALIC Company I International Government Bond Fund		34,050,414		1.05		1.42		111,778,746		1.64		0.40		1.85		6.75		8.31
VALIC Company I International Growth Fund		119,937,045		1.50		1.61		477,189,141		0.66		0.40		1.85		30.21		32.11
VALIC Company I International Socially Responsible Fund		49,476,454		1.82		1.96		389,059,564		1.83		0.40		1.85		23.67		25.48
VALIC Company I International Value Fund		473,244,377		1.03		1.13		664,065,620		2.97		0.00		1.85		14.29		16.42
VALIC Company I Large Cap Core Fund		46,117,162		2.52		2.92		156,215,912		0.93		0.40		1.85		30.15		32.05
VALIC Company I Large Capital Growth Fund		167,843,700		2.52		2.56		523,947,434		0.57		0.40		1.85		37.39		39.40
VALIC Company I Mid Cap Index Fund		138,158,296		2.16		2.53		3,306,910,919		1.36		0.40		1.85		23.41		25.21
VALIC Company I Mid Cap Strategic Growth Fund		92,728,090		2.18		2.27		310,849,990		0.01		0.40		1.85		35.21		37.18
VALIC Company I Nasdaq-100 Index Fund		224,185,309		3.53		3.97		525,497,310		0.40		0.40		1.85		36.12		38.11
VALIC Company I Science & Technology Fund		151,321,215		3.27		3.72		1,461,021,893		0.00		0.40		1.85		36.91		38.91
VALIC Company I Small Cap Aggressive Growth Fund		47,022,685		2.60		3.15		172,542,769		0.00		0.40		1.85		36.06		38.04
VALIC Company I Small Cap Fund		45,798,527		2.14		2.42		302,462,210		0.47		0.40		1.85		27.06		28.91
VALIC Company I Small Cap Index Fund		132,602,546		2.01		2.23		1,068,664,273		1.17		0.40		1.85		22.85		24.65
VALIC Company I Small Cap Special Values Fund		93,293,434		2.10		2.24		221,428,735		1.35		0.40		1.85		26.33		28.18
VALIC Company I Small Mid Growth Fund		49,449,062		2.25		2.46		127,438,795		0.00		0.40		1.85		35.39		37.37
VALIC Company I Stock Index Fund		357,451,782		2.55		122.62		4,761,735,529		1.59		0.33		1.85		28.69		30.66
VALIC Company I Systematic Core Fund		22,687,108		2.14		2.30		125,410,214		0.91		0.40		1.85		28.24		30.11
VALIC Company I Systematic Value Fund		18,994,803		2.10		2.12		45,589,977		1.39		0.40		1.85		21.52		23.29
VALIC Company I Value Fund		29,361,473		1.92		2.05		82,267,290		1.37		0.40		1.85		25.11		26.94
VALIC Company II Aggressive Growth Lifestyle Fund		161,797,511		1.79		1.93		611,963,138		1.96		0.15		1.60		21.09		22.86
VALIC Company II Capital Appreciation Fund		16,287,052		2.39		2.55		44,535,835		0.24		0.15		1.60		25.65		27.48
VALIC Company II Conservative Growth Lifestyle Fund		106,296,074		1.44		1.79		343,150,310		2.82		0.15		1.60		14.70		16.37
VALIC Company II Core Bond Fund		592,998,639		1.15		1.19		1,314,426,676		2.52		0.00		1.60		8.67		10.42
VALIC Company II Government Money Market II Fund		93,350,480		0.89		1.05		115,849,280		1.62		0.15		1.60		0.02		1.48
VALIC Company II High Yield Bond Fund		159,313,150		1.45		1.82		499,848,271		5.35		0.15		1.60		13.15		14.80
VALIC Company II International Opportunities Fund		186,737,772		1.36		1.52		578,594,427		0.98		0.15		1.60		23.74		25.55
VALIC Company II Large Cap Value Fund		47,788,470		1.88		2.17		186,713,151		1.25		0.15		1.60		24.96		26.79
VALIC Company II Mid Cap Growth Fund		73,336,174		2.05		2.08		226,823,205		0.00		0.15		1.60		30.50		32.40
VALIC Company II Mid Cap Value Fund		106,331,804		1.96		2.12		751,136,308		0.53		0.15		1.60		28.08		29.95
VALIC Company II Moderate Growth Lifestyle Fund		272,037,544		1.66		1.95		1,017,612,216		2.08		0.15		1.60		18.68		20.41
VALIC Company II Small Cap Growth Fund		35,238,378		2.72		2.96		179,640,143		0.00		0.15		1.60		35.51		37.49
VALIC Company II Small Cap Value Fund		73,282,087		1.70		1.94		323,878,033		1.52		0.15		1.60		17.31		19.02
VALIC Company II Strategic Bond Fund		209,755,874		1.29		1.74		665,991,927		3.76		0.15		1.60		9.59		11.19
VALIC Company II U.S. Socially Responsible Fund		185,821,391		1.63		2.67		749,741,882		1.47		0.00		1.60		29.60		31.69
Vanguard LifeStrategy Conservative Growth Fund Investor Shares		43,157,078		1.41		1.63		105,758,963		2.71		0.65		2.10		13.28		14.93
Vanguard LifeStrategy Growth Fund Investor Shares		93,285,134		1.76		1.77		277,459,358		2.50		0.65		2.10		20.57		22.33
Vanguard LifeStrategy Moderate Growth Fund Investor Shares		99,358,657		1.59		1.73		275,243,880		2.61		0.65		2.10		16.89		18.59
Vanguard Long-Term Investment-Grade Fund Investor Shares		81,725,783		1.65		2.31		343,172,621		4.10		0.40		1.85		18.20		19.94
Vanguard Long-Term Treasury Fund Investor Shares		54,380,180		1.49		2.05		211,010,282		2.66		0.40		1.85		12.04		13.68
Vanguard Wellington Fund Investor Shares		378,315,651		1.47		1.92		2,016,437,580		2.67		0.00		2.10		19.96		22.51
Vanguard Windsor II Fund Investor Shares		333,368,130		2.01		2.18		1,729,153,856		2.15		0.65		2.10		26.35		28.19

	December 31, 2018								For the Year Ended December 31 2018
									Investment		Expense				Total
			Unit Value ($)(a)				Net		Income		Ratio (%)(d)				Return (%)(e)
Sub-accounts	Units		Lowest		Highest		Assets ($)(b)		Ratio (%)(c)		Lowest		Highest		Lowest		Highest
American Beacon Bridgeway Large Cap Growth Fund Investor Class		60,869,212				0.94		57,241,745		0.09		0.40		1.85		-7.71		-6.96
AST SA BlackRock Multi-Asset Income Portfolio Class 3		84,845		11.10		11.35		958,252		6.57		1.15		1.55		-5.48		-5.10
AST SA PGI Asset Allocation Portfolio Class 3		2,397		17.26		17.70		41,659		2.68		1.15		1.30		-6.00		-5.86
AST SA Wellington Capital Appreciation Portfolio Class 3		42,219		28.21		31.09		1,267,646		0.00		1.15		1.90		-2.86		-2.13
AST SA Wellington Government and Quality Bond Portfolio Class 3		217,264		11.46		12.54		2,654,685		2.02		1.15		1.90		-2.10		-1.35
AST SA Wellington Strategic Multi-Asset Portfolio Class 3		57,254		10.28		10.37		593,223		1.95		1.15		1.55		-9.23		-8.87
Ariel Appreciation Fund Investor Class		80,852,269		1.58		1.88		256,887,178		0.89		0.40		1.85		-15.58		-14.34
Ariel Fund Investor Class		104,627,173		1.64		1.80		350,016,041		0.93		0.40		1.85		-15.26		-14.02
FTVIP Franklin Allocation VIP Fund Class 2		731		12.98		13.20		9,518		1.98		1.15		1.30		-10.82		-10.69
FTVIP Franklin Income VIP Fund Class 2		53,392		13.94		14.72		876,990		5.35		1.15		1.65		-5.88		-5.40
Goldman Sachs VIT Government Money Market Fund Service Shares		30,319		9.79		9.89		298,497		2.24		1.15		1.55		-0.09		0.32

49

SEPARATE ACCOUNT A

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

	December 31, 2018								For the Year Ended December 31 2018
									Investment		Expense				Total
			Unit Value ($)(a)				Net		Income		Ratio (%)(d)				Return (%)(e)
Sub-accounts	Units		Lowest		Highest		Assets ($)(b)		Ratio (%)(c)		Lowest		Highest		Lowest		Highest
Invesco V.I. Balanced-Risk Commodity Strategy Fund Class R5		234,224,055		0.55		0.61		137,365,267		0.22		0.40		1.85		-13.58		-12.31
Invesco V.I. Comstock Fund Series II		60,912		15.70		17.17		1,008,813		1.53		1.15		1.90		-14.03		-13.37
Invesco V.I. Growth and Income Fund Series II		72,603		15.68		16.76		1,202,823		1.94		1.30		1.90		-15.23		-14.71
Lord Abbett Growth and Income Portfolio Class VC		11,248		14.72		15.50		184,486		1.80		1.15		1.55		-9.57		-9.20
SST SA Allocation Balanced Portfolio Class 3		95,373		14.55		15.30		1,408,234		5.50		1.15		1.55		-5.43		-5.05
SST SA Allocation Growth Portfolio Class 3		187,555		15.58		16.41		3,023,874		4.92		1.15		1.55		-8.63		-8.27
SST SA Allocation Moderate Growth Portfolio Class 3		167,186		14.63		15.62		2,524,310		5.81		1.15		1.65		-7.48		-7.01
SST SA Allocation Moderate Portfolio Class 3		197,036		14.86		15.65		2,994,037		4.90		1.15		1.55		-6.43		-6.05
SST SA Putnam Asset Allocation Diversified Growth Portfolio Class 3		111,204		10.89		10.99		1,221,197		2.61		1.15		1.55		-10.18		-9.81
SST SA Wellington Real Return Portfolio Class 3		140,655		10.75		11.68		1,604,289		4.03		1.15		1.90		-2.09		-1.35
SAST SA AB Growth Portfolio Class 3		49,051		24.01		26.41		1,253,539		0.00		1.15		1.90		0.13		0.88
SAST SA AB Small & Mid Cap Value Portfolio Class 3		37,544		18.74		20.51		745,809		0.40		1.15		1.90		-16.93		-16.30
SAST SA American Funds Asset Allocation Portfolio Class 3		1,443,527		16.35		17.38		24,717,992		3.42		1.15		1.65		-6.44		-5.97
SAST SA American Funds Global Growth Portfolio Class 3		85,656		17.79		19.48		1,612,180		1.49		1.15		1.90		-10.99		-10.32
SAST SA American Funds Growth Portfolio Class 3		98,686		20.24		22.14		2,108,423		1.30		1.15		1.90		-2.40		-1.67
SAST SA American Funds Growth-Income Portfolio Class 3		162,174		18.75		19.93		3,138,200		3.23		1.15		1.65		-3.66		-3.18
SAST SA American Funds VCP Managed Allocation Portfolio Class 3		3,491,629		12.88		13.29		46,027,384		1.78		1.15		1.65		-6.69		-6.22
SAST SA BlackRock VCP Global Multi Asset Portfolio Class 3		2,288,575		10.59		10.75		24,504,957		1.20		1.15		1.65		-7.30		-6.84
SAST SA Columbia Technology Portfolio Class 3		16,285		23.85		25.03		397,262		0.00		1.15		1.55		-9.76		-9.40
SAST SA DFA Ultra Short Bond Portfolio Class 3		89,646		8.55		9.10		806,132		1.06		1.15		1.65		-0.43		0.07
SAST SA Dogs of Wall Street Portfolio Class 3		78,312		23.87		26.06		1,987,793		2.36		1.15		1.90		-2.44		-1.70
SAST SA Federated Hermes Corporate Bond Portfolio Class 3		181,803		15.86		17.38		3,078,379		4.15		1.15		1.90		-4.90		-4.18
SAST SA Fidelity Institutional AM® Real Estate Portfolio Class 3		7,210		11.79		12.09		86,373		2.31		1.30		1.55		-8.19		-7.96
SAST SA Fixed Income Index Portfolio Class 3		66,202		9.80		9.82		649,206		5.63		1.15		1.30		-2.16		-2.02
SAST SA Fixed Income Intermediate Index Portfolio Class 3		19,301		9.82		9.84		189,717		2.07		1.15		1.30		-0.97		-0.83
SAST SA Franklin Small Company Value Portfolio Class 3		21,772		15.80		17.28		363,633		0.86		1.15		1.90		-14.65		-14.01
SAST SA Global Index Allocation 60/40 Portfolio Class 3		15,315		9.32		9.35		142,933		2.77		1.15		1.55		-6.78		-6.53
SAST SA Global Index Allocation 75/25 Portfolio Class 3		42,213		9.14		9.16		386,354		2.74		1.15		1.55		-8.65		-8.40
SAST SA Global Index Allocation 90/10 Portfolio Class 3		93,570		8.93		8.96		837,909		2.65		1.15		1.55		-10.66		-10.42
SAST SA Goldman Sachs Global Bond Portfolio Class 3		137,340		11.38		12.44		1,668,747		4.09		1.15		1.90		-4.56		-3.83
SAST SA Goldman Sachs Multi-Asset Insights Portfolio Class 3		14,683		9.27		9.31		136,695		1.66		1.15		1.55		-9.94		-9.58
SAST SA Index Allocation 60/40 Portfolio Class 3		190,847		10.27		10.35		1,972,231		4.86		1.15		1.55		-6.35		-5.97
SAST SA Index Allocation 80/20 Portfolio Class 3		554,493		10.34		10.42		5,768,462		4.81		1.15		1.55		-8.21		-7.84
SAST SA Index Allocation 90/10 Portfolio Class 3		2,173,097		10.39		10.47		22,722,729		4.94		1.15		1.55		-9.12		-8.75
SAST SA International Index Portfolio Class 3		10,230		8.73		8.75		89,535		3.58		1.30		1.55		-15.59		-15.37
SAST SA Invesco Growth Opportunities Portfolio Class 3		6,039		20.24		21.25		123,918		0.00		1.15		1.55		-6.48		-6.11
SAST SA Invesco Main Street Large Cap Portfolio Class 3		52,694		16.91		18.55		946,281		0.91		1.15		1.90		-9.86		-9.18
SAST SA Invesco VCP Equity-Income Portfolio Class 3		1,594,555		11.69		11.96		18,930,708		2.82		1.15		1.55		-11.56		-11.20
SAST SA Janus Focused Growth Portfolio Class 3		17,461		19.00		20.87		351,431		0.00		1.15		1.90		-0.87		-0.12
SAST SA JPMorgan Diversified Balanced Portfolio Class 3		94,608		16.23		17.00		1,588,947		1.68		1.15		1.55		-9.39		-9.02
SAST SA JPMorgan Emerging Markets Portfolio Class 3		33,321		10.20		11.20		360,497		2.56		1.15		1.90		-21.09		-20.50
SAST SA JPMorgan Equity-Income Portfolio Class 3		68,443		17.73		19.48		1,280,047		1.99		1.15		1.90		-6.49		-5.78
SAST SA JPMorgan Global Equities Portfolio Class 3		3,244		13.31		13.66		43,291		2.89		1.30		1.55		-12.68		-12.46
SAST SA JPMorgan MFS Core Bond Portfolio Class 3		274,751		13.09		14.39		3,831,021		2.45		1.15		1.90		-2.58		-1.84
SAST SA JPMorgan Mid-Cap Growth Portfolio Class 3		9,913		22.74		24.16		230,844		0.00		1.15		1.65		-6.68		-6.21
SAST SA Large Cap Growth Index Portfolio Class 3		653				9.57		6,250		0.00				1.55				-4.34
SAST SA Large Cap Index Portfolio Class 3		12,567		9.80		9.84		123,447		5.61		1.30		1.55		-6.45		-6.22
SAST SA Large Cap Value Index Portfolio Class 3		717				9.29		6,659		1.40				1.30				-7.09
SAST SA Legg Mason BW Large Cap Value Portfolio Class 3		46,645		16.23		17.33		798,527		1.51		1.30		1.90		-10.58		-10.04
SAST SA Legg Mason Tactical Opportunities Class 3		11,891		9.51		9.56		113,623		1.88		1.15		1.55		-7.42		-7.04
SAST SA MFS Blue Chip Growth Portfolio Class 3		32,938		18.57		20.49		649,578		0.16		1.15		1.90		-7.27		-6.57
SAST SA MFS Massachusetts Investors Trust Portfolio Class 3		61,293		19.00		20.87		1,236,852		0.59		1.15		1.90		-7.43		-6.72
SAST SA MFS Total Return Portfolio Class 3		54,826		15.32		16.09		867,015		2.19		1.15		1.55		-7.45		-7.07
SAST SA Mid Cap Index Portfolio Class 3		19,785		9.06		9.09		179,828		1.31		1.30		1.55		-13.22		-13.00
SAST SA Morgan Stanley International Equities Portfolio Class 3		66,183		9.70		10.39		679,245		1.08		1.30		1.90		-15.76		-15.25
SAST SA PIMCO VCP Tactical Balanced Portfolio Class 3		1,901,937		11.71		12.05		22,730,769		3.10		1.15		1.65		-8.70		-8.24
SAST SA PineBridge High-Yield Bond Portfolio Class 3		46,106		14.29		15.77		702,275		7.44		1.15		1.90		-5.87		-5.16
SAST SA Putnam International Growth and Income Portfolio Class 3		11,624		8.30		8.64		99,729		2.75		1.30		1.65		-19.17		-18.89
SAST SA Schroders VCP Global Allocation Portfolio Class 3		1,378,326		10.79		10.92		14,995,909		2.28		1.15		1.55		-10.43		-10.06
SAST SA Small Cap Index Portfolio Class 3		20,974		8.80		8.83		185,063		0.97		1.30		1.55		-13.25		-13.03
SAST SA T. Rowe Price Asset Allocation Growth Portfolio Class 3		65,641		9.57		9.59		629,258		1.40		1.15		1.30		-6.96		-6.81
SAST SA T. Rowe Price VCP Balanced Portfolio Class 3		2,194,174		11.28		11.45		25,024,929		2.81		1.15		1.65		-8.63		-8.17
SAST SA Templeton Foreign Value Portfolio Class 3		55,686		9.50		10.40		559,006		4.99		1.15		1.90		-17.94		-17.32
SAST SA VCP Dynamic Allocation Portfolio Class 3		4,775,221		12.66		13.34		63,086,048		4.04		1.15		1.90		-8.59		-7.89
SAST SA VCP Dynamic Strategy Portfolio Class 3		4,165,149		12.42		13.05		53,850,121		4.23		1.15		1.90		-8.94		-8.25
SAST SA VCP Index Allocation Portfolio Class 3		815,049		9.47		9.51		7,745,940		4.93		1.15		1.55		-8.86		-8.49

50

SEPARATE ACCOUNT A

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

	December 31, 2018								For the Year Ended December 31 2018
									Investment		Expense				Total
			Unit Value ($)(a)				Net		Income		Ratio (%)(d)				Return (%)(e)
Sub-accounts	Units		Lowest		Highest		Assets ($)(b)		Ratio (%)(c)		Lowest		Highest		Lowest		Highest
SAST SA WellsCap Aggressive Growth Portfolio Class 3		14,942		15.21		16.11		230,325		0.00		1.15		1.55		-8.46		-8.09
T Rowe Price Retirement 2015 Advisor Class		9,280,225		1.10		1.13		10,207,156		2.19		0.40		1.00		-5.34		-4.77
T Rowe Price Retirement 2020 Advisor Class		25,200,911		1.12		1.14		28,121,762		2.07		0.40		1.00		-6.15		-5.58
T Rowe Price Retirement 2025 Advisor Class		26,008,930		1.13		1.16		29,395,881		2.01		0.40		1.00		-6.77		-6.20
T Rowe Price Retirement 2030 Advisor Class		25,988,743		1.14		1.17		29,664,948		1.76		0.40		1.00		-7.47		-6.91
T Rowe Price Retirement 2035 Advisor Class		20,055,154		1.15		1.18		23,032,564		1.53		0.40		1.00		-8.10		-7.55
T Rowe Price Retirement 2040 Advisor Class		19,993,530		1.15		1.18		23,088,440		1.41		0.40		1.00		-8.42		-7.87
T Rowe Price Retirement 2045 Advisor Class		13,405,587		1.15		1.18		15,509,429		1.36		0.40		1.00		-8.70		-8.15
T Rowe Price Retirement 2050 Advisor Class		11,694,837		1.15		1.18		13,517,528		1.36		0.40		1.00		-8.76		-8.21
T Rowe Price Retirement 2055 Advisor Class		5,005,564		1.15		1.18		5,783,592		1.31		0.40		1.00		-8.79		-8.23
T Rowe Price Retirement 2060 Advisor Class		2,949,718		1.15		1.18		3,410,133		1.31		0.40		1.00		-8.77		-8.22
VALIC Company I Asset Allocation Fund		18,369,939		1.33		1.57		143,374,206		1.64		0.40		1.85		-10.70		-9.38
VALIC Company I Blue Chip Growth Fund		265,270,445		1.44		2.48		680,266,252		0.06		0.00		1.85		0.09		1.97
VALIC Company I Capital Conservation Fund		41,178,080		1.06		1.37		151,892,365		2.04		0.40		1.85		-2.93		-1.50
VALIC Company I Core Equity Fund		53,956,824		1.70		1.84		219,365,992		1.16		0.40		1.85		-8.47		-7.13
VALIC Company I Dividend Value Fund		220,684,362		1.70		1.86		711,029,184		1.91		0.40		1.85		-10.67		-9.35
VALIC Company I Dynamic Allocation Fund		162,080,959		1.22		1.34		208,197,000		1.36		0.40		1.85		-8.64		-7.30
VALIC Company I Emerging Economies Fund		676,229,784		0.70		0.89		633,817,185		1.58		0.40		1.85		-20.82		-19.65
VALIC Company I Global Real Estate Fund		225,115,274		1.33		1.49		317,471,945		3.81		0.40		1.85		-7.75		-6.40
VALIC Company I Global Strategy Fund		171,661,237		1.27		1.49		331,626,256		0.00		0.40		1.85		-9.98		-8.66
VALIC Company I Government Money Market I Fund		165,491,511		0.88		1.00		326,741,596		1.28		0.40		1.85		-0.55		0.91
VALIC Company I Government Securities Fund		29,661,020		1.04		1.30		101,875,427		2.69		0.40		1.85		-1.34		0.11
VALIC Company I Growth Fund		506,233,283		1.96		2.08		1,130,204,874		0.58		0.40		1.85		-4.56		-3.16
VALIC Company I Health Sciences Fund		137,982,912		3.24		3.82		706,850,292		0.00		0.40		1.85		-0.90		0.56
VALIC Company I Inflation Protected Fund		459,866,794		1.01		1.03		595,375,939		1.70		0.00		1.85		-4.03		-2.22
VALIC Company I International Equities Index Fund		478,200,717		0.87		1.06		911,617,487		2.19		0.40		1.85		-15.33		-14.09
VALIC Company I International Government Bond Fund		41,596,081		0.98		1.31		124,581,902		1.05		0.40		1.85		-4.90		-3.50
VALIC Company I International Growth Fund		128,742,665		1.14		1.24		391,328,381		1.36		0.40		1.85		-9.81		-8.49
VALIC Company I International Socially Responsible Fund		52,724,451		1.45		1.58		334,161,388		1.83		0.40		1.85		-10.14		-8.82
VALIC Company I International Value Fund		507,208,049		0.89		0.99		618,032,802		2.10		0.00		1.85		-19.33		-17.81
VALIC Company I Large Cap Core Fund		50,661,879		1.94		2.21		130,684,233		1.08		0.40		1.85		-10.43		-9.11
VALIC Company I Large Capital Growth Fund		177,173,043		1.83		1.84		399,163,790		0.62		0.40		1.85		-1.14		0.31
VALIC Company I Mid Cap Index Fund		144,874,750		1.75		2.02		2,818,657,192		1.15		0.40		1.85		-13.07		-11.79
VALIC Company I Mid Cap Strategic Growth Fund		97,574,698		1.61		1.66		239,948,647		0.09		0.40		1.85		-6.48		-5.11
VALIC Company I Nasdaq-100 Index Fund		230,853,988		2.60		2.87		393,926,607		0.53		0.40		1.85		-2.46		-1.03
VALIC Company I Science & Technology Fund		162,973,839		2.39		2.68		1,141,701,306		0.00		0.40		1.85		-3.30		-1.88
VALIC Company I Small Cap Aggressive Growth Fund		49,862,408		1.91		2.28		133,397,123		0.00		0.40		1.85		-10.05		-8.72
VALIC Company I Small Cap Fund		50,949,880		1.68		1.87		262,683,184		0.28		0.40		1.85		-9.48		-8.15
VALIC Company I Small Cap Index Fund		154,248,615		1.64		1.79		1,010,809,213		1.03		0.40		1.85		-12.86		-11.58
VALIC Company I Small Cap Special Values Fund		103,110,708		1.67		1.75		191,951,271		1.32		0.40		1.85		-15.26		-14.02
VALIC Company I Small Mid Growth Fund		53,515,518		1.66		1.79		100,972,252		0.00		0.40		1.85		-7.04		-5.68
VALIC Company I Stock Index Fund		399,373,399		1.98		93.84		4,113,334,178		1.71		0.33		1.85		-6.47		-5.03
VALIC Company I Systematic Core Fund		24,676,192		1.64		1.79		105,507,598		0.97		0.40		1.85		-7.52		-6.17
VALIC Company I Systematic Value Fund		21,004,389				1.72		41,119,804		1.74		0.40		1.85		-13.04		-11.76
VALIC Company I Value Fund		32,021,641		1.51		1.64		71,085,760		1.65		0.40		1.85		-11.54		-10.24
VALIC Company II Aggressive Growth Lifestyle Fund		170,804,741		1.47		1.57		528,906,779		1.43		0.15		1.60		-10.06		-8.73
VALIC Company II Capital Appreciation Fund		19,162,320		1.88		2.03		41,217,310		0.45		0.15		1.60		-0.58		0.88
VALIC Company II Conservative Growth Lifestyle Fund		109,128,260		1.26		1.54		304,391,472		2.36		0.15		1.60		-7.55		-6.20
VALIC Company II Core Bond Fund		625,807,737		1.04		1.10		1,259,956,150		2.24		0.00		1.60		-3.60		-2.04
VALIC Company II Government Money Market II Fund		95,047,022		0.89		1.03		116,835,546		1.29		0.15		1.60		-0.34		1.12
VALIC Company II High Yield Bond Fund		159,619,662		1.28		1.58		437,180,562		5.60		0.15		1.60		-4.77		-3.38
VALIC Company II International Opportunities Fund		201,525,007		1.08		1.23		500,316,490		0.90		0.15		1.60		-18.82		-17.62
VALIC Company II Large Cap Value Fund		49,226,087		1.49		1.74		156,170,477		1.24		0.15		1.60		-11.56		-10.26
VALIC Company II Mid Cap Growth Fund		75,450,644				1.57		176,632,948		0.12		0.15		1.60		-8.89		-7.55
VALIC Company II Mid Cap Value Fund		113,038,656		1.53		1.63		617,783,072		0.46		0.15		1.60		-16.38		-15.15
VALIC Company II Moderate Growth Lifestyle Fund		273,159,524		1.40		1.62		853,639,488		1.63		0.15		1.60		-8.48		-7.14
VALIC Company II Small Cap Growth Fund		38,452,313		2.01		2.15		143,333,664		0.00		0.15		1.60		-6.18		-4.80
VALIC Company II Small Cap Value Fund		86,223,508		1.45		1.63		323,563,038		0.87		0.15		1.60		-16.92		-15.70
VALIC Company II Strategic Bond Fund		211,254,188		1.18		1.57		604,319,072		3.59		0.15		1.60		-5.08		-3.68
VALIC Company II U.S. Socially Responsible Fund		205,040,616		1.24		2.06		627,053,917		1.69		0.00		1.60		-6.72		-5.20
Vanguard LifeStrategy Conservative Growth Fund Investor Shares		41,125,525		1.25		1.42		88,193,095		2.60		0.65		2.10		-4.98		-3.59
Vanguard LifeStrategy Growth Fund Investor Shares		94,046,683		1.45		1.46		230,105,943		2.37		0.65		2.10		-8.85		-7.51
Vanguard LifeStrategy Moderate Growth Fund Investor Shares		99,419,127		1.36		1.46		233,716,151		2.48		0.65		2.10		-6.90		-5.53
Vanguard Long-Term Investment-Grade Fund Investor Shares		60,322,265		1.39		1.92		213,663,752		4.19		0.40		1.85		-7.68		-6.32
Vanguard Long-Term Treasury Fund Investor Shares		56,477,321		1.33		1.81		193,883,284		2.75		0.40		1.85		-3.71		-2.29
Vanguard Wellington Fund Investor Shares		400,037,303		1.20		1.60		1,769,540,521		2.71		0.00		2.10		-5.44		-3.42

51

SEPARATE ACCOUNT A

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 2018

For the Year Ended December 31 2018

Investment

Expense

Total

Unit Value ($)(a)

Net

Income

Ratio (%)(d)

Return (%)(e)

Sub-accounts

Units

Lowest

Highest

Assets ($)(b)

Ratio (%)(c)

Lowest

Highest

Lowest

Highest

Vanguard Windsor II Fund Investor Shares

361,271,823

1.57

1.73

1,473,470,129

2.18

0.65

2.10

-10.49

-9.18

	December 31, 2017								For the Year Ended December 31 2017
									Investment		Expense				Total
			Unit Value ($)(a)				Net		Income		Ratio (%)(d)				Return (%)(e)
Sub-accounts	Units		Lowest		Highest		Assets ($)(b)		Ratio (%)(c)		Lowest		Highest		Lowest		Highest
American Beacon Bridgeway Large Cap Growth Fund Investor Class		65,555,598				1.01		66,441,706		0.00		0.40		1.85		1.33		1.38
AST SA BlackRock Multi-Asset Income Portfolio Class 3		38,503		11.74		11.96		457,385		3.02		1.15		1.55		4.52		19.61
AST SA PGI Asset Allocation Portfolio Class 3		1,804				18.36		33,128		2.38				1.30				12.01
AST SA Wellington Capital Appreciation Portfolio Class 3		36,697		29.04		31.04		1,128,049		0.00		1.30		1.90		29.96		30.74
AST SA Wellington Government and Quality Bond Portfolio Class 3		177,337		11.46		12.71		2,195,706		1.53		1.15		1.90		-0.01		27.13
AST SA Wellington Strategic Multi-Asset Portfolio Class 3		14,929		11.32		11.38		169,675		0.12		1.15		1.55		14.28		14.74
Ariel Appreciation Fund Investor Class		98,592,900		1.87		2.20		371,011,142		0.76		0.40		1.85		13.00		14.64
Ariel Fund Investor Class		113,721,677		1.93		2.09		446,661,921		0.68		0.40		1.85		13.77		15.42
FTVIP Franklin Allocation VIP Fund Class 2		283				14.55		4,124		2.62				1.30				10.54
FTVIP Franklin Income VIP Fund Class 2		52,202		14.81		15.34		739,389		4.10		1.30		1.65		8.26		10.69
Goldman Sachs VIT Government Money Market Fund Service Shares		25,497		9.80		9.86		250,713		0.79		1.15		1.55		-1.37		-1.03
Invesco V.I. Balanced-Risk Commodity Strategy Fund Class R5		301,492,189		0.64		0.70		202,795,328		0.03		0.40		1.85		2.97		4.47
Invesco V.I. Comstock Fund Series II		59,903		18.26		19.39		1,148,183		2.04		1.30		1.90		15.37		16.06
Invesco V.I. Growth and Income Fund Series II		67,621		18.50		19.65		1,314,135		1.36		1.30		1.90		11.90		12.57
Lord Abbett Growth and Income Portfolio Class VC		8,155		16.28		16.63		124,750		1.46		1.30		1.55		15.06		15.41
SST SA Allocation Balanced Portfolio Class 3		66,966		15.39		16.11		1,048,256		2.14		1.15		1.55		3.00		8.83
SST SA Allocation Growth Portfolio Class 3		86,388		17.05		17.88		1,502,872		1.24		1.15		1.55		6.88		16.02
SST SA Allocation Moderate Growth Portfolio Class 3		88,920		15.81		16.80		1,439,760		1.66		1.15		1.65		6.06		13.27
SST SA Allocation Moderate Portfolio Class 3		136,804		15.88		16.66		2,211,165		2.00		1.15		1.55		5.07		11.55
SST SA Putnam Asset Allocation Diversified Growth Portfolio Class 3		41,090		12.13		12.19		500,336		1.48		1.15		1.55		17.65		18.12
SST SA Wellington Real Return Portfolio Class 3		102,432		10.98		11.84		1,180,311		2.81		1.15		1.90		0.02		18.42
SAST SA AB Growth Portfolio Class 3		13,868		24.72		25.65		355,077		0.00		1.30		1.65		29.52		29.97
SAST SA AB Small & Mid Cap Value Portfolio Class 3		25,769		22.56		24.50		613,193		0.12		1.15		1.90		4.05		10.68
SAST SA American Funds Asset Allocation Portfolio Class 3		653,413		17.48		31.76		11,879,037		0.91		1.15		1.65		7.76		14.00
SAST SA American Funds Global Growth Portfolio Class 3		44,254		19.98		21.73		933,189		0.99		1.15		1.90		4.83		28.64
SAST SA American Funds Growth Portfolio Class 3		42,455		20.74		22.51		928,454		0.44		1.15		1.90		2.26		25.54
SAST SA American Funds Growth-Income Portfolio Class 3		86,728		19.47		20.58		1,738,836		1.70		1.15		1.65		3.08		20.04
SAST SA American Funds VCP Managed Allocation Portfolio Class 3		2,576,285		13.81		14.17		36,220,476		0.82		1.15		1.65		5.54		12.59
SAST SA BlackRock VCP Global Multi Asset Portfolio Class 3		1,843,729		11.43		11.54		21,210,431		0.01		1.15		1.65		10.21		10.76
SAST SA Columbia Technology Portfolio Class 3		7,031		27.02		27.63		190,104		0.00		1.15		1.30		-3.88		33.11
SAST SA DFA Ultra Short Bond Portfolio Class 3		56,923		8.59		9.10		505,905		0.03		1.15		1.65		-9.04		-1.18
SAST SA Dogs of Wall Street Portfolio Class 3		74,886		24.47		26.08		1,938,614		2.25		1.30		1.90		16.30		17.00
SAST SA Federated Hermes Corporate Bond Portfolio Class 3		176,949		16.11		18.13		3,117,512		4.51		1.15		1.90		1.06		6.05
SAST SA Fidelity Institutional AM® Real Estate Portfolio Class 3		7,236		12.85		13.13		94,373		2.68		1.30		1.55		3.51		3.77
SAST SA Fixed Income Index Portfolio Class 3		4,255				10.02		42,630		0.00		1.15		1.30		0.16		0.20
SAST SA Franklin Small Company Value Portfolio Class 3		16,956		18.51		20.10		330,857		0.39		1.15		1.90		1.81		7.49
SAST SA Goldman Sachs Global Bond Portfolio Class 3		123,240		12.02		12.94		1,552,906		2.98		1.15		1.90		3.21		29.41
SAST SA Goldman Sachs Multi-Asset Insights Portfolio Class 3		1,461				10.30		15,048		0.00				1.15				2.99
SAST SA Index Allocation 60/40 Portfolio Class 3		39,466		10.97		11.01		433,934		0.45		1.15		1.55		9.67		10.06
SAST SA Index Allocation 80/20 Portfolio Class 3		142,179		11.27		11.31		1,606,337		0.97		1.15		1.55		12.69		13.09
SAST SA Index Allocation 90/10 Portfolio Class 3		563,893		11.44		11.48		6,466,080		1.02		1.15		1.55		14.37		14.78
SAST SA International Index Portfolio Class 3		880				10.34		9,104		0.00				1.30				3.44
SAST SA Invesco Growth Opportunities Portfolio Class 3		2,940		22.12		22.63		65,349		0.00		1.15		1.30		3.18		22.94
SAST SA Invesco Main Street Large Cap Portfolio Class 3		53,832		18.75		20.42		1,066,784		0.85		1.15		1.90		3.45		14.39
SAST SA Invesco VCP Equity-Income Portfolio Class 3		1,291,189		13.22		13.47		17,272,557		0.98		1.15		1.55		8.30		34.68
SAST SA Janus Focused Growth Portfolio Class 3		17,257		19.17		20.43		348,761		0.00		1.30		1.90		27.39		28.16
SAST SA JPMorgan Diversified Balanced Portfolio Class 3		59,487		17.91		18.69		1,092,156		1.50		1.15		1.55		2.94		12.52
SAST SA JPMorgan Emerging Markets Portfolio Class 3		20,297		12.93		13.77		277,098		1.88		1.30		1.90		39.26		40.10
SAST SA JPMorgan Equity-Income Portfolio Class 3		67,111		18.96		20.68		1,335,206		2.04		1.15		1.90		6.77		15.78
SAST SA JPMorgan Global Equities Portfolio Class 3		319				15.61		4,978		2.18				1.30				22.43
SAST SA JPMorgan MFS Core Bond Portfolio Class 3		240,116		13.36		14.66		3,404,288		2.39		1.15		1.90		0.51		2.27
SAST SA JPMorgan Mid-Cap Growth Portfolio Class 3		6,478		24.37		25.76		160,286		0.00		1.15		1.65		2.07		27.21
SAST SA Large Cap Index Portfolio Class 3		347				10.49		3,642		0.00				1.30				4.87
SAST SA Legg Mason BW Large Cap Value Portfolio Class 3		44,911		18.15		19.26		855,318		1.58		1.30		1.90		18.02		18.72
SAST SA Legg Mason Tactical Opportunities Class 3		2,755				10.29		28,331		0.14				1.15				2.85
SAST SA MFS Blue Chip Growth Portfolio Class 3		32,737		20.03		21.93		693,096		0.49		1.15		1.90		7.08		24.34
SAST SA MFS Massachusetts Investors Trust Portfolio Class 3		59,144		20.52		21.93		1,281,620		0.84		1.30		1.90		20.80		21.52
SAST SA MFS Total Return Portfolio Class 3		41,469		16.92		17.32		703,882		2.65		1.15		1.30		4.92		10.50
SAST SA Mid Cap Index Portfolio Class 3		2,178				10.45		22,760		0.00				1.30				4.50

52

SEPARATE ACCOUNT A

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

	December 31, 2017								For the Year Ended December 31 2017
									Investment		Expense				Total
			Unit Value ($)(a)				Net		Income		Ratio (%)(d)				Return (%)(e)
Sub-accounts	Units		Lowest		Highest		Assets ($)(b)		Ratio (%)(c)		Lowest		Highest		Lowest		Highest
SAST SA Morgan Stanley International Equities Portfolio Class 3		58,849		11.52		12.26		714,257		1.00		1.30		1.90		22.40		23.13
SAST SA PIMCO VCP Tactical Balanced Portfolio Class 3		1,633,718		12.83		13.13		21,292,596		0.19		1.15		1.65		14.29		31.28
SAST SA PineBridge High-Yield Bond Portfolio Class 3		39,223		15.18		16.63		630,137		7.36		1.15		1.90		-0.07		10.84
SAST SA Putnam International Growth and Income Portfolio Class 3		12,185		10.27		10.65		128,806		1.35		1.30		1.65		22.16		22.58
SAST SA Schroders VCP Global Allocation Portfolio Class 3		1,099,143		12.05		12.14		13,307,811		0.00		1.15		1.55		11.36		11.80
SAST SA Small Cap Index Portfolio Class 3		717				10.15		7,283		0.00				1.30				1.53
SAST SA T. Rowe Price Asset Allocation Growth Portfolio Class 3		2,485				10.29		25,568		0.26				1.30				2.88
SAST SA T. Rowe Price VCP Balanced Portfolio Class 3		1,632,204		12.34		12.46		20,286,212		0.04		1.15		1.65		16.96		17.55
SAST SA Templeton Foreign Value Portfolio Class 3		44,335		11.58		12.57		539,649		2.68		1.15		1.90		19.18		25.74
SAST SA VCP Dynamic Allocation Portfolio Class 3		4,224,848		13.85		14.48		60,636,054		1.17		1.15		1.90		10.94		17.70
SAST SA VCP Dynamic Strategy Portfolio Class 3		3,596,318		13.64		14.22		50,719,252		1.14		1.15		1.90		8.32		27.28
SAST SA VCP Index Allocation Portfolio Class 3		31,649				10.39		328,875		0.32		1.15		1.30		3.91		3.95
SAST SA WellsCap Aggressive Growth Portfolio Class 3		5,754		16.61		17.53		96,543		0.00		1.15		1.55		8.32		27.28
T Rowe Price Retirement 2015 Advisor Class		6,941,929		1.16		1.18		8,061,513		1.80		0.40		1.00		11.99		12.66
T Rowe Price Retirement 2020 Advisor Class		18,329,571		1.19		1.21		21,791,463		1.86		0.40		1.00		14.35		15.04
T Rowe Price Retirement 2025 Advisor Class		16,182,459		1.21		1.23		19,613,699		1.75		0.40		1.00		16.21		16.91
T Rowe Price Retirement 2030 Advisor Class		18,009,073		1.23		1.25		22,212,775		1.66		0.40		1.00		17.97		18.68
T Rowe Price Retirement 2035 Advisor Class		14,111,849		1.25		1.27		17,629,572		1.59		0.40		1.00		19.40		20.12
T Rowe Price Retirement 2040 Advisor Class		13,688,485		1.26		1.28		17,255,687		1.41		0.40		1.00		20.47		21.20
T Rowe Price Retirement 2045 Advisor Class		8,755,032		1.27		1.29		11,088,785		1.41		0.40		1.00		20.86		21.59
T Rowe Price Retirement 2050 Advisor Class		6,781,366		1.27		1.29		8,588,190		1.54		0.40		1.00		20.88		21.60
T Rowe Price Retirement 2055 Advisor Class		3,136,305		1.26		1.29		3,969,530		1.61		0.40		1.00		20.85		21.58
T Rowe Price Retirement 2060 Advisor Class		1,630,664				1.27		2,065,199		1.52		0.80		1.00		20.13		20.85
VALIC Company I Asset Allocation Fund		19,687,755		1.49		1.74		169,985,814		2.26		0.40		1.85		11.18		12.80
VALIC Company I Blue Chip Growth Fund		268,377,083		1.41		2.48		677,387,157		0.00		0.00		1.85		33.72		36.21
VALIC Company I Capital Conservation Fund		41,760,249		1.09		1.39		157,163,167		2.21		0.40		1.85		1.62		3.10
VALIC Company I Core Equity Fund		59,147,729		1.84		2.01		260,339,105		1.06		0.40		1.85		18.82		20.55
VALIC Company I Dividend Value Fund		211,950,225		1.87		2.08		749,009,037		1.85		0.40		1.85		15.91		17.60
VALIC Company I Dynamic Allocation Fund		184,019,647		1.34		1.44		256,696,371		1.84		0.40		1.85		17.98		19.74
VALIC Company I Emerging Economies Fund		705,849,703		0.87		1.12		827,618,593		1.38		0.40		1.85		38.69		40.70
VALIC Company I Global Real Estate Fund		202,170,993		1.44		1.60		305,291,918		4.25		0.40		1.85		11.76		13.39
VALIC Company I Global Strategy Fund		189,404,761		1.41		1.63		402,925,907		0.95		0.40		1.85		11.48		13.10
VALIC Company I Government Money Market I Fund		151,958,592		0.88		1.00		298,449,002		0.37		0.40		1.85		-1.46		-0.02
VALIC Company I Government Securities Fund		29,772,524		1.05		1.30		103,623,831		2.41		0.40		1.85		0.17		1.63
VALIC Company I Growth Fund		500,617,337		2.05		2.14		1,156,870,571		0.73		0.40		1.85		27.86		29.72
VALIC Company I Health Sciences Fund		147,159,519		3.27		3.80		753,751,250		0.00		0.40		1.85		25.33		27.15
VALIC Company I Inflation Protected Fund		356,598,447		1.05		1.06		475,521,264		0.24		0.00		1.85		2.94		4.86
VALIC Company I International Equities Index Fund		592,146,213		1.02		1.25		1,314,892,996		2.33		0.40		1.85		22.08		23.86
VALIC Company I International Government Bond Fund		56,030,138		1.03		1.36		175,219,643		0.00		0.40		1.85		6.13		7.67
VALIC Company I International Growth Fund		128,589,034		1.24		1.37		429,090,653		1.41		0.40		1.85		25.30		27.12
VALIC Company I International Socially Responsible Fund		62,001,730		1.59		1.76		438,775,790		1.65		0.40		1.85		20.47		22.22
VALIC Company I International Value Fund		557,899,484		1.08		1.23		835,931,366		1.87		0.00		1.85		14.86		17.00
VALIC Company I Large Cap Core Fund		56,932,870		2.16		2.43		162,489,954		0.94		0.40		1.85		19.22		20.95
VALIC Company I Large Capital Growth Fund		192,008,244		1.83		1.86		433,864,557		0.69		0.40		1.85		26.20		28.03
VALIC Company I Mid Cap Index Fund		151,102,680		2.01		2.29		3,368,306,160		1.18		0.40		1.85		13.79		15.45
VALIC Company I Mid Cap Strategic Growth Fund		102,563,019		1.73		1.74		267,375,959		0.00		0.40		1.85		23.97		25.78
VALIC Company I Nasdaq-100 Index Fund		233,595,865		2.66		2.90		405,176,660		0.67		0.40		1.85		29.87		31.76
VALIC Company I Science & Technology Fund		171,772,064		2.47		2.73		1,235,770,150		0.00		0.40		1.85		38.74		40.75
VALIC Company I Small Cap Aggressive Growth Fund		46,038,834		2.13		2.50		135,783,972		0.00		0.40		1.85		35.36		37.33
VALIC Company I Small Cap Fund		56,550,062		1.86		2.04		319,532,678		0.29		0.40		1.85		12.62		14.26
VALIC Company I Small Cap Index Fund		150,551,361		1.88		2.02		1,116,403,270		1.05		0.40		1.85		12.29		13.92
VALIC Company I Small Cap Special Values Fund		108,543,231		1.97		2.26		235,467,713		1.00		0.60		1.85		9.22		10.58
VALIC Company I Small Mid Growth Fund		57,916,161		1.79		1.90		116,510,136		0.00		0.40		1.85		25.43		27.25
VALIC Company I Stock Index Fund		420,173,995		2.12		98.82		4,581,664,951		1.48		0.33		1.85		19.20		21.02
VALIC Company I Systematic Core Fund		27,155,285		1.75		1.94		122,471,889		1.13		0.40		1.85		18.85		20.58
VALIC Company I Systematic Value Fund		23,917,635		1.94		1.98		53,146,967		1.37		0.40		1.85		15.98		17.67
VALIC Company I Value Fund		36,999,386		1.69		1.86		92,102,037		1.70		0.40		1.85		13.23		14.88
VALIC Company II Aggressive Growth Lifestyle Fund		175,049,393		1.64		1.73		597,400,403		1.79		0.15		1.60		14.42		16.09
VALIC Company II Capital Appreciation Fund		19,345,424		1.86		2.04		41,498,943		0.47		0.15		1.60		21.78		23.55
VALIC Company II Conservative Growth Lifestyle Fund		113,512,838		1.36		3.23		339,604,862		2.57		0.35		1.60		8.50		9.86
VALIC Company II Core Bond Fund		497,723,255		1.07		1.14		1,023,246,404		2.46		0.00		1.60		2.95		4.60
VALIC Company II Government Money Market II Fund		101,543,860		0.90		1.02		123,795,829		0.33		0.15		1.60		-1.26		0.18
VALIC Company II High Yield Bond Fund		173,436,602		1.35		1.64		495,903,122		4.63		0.15		1.60		6.20		7.75
VALIC Company II International Opportunities Fund		225,444,336		1.32		1.51		684,261,194		1.31		0.15		1.60		37.15		39.15
VALIC Company II Large Cap Value Fund		57,219,062		1.66		1.96		203,476,187		1.32		0.15		1.60		13.23		14.88
VALIC Company II Mid Cap Growth Fund		54,538,747		1.70		1.73		136,586,222		0.00		0.15		1.60		29.51		31.40

53

SEPARATE ACCOUNT A

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

	December 31, 2017								For the Year Ended December 31 2017
									Investment		Expense				Total
			Unit Value ($)(a)				Net		Income		Ratio (%)(d)				Return (%)(e)
Sub-accounts	Units		Lowest		Highest		Assets ($)(b)		Ratio (%)(c)		Lowest		Highest		Lowest		Highest
VALIC Company II Mid Cap Value Fund		134,638,078		1.83		1.92		876,439,667		0.57		0.15		1.60		12.66		14.30
VALIC Company II Moderate Growth Lifestyle Fund		273,875,279		1.53		1.74		927,236,654		2.12		0.15		1.60		11.81		13.44
VALIC Company II Small Cap Growth Fund		32,109,839		2.14		2.26		126,112,240		0.00		0.15		1.60		39.22		41.25
VALIC Company II Small Cap Value Fund		96,767,255		1.74		1.93		433,221,890		0.86		0.15		1.60		3.28		4.78
VALIC Company II Strategic Bond Fund		206,604,694		1.24		1.63		612,659,053		3.64		0.15		1.60		5.12		6.65
VALIC Company II U.S. Socially Responsible Fund		239,129,520		1.31		2.20		779,504,963		1.36		0.00		1.60		18.75		20.65
Vanguard LifeStrategy Conservative Growth Fund Investor Shares		41,049,609		1.31		1.47		91,831,292		2.23		0.65		2.10		8.68		10.27
Vanguard LifeStrategy Growth Fund Investor Shares		94,056,973		1.60		2.86		250,146,680		2.22		0.85		2.10		16.74		18.21
Vanguard LifeStrategy Moderate Growth Fund Investor Shares		101,919,583		1.46		1.54		255,132,358		2.24		0.65		2.10		12.66		14.30
Vanguard Long-Term Investment-Grade Fund Investor Shares		76,473,321		1.51		2.05		290,216,586		3.61		0.40		1.85		9.88		11.48
Vanguard Long-Term Treasury Fund Investor Shares		62,988,883		1.39		1.85		222,624,818		2.66		0.40		1.85		6.60		8.15
Vanguard Wellington Fund Investor Shares		426,658,543		1.24		1.69		1,988,511,026		2.48		0.00		2.10		12.35		14.72
Vanguard Windsor II Fund Investor Shares		397,426,878		1.73		1.93		1,798,668,358		1.97		0.65		2.10		14.36		16.03

	December 31, 2016								For the Year Ended December 31 2016
									Investment		Expense				Total
			Unit Value ($)(a)				Net		Income		Ratio (%)(d)				Return (%)(e)
Sub-accounts	Units		Lowest		Highest		Assets ($)(b)		Ratio (%)(c)		Lowest		Highest		Lowest		Highest
AST SA BlackRock Multi-Asset Income Portfolio Class 3		8,433				11.34		95,603		3.28				1.30				4.90
AST SA Wellington Capital Appreciation Portfolio Class 3		36,912		22.35		23.74		868,788		0.00		1.30		1.90		-0.18		0.42
AST SA Wellington Government and Quality Bond Portfolio Class 3		117,329		11.61		12.25		1,428,187		1.26		1.30		1.90		-2.67		-0.09
Ariel Appreciation Fund Investor Class		125,520,695		1.65		1.92		415,560,302		0.67		0.40		1.85		10.60		12.22
Ariel Fund Investor Class		127,747,087		1.70		1.81		438,241,476		0.29		0.40		1.85		13.45		15.10
FTVIP Franklin Allocation VIP Fund Class 2		266				13.16		3,499		3.54				1.30				11.72
FTVIP Franklin Income VIP Fund Class 2		46,142		13.38		14.17		645,658		5.09		1.30		1.90		11.88		12.55
Goldman Sachs VIT Government Money Market Fund Service Shares		17,691		9.90		9.92		175,364		0.04		1.30		1.55		-1.00		-0.84
Invesco V.I. Balanced-Risk Commodity Strategy Fund Class R5		301,402,901		0.62		0.66		195,116,290		2.36		0.60		1.85		9.91		11.29
Invesco V.I. Comstock Fund Series II		56,339		15.82		16.70		931,540		1.47		1.30		1.90		14.79		15.48
Invesco V.I. Growth and Income Fund Series II		62,992		16.53		17.46		1,088,719		0.99		1.30		1.90		17.19		17.89
Lord Abbett Growth and Income Portfolio Class VC		6,154		14.58		14.86		91,268		2.67		1.30		1.55		15.32		15.61
SST SA Allocation Balanced Portfolio Class 3		34,416		14.14		14.40		491,121		1.74		1.30		1.55		3.62		3.88
SST SA Allocation Growth Portfolio Class 3		33,942		14.70		14.98		506,053		2.31		1.30		1.55		4.12		4.38
SST SA Allocation Moderate Growth Portfolio Class 3		52,648		13.96		14.39		739,763		1.76		1.30		1.65		3.93		4.29
SST SA Allocation Moderate Portfolio Class 3		56,236		14.24		14.49		803,369		1.87		1.30		1.55		3.95		4.21
SST SA Wellington Real Return Portfolio Class 3		45,485		10.98		11.46		515,635		0.00		1.30		1.90		1.75		2.36
SAST SA AB Growth Portfolio Class 3		11,303		19.08		19.74		222,745		0.00		1.30		1.65		0.88		1.24
SAST SA AB Small & Mid Cap Value Portfolio Class 3		16,090		20.38		21.51		342,554		0.17		1.30		1.90		22.31		23.04
SAST SA American Funds Asset Allocation Portfolio Class 3		180,815		14.96		15.81		2,808,498		2.14		1.30		1.90		7.69		7.77
SAST SA American Funds Global Growth Portfolio Class 3		37,883		15.53		16.41		617,828		2.01		1.30		1.90		-1.54		-0.95
SAST SA American Funds Growth Portfolio Class 3		30,147		16.52		17.43		520,813		0.35		1.30		1.90		7.13		7.77
SAST SA American Funds Growth-Income Portfolio Class 3		58,048		16.22		16.70		967,240		1.43		1.30		1.65		9.39		9.78
SAST SA American Funds VCP Managed Allocation Portfolio Class 3		1,625,830		12.27		12.44		20,214,005		0.77		1.30		1.65		5.26		5.62
SAST SA BlackRock VCP Global Multi Asset Portfolio Class 3		1,113,436		10.37		10.40		11,580,535		0.06		1.30		1.65		3.67		4.01
SAST SA Columbia Technology Portfolio Class 3		3,283		19.91		20.30		66,469		0.00		1.30		1.55		14.75		15.04
SAST SA DFA Ultra Short Bond Portfolio Class 3		22,197		8.69		8.96		209,131		0.00		1.30		1.65		-1.97		-1.63
SAST SA Dogs of Wall Street Portfolio Class 3		59,711		21.04		22.29		1,320,918		1.98		1.30		1.90		15.43		16.12
SAST SA Federated Hermes Corporate Bond Portfolio Class 3		126,890		15.97		16.88		2,115,527		3.91		1.30		1.90		4.29		7.08
SAST SA Fidelity Institutional AM® Real Estate Portfolio Class 3		4,272		12.41		12.65		53,937		2.05		1.30		1.55		6.70		6.96
SAST SA Franklin Small Company Value Portfolio Class 3		14,310		17.22		18.16		257,984		0.47		1.30		1.90		28.11		28.88
SAST SA Goldman Sachs Global Bond Portfolio Class 3		78,294		11.40		12.02		938,530		0.08		1.30		1.90		-0.95		-0.25
SAST SA Invesco Growth Opportunities Portfolio Class 3		1,591				17.99		28,621		0.00				1.30				2.32
SAST SA Invesco Main Street Large Cap Portfolio Class 3		51,588		16.39		17.33		889,133		0.57		1.30		1.90		9.29		9.95
SAST SA Invesco VCP Equity-Income Portfolio Class 3		802,230		12.21		12.32		9,879,362		0.66		1.30		1.55		8.16		8.43
SAST SA Janus Focused Growth Portfolio Class 3		16,283		15.05		15.94		256,997		0.00		1.30		1.90		-3.54		-2.96
SAST SA JPMorgan Diversified Balanced Portfolio Class 3		36,719		15.92		16.24		595,830		1.88		1.30		1.55		5.26		5.52
SAST SA JPMorgan Emerging Markets Portfolio Class 3		19,458		9.28		9.83		189,777		1.89		1.30		1.90		8.36		9.01
SAST SA JPMorgan Equity-Income Portfolio Class 3		62,380		16.38		17.23		1,066,113		1.95		1.30		1.90		13.10		13.78
SAST SA JPMorgan Global Equities Portfolio Class 3		141				12.75		1,800		0.61				1.30				4.04
SAST SA JPMorgan MFS Core Bond Portfolio Class 3		150,574		11.65		13.90		2,067,602		1.99		1.30		1.90		1.18		1.79
SAST SA JPMorgan Mid-Cap Growth Portfolio Class 3		3,481		19.16		19.73		67,576		0.00		1.30		1.65		-1.68		-1.34
SAST SA Legg Mason BW Large Cap Value Portfolio Class 3		39,617		15.38		16.23		636,897		0.71		1.30		1.90		12.17		12.84
SAST SA MFS Blue Chip Growth Portfolio Class 3		30,624		16.11		17.05		518,139		0.45		1.30		1.90		4.09		4.72
SAST SA MFS Massachusetts Investors Trust Portfolio Class 3		54,991		16.99		18.04		981,427		0.73		1.30		1.90		6.33		6.97
SAST SA MFS Total Return Portfolio Class 3		29,294		15.02		15.32		480,060		2.72		1.30		1.55		7.13		7.40

54

SEPARATE ACCOUNT A

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

	December 31, 2016								For the Year Ended December 31 2016
									Investment		Expense				Total
			Unit Value ($)(a)				Net		Income		Ratio (%)(d)				Return (%)(e)
Sub-accounts	Units		Lowest		Highest		Assets ($)(b)		Ratio (%)(c)		Lowest		Highest		Lowest		Highest
SAST SA Morgan Stanley International Equities Portfolio Class 3		51,515		9.41		9.96		508,712		1.08		1.30		1.90		-4.04		-3.46
SAST SA PIMCO VCP Tactical Balanced Portfolio Class 3		1,270,952		11.22		11.37		14,441,076		0.00		1.30		1.65		5.04		5.40
SAST SA PineBridge High-Yield Bond Portfolio Class 3		22,591		14.13		15.01		330,929		8.15		1.30		1.90		13.00		16.44
SAST SA Putnam International Growth and Income Portfolio Class 3		10,671		8.41		8.69		91,918		0.71		1.30		1.65		-0.40		-0.05
SAST SA Schroders VCP Global Allocation Portfolio Class 3		553,684		10.82		10.84		6,003,699		0.00		1.30		1.55		8.19		8.45
SAST SA T. Rowe Price VCP Balanced Portfolio Class 3		890,030		10.55		10.59		9,423,063		0.34		1.30		1.65		6.72		6.82
SAST SA Templeton Foreign Value Portfolio Class 3		40,197		9.72		10.24		408,274		1.91		1.30		1.90		-0.74		-0.15
SAST SA VCP Dynamic Allocation Portfolio Class 3		3,549,403		11.77		12.12		43,002,007		1.75		1.30		1.90		2.55		3.16
SAST SA VCP Dynamic Strategy Portfolio Class 3		2,976,061		11.75		12.07		35,910,454		1.67		1.30		1.90		3.18		3.80
SAST SA WellsCap Aggressive Growth Portfolio Class 3		5,710		13.05		13.34		74,893		0.00		1.30		1.55		5.47		5.73
T Rowe Price Retirement 2015 Advisor Class		5,704,323		1.04		1.05		5,915,079		2.31		0.40		1.00		5.97		6.61
T Rowe Price Retirement 2020 Advisor Class		13,032,049		1.04		1.05		13,544,551		2.00		0.40		1.00		6.09		6.72
T Rowe Price Retirement 2025 Advisor Class		9,816,678		1.04		1.05		10,232,738		1.84		0.40		1.00		6.18		6.82
T Rowe Price Retirement 2030 Advisor Class		9,928,524		1.04		1.06		10,376,356		1.78		0.40		1.00		6.35		6.99
T Rowe Price Retirement 2035 Advisor Class		7,748,441				1.05		8,104,234		1.68		0.60		1.00		6.29		6.71
T Rowe Price Retirement 2040 Advisor Class		7,310,704		1.05		1.06		7,646,811		1.46		0.40		1.00		6.27		6.91
T Rowe Price Retirement 2045 Advisor Class		4,316,183		1.05		1.06		4,519,088		1.45		0.40		1.00		6.41		7.04
T Rowe Price Retirement 2050 Advisor Class		2,927,475		1.05		1.06		3,065,383		1.49		0.40		1.00		6.39		7.03
T Rowe Price Retirement 2055 Advisor Class		1,140,956		1.05		1.06		1,194,321		1.44		0.40		1.00		6.39		7.03
T Rowe Price Retirement 2060 Advisor Class		708,969		1.05		1.06		742,650		1.21		0.80		1.00		6.38		7.02
VALIC Company I Asset Allocation Fund		20,870,982		1.34		8.95		160,419,945		2.03		0.60		1.85		5.35		6.67
VALIC Company I Blue Chip Growth Fund		296,981,404		1.85		2.00		556,809,759		0.00		0.60		1.85		-0.99		0.25
VALIC Company I Capital Conservation Fund		38,515,466		1.08		4.19		144,459,223		2.05		0.60		1.85		0.40		1.66
VALIC Company I Core Equity Fund		64,571,955		1.52		1.69		236,958,128		1.08		0.40		1.85		10.65		12.26
VALIC Company I Dividend Value Fund		223,573,305		1.59		1.80		675,597,795		2.12		0.40		1.85		14.58		16.25
VALIC Company I Dynamic Allocation Fund		205,756,033		1.14		1.19		241,268,323		2.00		0.60		1.85		2.93		4.22
VALIC Company I Emerging Economies Fund		733,157,892		0.62		0.81		614,843,884		2.60		0.40		1.85		9.44		11.03
VALIC Company I Global Real Estate Fund		244,712,308		1.29		1.38		327,651,930		3.14		0.60		1.85		0.40		1.66
VALIC Company I Global Strategy Fund		214,909,453		1.27		1.97		406,455,323		6.06		0.60		1.85		3.37		4.66
VALIC Company I Government Money Market I Fund		163,996,811		0.90		1.00		324,004,925		0.01		0.40		1.85		-1.82		-0.39
VALIC Company I Government Securities Fund		31,411,762		1.05		4.02		109,583,866		2.43		0.60		1.85		-0.63		0.62
VALIC Company I Growth Fund		483,872,585		1.60		1.65		866,903,856		0.64		0.40		1.85		2.87		4.37
VALIC Company I Health Sciences Fund		165,775,531		2.61		4.30		671,812,946		0.00		0.60		1.85		-12.13		-11.03
VALIC Company I Inflation Protected Fund		321,032,128		1.03		1.34		412,297,625		1.22		0.60		1.85		1.90		3.18
VALIC Company I International Equities Index Fund		481,966,613		1.03		2.00		871,140,427		2.67		0.60		1.85		-0.59		0.65
VALIC Company I International Government Bond Fund		62,101,781		0.97		1.26		181,845,967		2.55		0.40		1.85		1.81		3.29
VALIC Company I International Growth Fund		138,846,105		1.09		2.88		368,095,001		1.44		0.60		1.85		-4.53		-3.33
VALIC Company I International Socially Responsible Fund		64,573,236		1.30		1.46		382,685,355		1.89		0.40		1.85		4.99		6.52
VALIC Company I International Value Fund		581,021,306		0.97		1.07		752,759,884		2.21		0.40		1.85		10.05		11.65
VALIC Company I Large Cap Core Fund		60,196,973		1.81		2.48		142,972,826		3.44		0.60		1.85		6.63		7.96
VALIC Company I Large Capital Growth Fund		207,313,236		1.43		1.47		368,041,985		0.89		0.40		1.85		4.21		5.72
VALIC Company I Mid Cap Index Fund		163,461,466		1.77		1.98		3,198,448,688		1.19		0.40		1.85		18.42		20.14
VALIC Company I Mid Cap Strategic Growth Fund		110,264,905				1.39		230,093,583		0.00		0.40		1.85		7.68		9.25
VALIC Company I Nasdaq-100 Index Fund		225,863,789		1.40		2.05		299,014,678		0.65		0.60		1.85		4.82		6.13
VALIC Company I Science & Technology Fund		179,094,645		1.78		1.94		920,374,886		0.00		0.40		1.85		5.37		6.90
VALIC Company I Small Cap Aggressive Growth Fund		49,417,602		1.57		2.25		106,752,000		0.00		0.60		1.85		-0.07		1.19
VALIC Company I Small Cap Fund		63,357,719		1.65		1.79		315,020,335		0.20		0.40		1.85		13.18		14.83
VALIC Company I Small Cap Index Fund		161,282,233		1.67		1.77		1,056,873,669		1.19		0.40		1.85		18.96		20.70
VALIC Company I Small Cap Special Values Fund		124,786,134		1.80		2.05		245,467,708		1.42		0.60		1.85		27.47		29.07
VALIC Company I Small Mid Growth Fund		62,534,119		1.42		1.65		99,380,094		0.00		0.60		1.85		-1.61		-0.37
VALIC Company I Stock Index Fund		438,663,027		1.77		81.66		3,985,297,949		2.44		0.33		1.85		9.56		11.23
VALIC Company I Systematic Core Fund		27,491,527		1.63		4.17		105,060,295		1.24		0.60		1.85		9.19		10.56
VALIC Company I Systematic Value Fund		24,571,826		1.71		1.99		46,787,694		1.39		0.60		1.85		11.76		13.17
VALIC Company I Value Fund		41,890,640		1.64		2.30		91,300,280		1.48		0.60		1.85		11.24		12.63
VALIC Company II Aggressive Growth Lifestyle Fund		179,473,955		1.43		3.17		530,487,019		2.06		0.35		1.60		7.06		8.40
VALIC Company II Capital Appreciation Fund		20,863,767		1.68		1.87		36,509,166		0.38		0.35		1.60		0.44		1.70
VALIC Company II Conservative Growth Lifestyle Fund		118,462,070		1.25		2.94		323,748,368		2.78		0.35		1.60		4.95		6.27
VALIC Company II Core Bond Fund		449,371,836		1.11		1.47		892,797,494		2.08		0.15		1.60		1.80		3.29
VALIC Company II Government Money Market II Fund		109,867,124		0.91		1.30		134,153,010		0.01		0.35		1.60		-1.58		-0.34
VALIC Company II High Yield Bond Fund		168,773,678		1.27		2.87		449,284,525		4.03		0.35		1.60		11.11		12.50
VALIC Company II International Opportunities Fund		229,789,203		1.10		2.35		504,126,294		1.11		0.35		1.60		-2.13		-0.90
VALIC Company II Large Cap Value Fund		66,351,638		1.73		3.34		203,980,017		1.10		0.35		1.60		15.22		16.66
VALIC Company II Mid Cap Growth Fund		52,595,301		1.33		2.05		100,676,950		0.00		0.35		1.60		3.02		4.31
VALIC Company II Mid Cap Value Fund		160,086,694		1.63		1.68		919,346,687		0.26		0.15		1.60		12.26		13.89
VALIC Company II Moderate Growth Lifestyle Fund		280,843,771		1.37		3.22		842,935,369		2.20		0.35		1.60		6.69		8.02

55

SEPARATE ACCOUNT A

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

	December 31, 2016								For the Year Ended December 31 2016
									Investment		Expense				Total
			Unit Value ($)(a)				Net		Income		Ratio (%)(d)				Return (%)(e)
Sub-accounts	Units		Lowest		Highest		Assets ($)(b)		Ratio (%)(c)		Lowest		Highest		Lowest		Highest
VALIC Company II Small Cap Growth Fund		27,036,435		1.54		2.99		75,435,259		0.00		0.35		1.60		6.13		7.46
VALIC Company II Small Cap Value Fund		116,675,370		1.69		1.85		502,254,358		1.10		0.15		1.60		28.01		29.88
VALIC Company II Strategic Bond Fund		210,077,767		1.18		3.01		585,263,049		4.06		0.35		1.60		6.46		7.79
VALIC Company II U.S. Socially Responsible Fund		268,366,950		1.86		2.94		734,092,410		1.38		0.35		1.60		8.90		10.27
Vanguard LifeStrategy Conservative Growth Fund Investor Shares		42,667,897		1.21		2.19		87,064,491		2.23		0.85		2.10		3.71		5.01
Vanguard LifeStrategy Growth Fund Investor Shares		96,702,868		1.37		2.42		218,344,085		2.26		0.85		2.10		6.08		7.41
Vanguard LifeStrategy Moderate Growth Fund Investor Shares		102,772,385		1.30		2.36		226,264,382		2.23		0.85		2.10		4.91		6.23
Vanguard Long-Term Investment-Grade Fund Investor Shares		85,760,846		1.37		1.84		293,362,656		4.90		0.40		1.85		5.84		7.38
Vanguard Long-Term Treasury Fund Investor Shares		73,586,886		1.30		1.71		241,608,557		2.79		0.40		1.85		-0.66		0.79
Vanguard Wellington Fund Investor Shares		439,520,652		1.50		1.66		1,818,946,852		2.58		0.65		2.10		8.71		10.30
Vanguard Windsor II Fund Investor Shares		431,195,785		1.49		1.69		1,694,716,004		2.41		0.65		2.10		11.06		12.68

(a) Because the unit values are presented as a range of lowest to highest, based on the product grouping representing the minimum and maximum expense ratio amounts, some individual contract unit values are not within the ranges presented.

(b) These amounts represent the net asset value before adjustments allocated to the contracts in payout period.

(c) These amounts represent the dividends, excluding distributions of capital gains, received by the sub-account from the Funds, 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 sub-account is affected by the timing of the declaration of dividends by the Funds in which the sub-account invests. The average net assets are calculated using the net asset balances at the beginning and end of the year.

(d) These amounts represent the annualized contract expenses of the sub-account, consisting of distribution, mortality and expense charges, for each period indicated. The ratios include only those expenses that result in direct reduction to unit values. Charges made directly to contract owners account through the redemption of units and expenses of the Funds have been excluded. For additional information on charges and deductions, see Note 4.

(e) These amounts represent the total return for the periods indicated, including changes in the value of the Funds, and expenses assessed through the reduction of unit values. These ratios do not include any expenses assessed through 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 of the periods indicated or from the effective date through the end of the reporting period. Because the total return is presented as a range of minimum and maximum values, based on the product grouping representing the minimum and maximum expense ratios, some individual contract total returns are not within the ranges presented.

7. Subsequent Events

Management considered Separate Accounts related events and transactions that occurred after the date of the Statement of Assets and Liabilities, but before the financial statements are issued to provide additional evidence relative to certain estimates or to identify matters that required additional disclosures. Management has evaluated events through the date the financial statements were issued.

56

The Variable Annuity Life

Insurance Company

Audited Statutory Financial Statements

At December 31, 2020 and 2019 and

for each of the three years ended December 31, 2020

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

TABLE OF CONTENTS TO AUDITED STATUTORY FINANCIAL STATEMENTS AND SUPPLEMENTAL INFORMATION

	Page
STATUTORY FINANCIAL STATEMENTS
Independent Auditor’s Report		2
Statutory Statements of Admitted Assets, Liabilities and Capital and Surplus at December 31, 2020 and 2019		4
Statutory Statements of Operations for the Years Ended December  31, 2020, 2019 and 2018		6
Statutory Statements of Changes in Capital and Surplus for the Years Ended December 31, 2020, 2019 and 2018		7
Statutory Statements of Cash Flows for the Years Ended December  31, 2020, 2019 and 2018		8

NOTES TO STATUTORY FINANCIAL STATEMENTS
1.	Nature of Operations	9
2.	Summary of Significant Accounting Policies	9
3.	Investments	21
4.	Securities Lending and Repurchase Agreements	29
5.	Restricted Assets	33
6.	Subprime Mortgage Risk Exposure	33
7.	Derivatives	34
8.	Information about Financial Instruments with Off-Balance Sheet Risk and Financial Instruments with Concentrations of Credit Risk	36
9.	Fair Value Measurements	37
10.	Aggregate Policy Reserves and Deposit Fund Liabilities	43
11.	Separate Accounts	45
12.	Reserves for Guaranteed Policy Benefits and Enhancements	47
13.	Reinsurance	48
14.	Federal Income Taxes	49
15.	Capital and Surplus	56
16.	Retirement Plans and Share-Based and Deferred Compensation Plans	57
17.	Debt	58
18.	Commitments and Contingencies	59
19.	Related Party Transactions	61
20.	Subsequent Events	65
21	Loan-Backed and Structured Security Impairments and Structured Notes Holdings	66

SUPPLEMENTAL INFORMATION
Supplemental Schedule of Assets and Liabilities	70
Supplemental Investment Risks Interrogatories	72
Supplemental Summary Investment Schedule	78
Supplemental Schedule of Reinsurance Disclosures	79

1

Report of Independent Auditors

To the Board of Directors and Shareholder of The Variable Annuity Life Insurance Company

We have audited the accompanying statutory financial statements of The Variable Annuity Life Insurance Company (the “Company”), an indirect, wholly-owned subsidiary of American International Group, Inc., which comprise the statutory statements of admitted assets, liabilities and capital and surplus as of December 31, 2020 and 2019, and the related statutory statements of operations and changes in capital and surplus, and of cash flows for each of the three years in the period ended December 31, 2020.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with the accounting practices prescribed or permitted by the Texas Department of Insurance. Management is also responsible for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on the financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the Company’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Basis for Adverse Opinion on U.S. Generally Accepted Accounting Principles

As described in Note 2 to the financial statements, the financial statements are prepared by the Company on the basis of the accounting practices prescribed or permitted by the Texas Department of Insurance, which is a basis of accounting other than accounting principles generally accepted in the United States of America.

The effects on the financial statements of the variances between the statutory basis of accounting described in Note 2 and accounting principles generally accepted in the United States of America, although not reasonably determinable, are presumed to be material.

Adverse Opinion on U.S. Generally Accepted Accounting Principles

In our opinion, because of the significance of the matter discussed in the “Basis for Adverse Opinion on U.S. Generally Accepted Accounting Principles” paragraph, the financial statements referred to above do not present fairly, in accordance with accounting principles generally accepted in the United States of America, the financial position of the Company as of December 31, 2020 and 2019, or the results of its operations or its cash flows for each of the three years in the period ended December 31, 2020.

Opinion on Statutory Basis of Accounting

In our opinion, the financial statements referred to above present fairly, in all material respects, the admitted assets, liabilities and capital and surplus of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2020, in accordance with the accounting practices prescribed or permitted by the Texas Department of Insurance described in Note 2.

2

Other Matter

Our audit was conducted for the purpose of forming an opinion on the statutory-basis financial statements taken as a whole. The Supplemental Schedule of Assets and Liabilities, Supplemental Investment Risks Interrogatories, Supplemental Summary Investment Schedule, and Supplemental Schedule of Reinsurance Disclosures (collectively, the “supplemental schedules”) of the Company as of December 31, 2020 and for the year then ended are presented to comply with the National Association of Insurance Commissioners’ Annual Statement Instructions and Accounting Practices and Procedures Manual and for purposes of additional analysis and are not a required part of the statutory-basis financial statements. The supplemental schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the statutory-basis financial statements. The supplemental schedules have been subjected to the auditing procedures applied in the audit of the statutory-basis financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the statutory-basis financial statements or to the statutory-basis financial statements themselves and other additional procedures, in accordance with auditing standards generally accepted in the United States of America. In our opinion, the supplemental schedules are fairly stated, in all material respects, in relation to the statutory-basis financial statements taken as a whole.

/s/ PricewaterhouseCoopers LLP

Houston, Texas

April 23, 2021

3

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

STATUTORY STATEMENTS OF ADMITTED ASSETS, LIABILITIES AND CAPITAL AND SURPLUS

	December 31,
(in millions)	2020		2019
Admitted assets
Cash and investments
Bonds	$	37,621	$	36,053
Preferred stock		3		42
Common stock		131		116
Cash, cash equivalents and short-term investments		(30)		232
Mortgage loans		6,928		7,153
Real estate		5		5
Contract loans		517		576
Derivatives		227		248
Securities lending reinvested collateral assets		1,383		1,173
Other invested assets		1,746		1,039
Total cash and investments		48,531		46,637
Amounts receivable under reinsurance contracts		2		36
Deferred tax asset		88		72
Due and accrued investment income		615		615
Receivables from affiliates		116		89
Other assets		31		223
Separate account assets		41,727		38,158
Total admitted assets	$	91,110	$	85,830

See accompanying Notes to Statutory Financial Statements.

4

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

SUPPLEMENTAL INVESTMENT RISKS INTERROGATORIES (CONTINUED)

DECEMBER 31, 2020

(in millions)

	December 31,
(in millions, except per share data)	2020		2019
Liabilities
Policy reserves and contractual liabilities
Life and annuity reserves	$	38,090	$	37,001
Liabilities for deposit-type contracts		5,768		5,442
Total policy reserves and contractual liabilities		43,858		42,443
Payable to affiliates		81		71
Interest maintenance reserve		98		111
Amounts withheld or retained by Company as agent or trustee and held for agents’ account		25		28
Federal income taxes payable		6		32
Derivatives		3		1
Payable for securities lending		1,479		1,167
Repurchase agreements		29		15
Collateral for derivatives program		238		297
Accrued expenses and other liabilities		104		113
Net transfers to (from) separate accounts due or accrued		(188)		197
Asset valuation reserve		745		597
Separate account liabilities		41,727		38,158
Total liabilities		88,205		83,230
Commitments and contingencies (see Note 18)
Capital and surplus
Common stock, $1 par value; 5,000,000 shares authorized; 3,575,000 issued and outstanding		4		4
Other than special deficit funds		(3)		(3)
Gross paid-in and contributed surplus		2,263		2,263
Unassigned surplus		641		336
Total capital and surplus		2,905		2,600
Total liabilities and capital and surplus	$	91,110	$	85,830

See accompanying Notes to Statutory Financial Statements.

5

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

STATUTORY STATEMENTS OF OPERATIONS

	Years Ended December 31,
(in millions)	2020		2019		2018
Revenues
Premiums and annuity considerations	$	4,014	$	4,619	$	4,617
Net investment income		2,006		2,154		2,189
Amortization of interest maintenance reserve		18		26		33
Reserve adjustments on reinsurance ceded		(55)		(40)		499
Commissions and expense allowances		-		-		1
Separate account fees		377		407		363
Other income		251		230		243
Total revenues		6,611		7,396		7,945
Benefits and expenses
Annuity benefits		683		608		538
Surrender benefits		5,351		6,297		6,448
Other benefits		146		187		103
Change in reserves		1,231		657		537
Commissions		153		173		182
General insurance expenses		400		365		333
Net transfers from separate accounts		(2,136)		(1,667)		(1,200)
Other expenses		118		113		119
Total benefits and expenses		5,946		6,733		7,060
Net gain from operations before federal income taxes		665		663		885
Federal income tax expense		270		303		189
Net gain from operations		395		360		696
Net realized capital gains (losses), net of tax		168		71		(14)
Net income	$	563	$	431	$	682

See accompanying Notes to Statutory Financial Statements.

6

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

STATUTORY STATEMENTS OF CHANGES IN CAPITAL AND SURPLUS

(in millions)	Common Stock		Other Than Special Surplus (Deficit) Funds			Gross Paid- In and Contributed Surplus		Unassigned Surplus			Total     Capital and Surplus
Balance, January 1, 2018	$	4	$	(3	)	$	2,263	$	536		$	2,800
Net income		-		-			-		682			682
Change in net unrealized capital gains (losses)		-		-			-		41			41
Change in net unrealized foreign exchange capital gains (losses)		-		-			-		(73	)		(73	)
Change in deferred tax		-		-			-		(16	)		(16	)
Change in non-admitted assets		-		-			-		(81	)		(81	)
Change in asset valuation reserve		-		-			-		(15	)		(15	)
Dividends to stockholder		-		-			-		(649	)		(649	)
Balance, December 31, 2018	$	4	$	(3	)	$	2,263	$	425		$	2,689
Net income		-		-			-		431			431
Change in net unrealized capital gains (losses)		-		-			-		(3	)		(3	)
Change in net unrealized foreign exchange capital gains (losses)		-		-			-		59			59
Change in deferred tax		-		-			-		260			260
Change in non-admitted assets		-		-			-		(125	)		(125	)
Change in asset valuation reserve		-		-			-		(56	)		(56	)
Change in surplus from separate accounts		-		-			-		52			52
Other changes in surplus in separate accounts		-		-			-		(52	)		(52	)
Cumulative effect of changes in accounting principles		-		-			-		(28	)		(28	)
Dividends to stockholder		-		-			-		(622	)		(622	)
Prior period corrections (see Note 2)		-		-			-		(5	)		(5	)
Balance, December 31, 2019	$	4	$	(3	)	$	2,263	$	336		$	2,600
Net income		-		-			-		563			563
Change in net unrealized capital gains (losses)		-		-			-		(45	)		(45	)
Change in net unrealized foreign exchange capital gains (losses)		-		-			-		116			116
Change in deferred tax		-		-			-		139			139
Change in non-admitted assets		-		-			-		(122	)		(122	)
Change in reserve on account		-		-			-		134			134
Change in asset valuation reserve		-		-			-		(148	)		(148	)
Change in surplus from separate accounts		-		-			-		16			16
Other changes in surplus in separate accounts		-		-			-		(16	)		(16	)
Dividends to stockholder		-		-			-		(360	)		(360	)
Disposition of investment		-		-			-		20			20
Prior period corrections (see Note 2)		-		-			-		8			8
Balance, December 31, 2020	$	4	$	(3	)	$	2,263	$	641		$	2,905

See accompanying Notes to Statutory Financial Statements.

7

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

STATUTORY STATEMENTS OF CASH FLOWS

	Years Ended December 31,
(in millions)	2020		2019		2018
Cash from operations
Premium and annuity considerations, collected, net of reinsurance	$	4,014	$	4,619	$	5,209
Net investment income collected		1,863		2,015		1,861
Other income		573		598		526
Total revenue received		6,450		7,232		7,596
Benefits paid		6,287		7,005		7,210
Net transfers from separate accounts		(1,750)		(1,750)		(1,332)
Commissions and expenses paid		672		655		635
Federal income taxes paid		341		362		139
Total benefits and expenses paid		5,550		6,272		6,652
Net cash provided by operations		900		960		944
Cash from investments
Proceeds from investments sold, matured or repaid:
Bonds		5,347		6,653		8,272
Stocks		40		19		1
Mortgage loans		600		619		467
Real estate		-		39		-
Other invested assets		572		507		869
Miscellaneous proceeds		239		206		203
Total proceeds from investments sold, matured or repaid		6,798		8,043		9,812
Cost of investments acquired:
Bonds		6,745		6,711		8,425
Stocks		-		41		9
Mortgage loans		370		1,146		1,301
Real estate		-		1		-
Other invested assets		1,130		606		478
Securities lending reinvested collateral assets		210		819		-
Miscellaneous purchases		-		-		6
Total cost of investments acquired		8,455		9,324		10,219
Net adjustment in contract loans		(59)		(33)		(44)
Net cash (used in) investing activities		(1,598)		(1,248)		(363)
Cash from financing and miscellaneous sources
Cash provided (applied):
Net deposits on deposit-type contracts		202		61		264
Dividends to Parent		(360)		(622)		(649)
Change in securities lending payable		312		808		112
Other, net		282		84		(254)
Net cash provided by (used in) financing and miscellaneous activities		436		331		(527)
Net increase (decrease) in cash, cash equivalents and short-term investments		(262)		43		54
Cash, cash equivalents and short-term investments at beginning of year		232		189		135
Cash, cash equivalents and short-term investments at end of year	$	(30)	$	232	$	189
Non-cash investing/financing activities, excluded from above:
Non-cash transfer from Mortgage Loans to Other Invested Assets	$	35	$	-	$	-
Non-cash transfer from Bonds to Stocks		-		15		-
Non-cash transfer from Mortgage Loans to Real Estate – Reserve at Park Ten		-		15		-
Non-cash transfer from Other Invested Assets to Mortgage Loans		-		10		-
Non-cash Fortitude Re settlement		-		3		12
Non-cash transfer from Other Invested Assets to Stocks		-		2		-
Non-cash AIG Global Real Estate transactions		-		-		178
Non-cash Pinebridge sale		-		-		59

See accompanying Notes to Statutory Financial Statements.

8

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS

1. NATURE OF OPERATIONS

The Variable Annuity Life Insurance Company (VALIC or the Company) is a wholly owned subsidiary of AGC Life Insurance Company (AGC Life or the Parent), which is an indirect, wholly owned subsidiary of American International Group, Inc. (AIG Parent). AIG Parent is a holding company, which through its subsidiaries provides a wide range of property casualty insurance, life insurance, retirement products and other financial services to commercial and individual customers in more than 80 countries and jurisdictions. The term “AIG Parent” means American International Group, Inc. and not any of its consolidated subsidiaries.

The Company is a stock life insurance company domiciled and licensed under the laws of the State of Texas and is subject to regulation by the Texas Department of Insurance (TDI). The Company is also subject to regulation by the states in which it is authorized to transact business. The Company is licensed in 50 states and the District of Columbia.

The Company is a leading provider of defined contribution retirement savings plans sponsored by education, not-for-profit and government organizations. Primary products include fixed and variable annuities, and mutual funds and plan administrative and compliance services. The Company utilizes career financial advisors and independent financial advisors to provide retirement plan participants with enrollment support and comprehensive financial planning services. No annual annuity deposits for any individual advisor in 2020 or 2019 represented more than 10 percent of total annuity deposits.

The operations of the Company are influenced by many factors, including general economic conditions, financial condition of AIG Parent, monetary and fiscal policies of the United States federal government and policies of state and other regulatory authorities. The level of sales of the Company’s insurance and 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 products. The Company is exposed to the risks normally associated with a portfolio of fixed income securities, which include interest rate, option, liquidity and credit risks. The Company controls its exposure to these risks by, among other things, closely monitoring and managing the duration and cash flows of its assets and liabilities, monitoring and limiting prepayments and extension risk in its portfolio, maintaining a large percentage of the Company’s portfolio in highly liquid securities, engaging in a disciplined process of underwriting, and reviewing and monitoring credit risk.

The Company is also exposed to market risk, policyholder behavior risk and mortality/longevity risk. Market volatility and other equity market conditions may affect the Company’s exposure to risks related to guaranteed death benefits and guaranteed living benefits on variable annuity products, and may reduce fee income on variable product assets held in separate accounts. Such guaranteed benefits are sensitive to equity and interest rate market conditions.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The financial statements of the Company are presented on the basis of accounting practices prescribed or permitted by the TDI. These accounting practices vary in certain respects from accounting principles generally accepted in the United States of America (U.S. GAAP), as described herein.

The TDI recognizes only statutory accounting practices (SAP) prescribed or permitted by the State of Texas for determining and reporting the financial condition and results of operations of an insurance company and for determining its solvency under the Texas Insurance Law. The National Association of Insurance Commissioners’ (NAIC) Accounting Practices and Procedures Manual (NAIC SAP) has been adopted as a component of prescribed or permitted practices by the State of Texas.

Effective December 31, 2017, VALIC received approval from the TDI to apply a permitted practice in its 2017 Annual Statement and subsequent reporting periods through September 30, 2019. The permitted practice allowed VALIC to use the criteria established in Actuarial Guideline 43, instead of the criteria established in Statement of Statutory Accounting Principles (“SSAP”) No. 86, “Accounting for Derivative Instruments and Hedging, Income Generation, and

9

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

Replication (Synthetic Asset) Transactions” to determine if a hedge was effective for certain interest rate swaps and swaptions that were used to hedge guaranteed minimum withdrawal benefits. Thus, specific interest rate swaps and swaptions that VALIC determined were effective hedges were reported at amortized cost, pursuant to the accounting guidance set forth in SSAP 86. Upon adoption, the effect of the original permitted practice was reported as a change in accounting principle, consistent with SSAP No. 3, “Accounting Changes and Corrections of Errors”.

Upon expiration of the above permitted practice for swaps and swaptions subsequent to September 30, 2019, VALIC applied the guidance in SSAP No. 86 and recognized this change in accounting principle as of the beginning of the year (i.e., January 1, 2019), as required by SSAP 3, which decreased the Company’s surplus by approximately $28 million at January 1, 2019. Subsequent to January 1, 2019, application of guidance in SSAP 86 to the Company’s hedging instruments (swaps and swaptions) increased VALIC’s surplus by approximately $60 million, primarily due to the recognition of unrealized gains.

At December 31, 2020, The Company had five non-conforming Credit Tenant Loans (CLTs) for $16 million that had been filed with the SVO and reported on Schedule D-1 and not on Schedule BA.

The Insurance Commissioner of State of Texas has the right to permit other specific practices that deviate from prescribed practices.

The following table presents a reconciliation of the Company’s net income and capital and surplus between NAIC SAP basis and the basis including practices prescribed or permitted by the State of Texas:

			December 31,
(in millions)	SSAP#		2020		2019		2018
NET INCOME
State basis			$	563	$	431	$	682
State permitted practices that increase (decrease) NAIC SAP:
Effective interest rate hedges - NII		86		-		-		-
Effective interest rate hedges - RG(L)				-		-		3
State prescribed practices that increase (decrease) NAIC SAP:
Depreciation of home office property		40R		-		-		-
Net income, NAIC SAP			$	563	$	431	$	685
SURPLUS
State basis			$	2,905	$	2,600	$	2,689
State permitted practices that increase (decrease) NAIC SAP:
Effective interest rate hedges		86		-		-		(35)
State prescribed practices that increase (decrease) NAIC SAP:
Depreciation of home office property		40R		-		-		-
Non-conforming CTLs		1		16		-		-
Non-conforming CTLs		1		(16)		-		-
Statutory capital and surplus, NAIC SAP			$	2,905	$	2,600	$	2,654

In the event VALIC had not employed any or all of these permitted and prescribed practices, VALIC’s risk-based capital (RBC) would not have triggered a regulatory event.

10

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

Use of Estimates

The preparation of financial statements in conformity with accounting practices prescribed or permitted by the TDI requires management to make estimates and assumptions that affect the reported amounts in the statutory financial statements and the accompanying notes. It also requires disclosure of contingent assets and liabilities at the date of the statutory financial statements and the reported amounts of revenue and expense during the period. The areas of significant judgments and estimates include the following:

• application of other-than-temporary impairments (OTTI);

• estimates with respect to income taxes, including recoverability of deferred tax assets (DTA);

• fair value measurements of certain financial assets; and

• policy reserves for life and annuity, including guarantees.

These accounting estimates require the use of assumptions about matters, some of which are highly uncertain at the time of estimation. To the extent actual experience differs from the assumptions used, the Company’s Statutory Statements of Admitted Assets, Liabilities and Capital and Surplus, Statutory Statements of Operations and Statutory Statements of Cash Flows could be materially affected.

Significant Accounting Policies

Bonds not backed by other loans are carried at amortized cost except for those with a NAIC designation of “6” or “6*”. Bonds with a NAIC 6 designation are carried at the lower of amortized cost or fair value, with unrealized losses charged directly to unassigned surplus. Bonds that have not been filed and have not received a designation in over one year from the NAIC’s Investment Analysis Office (IAO) receive a “6*” designation and are carried at zero, with the unrealized loss charged directly to unassigned surplus. Bonds filed with the IAO which receive a “6*” designation may carry a value greater than zero. Securities are assigned a NAIC 5* designation if the Company certifies that (1) the documentation necessary to permit a full credit analysis does not exist, (2) the issuer or obligor is current on all contracted interest and principal payments and (3) the Company has an actual expectation of ultimate repayment of all contracted interest and principal. Securities with NAIC 5* designations are deemed to possess the credit characteristics of securities assigned a NAIC 5 designation. The discount or premium on bonds is amortized using the effective yield method.

Loan-backed and structured securities (LBaSS) include residential mortgage-backed securities (RMBS), commercial mortgage-backed securities (CMBS), asset-backed securities (ABS), pass-thru securities, lease-backed securities, equipment trust certificates, loan-backed securities issued by special purpose corporations or trusts, and securities where there is not direct recourse to the issuer. LBaSS are carried on a basis consistent with that of bonds not backed by loans. Income recognition for LBaSS is determined using the effective yield method and estimated cash flows. Prepayment assumptions for single-class and multi-class mortgage-backed securities (MBS) and ABS were obtained from an outside vendor or internal estimates. The Company uses independent pricing services and broker quotes in determining the fair value of its LBaSS. The Company uses the retrospective adjustment method to account for the effect of unscheduled payments affecting high credit quality securities, while securities with less than high credit quality and securities for which the collection of all contractual cash flows is not probable are both accounted for using the prospective adjustment method.

Risk-based capital (RBC) charges for LBaSS are based on the final NAIC designations, which are determined with a multi-step approach. The initial designation is used to determine the carrying value of the security. The final NAIC designation is used for reporting and affects RBC. The final NAIC designation is determined in one of three ways. The final NAIC designation for most RMBS and CMBS is determined by financial modeling conducted by BlackRock. RMBS and CMBS that are not financially modeled, primarily due to a lack of publicly available information and most remaining LBaSS are subject to a modified designation based on an NAIC matrix and the Company’s statement value for the security. For credit tenant loans, equipment trust certificates, any corporate-like securities rated by the NAIC’s IAO, interest only securities, and those securities with an original NAIC designation of 5, 5*, 6 or 6*, the final NAIC designation is based on the IAO or Credit Rating Provider rating and is not subject to a modified designation or financial modeling.

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THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

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Short sale is the sale of a security which is not owned by the company at the time of sale. Short sales are normally settled by the delivery of a security borrowed by or on behalf of seller. A short sale as defined in Statement of Statutory Accounting Principle (SSAP) No. 103 “Transfers and Servicing of Financial Assets and Extinguishments of Liabilities” is reported as a contra-asset (negative asset) initially reported at fair value, with changes in fair value recognized as unrealized gains and losses.

Preferred stocks with NAIC designations of “1” through “3” are carried at amortized cost. All other preferred stocks are stated at the lower of cost, amortized cost or fair value, with unrealized capital losses charged directly to unassigned surplus. Provisions made for impairment are recorded as realized capital losses when declines in fair value are determined to be other than temporary.

Unaffiliated common stocks are carried at fair value, with unrealized capital gains and losses credited or charged directly to unassigned surplus. Provisions made for impairment are recorded as realized capital losses when declines in fair value are determined to be other than temporary. For Federal Home Loan Bank (FHLB) capital stock, which is only redeemable at par, the fair value shall be presumed to be par, unless considered other-than-temporarily impaired.

The Company has no investments in insurance subsidiary, controlled, and affiliated (SCA) entities. Investments in non-insurance SCA entities are recorded based on the equity of the investee per audited financial statements prepared pursuant to U.S. GAAP, which is adjusted to a statutory basis of accounting, if applicable. All investments in non-insurance SCA entities for which either audited U.S. GAAP financial statements or audited foreign GAAP basis financial statements that include a footnote reconciling net income and equity on a foreign GAAP basis to U.S. GAAP are not available, are non-admitted as assets. Undistributed equity in earnings of affiliates is included in unassigned surplus as a component of unrealized capital gains or losses. Dividends received from such affiliates are recorded as investment income when declared.

Mortgage and mezzanine real estate loans are carried at unpaid principal balances less allowances for credit losses and plus or minus adjustments for the accretion or amortization of discount or premium. Interest income on performing loans is accrued as earned.

Mortgage loans are considered impaired when collection of all amounts due under contractual terms is not probable. Impairment is measured using either i) the present value of expected future cash flows discounted at the loan’s effective interest rate, ii) the loan’s observable market price, if available, or iii) the fair value of the collateral if the loan is collateral dependent. An allowance is typically established for the difference between the impaired value of the loan and its current carrying amount. Additional allowance is established for incurred but not specifically identified impairments, based on statistical models primarily driven by past due status, debt service coverage, loan-to-value ratio, property occupancy, profile of the borrower and of the major property tenants, and economic trends in the market where the property is located. When all or a portion of a loan is deemed uncollectible, the uncollectible portion of the carrying amount of the loan is charged off against the allowance.

Real estate consists of properties occupied by the Company, properties held for the production of income and properties held for sale. Properties occupied by the Company and held for the production of income are carried at depreciated cost, less encumbrances, unless events or circumstances indicate the carrying amount of the asset (amount prior to reduction for encumbrances) may not be recoverable. Properties held for sale are carried at the lower of its depreciated cost or fair value less estimated costs to sell the property and net of encumbrances. Real estate obtained through foreclosure, in satisfaction of a loan, is recorded at the time of foreclosure at the lower of fair value as determined by acceptable appraisal methodologies, or the carrying amount of the related loan. Land is reported at cost.

Cash, cash equivalents and short-term investments include cash on hand and amounts due from banks and highly liquid debt instruments that have original maturities within one year of date of purchase and are carried at amortized cost. Short-term investments include interest-bearing money market funds, investment pools and other investments with original maturities within one year from the date of purchase.

Contract loans are carried at unpaid balances, which include unpaid principal plus accrued interest, including 90 days or more past due. All loan amounts in excess of the contract cash surrender value are considered non-admitted assets.

Derivative instruments used in hedging transactions that meet the criteria of a highly effective hedge are reported in a manner consistent with the hedged asset or liability (hedge accounting). Changes in statement value or cash flow of

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THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

derivatives that qualify for hedge accounting are recorded consistent with the changes in the statement value or cash flow of the hedged asset or liability. Derivative instruments used in hedging transactions that do not meet or no longer meet the criteria of an effective hedge (ineffective hedges) are accounted for at fair value and the changes in fair value are recorded as unrealized gains or losses.

Hedge accounting was not used for any derivative instruments in 2020 or 2019.

Other invested assets principally consist of investments in limited partnerships and limited liability companies. Investments in these assets, except for joint ventures, partnerships and limited liability companies with a minor ownership interest, are reported using the equity method. Under SAP, such investments are generally reported based on audited U.S. GAAP equity of the investee, with subsequent adjustment to a statutory basis of accounting, if applicable.

Joint ventures, partnerships and limited liability companies in which the Company has a minor ownership interest (i.e., less than 10 percent) or lacks control, are generally recorded based on the underlying audited U.S. GAAP equity of the investee, with some prescribed exceptions. SAP allows the use of (a) the U.S. GAAP equity as set forth in the footnote reconciliation of foreign GAAP equity and income to U.S. GAAP within audited foreign GAAP financial statements or (b) the International Financial Reporting Standards (IFRS) basis equity in audited IFRS financial statements as an acceptable basis for the valuation of minor/non-controlled investments. The audited U.S. tax basis equity may also be used in certain circumstances.

All other investments in entities for which audited U.S. GAAP financial statements, or another acceptable audited basis of accounting as described above were not available have been non-admitted as assets. Undistributed accumulated earnings of such entities are included in unassigned surplus as a component of unrealized capital gains or losses. Distributions received that are not in excess of the undistributed accumulated earnings are recognized as investment income. Impairments that are determined to be other than temporary are recognized as realized capital losses.

Securities lending and repurchase agreements: The Company has a securities lending program, which was approved by its Board of Directors and lends securities from its investment portfolio to supplement liquidity or for other uses as deemed appropriate by management. Under the program, securities are lent to financial institutions, and in return the Company receives cash as collateral equal to 102 percent of the fair value of the loaned securities. The cash collateral received is invested in short-term investments that may be sold or repledged or partially used for short-term liquidity purposes based on conservative cash flow forecasts. Securities lent by the Company under these transactions may be sold or repledged by the counterparties. The liability for cash collateral received is reported in payable for securities lending in the Statutory Statements of Admitted Assets, Liabilities and Capital and Surplus. The Company monitors the fair value of securities loaned and obtains additional collateral as necessary. At the termination of the transactions, the Company and its counterparties are obligated to return the collateral provided and the securities lent, respectively. These transactions are treated as secured financing arrangements.

In addition, the Company is a party to secured financing transactions involving securities sold under agreements to repurchase (repurchase agreements), in which the Company transfers securities in exchange for cash, with an agreement by the Company to repurchase the same or substantially similar securities on agreed upon dates specified in the agreements.

Investment income due and accrued is non-admitted from investment income for bonds and other invested assets when collection of interest is overdue by more than 90 days, or is uncertain, and for mortgage loans when loans are foreclosed, or delinquent in payment for greater than 90 days, or when collection of interest is uncertain.

Net realized capital gains and losses, which are determined by using the specific identification method, are reflected in income net of applicable federal income taxes and transfers to the interest maintenance reserve.

The Company regularly evaluates its investments for other-than-temporary impairment (OTTI) in value. The determination that a security has incurred an OTTI in value and the amount of any loss recognition requires the judgment of the Company’s management and a continual review of its investments.

For bonds, other than LBaSS, an OTTI shall be considered to have occurred if it is probable that the Company will not be able to collect all amounts due under the contractual terms in effect at the acquisition date of the debt security. If it is

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THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

determined an OTTI has occurred, the cost basis of bonds are written down to fair value and the amount of the write-down is recognized as a realized capital loss.

For LBaSS, a non-interest related OTTI resulting from a decline in value due to fundamental credit problems of the issuer is recognized when the projected discounted cash flows for a particular security are less than its amortized cost. When a non-interest related OTTI occurs, the LBaSS is written down to the present value of future cash flows expected to be collected. An OTTI is also deemed to have occurred if the Company intends to sell the LBaSS or does not have the intent and ability to retain the LBaSS until recovery. If the decline is interest-related, the LBaSS is written down to fair value.

In periods subsequent to the recognition of an OTTI loss, the Company generally accretes the difference between the new cost basis and the future cash flows expected to be collected, if applicable, as interest income over the remaining life of the security based on the amount and timing of estimated future cash flows.

Non-admitted assets are excluded from admitted assets and the change in the aggregate amount of such assets is reflected as a separate component of unassigned surplus. Non-admitted assets include all assets specifically designated as non-admitted and assets not designated as admitted, such as a negative IMR, a certain portion of DTAs, prepaid expenses, electronic data processing (EDP) equipment assets, agents’ balances or other receivables over 90 days. Non-admitted assets amounted to $767 million and $644 million at December 31, 2020 and 2019, respectively.

Interest maintenance reserve (IMR) is calculated based on methods prescribed by the NAIC and was established to prevent large fluctuations in interest-related investment gains and losses resulting from sales (net of taxes) and interest-related OTTI (net of taxes). An OTTI occurs when the Company, at the reporting date, has the intent to sell an investment or does not have the intent and ability to hold the security before recovery of the cost of the investment. For LBaSS, if the Company recognizes an interest-related OTTI, the non-interest-related OTTI is recorded to the asset valuation reserve, and the interest-related portion to IMR. Such gains and losses are deferred into the IMR and amortized into income using the grouped method over the remaining contractual lives of the securities sold.

Asset valuation reserve (AVR) is used to stabilize surplus from fluctuations in the market value of bonds, stocks, mortgage loans, real estate, limited partnerships and other investments. Changes in the AVR are recorded as direct increases or decreases in surplus.

Separate account assets and liabilities generally represent funds for which the contract holder, rather than the Company, bears the investment risk. Separate account contract holders have no claim against the assets of the general account of the Company, except for certain guaranteed products. Separate account assets are generally reported at fair value. In addition, certain products with fixed guarantees and market-value-adjusted (MVA) fixed annuity contracts in which the assets are generally carried at amortized cost are required by certain states to be carried in a separate account. The operations of the separate accounts are excluded from the Statutory Statements of Operations and Statutory Statements of Cash Flows of the Company. The Company receives fees for assuming mortality and certain expense risks. Such fees are included in separate account fees in the Statutory Statements of Operations. Reserves for variable annuity contracts are provided in accordance with the Variable Annuity Commissioners’ Annuity Reserve Valuation Method (VACARVM) under subsection 21 of the Valuation Manual (“VM-21”) for 2020, and under Actuarial Guideline 43 (AG 43) for prior years.

Policy reserves are established according to different methods.

Life and annuity reserves are developed by actuarial methods and are generally determined based on published tables using specified interest rates, mortality or morbidity assumptions, and valuation methods prescribed or permitted by statutes that will provide, in the aggregate, reserves that are greater than or equal to the minimum or guaranteed policy cash values or the amounts required by the TDI.

Principle-based reserving (“PBR”) is designed to tailor the reserving process to more closely reflect the risks of specific products, rather than the previous prescribed approach. Reserve requirements for AIG’s life insurance policies issued after January 1, 2020 are contained in subsection 20 of the Valuation Manual (“VM-20”), “Requirements for Principle-Based Reserves for Life Products”, policies issued prior to that date are reserved for using the Commissioners Reserve

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THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

Valuation Method (CRVM). Under VM-20, these reserves are generally more sensitive to changes in actuarial assumptions.

The Company performs annual cash flow testing in accordance with the Actuarial Opinion and Memorandum Regulation to ensure adequacy of the reserves. $122 million in cash flow testing reserves were held at December 31, 2020.

A majority of the Company’s variable annuity products are issued with a guaranteed minimum death benefit (GMDB), which provides that, upon the death of a contract holder, the contract holder’s beneficiary will receive the greater of: (1) the contract holder’s account value or (2) a GMDB, which varies by product. Depending on the product, the GMDB may equal the principal invested, adjusted for withdrawals; or the principal invested, adjusted for withdrawals, accumulated at up to 3 percent per annum (subject to certain caps). Death benefits on GMDB policies reduce on a proportional basis when a partial withdrawal occurs. This applies to all contracts issued in states where the proportional GMDB is approved except where precluded by contract for a very limited number of groups. Prior to December 2003, the Company sold variable annuity contracts containing a GMDB where the death benefits reduce on a dollar-for-dollar basis when a partial withdrawal occurs.

The guaranteed minimum withdrawal benefit (GMWB) is a feature the Company offers on certain variable annuity products. If available and elected by the contract holder at time of issuance and depending on the provisions of the feature elected, this feature provides a guaranteed annual stream of income payments for life or other specified period, regardless of market performance. The amount of the guaranteed withdrawal stream is determined from a guaranteed benefit base amount that is dependent upon the specific feature elected. The Company bears the risk that protracted under-performance of the financial markets and/or greater than expected longevity could result in GMWB benefits being higher than the underlying contract holder account balances and that the fees collected under the contract are insufficient to cover the costs of the benefits to be provided.

In addition, the Company is a reinsurer for the guaranteed minimum income benefit (GMIB), GMWB and GMDB on certain variable annuities issued in Japan by MetLife Insurance K.K. (MetLife in Japan). The GMIB is an optional feature that guarantees that the income benefit upon annuitization will not be less than the guaranteed income benefit even if the accumulation value of the contract falls to zero. New business under these reinsurance agreements was no longer accepted after March 31, 2009.

Liabilities for deposit-type contracts, which include supplementary contracts without life contingencies and annuities certain, are based on the discounting of future payments at an annual statutory effective rate. Tabular interest on other funds not involving life contingencies is based on the interest rate at which the liability accrues.

Premiums and annuity considerations and related expenses are recognized over different periods. Life premiums are recognized as income over the premium paying periods of the related policies. Annuity considerations are recognized as revenue when received. Premiums for deposit-type products are credited directly to the respective reserves and are not recorded in the Statutory Statement of Operations. Acquisition costs such as commissions and other expenses related to the production of new business are charged to the Statutory Statements of Operations as incurred.

Reinsurance premiums and benefits paid or provided are accounted for on a basis consistent with those used in accounting for the original policies issued and the terms of the reinsurance contracts.

Annuity and deposit-type contract surrender benefits are reported on a cash basis, and include annuity benefits, payments under supplementary contracts with life contingencies, surrenders and withdrawals. Withdrawals from deposit-type contracts directly reduce the liability for deposit-type contracts and are not reported in the Statutory Statements of Operations.

General insurance expenses include allocated expenses pursuant to a cost allocation agreement. The Company purchases administrative, accounting, marketing and data processing services from AIG Parent or its subsidiaries and is charged based on estimated levels of usage, transactions or time incurred in providing the respective services. The allocation of costs for investment management services purchased from AIG Parent or its subsidiaries is based on the level of assets under management.

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THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

Federal income tax expense (benefit) is recognized and computed on a separate company basis pursuant to a tax sharing agreement with AIG Parent, because the Company is included in the consolidated federal income tax return of its ultimate parent, AIG Parent. To the extent that benefits for net operating losses, foreign tax credits or net capital losses are utilized on a consolidated basis, the Company would recognize tax benefits based upon the amount of those deductions and credits utilized in the consolidated federal income tax return. The federal income tax expense or benefit reflected in the Statutory Statements of Operations represents income taxes provided on income that is currently taxable, but excludes tax on the net realized capital gains or losses.

Income taxes on capital gains or losses reflect differences in the recognition of capital gains or losses on a statutory accounting basis versus a tax accounting basis. The most significant of such differences involve impairments of investments, which are recorded as realized losses in the Statutory Statements of Operations but are not recognized for tax purposes, and the deferral of net capital gains and losses into the IMR for statutory income but not for taxable income. Capital gains and losses on certain related-party transactions are recognized for statutory financial reporting purposes but are deferred for income tax reporting purposes until the security is sold to an outside party.

A deferred tax asset (DTA) or deferred tax liability (DTL) is included in the Statutory Statements of Admitted Assets, Liabilities and Capital and Surplus, which reflects the expected future tax consequences of temporary differences between the statement values of assets and liabilities for statutory financial reporting purposes and the amounts used for income tax reporting purposes. The change in the net DTA or DTL is reflected in a separate component of unassigned surplus. Net DTA are limited in their admissibility.

Accounting Changes

Actuarial Change / Reserve PBR (VM-20 and VM-21)

Principle-based reserving (“PBR”) is designed to tailor the reserving process to more closely reflect the risks of specific products, rather than the previous prescribed approach. Reserve requirements for AIG’s life insurance policies issued after January 1, 2020 are contained in subsection 20 of the Valuation Manual (“VM-20”), “Requirements for Principle-Based Reserves for Life Products”, policies issued prior to that date are reserved for using the Commissioners Reserve Valuation Method (CRVM). Under VM-20, these reserves are generally more sensitive to changes in actuarial assumptions.

PBR is designed to tailor the reserving process to more closely reflect the risks of specific products, rather than the factor-based approach typically employed historically. Variable Annuity (“VA”) reserving requirements are contained in subsection 21 of the Valuation Manual (“VM-21”), “Requirements for Principle-Based Reserves for Variable Annuities”, and replace the previous Actuarial Guideline XLVIII (“AG 43”) requirements, which also employed a principle-based approach. The Company fully applied VM-21 requirements to reserving for both new and existing VA contracts effective January 1, 2020. Under VM-21, these reserves are generally more sensitive to changes in interest rates. The impact of the implementation was $134 million.

There were no other new accounting standards that were effective during the periods covered by this statement that had a material impact on the operations of the Company.

Correction of Errors

SAP requires that corrections of errors related to prior periods be reported as adjustments to unassigned surplus to the extent that they are not material to prior periods.

In 2020, one out-of-period error was identified and corrected, which decreased reserves relating to fixed annuities due to a rate update/survivorship formula correction and increased surplus by $8 million.

In 2019, one out-of-period error was identified and corrected, which increased reserves relating to fixed indexed annuities due to an incorrect application of incident rates and decreased unassigned surplus by $5 million.

There was no correction of errors related to prior period in 2018.

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THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

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Differences in Statutory Accounting and U.S. GAAP Accounting

The accompanying statutory financial statements have been prepared in accordance with accounting practices prescribed or permitted by the TDI. These accounting practices vary in certain respects from U.S. GAAP. The primary differences between NAIC SAP and U.S. GAAP are as follows.

The objectives of U.S. GAAP differ from the objectives of SAP. U.S. GAAP is designed to measure the entity as a going concern and to produce general purpose financial statements to meet the varying needs of the different users of financial statements. SAP is designed to address the accounting requirements of regulators, who are the primary users of statutory-basis financial statements and whose primary objective is to measure solvency. As a result, U.S. GAAP stresses measurement of earnings and financial condition of a business from period to period, while SAP stresses measurement of the ability of the insurer to pay claims in the future.

Investments. Under SAP, investments in bonds and preferred stocks are generally reported at amortized cost. However, if bonds are designated category “6” and preferred stocks are designated categories “4 – 6” by the NAIC, these investments are reported at the lesser of amortized cost or fair value with a credit or charge to unrealized investment gains or losses. For U.S. GAAP, such fixed-maturity investments are designated at purchase as held-to-maturity, trading, or available-for-sale. Held-to-maturity fixed-maturity investments are reported at amortized cost, and the remaining fixed-maturity investments are reported at fair value, with unrealized capital gains and losses reported in operations for those designated as trading and as a component of other comprehensive income for those designated as available-for-sale.

Under SAP, all single- and multi-class MBS or other ABS (e.g., Collateralized Mortgage Obligations (CMO) are adjusted for the effects of changes in prepayment assumptions on the related accretion of discount or amortization of premium with respect to such securities using either the retrospective or prospective method. For LBaSS subsequent to July 1, 2009, if it is determined that a decline in fair value is other than temporary the cost basis of the security is written down to the discounted estimated future cash flows. Bonds, other than LBaSS, that are other-than-temporarily impaired are written down to fair value. For U.S. GAAP purposes, all securities, purchased or retained, that represent beneficial interests in securitized assets (e.g., CMO, MBS and ABS securities), other than high credit quality securities, would be adjusted using the prospective method when there is a change in estimated future cash flows. If high-credit quality securities must be adjusted, the retrospective method would be used. For all bonds, if it is determined that a decline in fair value is other-than-temporary, the cost basis of the security would be written down to the discounted estimated future cash flows, while the non-credit portion of the impairment would be recorded as an unrealized loss in other comprehensive income.

Under SAP, when it is probable that the insurer will be unable to collect all amounts due according to the contractual terms of the mortgage agreement, valuation allowances are established for temporarily-impaired mortgage loans based on the difference between the unpaid loan balance and the estimated fair value of the underlying real estate, less estimated costs to obtain and sell. The initial valuation allowance and subsequent changes in the allowance for mortgage loans are charged or credited directly to unassigned surplus rather than as a component of earnings as would be required under U.S. GAAP. If the impairment is other-than-temporary, a direct write down is recognized as a realized loss, and a new cost basis is established. Under U.S. GAAP, effective January 1, 2020, the Company adopted the new accounting standard for current expected credit losses (CECL). This standard requires an allowance for credit losses based on the expectation of lifetime credit losses. Prior to the adoption of CECL, valuation allowances would be established when the insurer determines it is probable that it will be unable to collect principal and interest due according to the contractual terms of the loan agreement. Such U.S. GAAP allowances would be based on the difference between the unpaid loan balance and the present value of expected future cash flows discounted at the loan’s original effective interest rate or, if foreclosure is probable, on the estimated fair value of the underlying real estate.

Under SAP, joint ventures, partnerships and limited liability companies in which the insurer has a minor ownership interest (i.e., less than 10 percent) or lacks control are generally recorded based on the underlying audited U.S. GAAP basis equity of the investee. Under U.S. GAAP, joint ventures, partnerships and limited liability companies in which the insurer has a significant ownership interest or is deemed to have control are accounted for under the equity method, where that is not the case, such investments are carried at fair value with changes in fair value recognized in earnings in 2018 for equity securities previously designated as available-for-sale and through net income for equity securities

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THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

measured at fair value at the Company’s election. Prior to 2018, equity securities designated as available-for-sale were carried at fair value with changes in fair value recorded through other comprehensive income.

Real Estate. Under SAP, investments in real estate are reported net of related obligations; under U.S. GAAP, investments in real estate are reported on a gross basis. Under SAP, real estate owned and occupied by the insurer is included in investments; under U.S. GAAP, real estate owned and occupied by the insurer is reported as an operating asset, and operating income and expenses include rent for the insurer’s occupancy of those properties.

Derivatives. Under SAP, derivative instruments used in hedging transactions that do not meet or no longer meet the criteria of an effective hedge are accounted for at fair value with the changes in fair value recorded as unrealized capital gains or losses. Under U.S. GAAP, such derivative instruments are accounted for at fair value with the changes in fair value recorded as realized capital gains or losses. Under U.S. GAAP, fair value measurement for free standing derivatives incorporate either counterparty’s credit risk for derivative assets or the insurer’s credit risk for derivative liabilities by determining the explicit cost to protect against credit exposure. This credit exposure evaluation takes into consideration observable credit default swap rates. Under SAP, non-performance risk (own credit-risk) is not reflected in the fair value calculations for derivative liabilities. Under U.S. GAAP, index life insurance features in certain variable universal life contracts and certain guaranteed features of variable annuities are bifurcated and accounted for separately as embedded policy derivatives. Under SAP, embedded derivatives are not bifurcated or accounted for separately from the host contract.

Interest Maintenance Reserve. Under SAP, the insurer is required to maintain an IMR. IMR is calculated based on methods prescribed by the NAIC and was established to prevent large fluctuations in interest-related capital gains and losses realized through sales or OTTI. IMR applies to all types of fixed maturity investments, including bonds, preferred stocks, MBS, ABS and mortgage loans. After-tax capital gains or losses realized upon the sale or impairment of such investments resulting from changes in the overall level of interest rates are excluded from current period net income and transferred to the IMR. The transferred after-tax net realized capital gains or losses are then amortized into income over the remaining period to maturity of the divested asset. Realized capital gains and losses are reported net of tax and transfers to the IMR, after net gain from operations. Any negative IMR balance is treated as non-admitted asset. This reserve is not required under U.S. GAAP and pre-tax realized capital gains and losses are reported as component of total revenues, with related taxes included in taxes from operations.

Asset Valuation Reserve. Under SAP, the insurer is required to maintain an AVR, which is computed in accordance with a prescribed formula and represents a provision for possible fluctuations in the value of bonds, equity securities, mortgage loans, real estate, and other invested assets. The level of AVR is based on both the type of investment and its credit rating. Under SAP, AVR is included in total adjusted capital for RBC analysis purposes. Changes to AVR are charged or credited directly to unassigned surplus. This reserve is not required under U.S. GAAP.

Subsidiaries. Under SAP, investments in insurance subsidiaries are recorded based upon the underlying audited statutory equity of a subsidiary with all undistributed earnings or losses shown as an unrealized capital gain or loss in unassigned surplus. Dividends received by the parent company from its subsidiaries are recorded through net investment income. Under U.S. GAAP, subsidiaries’ financial statements are combined with the parent company’s financial statements through consolidation. All intercompany balances and transactions are eliminated under U.S. GAAP. Dividends received by the parent company from its subsidiaries reduce the parent company’s investment in the subsidiaries.

Policy Acquisition Costs and Sales Inducements. Under SAP, policy acquisition costs are expensed when incurred. Under U.S. GAAP, acquisition costs that are incremental and directly related to the successful acquisition of new and renewal of existing insurance and investment-type contracts, are deferred and amortized, generally in proportion to the present value of expected future gross profit margins. For all other insurance contracts, to the extent recoverable from future policy revenues, deferred policy acquisition costs (DAC) are amortized, with interest, over the premium-paying period of the related contracts, using assumptions that are consistent with those used in computing policy benefit reserves. Under SAP, sales inducements are expensed when incurred. Under U.S. GAAP, certain sales inducements on interest-sensitive life insurance contracts and deferred annuities are deferred and amortized over the life of the contract using the same methodology and assumptions used to amortize DAC.

Deferred Premiums. Under SAP, when deferred premiums exist, statutory deferred premiums are held as a statutory asset, while under U.S. GAAP, deferred premiums are held as a contra-liability in the future policy benefits liability.

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THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

Non-admitted Assets. Certain assets designated as “non-admitted,” principally any negative IMR, agents’ balances or unsecured loans or advances to agents, certain DTAs, furniture, equipment and computer software, receivables over 90 days and prepaid expenses, as well as other assets not specifically identified as admitted assets within the NAIC SAP, are excluded from the Statutory Statements of Admitted Assets, Liabilities, Capital and Surplus and are charged directly to unassigned surplus. Under U.S. GAAP, such assets are included in the balance sheet.

Universal Life and Annuity Policies. Under SAP, revenues for universal life and annuity policies containing mortality or morbidity risk considerations consist of the entire premium received, and benefits incurred consist of the total of death benefits paid and the change in policy reserves. Payments received on contracts that do not incorporate any mortality or morbidity risk considerations (deposit-type contracts) are credited directly to an appropriate liability for deposit-type contract account without recognizing premium income. Interest credited to deposit-type contracts is recorded as an expense in the Statutory Statements of Operations as incurred. Payments that represent a return of policyholder balances are recorded as a direct reduction of the liability for deposit-type contracts, rather than a benefit expense. Under U.S. GAAP, premiums received in excess of policy charges are not recognized as premium revenue, and benefits represent the excess of benefits paid over the policy account value and interest credited to the account values.

Benefit Reserves. Under SAP, loading is the difference between the gross and valuation net premium. Valuation net premium is calculated using valuation assumptions which are different for statutory and U.S. GAAP. Statutory valuation assumptions are set by the insurer within limits as defined by statutory law. U.S. GAAP valuation assumptions are set by the insurer based on management’s estimates and judgment.

Policyholder funds not involving life contingencies use different valuation assumptions for SAP and U.S. GAAP. Under SAP, prescribed rates of interest related to payout annuities are used in the discounting of expected benefit payments, while under U.S. GAAP, the insurer’s best estimates of interest rates are used.

Under SAP, the Commissioners’ Reserve Valuation Method is used for the majority of individual insurance reserves. Under U.S. GAAP, individual insurance policyholder liabilities for traditional forms of insurance are generally established using the net level premium method. For interest-sensitive policies, a liability for policyholder account balances is established under U.S. GAAP based on the contract value that has accrued to the benefit of the policyholder. Policy assumptions used in the estimation of policyholder liabilities are generally prescribed under SAP. Under U.S. GAAP, policy assumptions are based upon best estimates as of the date the policy was issued, with provisions for the risk of adverse deviation.

Under SAP, the CARVM is used for the majority of individual deferred annuity reserves, while under U.S. GAAP, individual deferred annuity policyholder liabilities are generally equal to the contract value that has accrued to the benefit of the policyholder, together with liabilities for certain contractual guarantees, if applicable.

Under SAP, reserves for fixed rate deposit-type contracts are based upon their accumulated values, discounted at an annual statutory effective rate, while under U.S. GAAP, reserves for deposit-type contracts are recorded at their accumulated values.

Reinsurance. Under SAP, policy and contract liabilities ceded to reinsurers are reported as reductions of the related reserves rather than as assets as required under U.S. GAAP. Under SAP, a liability for reinsurance balances has been provided for unsecured policy reserves, unearned premiums, and unpaid losses ceded to reinsurers not licensed to assume such business. Changes to these amounts are credited or charged directly to unassigned surplus. Under U.S. GAAP, an allowance for amounts deemed uncollectible would be established through a charge to earnings. Under SAP, the criteria used to demonstrate risk transfer varies from U.S. GAAP, which may result in transactions that are accounted for as reinsurance for SAP and deposit accounting for U.S. GAAP. Under SAP, the reserve credit permitted for unauthorized reinsurers is less than or equal to the amount of letter of credit or funds held in trust by the reinsurer. Under U.S. GAAP, assumed and ceded reinsurance is reflected on a gross basis in the balance sheet, and certain commissions allowed by reinsurers on ceded business are deferred and amortized on a basis consistent with DAC.

Policyholder Dividend Liabilities. Under SAP, policyholder dividends are recognized when declared. Under U.S. GAAP, policyholder dividends are recognized over the term of the related policies.

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THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

Separate Accounts. Under SAP, separate account surplus created through the use of the CRVM, the VACARVM or other reserving methods is reported by the general account as an unsettled transfer from the separate account. The net change on such transfers is included as a part of the net gain from operations in the general account. This is not required under U.S. GAAP.

Separate accounts include certain non-unitized assets which primarily represent MVA fixed options of variable annuity contracts issued in various states. Under SAP, these contracts are accounted for in the separate account financial statements, while under U.S. GAAP, they are accounted for in the general account.

Deferred Income Taxes. Under SAP, statutory DTAs that are more likely than not to be realized are limited to: 1) the amount of federal income taxes paid in prior years that can be recovered through loss carrybacks for existing temporary differences that reverse by the end of the subsequent calendar year, plus 2) the lesser of the remaining gross DTA expected to be realized within a maximum three years of the reporting date or a maximum 15 percent of the capital and surplus excluding any net DTA, EDP equipment and operating software and any net positive goodwill, plus 3) the amount of the remaining gross DTA that can be offset against existing gross DTLs. The remaining DTAs are non-admitted. Deferred taxes do not include amounts for state taxes. Under U.S. GAAP, state taxes are included in the computation of deferred taxes, all DTAs are recorded and a valuation allowance is established if it is more likely than not that some portion of the DTA will not be realized. Under SAP, income tax expense is based upon taxes currently payable. Changes in deferred taxes are reported in surplus and subject to admissibility limits. Under U.S. GAAP, changes in deferred taxes are recorded in income tax expense.

Offsetting of Assets and Liabilities. Under SAP, offsetting of assets and liabilities is not permitted when there are master netting agreements unless four requirements for valid right of offset are met. The requirements include 1) each of the two parties owes the other determinable amounts, 2) the reporting party has the right to set off the amount owed with the amount owed by the other party, 3) the reporting party intends to set off, and 4) the right of setoff is enforceable. The prohibition against offsetting extends to derivatives and collateral posted against derivative positions, repurchase and reverse repurchase agreements, and securities borrowing and lending transactions. Under U.S. GAAP, these amounts under master netting arrangements may be offset and presented on a net basis.

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THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

3. INVESTMENTS

Bonds and Equity Securities

The following table presents the statement value, gross unrealized gain, gross unrealized loss and the estimated fair value of bonds and equity securities by major security type:

(in millions)	Statement Value		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
December 31, 2020
Bonds:
U.S. government obligations	$	652	$	123	$	-		$	775
All other governments		1,061		155		(2	)		1,214
States, territories and possessions		315		56		-			371
Political subdivisions of states, territories and possessions		188		45		-			233
Special revenue		3,656		461		(2	)		4,115
Industrial and miscellaneous		30,634		3,401		(144	)		33,891
Hybrid securities		120		18		-			138
Bank loans		995		8		(29	)		974
Total bonds		37,621		4,267		(177	)		41,711
Preferred stock		3		-		-			3
Common stock*		131		-		-			131
Total equity securities		134		-		-			134
Total	$	37,755	$	4,267	$	(177	)	$	41,845
December 31, 2019
Bonds:
U.S. government obligations	$	678	$	82	$	(2	)	$	758
All other governments		1,102		100		(6	)		1,196
States, territories and possessions		315		26		(1	)		340
Political subdivisions of states, territories and possessions		191		28		-			219
Special revenue		3,798		226		(8	)		4,016
Industrial and miscellaneous		28,685		1,932		(86	)		30,531
Hybrid securities		136		13		-			149
Bank loans		1,148		2		(19	)		1,131
Total bonds		36,053		2,409		(122	)		38,340
Preferred stock		42		16		-			58
Common stock*		116		-		-			116
Total equity securities		158		16		-			174
Total	$	36,211	$	2,425	$	(122	)	$	38,514

* At December 31, 2020, the Company held $115 million of investments in affiliates. At December 31, 2019, the Company had $97 million of investments in the common stock of affiliates.

Bonds and Equity Securities in Loss Positions

The following table summarizes the fair value and gross unrealized losses (where fair value is less than amortized cost) on bonds and equity securities, including amounts on NAIC 6 and 6* bonds, aggregated by

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THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

major investment category and length of time that individual securities have been in a continuous unrealized loss position:

	Less than 12 Months					12 Months or More					Total
(in millions)	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
December 31, 2020
Bonds:
U.S. government obligations	$	-	$	-		$	-	$	-		$	-	$	-
All other governments		23		(1	)		12		(1	)		35		(2	)
States, territories and possessions		28		-			-		-			28		-
Political subdivisions of states, territories and possessions		3		-			-		-			3		-
Special revenue		107		(2	)		-		-			107		(2	)
Industrial and miscellaneous		2,314		(85	)		628		(59	)		2,942		(144	)
Hybrid securities		1		-			1		-			2		-
Bank loans		672		(29	)		-		-			672		(29	)
Total bonds		3,148		(117	)		641		(60	)		3,789		(177	)
Preferred stock		-		-			-		-			-		-
Common stock		-		-			-		-			-		-
Total equity securities		-		-			-		-			-		-
Total	$	3,148	$	(117	)	$	641	$	(60	)	$	3,789	$	(177	)
December 31, 2019
Bonds:
U.S. government obligations	$	103	$	(2	)	$	-	$	-		$	103	$	(2	)
All other governments		21		-			27		(5	)		48		(5	)
States, territories and possessions		33		(1	)		-		-			33		(1	)
Political subdivisions of states, territories and possessions		5		-			-		-			5		-
Special revenue		346		(7	)		137		(1	)		483		(8	)
Industrial and miscellaneous		1,842		(54	)		792		(34	)		2,634		(88	)
Hybrid securities		7		-			1		-			8		-
Bank loans		877		(19	)		-		-			877		(19	)
Total bonds		3,234		(83	)		957		(40	)		4,191		(123	)
Preferred stock		-		-			-		-			-		-
Common stock		-		-			-		-			-		-
Total equity securities		-		-			-		-			-		-
Total	$	3,234	$	(83	)	$	957	$	(40	)	$	4,191	$	(123	)

As of December 31, 2020 and 2019, the number of bonds and equity securities in an unrealized loss position was 532 and 660, respectively. Bonds comprised 532 of the total of which 105 were in a continuous loss position greater than 12 months at December 31, 2020. Bonds comprised 656 of the total of which 157 were in a continuous loss position greater than 12 months at December 31, 2019.

The Company did not recognize the unrealized losses in earnings on these fixed maturity securities at December 31, 2020 and 2019, respectively, because the Company neither intends to sell the securities nor does the Company believe that it is more likely than not that the Company will be required to sell these securities before recovery of their amortized cost basis. For fixed maturity securities with significant declines, the Company performed fundamental credit analyses on a security-by-security basis, which included consideration of credit enhancements, expected defaults on underlying collateral, review of relevant industry analyst reports and forecasts and other available market data.

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THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

Contractual Maturities of Bonds

The following table presents the statement value and fair value of bonds by contractual maturity:

(in millions)	Statement Value		Fair Value
December 31, 2020
Due in one year or less	$	1,335	$	1,353
Due after one year through five years		3,985		4,160
Due after five years through ten years		7,020		7,877
Due after ten years		14,429		16,454
LBaSS		10,860		11,875
Total	$	37,629	$	41,719

Actual maturities may differ from contractual maturities because certain borrowers have the right to call or prepay certain obligations with or without call or prepayment penalties.

Bonds in or near default as to payment of principal or interest had a statement value of $51 million and $88 million at December 31, 2020 and 2019, respectively which is the fair value. At December 31, 2020 and 2019, the Company had no income excluded from due and accrued for bonds.

At December 31, 2020, the Company’s bond portfolio included bonds totaling $2.7 billion not rated investment grade by the NAIC designations (categories 3-6). These bonds accounted for 2.93 percent of the Company’s total assets and 5.48 percent of invested assets. These below investment grade securities, excluding structured securities, span across 15 industries. At December 31, 2019, the Company’s bond portfolio included bonds totaling $1.3 billion not rated investment grade by the NAIC designations (categories 3-6). These bonds accounted for 3 percent of the Company’s total assets and 5 percent of invested assets. These below investment grade securities, excluding structured securities, span across 15 industries.

The following table presents the industries that constitute more than 10% of the below investment grade securities:

	December 31,
	2020			2019
Consumer cyclical		20.4	%		21.4	%
Consumer Noncyclical		18.6			22.1
Energy		16.7			11.6
Capital Goods		-			10.4

LBaSS

The Company determines fair value of LBaSS based on the amount at which a security could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The majority of the Company’s ABS, RMBS, CMBS, and collateralized debt obligations (CDO) are priced by approved independent third-party valuation service providers and broker dealer quotations. Small portions of the LBaSS that are not traded in active markets are priced by market standard internal valuation methodologies, which include discounted cash flow methodologies and matrix pricing. The estimated fair values are based on available market information and management’s judgments.

The following table presents the statement value and fair value of LBaSS:

	December 31, 2020				December 31, 2019
(in millions)	Statement Value		Fair Value		Statement Value		Fair Value
Loan-backed and structured securities	$	10,860	$	11,875	$	12,695	$	13,495

Prepayment assumptions for single class, multi-class mortgage-backed and ABS were obtained from independent third-party valuation service providers or internal estimates. These assumptions are consistent with the current interest rate and economic environment.

23

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

At December 31, 2020 and 2019, the Company had exposure to a variety of LBaSS. These securities could have significant concentrations of credit risk by country, geographical region, property type, servicer or other characteristics. As part of the quarterly surveillance process, the Company takes into account many of these characteristics in making the OTTI assessment.

At December 31, 2020 and 2019, the Company did not have any LBaSS with a recognized OTTI due to the intent to sell or an inability or lack of intent to retain the security for a period of time sufficient to recover the amortized cost basis.

During 2020, 2019 and 2018, the Company recognized total OTTI of $15.4 million, $8.1 million and $15 million, respectively, on LBaSS that were still held by the Company. In addition, at December 31, 2020 and 2019, the Company held loan-backed impaired securities (fair value is less than cost or amortized cost) for which an OTTI had not been recognized in earnings as a realized loss. Such impairments include securities with a recognized OTTI for non-interest (credit) related declines that were recognized in earnings, but for which an associated interest-related decline has not been recognized in earnings as a realized capital loss.

The following table summarizes the fair value and aggregate amount of unrealized losses on LBaSS and length of time that individual securities have been in a continuous unrealized loss position:

	Less than 12 Months					12 Months or More					Total
(in millions)	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
December 31, 2020
LBaSS	$	966	$	(25	)	$	370	$	(11	)	$	1,336	$	(36	)
December 31, 2019
LBaSS	$	1,170	$	(18	)	$	554	$	(10	)	$	1,724	$	(28	)

In its OTTI assessment, the Company considers all information relevant to the collectability of the security, including past history, current conditions and reasonable forecasts when developing an estimate of future cash flows. Relevant analyst reports and forecasts for the asset class also receive appropriate consideration. The Company also considers how credit enhancements affect the expected performance of the security. In addition, the Company generally considers its cash and working capital requirements and expected cash flows in relation to its business plans and how such forecasts affect the intent and ability to hold such securities to recovery of their amortized cost.

The Company does not have any LBaSS for which it is not practicable to estimate fair values.

The following table presents the rollforward of non-interest related OTTI for LBaSS:

	December 31,
(in millions)	2020		2019
Balance, beginning of year	$	388	$	429
Increases due to:
Credit impairment on new securities subject to impairment losses		5		4
Additional credit impairment on previously impaired investments		10		4
Reduction due to:
Credit impaired securities fully disposed for which there was no prior intent or requirement to sell		3		49
Balance, end of year	$	400	$	388

See Note 21 for a list with each LBaSS at a CUSIP level where the present value of cash flows expected to be collected is less than the amortized cost basis during the current year and a list of the Company’s structured notes holding at December 31, 2020.

Mortgage Loans

Mortgage loans had outstanding principal balances of $7.0 billion and $7.2 billion at December 31, 2020 and 2019, respectively. Contractual interest rates range from 1.75 percent to 12.00 percent. The mortgage loans at December 31, 2020 had maturity dates ranging from 2021 to 2055.

24

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

The Company’s mortgage loans are collateralized by a variety of commercial real estate property types located throughout the U.S. and Canada. The commercial mortgage loans are non-recourse to the borrower.

The following tables present the geographic and property-type distribution of the Company’s mortgage loan portfolio:

	December 31,
	2020			2019
Geographic distribution:
Mid-Atlantic		34.0	%		31.5	%
Pacific		15.8			19.0
Foreign		14.4			15.3
South Atlantic		13.4			12.4
West South Central		5.2			5.9
East North Central		7.2			6.4
New England		5.6			5.5
Mountain		3.6			3.2
East South Central		0.6			0.6
West North Central		0.2			0.2
Total		100.0	%		100.0	%
Property type distribution:
Multi-family		35.2	%		34.2	%
Office		28.8			27.2
Retail		17.7			17.3
Hotel/Motel		8.8			8.6
Industrial		5.3			5.0
Other		4.2			7.7
Total		100.0	%		100.0	%

At December 31, 2020, there were 123 mortgage loans with outstanding balances of $20 million or more, which loans collectively, aggregated approximately 77 percent of this portfolio.

The following table presents the minimum and maximum lending rates for new mortgage loans during 2020 and 2019:

	Years Ended December 31,
	2020						2019
(in millions)	Maximum			Minimum			Maximum			Minimum
Multi-family		6.00	%		3.23	%		5.42	%		2.05	%
Retail		6.48			5.00			6.36			6.36
Office		3.85			3.53			4.66			1.75
Hotel/Motel		12.00			4.25			-			-
Industrial		6.90			3.20			-			-
Other		5.26			2.81			5.74			2.99

The Company did not reduce any interest rates during 2020 and 2019.

The maximum percentage of any one loan to the value of security at the time of the loan, exclusive of insured or guaranteed or purchase money mortgage was 79.0 percent and 85.0 percent in 2020 and 2019, respectively.

At December 31, 2020, the Company held $37 million in impaired mortgages with $25 million of related allowances for credit losses and $12 million in impaired loans without a related allowance. At December 31, 2019, the Company held $15 million in impaired mortgages with no related allowances for credit losses. The Company’s average recorded investment in impaired loans was $27.6 million and $7 million, at December 31, 2020 and 2019, respectively. The Company recognized $1 million of interest income for 2020, $1 million of interest income for 2019 and no interest income in 2018. The Company recognizes interest income on its impaired mortgage loans upon receipt.

25

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

The following table presents a rollforward of the changes in the allowance for losses on mortgage loans receivable:

	December 31,
(in millions)	2020		2019			2018
Balance, beginning of year	$	47	$	49		$	43
Additions (reductions) charged to unrealized capital loss		27		-			6
Direct write-downs charged against allowance		-		(2	)		-
Balance, end of year	$	74	$	47		$	49

During 2020, the Company did not derecognize any mortgage loans and did not recognize any real estate collateral as a result of foreclosure.

The mortgage loan portfolio has been originated by the Company under strict underwriting standards. Commercial mortgage loans on properties such as offices, hotels and shopping centers generally represent a higher level of risk than do mortgage loans secured by multi-family residences. This greater risk is due to several factors, including the larger size of such loans and the more immediate effects of general economic conditions on these commercial property types. However, due to the Company’s strict underwriting standards, the Company believes that it has prudently managed the risk attributable to its mortgage loan portfolio while maintaining attractive yields.

The following table presents the age analysis of mortgage loans:

	December 31,
(in millions)	2020		2019
Current	$	6,758	$	7,149
30 - 59 days past due		60		2
60 - 89 days past due		85		1
90 - 179 days past due		25		-
Greater than 180 days past due		1		1
Total	$	6,929	$	7,153

At December 31, 2020 and 2019, the Company had mortgage loans outstanding under participant or co-lender agreements of $5.2 billion and $5.3 billion, respectively.

In addition, the Company had $15 million in restructured loans for 2020 and $15 million at December 31, 2019.

Aggregate mortgage loans having the following loan-to-value ratios as determined from the most current appraisal as of December 31, 2020:

(in millions)	Residential					Commercial					Agricultural
Loan-to-Value	Amount		Percentage of Total Admitted Assets			Amount		Percentage of Total Admitted Assets			Amount		Percentage of Total Admitted Assets
a. above 95%	$	2		-	%	$	25		0.10	%	$	-		-	%
b. 91% to 95%		2		-			-		-			-		-
c. 81% to 90%		19		0.10			82		0.20			-		-
d. 71% to 80%		45		0.30			188		0.40			-		-
e. below 70%		181		0.60			6,385		12.90			-		-

Troubled Debt Restructuring

The Company held no restructured debt for which impairment was recognized for both December 31, 2020 and 2019. In 2020, the Company had no outstanding commitment to debtors that hold loans with restructured terms. In 2019, the Company had no outstanding commitment to debtors that hold loans with restructured terms.

26

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

Real Estate

The following table presents the components of the Company’s investment in real estate:

	December 31,
(in millions)	2020		2019
Properties occupied by the Company	$	5	$	5
Properties held for production of income		-		-
Properties held for sale		-		-
Total	$	5	$	5

In 2020, the Company recognized no loss on the sale of real estate property. In 2019 the Company recognized $1 million loss, and in 2018, the Company did not recognize any gains or losses on the sale of real estate property. The Company did not recognize any impairment write-downs for 2020 and 2019 and the Company recognized $12 million in impairment write-downs for its investments in real estate during 2018.

Other Invested Assets

The following table presents the components of the Company’s other invested assets:

	December 31,
(in millions)	2020			2019
Investments in limited liability companies	$	228		$	253
Investments in limited partnerships		1,143			519
Other unaffiliated investments		318			219
Receivable for securities		60			45
Initial margin for futures		4			4
Non-admitted assets		(7	)		(1	)
Total	$	1,746		$	1,039

The Company utilizes the look-through approach in valuing its investments in affiliated real estate investments which had an aggregate value of $254 million at December 31, 2020. All liabilities, commitments, contingencies, guarantees, or obligations of these holding company entities, which are required to be recorded as liabilities, commitments, contingencies, guarantees or obligations under applicable accounting guidance, are reflected in the Company’s determination of the carrying value of the investment in each of the respective holding company entities, if applicable.

The Company recorded impairment write-downs in joint ventures and partnerships of $15 million, $32 million and $19 million during 2020, 2019 and 2018, respectively.

Net Investment Income

The following table presents the components of net investment income:

	Years ended December 31,
(in millions)	2020			2019			2018
Bonds	$	1,677		$	1,735		$	1,767
Preferred stocks		1			2			2
Common stocks		-			1			-
Cash and short-term investments		10			25			2
Mortgage loans		296			303			296
Real estate		2			6			8
Contract loans		27			30			31
Derivatives		10			53			56
Investment income from affiliates		25			54			36
Other invested assets		33			35			61
Gross investment income		2,081			2,244			2,259
Investment expenses		(75	)		(90	)		(70	)
Net investment income	$	2,006		$	2,154		$	2,189

27

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

* Includes amounts for the occupancy of Company-owned property of $5 million in 2020, $1 million in 2019 and none in 2018.

Net Realized and Unrealized Capital Gains (Losses)

The following table presents the components of Net realized capital gains (losses):

	Years Ended December 31,
(in millions)	2020			2019			2018
Bonds	$	(36	)	$	70		$	(64	)
Preferred stocks		(1	)		3			-
Common stocks		(5	)		(1	)		-
Cash and short-term investments		(2	)		-			2
Mortgage loans		(3	)		(28	)		(13	)
Real estate		-			(1	)		(12	)
Derivatives		165			74			37
Other invested assets		101			41			10
Realized capital gains (losses)		219			158			(40	)
Federal income tax (expense) benefit		(46	)		(33	)		8
Net (gains) losses transferred to IMR		(5	)		(54	)		18
Net realized capital gains (losses)	$	168		$	71		$	(14	)

During 2020, 2019 and 2018, the Company recognized $43 million, $24 million and $44 million, respectively, of impairment write-downs in accordance with the impairment policy described in Note 2.

The following table presents the proceeds from sales of bonds and equities and the related gross realized capital gains and gross realized capital losses:

	Years Ended December 31,
(in millions)	2020			2019			2018
Proceeds	$	1,427		$	2,900		$	3,323
Gross realized capital gains	$	55		$	139		$	35
Gross realized capital losses		(47	)		(39	)		(60	)
Net realized capital gains (losses)	$	8		$	100		$	(25	)

The following table presents the net change in unrealized capital gains (losses) of investments (including foreign exchange capital gains (losses):

	Years Ended December 31,
(in millions)	2020			2019			2018
Bonds	$	83		$	27		$	(72	)
Preferred and common stocks		25			(30	)		25
Mortgage loans		24			55			(45	)
Derivatives		(51	)		67			80
Other invested assets		4			(31	)		(33	)
Federal income tax expense		(14	)		(32	)		13
Net change in unrealized gains (losses) of investments	$	71		$	56		$	(32	)

28

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

5GI Securities Measured at Aggregate Book Adjusted Carrying Value and Fair Value

The following table presents 5GI Securities measured at aggregate book adjusted carrying value (BACV) and aggregate fair value at December 31:

Investment	Number of 5GI Securities			Aggregate BACV (in millions)				Aggregate Fair Value (in millions)
	2020	2019		2020		2019		2020		2019
Bonds -AC	7	6	$	32	$	17	$	31	$	17
LB&SS -AC	1	-		1		-		1		-
Preferred Stock -AC	1	-		2		-		2		-
Preferred Stock -FV	-	-		-		-		-		-
Total	9	6	$	35	$	17	$	34	$	17

AC-Amortized Cost

FV-Fair Value

4. SECURITIES LENDING AND REPURCHASE AGREEMENTS

Securities Lending

As of December 31, 2020 and 2019, the Company had bonds loaned with a fair value of approximately $1.5 billion and $1.1 billion, respectively, to unaffiliated parties as part of the securities lending program. These loaned securities are classified as bonds on the Company’s balance sheet.

The following table presents the aggregate fair value of cash collateral received related to the securities lending program and the terms of the contractually obligated collateral positions:

	December 31,
(in millions)	2020		2019
30 days or less	$	369	$	218
31 to 60 days		448		416
61 to 90 days		662		533
Greater than 90 days		-		-
Subtotal		1,479		1,167
Securities collateral received		-		-
Total collateral received	$	1,479	$	1,167

The following table presents the aggregate amortized cost and fair value of cash collateral reinvested related to the securities lending program by maturity date:

	December 31, 2020				December 31, 2019
(in millions)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Open positions	$	1,383	$	1,383	$	1,173	$	1,173
Subtotal		1,383		1,383		1,173		1,173
Securities collateral received		-		-		-		-
Total collateral reinvested	$	1,383	$	1,383	$	1,173	$	1,173

Repurchase Agreements

At December 31, 2020 and 2019, bonds with a fair value of approximately $30 million and $27 million respectively, were subject to repurchase agreements to secure amounts borrowed by the Company.

29

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

The following table presents the aggregate fair value of cash collateral received related to the repurchase agreement program and the terms of the contractually obligated collateral positions:

	December 31,
(in millions)	2020		2019
Open positions	$	-	$	-
30 days or less		-		-
31 to 60 days		-		-
61 to 90 days		-		-
Greater than 90 days		29		15
Subtotal		29		15
Securities collateral received		-		-
Total collateral received	$	29	$	15

The following table presents the original (flow) and residual maturity for bi-lateral repurchase agreement transactions for the year ended December 31, 2020:

(in millions)	FIRST QUARTER		SECOND QUARTER		THIRD QUARTER		FOURTH QUARTER
a. Maximum Amount
1. Open - No Maturity	$	31	$	39	$	49	$	52
2. Overnight		15		12		1		11
3. 2 Days to 1 Week		15		8		41		25
4. > 1 Week to 1 Month		-		-		-		-
5. > 1 Month to 3 Months		-		-		-		-
6. > 3 Months to 1 Year		-		-		-		-
7. > 1 Year		-		-		-		-
b. Ending Balance
1. Open - No Maturity	$	-	$	8	$	8	$	3
2. Overnight		-		-		-		1
3. 2 Days to 1 Week		10		8		41		25
4. > 1 Week to 1 Month		-		-		-		-
5. > 1 Month to 3 Months		-		-		-		-
6. > 3 Months to 1 Year		-		-		-		-
7. > 1 Year		-		-		-		-

The following table presents the Company’s liability to return collateral for the year ended December 31, 2020:

(in millions)	FIRST QUARTER		SECOND QUARTER		THIRD QUARTER		FOURTH QUARTER
a. Maximum Amount
1. Cash (Collateral - All)	$	60	$	59	$	90	$	88
2. Securities Collateral (FV)		-		-		-		-
b. Ending Balance
1. Cash (Collateral - All)	$	10	$	16	$	49	$	29
2. Securities Collateral (FV)		-		-		-		-

The Company requires a minimum of 95 percent of the fair value of securities sold under the repurchase agreements to be maintained as collateral. Cash collateral received is invested in corporate bonds and the offsetting collateral liability for repurchase agreements is included in other liabilities.

30

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

The following table presents the aggregate amortized cost and fair value of cash collateral reinvested related to the repurchase agreement program by maturity date:

	December 31, 2020				December 31, 2019
(in millions)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Open positions	$	27	$	30	$	25	$	27
Greater than three years		-		-		-		-
Subtotal		27		30		25		27
Securities collateral received		-		-		-		-
Total collateral reinvested	$	27	$	30	$	25	$	27

The following table presents the fair value of securities under bi-lateral repurchase agreement transactions for the year ended December 31, 2020:

(in millions)	FIRST QUARTER		SECOND QUARTER		THIRD QUARTER		FOURTH QUARTER
a. Maximum Amount
1. BACV	$	-	$	-	$	-	$	-
2. Nonadmitted - Subset of BACV		-		-		-		-
3. Fair Value		-		-		-		-
b. Ending Balance
1. BACV	$	22	$	32	$	97	$	27
2. Nonadmitted - Subset of BACV		-		-		-		-
3. Fair Value		21		34		107		30

31

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

The following table presents the fair value of securities under bi-lateral repurchase agreement transactions for the year ended December 31, 2020:

	1		2		3		4
(in millions)	None		NAIC 1		NAIC 2		NAIC 3
Ending Balance
a. Bonds - BACV	$	-	$	10	$	17	$	-
b. Bonds - FV		-		11		19		-
c. LB & SS - BACV		-		-		-		-
d. LB & SS - FV		-		-		-		-
e. Preferred Stock - BACV		-		-		-		-
f. Preferred Stock - FV		-		-		-		-
g. Common Stock		-		-		-		-
h. Mortgage Loans - BACV		-		-		-		-
i. Mortgage Loans - FV		-		-		-		-
j. Real Estate - BACV		-		-		-		-
k. Real Estate - FV		-		-		-		-
l. Derivatives - BACV		-		-		-		-
m. Derivatives - FV		-		-		-		-
n. Other Invested Assets - BACV		-		-		-		-
o. Other Invested Assets - FV		-		-		-		-
p. Total Assets - BACV		-		10		17		-
q. Total Assets - FV		-		11		19		-
(in millions)	5		6		7		8
	NAIC 4		NAIC 5		NAIC 6		Non-Admitted
Ending Balance
a. Bonds - BACV	$	-	$	-	$	-	$	-
b. Bonds - FV		-		-		-		-
c. LB & SS - BACV		-		-		-		-
d. LB & SS - FV		-		-		-		-
e. Preferred Stock - BACV		-		-		-		-
f. Preferred Stock - FV		-		-		-		-
g. Common Stock		-		-		-		-
h. Mortgage Loans - BACV		-		-		-		-
i. Mortgage Loans - FV		-		-		-		-
j. Real Estate - BACV		-		-		-		-
k. Real Estate - FV		-		-		-		-
l. Derivatives - BACV		-		-		-		-
m. Derivatives - FV		-		-		-		-
n. Other Invested Assets - BACV		-		-		-		-
o. Other Invested Assets - FV		-		-		-		-
p. Total Assets - BACV		-		-		-		-
q. Total Assets - FV		-		-		-		-

32

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

5. RESTRICTED ASSETS

The Company has restricted assets as detailed below. Assets under restriction are general account assets and are not part of the Separate Accounts.

The following table presents the carrying value of the Company’s restricted assets:

	December 31,
(in millions)	2020		2019
On deposit with states	$	3	$	3
Securities lending		1,226		1,019
Collateral held on securities lending		1,479		1,167
FHLB stock and collateral pledged		509		472
Subject to repurchase agreements		27		25
Collateral for derivatives		42		17
Other restricted assets		238		251
Total	$	3,524	$	2,954

6. SUBPRIME MORTGAGE RISK EXPOSURE

The following features are commonly recognized characteristics of subprime mortgage loans:

• An interest rate above prime to borrowers who do not qualify for prime rate loans;

• Borrowers with low credit ratings (FICO scores);

• Interest-only or negative amortizing loans;

• Unconventionally high initial loan-to-value ratios;

• Low initial payments based on a fixed introductory rate that expires after a short initial period, then adjusts to a variable index rate plus a margin for the remaining term of the loan;

• Borrowers with less than conventional documentation of their income and/or net assets;

• Very high or no limits on how much the payment amount or the interest rate may increase at reset periods, potentially causing a substantial increase in the monthly payment amount; and/or,

• Substantial prepayment penalties and/or prepayment penalties that extend beyond the initial interest rate adjustment period.

Non-agency RMBS can belong to one of several different categories depending on the characteristics of the borrower, the property and the loan used to finance the property. Categorization is a function of FICO score, the type of loan, loan-to-value ratio, and property type and loan documentation.

Generally, subprime loans are made to borrowers with low FICO scores, low levels of equity and reduced income/asset documentation. Due to these characteristics, subprime borrowers pay a substantially higher interest rate than prime borrowers. In addition, they often utilize mortgage products that reduce their monthly payments in the near-term. These include adjustable-rate mortgages with low initial rates or interest-only loans. Borrowers in products like this often experience significant “payment shock” when the teaser payment resets upwards after the initial fixed period.

The primary classification mechanism the Company uses for subprime loans is FICO score. Specifically, a pool with an average FICO at origination less than 650 is considered to be subprime. However, the Company may subjectively adjust this classification based on an assessment of the other parameters mentioned above.

To monitor subprime securities, the Company uses a model with vintage-specific assumptions for delinquency roll rates, loss severities and the timing of losses. As and when needed, these vintage-based assumptions are supplemented with deal-specific information including, but not limited to, geographic distribution, realized loss severities, trigger status and scenario analysis.

The Company has no direct exposure through investments in subprime mortgage loans. The Company’s exposure is through other investments, primarily in RMBS, as described above.

33

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

The following table presents information regarding the Company’s investments with subprime exposures:

(in millions)	Actual Cost		Book Adjusted Statement Value		Fair Value		OTTI Recognized to Date
December 31, 2020
In general account:
RMBS	$	365	$	350	$	447	$	(49	)
CDOs		323		317		326		(10	)
Total subprime exposure	$	688	$	667	$	773	$	(59	)
December 31, 2019
In general account:
RMBS	$	388	$	377	$	470	$	(45	)
CDOs		351		343		355		(10	)
Total subprime exposure	$	739	$	720	$	825	$	(55	)

The Company has no underwriting exposure to subprime mortgage risk through mortgage guaranty or financial guaranty insurance coverage.

7. DERIVATIVES

The Company has taken positions in certain derivative financial instruments to mitigate or hedge the impact of changes in interest rates, foreign currencies, equity markets, swap spreads, volatility, correlations and yield curve risk on cash flows from investment income, policyholder liabilities and equity. Financial instruments used by the Company for such purposes include interest rate swaps, interest rate swaptions, cross-currency swaps, futures and futures options on equity indices, and futures and futures options on government securities. The Company does not engage in the use of derivative instruments for speculative purposes and is neither a dealer nor trader in derivative instruments.

All derivative instruments are recognized in the financial statements. The Company has determined that its derivative financial instruments do not qualify for hedge accounting. As a result, excluding the special accounting treatment for limited derivatives hedging variable annuity guarantees discussed in Note 2, derivatives are accounted for at fair value and the changes in the fair value recorded in surplus as unrealized gains or losses, net of deferred taxes. The value of the Company’s exchange traded futures contracts relates to the one day lag in the net cash settlement of these contracts.

The Company recognized a net unrealized capital loss of $51 million in 2020, unrealized capital gain of $67 million in 2019 and unrealized capital gain of $80 million in 2018, related to derivatives that did not qualify for hedge accounting.

Refer to Note 3 for disclosures related to net realized capital gains (losses).

Swaps, Options, and Futures

Interest rate or cross-currency swap agreements are agreements to exchange with a counterparty, at specified intervals, payments of differing character (for example, variable-rate payments exchanged for fixed-rate payments) or in different currencies, based on an underlying principal balance, notional amount. Generally no cash is exchanged at the outset of the contract and no principal payments are made by either party. A single net payment is usually made by one counterparty at each contractual payment due date, and this net payment is included in the Statutory Statement of Operations.

Options are contracts that grant the purchaser, for a premium payment, the right, but not the obligation, either to purchase or sell a financial instrument at a specified price within a specified period of time. The Company purchases call options on the S&P 500 Index to offset the risk of certain guarantees of specific equity-index annuity and universal life policy values. The Company also purchases put options on the S&P 500 Index to offset volatility risk arising from minimum guarantees embedded in variable annuities. The options are carried at fair value, with changes in fair value recognized in unrealized investment gains and losses.

34

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

Financial futures are contracts between two parties that commit one party to purchase and the other to sell a particular commodity or financial instrument at a price determined on the final settlement day of the contract. Futures contracts detail the quality and quantity of the underlying asset; they are standardized to facilitate trading on a futures exchange. Some futures contracts may call for physical delivery of the asset, while others are settled in cash. The Company uses futures contracts on Euro dollar deposits, U.S. Treasury Notes, U.S. Treasury Bonds, the S&P 500 Index, MidCap 400, Russell 2000, MSCI EAFE, foreign government debt securities, and foreign denominated equity indices to offset the risk of certain guarantees on annuity policy values.

Interest Rate Risk

Interest rate derivatives are used to manage interest rate risk associated with certain guarantees of variable annuities and equity indexed annuities and certain bonds. The Company’s interest rate hedging derivative instruments include (1) interest rate swaps and swaptions; (2) listed futures on government securities; and (3) listed futures options on government securities.

Currency Risk

Foreign exchange contracts used by the Company include cross-currency swaps, which are used to reduce risks from changes in currency exchange rates with respect to investments denominated in foreign currencies that the Company holds.

Equity Risk

Equity derivatives are used to mitigate financial risk embedded in certain insurance liabilities.

Credit Risk

The Company is exposed to credit-related losses in the event of non-performance by counterparties to financial instruments, but it does not expect any counterparties to fail to meet their obligations given their high credit ratings. For over-the-counter (OTC) derivatives, the Company’s net credit exposure is determined based on master netting agreements, which take into consideration all derivative positions with the counterparty, as well as collateral posted by the counterparty at the balance sheet date. The Company is exposed to credit risk when the net position with a particular counterparty results in an asset that exceeds collateral pledged by that counterparty.

For OTC contracts, the Company generally uses an International Swaps and Derivative Association Master Agreement (ISDA Master Agreement) and Credit Support Annexes with bilateral collateral provisions to reduce counterparty credit exposures. An ISDA Master Agreement is an agreement between two counterparties, which may cover multiple derivative transactions and such ISDA Master Agreement generally provides for the net settlement of all or a specified group of these derivative transactions, as well as transferred collateral, through a single payment, in a single currency, in the event of a default affecting any one derivative transaction or a termination event affecting all or a specified group of the transactions. The Company minimizes the risk that counterparties might be unable to fulfill their contractual obligations by monitoring counterparty credit exposure and collateral value and may require additional collateral to be posted upon the occurrence of certain events or circumstances. In the unlikely event of a failure to perform by any of the counterparties to these derivative transactions, there would not be a material effect on the Company’s admitted assets, liabilities or capital and surplus.

The Company has also entered into exchange-traded options and futures contracts. Under exchange-traded futures contracts, the Company agrees to purchase a specified number of contracts with other parties and to post or receive variation margin on a daily basis in an amount equal to the difference in the daily market values of those contracts. The parties with whom the Company enters into exchange-traded futures are regulated futures commission merchants who are members of a trading exchange. The credit risk of exchange-traded futures is partially mitigated because variation margin is settled daily in cash. Exchange-traded option contracts are not subject to daily margin settlements and amounts due to the Company based upon favorable movements in the underlying securities or indices are owed upon exercise.

35

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

The following table presents the notional amounts, statement values and fair values of the Company’s derivative instruments:

	December 31, 2020								December 31, 2019
(in millions)	Contract or Notional Amount		Statement Value			Fair Value			Contract or Notional Amount		Statement Value			Fair Value
Assets:
Interest rate contracts	$	617	$	11		$	11		$	797	$	16		$	16
Foreign exchange contracts		974		58			58			1,501		100			100
Equity contracts		7,066		872			872			6,387		632			632
Derivative assets, gross		8,657		941			941			8,685		748			748
Counter party netting*		-		(714	)		(714	)		-		(500	)		(500	)
Derivative assets, net	$	8,657	$	227		$	227		$	8,685	$	248		$	248
Liabilities:
Interest rate contracts	$	825	$	10		$	10		$	693	$	11		$	11
Foreign exchange contracts		1,721		81			81			1,167		37			37
Equity contracts		3,983		626			626			3,482		453			453
Derivative liabilities, gross		6,529		717			717			5,342		501			501
Counter party netting*		-		(714	)		(714	)		-		(500	)		(500	)
Derivative liabilities, net	$	6,529	$	3		$	3		$	5,342	$	1		$	1

* Represents netting of derivative exposures covered by a qualifying master netting agreement.

The Company has a right of offset of its derivatives asset and liability positions with various counterparties. The following table presents the effect of the right of offsets:

	December 31, 2020						December 31, 2019
(in millions)	Assets			Liabilities			Assets			Liabilities
Gross amount recognized	$	941		$	717		$	748		$	501
Amount offset		(714	)		(714	)		(500	)		(500	)
Net amount presented in the Statement of Admitted Assets, Liabilities, and Capital and Surplus	$	227		$	3		$	248		$	1

8. INFORMATION ABOUT FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK AND FINANCIAL INSTRUMENTS WITH CONCENTRATIONS OF CREDIT RISK

The following table presents the Company’s derivative financial instruments with concentrations of credit risk:

	December 31, 2020				December 31, 2019
(in millions)	Contract or Notional Amount		Final Maturity Date		Contract or Notional Amount		Final Maturity Date
Derivative assets:
Interest rate contracts	$	617		2060	$	797		2056
Foreign exchange contracts		974		2050		1,501		2050
Equity contracts		7,066		2022		6,387		2022
Derivative liabilities:
Interest rate contracts		825		2051		693		2050
Foreign exchange contracts		1,721		2056		1,167		2056
Equity contracts		3,983		2022		3,482		2022

The credit exposure to the Company’s derivative contracts is limited to the fair value of such contracts that are favorable to the Company at the reporting date.

The credit exposure to the Company’s derivative contracts aggregated $92 million and $64 million at December 31, 2020 and 2019, respectively.

36

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

9. FAIR VALUE MEASUREMENTS

Fair Value Measurements

The Company carries certain financial instruments at fair value. The Company defines the fair value of a financial instrument as the amount that would be received from the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company is responsible for the determination of the value of the investments carried at fair value and the supporting methodologies and assumptions.

The degree of judgment used in measuring the fair value of financial instruments generally inversely correlates with the level of observable valuation inputs. The Company maximizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value. Financial instruments with quoted prices in active markets generally have more pricing observability and less judgment is used in measuring fair value. Conversely, financial instruments for which no quoted prices are available have less observability and are measured at fair value using valuation models or other pricing techniques that require more judgment. Pricing observability is affected by a number of factors, including the type of financial instrument, whether the financial instrument is new to the market and not yet established, the characteristics specific to the transaction, liquidity and general market conditions.

Fair Value Hierarchy

Assets and liabilities recorded at fair value are measured and classified in accordance with a fair value hierarchy consisting of three “levels” based on the observability of valuation inputs:

• Level 1: Fair value measurements based on quoted prices (unadjusted) in active markets that the Company has the ability to access for identical assets or liabilities. Market price data generally is obtained from exchange or dealer markets. The Company does not adjust the quoted price for such instruments.

• Level 2: Fair value measurements based on inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs other than quoted prices that are observable for the asset or liability, such as interest rates and yield curves that are observable at commonly quoted intervals.

• Level 3: Fair value measurements based on valuation techniques that use significant inputs that are unobservable. Both observable and unobservable inputs may be used to determine the fair values of positions classified in Level 3. The circumstances for using these measurements include those in which there is little, if any, market activity for the asset or liability. Therefore, the Company must make certain assumptions as to the inputs a hypothetical market participant would use to value that asset or liability. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In those cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

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.

Bonds: Fair value is based principally on value from independent third-party valuation service providers, broker quotes and other independent information.

Preferred stocks: Fair value of unaffiliated preferred stocks is based principally on value from independent third-party service providers, broker quotes and other independent information.

Cash, cash equivalents and short term investments: Carrying amount approximate fair value because of the relatively short period of time between origination and expected realization and their limited exposure to credit risk.

Mortgage loans: Fair values are primarily determined by discounting future cash flows to the present at current market rates, using expected prepayment rates.

37

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

Contract loans: Carrying amounts, which approximate fair value, are generally equal to unpaid principal amount as of each reporting date. No consideration is given to credit risk because contract loans are effectively collateralized by the cash surrender value of the policies.

Securities lending reinvested collateral assets: Securities lending assets are generally invested in short-term investments and thus carrying amounts approximate fair values because of the relatively short period of time between origination and expected realizations.

Separate account assets: Variable annuity and variable universal life assets are carried at the market value of the underlying securities. Certain separate account assets related to market value adjustment fixed annuity contracts are carried at book value. Fair value is based principally on the value from independent third-party valuation service providers, broker quotes and other independent information.

Policy reserves and contractual liabilities: Fair value for investment contracts (those without significant mortality risk) not accounted for at fair value were estimated for disclosure purposes using discounted cash flow calculations based upon interest rates currently being offered for similar contracts with maturities consistent with those remaining for the contracts being valued. When no similar contracts are being offered, the discount rate is the appropriate swap rates (if available) or current risk-free interest rates consistent with the currency in which cash flows are denominated.

Payable for securities lending: Cash collateral received from the securities lending program is invested in short-term investments and the offsetting liability is included in payable for securities lending. The carrying amount of this liability approximates fair value because of the relatively short period between origination of the liability and expected settlement.

Receivables/payables for securities: Such amounts represent transactions of a short-term nature for which the statement value is considered a reasonable estimate of fair value.

38

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

Fair Value Information about Financial Instruments Not Measured at Fair Value

The following table presents the aggregate fair values of the Company’s financial instruments not measured at fair value compared to their statement values:

(in millions)	Aggregate Fair Value			Admitted Assets or Liabilities			Level 1			Level 2		Level 3
December 31, 2020
Assets:
Bonds	$	41,705		$	37,614		$	-		$	36,977	$	4,728
Preferred stocks		3			3			-			1		2
Common stocks		17			17			-			17		-
Cash, cash equivalents and short-term investments		(30	)		(30	)		(84	)		54		-
Mortgage loans		7,466			6,928			-			-		7,466
Contract loans		517			517			-			-		517
Receivables for securities		59			59			-			59		-
Securities lending reinvested collateral assets		1,383			1,383			-			1,383		-
Separate account assets		415			415			-			415		-
Liabilities:
Policy reserves and contractual liabilities		54,169			43,494			-			-		54,169
Payable for securities		25			25			-			25		-
Payable for securities lending		1,479			1,479			-			1,479		-
December 31, 2019
Assets:
Bonds	$	38,338		$	36,050		$	-		$	33,039	$	5,299
Preferred stocks		57			42			4			47		6
Common stocks		16			16			-			16		-
Cash, cash equivalents and short-term investments		232			232			16			216		-
Mortgage loans		7,505			7,153			-			-		7,505
Contract loans		576			576			-			-		576
Receivables for securities		44			44			-			44		-
Securities lending reinvested collateral assets		1,173			1,173			-			1,173		-
Separate account assets		372			372			-			372		-
Liabilities:
Policy reserves and contractual liabilities		50,213			42,042			-			-		50,213
Payable for securities		44			44			-			44		-
Payable for securities lending		1,167			1,167			-			1,167		-

Valuation Methodologies of Financial Instruments Measured at Fair Value

Bonds

Bonds with NAIC 6 or 6* designations and preferred stocks with NAIC 4, 5 or 6 designations are carried at the lower of amortized cost or fair value. The Company maximizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value. Whenever available, the Company obtains quoted prices in active markets for identical assets at the balance sheet date to measure bonds at fair value. Market price data generally is obtained from exchange or dealer markets.

The Company estimates the fair value of securities not traded in active markets, by referring to traded securities with similar attributes, using dealer quotations, a matrix pricing methodology, discounted cash flow analyses or internal valuation models. This methodology considers such factors as the issuer’s industry, the security’s rating and tenor, its coupon rate, its position in the capital structure of the issuer, yield curves, credit curves, prepayment rates and other relevant factors. For bonds that are not traded in active markets or that are subject to transfer restrictions, valuations are adjusted to reflect illiquidity and/or non-transferability, and such adjustments generally are based on available market evidence. In the absence of such evidence, management’s best estimate is used.

39

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

Fair values for bonds and preferred stocks based on observable market prices for identical or similar instruments implicitly include the incorporation of counterparty credit risk. Fair values for bonds and preferred stocks based on internal models incorporate counterparty credit risk by using discount rates that take into consideration cash issuance spreads for similar instruments or other observable information.

Common Stocks (Unaffiliated)

Whenever available, the Company obtains quoted prices in active markets for identical assets at the balance sheet date to measure equity securities at fair value. Market price data is generally obtained from exchanges or dealer markets.

Freestanding Derivatives

Derivative assets and liabilities can be exchange-traded or traded OTC. The Company generally values exchange-traded derivatives, such as futures and options, using quoted prices in active markets for identical derivatives at the balance sheet date.

OTC derivatives are valued using market transactions and other observable market evidence whenever possible, including market-based inputs to models, model calibration to market clearing transactions, broker or dealer quotations or alternative pricing sources with reasonable levels of price transparency. When models are used, the selection of a particular model to value an OTC derivative depends on the contractual terms of, and specific risks inherent in, the instrument as well as the availability of pricing information in the market. The Company generally uses similar models to value similar instruments. Valuation models can require a variety of inputs, including contractual terms, market prices and rates, yield curves, credit curves, measures of volatility, prepayment rates and correlations of such inputs. For OTC derivatives that trade in liquid markets, such as generic forwards, swaps and options, model inputs can generally be corroborated by observable market data by correlation or other means, and model selection does not involve significant management judgment.

Certain OTC derivatives trade in less liquid markets with limited pricing information, and the determination of fair value for these derivatives is inherently more difficult. When the Company does not have corroborating market evidence to support significant model inputs and cannot verify the model using market transactions, the transaction price is initially used as the best estimate of fair value. Accordingly, when a pricing model is used to value such an instrument, the model is adjusted so the model value at inception equals the transaction price. Subsequent to initial recognition, the Company updates valuation inputs when corroborated by evidence such as similar market transactions, independent third-party valuation services and/or broker or dealer quotations, or other empirical market data. When appropriate, valuations are adjusted for various factors such as liquidity, bid/offer spreads and credit considerations. Such adjustments are generally based on available market evidence. In the absence of such evidence, management’s best estimate is used.

Separate Account Assets

Separate account assets are comprised primarily of registered and open-ended variable funds that trade daily and are measured at fair value using quoted prices in active markets for identical assets. Certain separate account assets are carried at amortized cost.

40

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

Assets and Liabilities Measured at Fair Value

The following table presents information about assets and liabilities measured at fair value:

(in millions)	Level 1		Level 2		Level 3		Counterparty Netting*			Total
December 31, 2020
Assets at fair value:
Bonds
Industrial and miscellaneous	$	-	$	-	$	1	$	-		$	1
Bank loans		-		-		6		-			6
Total bonds		-		-		7		-			7
Common stock
Industrial and miscellaneous		-		-		-		-			-
Derivative assets:
Interest rate contracts		-		11		-		-			11
Foreign exchange contracts		-		58		-		-			58
Equity contracts		-		854		17		-			871
Counterparty netting		-		-		-		(714	)		(714	)
Total derivative assets		-		923		17		(714	)		226
Separate account assets		41,182		130		-		-			41,312
Total assets at fair value	$	41,182	$	1,053	$	24	$	(714	)	$	41,545
Liabilities at fair value:
Derivative liabilities:
Interest rate contracts	$	-	$	10	$	-	$	-		$	10
Foreign exchange contracts		-		81		-		-			81
Equity contracts		4		622		-		-			626
Counterparty netting		-		-		-		(714	)		(714	)
Total derivative liabilities		4		713		-		(714	)		3
Total liabilities at fair value	$	4	$	713	$	-	$	(714	)	$	3
December 31, 2019
Assets at fair value:
Bonds
Industrial and miscellaneous	$	-	$	2	$	-	$	-		$	2
Total bonds		-		2		-		-			2
Common stock
Industrial and miscellaneous		-		-		6		-			6
Total common stock		-		-		6		-			6
Derivative assets:
Interest rate contracts		-		16		-		-			16
Foreign exchange contracts		-		100		-		-			100
Equity contracts		1		618		13		-			632
Counterparty netting		-		-		-		(500	)		(500	)
Total derivative assets		1		734		13		(500	)		248
Separate account assets		37,637		149		-		-			37,786
Total assets at fair value	$	37,638	$	885	$	19	$	(500	)	$	38,042
Liabilities at fair value:
Derivative liabilities:
Interest rate contracts	$	-	$	11	$	-	$	-		$	11
Foreign exchange contracts		-		37		-		-			37
Equity contracts		1		452		-		-			453
Counterparty netting		-		-		-		(500	)		(500	)
Total derivative liabilities		1		500		-		(500	)		1
Total liabilities at fair value	$	1	$	500	$	-	$	(500	)	$	1

* Represents netting of derivative exposures covered by a qualifying master netting agreement.

41

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

Changes in Level 3 Fair Value Measurements

The following tables present changes in Level 3 assets and liabilities measured at fair value and the gains (losses) related to the Level 3 assets and liabilities that remained on the Statutory Statements of Admitted Assets, Liabilities and Capital and Surplus:

(in millions)	Bonds			Common Stocks			Derivative Assets			Total Assets
Balance, January 1, 2019	$	7		$	3		$	2		$	12
Total realized/unrealized capital gains or losses:
Included in net income		(1	)		(1	)		-			(2	)
Included in surplus		2			-			7			9
Purchases, issuances and settlements		(7	)		(10	)		4			(13	)
Transfers into Level 3		5			14			-			19
Transfers out of Level 3		(5	)		-			-			(5	)
Balance, December 31, 2019	$	1		$	6		$	13		$	20
Total realized/unrealized capital gains or losses:
Included in net income		(3	)		-			(6	)		(9	)
Included in surplus		4			-			6			10
Purchases, issuances and settlements		(13	)		(26	)		6			(33	)
Transfers into Level 3		20			20			-			40
Transfers out of Level 3		(2	)		-			-			(2	)
Balance, December 31, 2020	$	7		$	-		$	19		$	26

Assets are transferred out of Level 3 when circumstances change such that significant inputs can be corroborated with market observable data or when the asset is no longer carried at fair value. This may be due to a significant increase in market activity for the asset, a specific event, one or more significant inputs becoming observable or when a long-term interest rate significant to a valuation becomes short-term and thus observable. Transfers out of level 3 can also occur due to favorable credit migration resulting in a higher NAIC designation. Securities are generally transferred into Level 3 due to a decrease in market transparency, downward credit migration and an overall increase in price disparity for certain individual security types. The Company’s policy is to recognize transfers in and out at the end of the reporting period, consistent with the date of the determination of fair value.

In both 2020 and 2019, there were no transfers between Level 1 and Level 2 securities.

Both observable and unobservable inputs may be used to determine the fair values of positions classified in Level 3 in the tables above. As a result, the unrealized capital gains (losses) on instruments held at December 31, 2020 and 2019 may include changes in fair value that were attributable to both observable inputs (e.g., changes in market interest rates) and unobservable inputs (e.g., changes in unobservable long-dated volatilities).

Quantitative Information About Level 3 Fair Value Measurements

The Company had no quantitative information about level 3 fair value measurements to report at December 31, 2020.

Gross Basis Fair Value Measurements

The following table presents the Company’s derivative assets and liabilities measured at fair value, on a gross basis, before counterparty and cash collateral netting:

(in millions)	Level 1		Level 2		Level 3		Total
December 31, 2020
Derivative assets at fair value	$	1	$	924	$	17	$	942
Derivative liabilities at fair value		4		714		-		718
December 31, 2019
Derivative assets at fair value	$	1	$	734	$	13	$	748
Derivative liabilities at fair value		1		500		-		501

42

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

10. AGGREGATE POLICY RESERVES AND DEPOSIT FUND LIABILITIES

The following table presents the Company’s reserves by major category:

	Years ended December 31,
(in millions)	2020		2019
Life insurance	$	-	$	-
Annuities (excluding supplementary contracts with life contingencies)		37,663		36,537
Supplementary contracts with life contingencies		295		304
Accidental death benefits		-		-
Disability - active lives		-		-
Disability - disabled lives		-		-
Excess of VM-21 reserves over basic reserves		10		-
Excess of AG 43 reserves over basic reserves		-		28
Deficiency reserves		-		-
Other miscellaneous reserve		122		131
Gross life and annuity reserves		38,090		37,000
Reinsurance ceded		-		-
Net life and annuity reserves		38,090		37,000
Accident and health reserves
Unearned premium reserves		-		-
Present value of amounts not yet due on claims		-		-
Additional contract reserves		-		-
Gross accident and health reserves		-		-
Reinsurance ceded		-		-
Net accident and health reserves		-		-
Aggregate policy reserves	$	38,090	$	37,000

43

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

The following table presents the withdrawal characteristics of annuity actuarial reserves and deposit-type contract funds and other liabilities without life contingencies:

A. Individual Annuities:

		December 31, 2020
(in millions)		General account		Separate account with guarantees		Separate account nonguaranteed		Total		% of Total
(1)	Subject to discretionary withdrawal :
	a. With market value adjusted	$	755	$	412	$	14,410	$	15,577		33.21	%
	b. At book value less current surrender charge of 5% or more		5,749		-		-		5,749		12.26	%
	c. At fair value		-		-		7,186		7,186		15.32	%
	d. Total with market adjustment or at fair value		6,504		412		21,596		28,512		60.79	%
	e. At book value without adjustment (minimal or no charge or adjustment)		17,660		-		-		17,660		37.66	%
(2)	Not subject to discretionary withdrawal		701		-		26		727		1.55	%
(3)	Total (gross: direct + assumed)	$	24,865	$	412	$	21,622	$	46,899		100.00	%
(4)	Reinsurance ceded		-		-		-		-
(5)	Total (net)* (3) - (4)	$	24,865	$	412	$	21,622	$	46,899
(6)	Amount included in A(1)b above that will move to A(1)e in the year after statement date:	$	258	$	2	$	-	$	260
* Reconciliation of total annuity actuarial reserves and deposit fund liabilities.
B. Group Annuities:
		December 31, 2020
(in millions)		General account		Separate account with guarantees		Separate account nonguaranteed		Total		% of Total
(1)	Subject to discretionary withdrawal :
	a. With market value adjusted	$	992	$	-	$	2,045	$	3,037		9.28	%
	b. At book value less current surrender charge of 5% or more		3,970		-		-		3,970		12.13	%
	c. At fair value		-		132		17,327		17,459		53.37	%
	d. Total with market adjustment or at fair value		4,962		132		19,372		24,466		74.78	%
	e. At book value without adjustment (minimal or no charge or adjustment)		8,117		-		-		8,117		24.81	%
(2)	Not subject to discretionary withdrawal		136		-		-		136		0.41	%
(3)	Total (gross: direct + assumed)	$	13,215	$	132	$	19,372	$	32,719		100.00	%
(4)	Reinsurance ceded		-		-		-		-
(5)	Total (net)* (3) - (4)	$	13,215	$	132	$	19,372	$	32,719
(6)	Amount included in B(1)b above that will move to B(1)e in the year after statement date:	$	756	$	-	$	-	$	756
* Reconciliation of total annuity actuarial reserves and deposit fund liabilities.
C. Deposit-Type Contracts (no life contingencies):
		December 31, 2020
(in millions)		General account		Separate account with guarantees		Separate account nonguaranteed		Total		% of Total
(1)	Subject to discretionary withdrawal :
	a. With market value adjusted	$	3,430	$	-	$	-	$	3,430		59.47	%
	b. At book value less current surrender charge of 5% or more		3		-		-		3		0.05	%
	c. At fair value		-		-		-		-		-	%
	d. Total with market adjustment or at fair value		3,433		-		-		3,433		59.52	%
	e. At book value without adjustment (minimal or no charge or adjustment)		2,074		-		-		2,074		35.96	%
(2)	Not subject to discretionary withdrawal		261		-		-		261		4.52	%
(3)	Total (gross: direct + assumed)	$	5,768	$	-	$	-	$	5,768		100.00	%
(4)	Reinsurance ceded		-		-		-		-
(5)	Total (net)* (3) - (4)	$	5,768	$	-	$	-	$	5,768
(6)	Amount included in C(1)b above that will move to C(1)e in the year after statement date:	$	-	$	-	$	-	$	-
* Represents annuity reserves reported in separate accounts liabilities

44

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

Withdrawal characteristics of Life Actuarial Reserves as of December 31, 2020:

December 31, 2020

General Account

Separate Account - Nonguaranteed

(in millions)

Account value

Cash value

Reserve

Account value

Cash value

Reserve

A.

Subject to discretionary withdrawal, surrender values, or policy loans:

(1) Term policies with cash value

$

-

$

-

$

-

$

-

$

-

$

-

(2) Universal life

-

-

-

-

-

-

(3) Universal life with secondary guarantees

-

-

-

-

-

-

(4) Indexed universal life

-

-

-

-

-

-

(5) Indexed universal life with secondary guarantees

-

-

-

-

-

-

(6) Indexed life

-

-

-

-

-

-

(7) Other permanent cash value life insurance

-

-

-

-

-

-

(8) Variable life

-

-

-

-

-

-

(9) Variable universal life

-

-

-

-

-

-

(10) Miscellaneous reserves

-

-

-

-

-

-

B.

Not subject to discretionary withdrawal or no cash values

(1) Term policies without cash value

XXX

XXX

$

-

XXX

XXX

$

-

(2) Accidental death benefits

XXX

XXX

-

XXX

XXX

-

(3) Disability - active lives

XXX

XXX

-

XXX

XXX

-

(4) Disability - disabled lives

XXX

XXX

-

XXX

XXX

-

(5) Miscellaneous reserves

XXX

XXX

-

XXX

XXX

-

C.

Total (gross: direct + assumed)

$

-

$

-

$

-

$

-

$

-

$

-

D.

Reinsurance ceded

-

-

-

-

-

-

E.

Total (net) (C) - (D)

$

-

$

-

$

-

$

-

$

-

$

-

11. SEPARATE ACCOUNTS

Separate Accounts

The separate accounts held by the Company consist primarily of variable annuities. These contracts generally are non-guaranteed in nature such that the benefit is determined by the performance and/or market value of the investments held in the separate account. The net investment experience of the separate account is credited directly to the policyholder and can be positive or negative.

Certain other separate accounts relate to MVA fixed annuity contracts in which the assets are carried at amortized cost. These policies are required to be held in the Company’s separate account by certain states, including Texas.

The Company does not engage in securities lending transactions within the separate accounts.

In accordance with the products/transactions recorded within the separate account, some assets are considered legally insulated whereas others are not legally insulated from the general account. The legal insulation of the separate account assets prevents such assets from being generally available to satisfy claims resulting from the general account.

The following table presents separate account assets by product or transaction:

	December 31, 2020				December 31, 2019
(in millions)	Legally Insulated Assets		Separate Accounts Assets (Not Legally Insulated)		Legally Insulated Assets		Separate Accounts Assets (Not Legally Insulated)
Variable annuities	$	41,179	$	-	$	37,646	$	-
Annuities with MVA features		-		415		-		372
DeKalb separate account		133		-		140		-
Total	$	41,312	$	415	$	37,786	$	372

Some separate account liabilities are guaranteed by the general account. To compensate the general account for the risks taken, the separate accounts pay risk charges to the general account.

45

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

If claims were filed on all contracts, the current total maximum guarantee the general account would provide to the separate account as of December 31, 2020 and 2019 is $302 million and $452 million, respectively.

The following table presents the risk charges paid by the separate accounts and the guarantees paid by the general account:

(in millions)	Risk Charge paid by the Separate Account		Guarantees Paid by the General Account
2020	$	16	$	2
2019		16		1
2018		17		1
2017		18		2
2016		22		2

Certain separate accounts relate to experience-rated group annuity contracts that fund defined contribution pension plans. These contracts provide guaranteed interest returns for one quarter only, where the guaranteed interest rate is re-established each quarter based on the investment experience of the separate account. In no event can the interest rate be less than 3 percent. There are guarantees of principal and interest for purposes of plan participant transactions (e.g., participant-directed withdrawals and fund transfers done at market value). The assets and liabilities of these separate accounts are carried at the quoted market value of the underlying assets. This business has been included in Column 1 of the table below.

There was no separate account business seed money at December 31, 2020 and 2019.

The following table presents information regarding the separate accounts:

(in millions)	Non-indexed Guarantee less than or equal to 4%		Non- guaranteed Separate Accounts		Total
December 31, 2020
Premiums, considerations or deposits	$	51	$	1,916	$	1,967
Reserves for accounts with assets at:
Market value	$	132	$	40,995	$	41,127
Amortized costs		412		-		412
Total reserves	$	544	$	40,995	$	41,539
By withdrawal characteristics:
Subject to discretionary withdrawal with MVA	$	412	$	16,455	$	16,867
At market value		132		24,514		24,646
Subtotal		544		40,969		41,513
Not subject to discretionary withdrawal		-		26		26
Total reserves	$	544	$	40,995	$	41,539
December 31, 2019
Premiums, considerations or deposits	$	134	$	2,096	$	2,230
Reserves for accounts with assets at:
Market value	$	140	$	37,628	$	37,768
Amortized costs		381		-		381
Total reserves	$	521	$	37,628	$	38,149
By withdrawal characteristics:
Subject to discretionary withdrawal with MVA	$	381	$	15,503	$	15,884
At market value		140		22,100		22,240
Subtotal		521		37,603		38,124
Not subject to discretionary withdrawal		-		25		25
Total reserves	$	521	$	37,628	$	38,149

46

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

Reconciliation of Net Transfers to or from Separate Accounts

The following table presents a reconciliation of the net transfers to (from) separate accounts:

	Years ended December 31,
(in millions)	2020			2019			2018
Transfers to separate accounts	$	1,967		$	2,230		$	2,526
Transfers from separate accounts		(4,103	)		(3,897	)		(3,726	)
Net transfers from separate accounts		(2,136	)		(1,667	)		(1,200	)
Transfers as reported in the Statutory Statements of Operations	$	(2,136	)	$	(1,667	)	$	(1,200	)

12. RESERVES FOR GUARANTEED POLICY BENEFITS AND ENHANCEMENTS

Variable annuity contracts may include certain contractually guaranteed benefits to the contract holder. These guaranteed features include GMDB that are payable in the event of death, and living benefits that are payable in the event of annuitization, or, in other instances, at specified dates during the accumulation period. Living benefits include guaranteed minimum withdrawal benefits (GMWB) and, to a lesser extent, guaranteed minimum accumulation benefits (GMAB), which are no longer offered. A variable annuity contract may include more than one type of guaranteed benefit feature; for example, it may have both a GMDB and a GMWB. However, a policyholder generally can only receive payout from one guaranteed feature on a contract containing a death benefit and a living benefit, i.e. the features are mutually exclusive. A policyholder cannot purchase more than one living benefit on one contract. The net amount at risk for each feature is calculated irrespective of the existence of other features; as a result, the net amount at risk for each feature is not additive to that of other features.

Reserves for GMDB and GMWB were included in the VACARVM reserves. Total reserves in excess of basic reserves were $10 million and $28 million at December 31, 2020 and 2019, respectively.

GMDB

Depending on the product, the GMDB feature may provide a death benefit of either (a) total deposits made to the contract less any partial withdrawals plus a minimum return or (b) the highest contract value attained, typically on any anniversary date minus any subsequent withdrawals following the contract anniversary.

The net amount at risk, which represents the guaranteed benefit exposure in excess of the current account value if death claims were filed on all contracts related to GMDB, was $179 million and $307 million at December 31, 2020 and 2019, respectively.

GMWB

Certain of the Company’s variable annuity contracts offer optional GMWB. With a GMWB, the contract holder can monetize the excess of the guaranteed amount over the account value of the contract only through a series of withdrawals that do not exceed a specific percentage per year of the guaranteed amount. If, after the series of withdrawals, the account value is exhausted, the contract holder will receive a series of annuity payments equal to the remaining guaranteed amount, and, for lifetime GMWB products, the annuity payments continue as long as the covered person(s) are living.

The net amount at risk for GMWB represents the present value of minimum guaranteed withdrawal payments, in accordance with contract terms, in excess of account value. The net amount at risk related to this benefit was $123 million and $145 million at December 31, 2020 and 2019, respectively. The Company uses derivative instruments and other financial instruments to mitigate a portion of the exposure that arises from GMWB.

47

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

13. REINSURANCE

At December 31, 2020 and 2019, policy reserves on reinsurance assumed were $97 million and $100 million, respectively.

The Company has modified coinsurance and coinsurance reinsurance agreements with MetLife in Japan, pertaining to certain policies written via its branch in Japan. Under the agreements, the Company assumes liability for a quota share portion of contracts issued by MetLife in Japan that include GMIB and GMWB. The contracts assumed also include a GMDB provision. The GMIB (prior to its utilization date), GMWB and the GMDB have a 100 percent quota share and are assumed under coinsurance agreements. The GMIB (after its utilization date) has a 100 percent quota share and is assumed under the modified coinsurance provisions. The benefits provided by the reinsured contracts are assumed with a 50 percent quota share and varied quota share under the modified coinsurance agreements. The agreements are unlimited in duration, but were terminated for new business after March 31, 2009.

The Company calculates total policy reserves for contracts assumed by MetLife in Japan pursuant to AG 43, which includes all assumed GMIB, GMWB and GMDB benefits. MetLife in Japan holds a modified coinsurance reserve for the contracts under the agreements. The Company holds a reserve equal to the excess, if any, of the AG 43 reserve above the modified coinsurance reserve.

In February 2018, the Company and its U.S. life insurance company affiliates, The United States Life Insurance Company in the City of New York and American General Life Insurance Company, each executed their respective Modified Coinsurance (ModCo) Agreements (The Agreements) with Fortitude Reinsurance Company, Ltd (FRL), (formerly DSA Reinsurance Company Limited), at the time a wholly owned AIG subsidiary and registered Class 4 and Class E reinsurer in Bermuda. The Agreements were effective as of January 1, 2017 in respect of certain closed blocks of business (including structured settlements and single premium immediate annuities). Fortitude Group Holdings, LLC (Fortitude Holdings) was formed by AIG to act as a holding company for FRL.

The initial consideration represented the book value of ModCo Assets held by the Company on behalf of FRL and was equal to the ModCo Reserves ceded at the effective date. While there was no net impact from the initial accounting as of the effective date, there was a significant offsetting impact on certain individual line items in the Summary of Operations.

Total returns on the ModCo Assets subsequent to the effective date inure to the benefit of FRL and are reported with the ModCo reserve adjustments. The Company did not receive a ceding commission at contract inception.

The Company completed its initial settlement with FRL in June 2018 and settles all payable or receivable balances quarterly. The fourth quarter settlement of $9 million was paid in March 2021.

On November 13, 2018, AIG completed the sale of a 19.9 percent ownership interest in Fortitude Holdings to TC Group Cayman Investment Holdings, L.P. (TCG), an affiliate of The Carlyle Group L.P. Subsequent to this sale, Fortitude Holdings owns 100 percent of the outstanding common shares of FRL and AIG has an 80.1 percent ownership interest in Fortitude Holdings.

On November 25, 2019, AIG entered into a membership interest purchase agreement with Fortitude Holdings, The Carlyle Group L.P. (Carlyle), Carlyle FRL, L.P., an investment fund advised by an affiliate of Carlyle (Carlyle FRL), T&D United Capital Co., Ltd. (T&D) and T&D Holdings, Inc., pursuant to which, subject to the satisfaction or waiver of certain conditions set forth therein, Carlyle FRL will purchase from AIG a 51.6 percent ownership interest in Fortitude Holdings and T&D will purchase from AIG a 25 percent ownership interest in Fortitude Holdings. Upon closing of the Fortitude Sale, AIG will have a 3.5 percent ownership interest in Fortitude Holdings. Additional information about this transaction is set forth in AIG’s Parent 10-K for year ending December 31, 2019.

On June 2, 2020, AIG Parent completed the sale of a majority of the interests in Fortitude Group Holdings, LLC (Fortitude Holdings) to Carlyle FRL, L.P. (Carlyle FRL), an investment fund advised by an affiliate of The Carlyle Group Inc. (Carlyle), and T&D United Capital Co., Ltd. (T&D), a subsidiary of T&D Holdings, Inc., under the terms of a membership interest purchase agreement entered into on November 25, 2019 by and among AIG Parent, Fortitude Holdings, Carlyle FRL, Carlyle, T&D and T&D Holdings, Inc. (the Majority Interest Fortitude Sale). AIG Parent

48

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

established Fortitude Reinsurance Company Ltd. (Fortitude Re), a wholly owned subsidiary of Fortitude Holdings, in 2018 in a series of reinsurance transactions related to AIG Parent’s Legacy Portfolio. As of December 31, 2020, approximately $30.5 billion of reserves from AIG’s Parent’s Legacy Life and Retirement Run-Off Lines and approximately $4.1 billion of reserves from AIG’ Parent’s Legacy General Insurance Run-Off Lines, related to business written by multiple wholly-owned AIG subsidiaries, had been ceded to Fortitude Re under these reinsurance transactions. As of closing of the Majority Interest Fortitude Sale, these reinsurance transactions are no longer considered affiliated transactions and Fortitude Re is the reinsurer of the majority of AIG Parent’s Legacy Portfolio. As these reinsurance transactions are structured as modified coinsurance and loss portfolio transfers with funds withheld, following the closing of the Majority Interest Fortitude Sale, AIG Parent continues to reflect the invested assets, which consist mostly of available for sale securities, supporting Fortitude Re’s obligations, in AIG’ Parent’s financial statements.

Following closing, AIG contributed $700 million of the proceeds of the Majority Interest Fortitude Sale to certain of its General Insurance subsidiaries and $135 million of the proceeds of the Majority Interest Fortitude Sale to The United States Life Insurance Company in the City of New York. AIG retained $615 million of the proceeds it had previously expected to contribute to certain of its Life and Retirement subsidiaries; as a result of the lower contribution, AIG expects to receive reduced dividend distributions from its Life and Retirement subsidiaries in 2020 compared to its original plan.

The table below presents the impact of the execution of the ModCo Agreement in February 2018 with an effective date of January 1, 2017, by line item in the Company’s statements of assets, liabilities, surplus and other funds and on the summary of operations:

										Balance as of December 31, 2020
Statutory Statements of Assets, Liabilities and Capital and Surplus
Funds withheld										$	9
Increase (Decrease) (in millions)	Initial Accounting			As of and Year Ended December 31, 2019, 2018 and 2017			Total Reported at December 31, 2019			As of and Year Ended December 31, 2020
Statutory Statement of Operations
Premiums and annuity considerations	$	(592	)	$	-		$	(592	)	$	-
Commissions and expense allowances		-			1			1			-
Reserve adjustments on reinsurance ceded		592			(133	)		459			(55	)
Total revenues		-			(132	)		(132	)		(55	)
Death benefits		-			-			-			-
Annuity benefits		-			(43	)		(43	)		(15	)
Surrender benefits		-			-			-			-
Other benefits		-			(102	)		(102	)		(27	)
Total benefits and expenses		-			(145	)		(145	)		(42	)
Net gain from operations before dividends to policyholders and federal income taxes		-			13			13			(13	)
Dividends to policyholders		-			-			-			-
Net gain from operations after dividends to policyholders and before federal income taxes	$	-		$	13		$	13		$	(13	)

14. FEDERAL INCOME TAXES

Recent U.S. Tax Law Changes

On December 22, 2017, the United States enacted Public Law 115-97, known as the Tax Cuts and Jobs Act (“the Tax Act”). The Tax Act reduced the statutory rate of U.S. federal corporate income tax to 21 percent and enacted numerous other changes impacting the Company.

49

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

The Tax Act includes provisions for Global Intangible Low-Taxed Income (“GILTI”), under which taxes on foreign income are imposed on the excess of a deemed return on tangible assets of foreign corporations and for Base Erosion and Anti-Abuse Tax (“BEAT”), under which taxes are imposed on certain base eroding payments to affiliated foreign companies. While the U.S. tax authorities issued formal guidance, including recently issued proposed and final regulations for BEAT and other provisions of the Tax Act, there are still certain aspects of the Tax Act that remain unclear and subject to substantial uncertainties. Additional guidance is expected in future periods. Such guidance may result in changes to the interpretations and assumptions we made and actions we may take, which may impact amounts recorded with respect to international provisions of the Tax Act, possibly materially. Consistent with accounting guidance, we treat BEAT as a period tax charge in the period the tax is incurred and have made an accounting policy election to treat GILTI taxes in a similar manner. No provision for income tax related to GILTI or BEAT was recorded as of December 31, 2020.

On March 27, 2020, the U.S. enacted the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act to mitigate the economic impacts of the COVID-19 crisis. The tax provisions of the CARES Act have not had and are currently not expected to have a material impact on the Company’s U.S. federal tax liabilities.

The following table presents the components of the net deferred tax assets and liabilities:

	December 31, 2020						December 31, 2019						Change
(in millions)	Ordinary		Capital		Total		Ordinary		Capital		Total		Ordinary			Capital		Total
Gross DTA	$	483	$	389	$	872	$	469	$	257	$	726	$	14		$	132	$	146
Statutory valuation allowance adjustment		-		-		-		-		-		-		-			-		-
Adjusted gross DTA		483		389		872		469		257		726		14			132		146
DTA non-admitted		342		389		731		365		257		622		(23	)		132		109
Net admitted DTA		141		-		141		104		-		104		37			-		37
DTL		53		-		53		32		-		32		21			-		21
Total	$	88	$	-	$	88	$	72	$	-	$	72	$	16		$	-	$	16

The following table presents the ordinary and capital DTA admitted assets as the result of the application of SSAP 101:

	December 31, 2020						December 31, 2019						Change
(in millions)	Ordinary		Capital		Total		Ordinary		Capital		Total		Ordinary		Capital		Total
Admission calculation components
SSAP 101
Federal income taxes paid in prior years recoverable through loss carry backs	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Adjusted gross DTA expected to be realized (excluding amount of DTA from above) after application of the threshold limitation		88		-		88		72		-		72		16		-		16
1. Adjusted gross DTA expected to be realized following the reporting date		88		-		88		72		-		72		16		-		16
2. Adjusted gross DTA allowed per limitation threshold		-		-		534		-		-		469		-		-		65
Adjusted gross DTA (excluding the amount of DTA from above) offset by gross DTL		53		-		53		32		-		32		21		-		21
DTA admitted as the result of application of SSAP 101	$	141	$	-	$	141	$	104	$	-	$	104	$	37	$	-	$	37

50

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

The following table presents the ratio percentage and amount of adjusted capital to determine the recovery period and threshold limitation amount:

	Years ended December 31,
($ in millions)	2020			2019
Ratio percentage used to determine recovery period and threshold limitation amount		852	%		828	%
Amount of adjusted capital and surplus used to determine recovery period and threshold limitation amount	$	3,562		$	3,125

The Company has no tax planning strategies used in the determination of adjusted gross DTA’s or net admitted DTA’s.

The Company’s planning strategy does not include the use of reinsurance.

The Company is not aware of any significant DTLs that are not recognized in the statutory financial statements.

The following tables present the major components of the current income tax expense and net deferred tax assets (liabilities):

	Years Ended December 31,
(in millions)	2020		2019		2018
Current income tax expense
Federal	$	270	$	303	$	189
Federal income tax on net capital gains (losses)		46		33		(9	)
Federal income tax incurred	$	316	$	336	$	180
	Years Ended December 31,
(in millions)	2020		2019		Change
Deferred tax assets:
Ordinary:
Policyholder reserves	$	108	$	102	$	6
Investments		4		20		(16	)
Deferred acquisition costs		191		157		34
Fixed assets		128		125		3
Tax credit carryforward		48		56		(8	)
Other (including items less than 5% of total ordinary tax assets)		4		9		(5	)
Subtotal		483		469		14
Non-admitted		342		365		(23	)
Admitted ordinary deferred tax assets		141		104		37
Capital:
Investments		389		257		132
Subtotal		389		257		132
Statutory valuation allowance adjustment		-		-		-
Non-admitted		389		257		132
Admitted capital deferred tax assets		-		-		-
Admitted deferred tax assets		141		104		37
Deferred tax liabilities:
Ordinary:
Investments		4		32		(28	)
Policyholder reserves		49		-		49
Other (including items less than 5% of total ordinary tax liabilities)		-		-		-
Subtotal		53		32		21
Capital:
Other (including items less than 5% of total capital tax liabilities)		-		-		-
Subtotal		-		-		-
Deferred tax liabilities		53		32		21
Net deferred tax assets	$	88	$	72	$	16

51

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

The change in net deferred income taxes is comprised of the following (this analysis is exclusive of non-admitted assets as the change in non-admitted assets and the change in net deferred income taxes are reported in separate components of capital and surplus):

	Years Ended December 31,
(in millions)	2020		2019		Change
Total adjusted deferred tax assets	$	872	$	726	$	146
Total deferred tax liabilities		53		32		21
Net adjusted deferred tax assets	$	819	$	694		125
Tax effect of unrealized capital gains (losses)						14
Change in net deferred income tax					$	139

The provision for incurred federal taxes is different from that which would be obtained by applying the statutory federal income tax rate to income before income taxes. The following table presents the significant items causing this difference:

	December 31, 2020						December 31, 2019						December 31, 2018
(in millions)	Amount			Effective Tax Rate			Amount			Effective Tax Rate			Amount			Effective Tax Rate
Income tax expense at applicable rate	$	185			21.0	%	$	161			21.0	%	$	181			21.0	%
Change in valuation adjustment		-			-			(54	)		(7.0	)		54			6.3
Dividends received deduction		(24	)		(2.8	)		(26	)		(3.3	)		(23	)		(2.7	)
Amortization of interest maintenance reserve		(3	)		(0.3	)		6			0.8			(11	)		(1.2	)
Prior year return true-ups and adjustments		(22	)		(2.5	)		(15	)		(1.8	)		(8	)		(0.9	)
Change in non-admitted assets		(1	)		(0.2	)		-			(0.1	)		3			0.3
Surplus adjustments		34			4.0			(1	)		(0.1	)		-			-
Tax credit expiration		8			0.9			5			0.5			-			-
Statutory income tax expense	$	177			20.1	%	$	76			10.0	%	$	196			22.8	%
Federal income taxes incurred	$	316			35.9	%	$	336			43.8	%	$	180			20.9	%
Change in net deferred income taxes		(139	)		(15.8	)		(260	)		(33.8	)		16			1.9
Statutory income tax expense	$	177			20.1	%	$	76			10.0	%	$	196			22.8	%

At December 31, 2020, the Company had the following foreign tax credits carryforwards:

(in millions)
Year Expires	Amount
2021	$	10
2022		7
2023		8
2024		4
Total	$	29

At December 31, 2020, the Company had no operating loss carryforwards or capital loss carryforwards.

At December 31, 2020, the Company had the following general business credit carryforwards:

(in millions)
Year Expires	Amount
2028	$	6
2029		4
2030		1
2033		8
Total	$	19

52

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

The following table presents income tax incurred that is available for recoupment in the event of future net losses:

(in millions)
December 31,	Capital
2018	$	-
2019		120
2020		189
Total	$	309

In general, realization of DTAs depends on a company’s ability to generate sufficient taxable income of the appropriate character within the carryforward periods in the jurisdictions in which the net operating losses and deductible temporary differences were incurred. In accordance with the requirements established in SSAP 101, the Company assessed its ability to realize DTAs of $873 million and concluded that no valuation allowance was required at December 31, 2020. Similarly, the Company concluded that no valuation allowance was required on the DTAs of $726 million at December 31, 2019.

The Company had no deposits admitted under Internal Revenue Code Section 6603.

The following table presents a reconciliation of the beginning and ending balances of the total amounts of gross unrecognized tax benefits, excluding interest and penalties:

	Years Ended December 31,
(in millions)	2020			2019
Gross unrecognized tax benefits at beginning of year	$	17		$	17
Increases in tax position for prior years		-			-
Decreases in tax position for prior years		(5	)		-
Gross unrecognized tax benefits at end of year	$	12		$	17

As of December 31, 2020 and 2019, the amounts of unrecognized tax benefits that, if recognized, would favorably affect the effective tax rate were $12 million and $17 million, respectively.

Interest and penalties related to unrecognized tax benefits are recognized in income tax expenses. At December 31, 2020 and 2019, the Company had accrued $2 million and $5 million, respectively, for the payment of interest (net of the federal benefit) and penalties. At December 31, 2020 and 2019, the Company recognized benefit of $3 million and expense of less than $1 million, respectively, of interest (net of the federal benefit) and penalties.

The Company regularly evaluates proposed adjustments by taxing authorities. At December 31, 2020, such proposed adjustments would not have resulted in a material change to the Company’s financial condition, although it is possible that the effect could be material to the Company’s results of operations for an individual reporting period. Although it is reasonably possible that a change in the balance of unrecognized tax benefits may occur within the next twelve months, based on the information currently available, the Company does not expect any change to be material to its financial condition.

The Company is currently under Internal Revenue Service (IRS) examination for the taxable years 2007-2013. Although the final outcome of possible issues raised in any future examination are uncertain, the Company believes that the ultimate liability, including interest, will not materially exceed amounts recorded in the financial statements. The Company’s taxable years 2007-2020 remain subject to examination by major tax jurisdictions.

The Company is not subject to the repatriation transition tax for the year ended December 31, 2020.

Alternative Minimum Tax Credit

53

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

(in millions)	2020
(1) Gross AMT Credit Recognized as:
a. Current year recoverable	$	-
b. Deferred tax asset (DTA)		-
(2) Beginning balance of AMT credit carryforward	$	-
(3) Amounts recovered		-
(4) Adjustments		-
(5) Ending Balance of AMT credit carryforward (5=2-3-4)		-
(6) Reduction for sequestration		-
(7) Nonadmitted by reporting entity		-
(8) Reporting entity ending balance (8=5-6-7)	$	-

The Company joins in the filing of a consolidated federal income tax return with AIG Parent.

The Company has a written agreement with AIG Parent under which each subsidiary agrees to pay AIG Parent an amount equal to the consolidated federal income tax expense multiplied by the ratio that the subsidiary’s separate return tax liability bears to the consolidated tax liability, plus one hundred percent of the excess of the subsidiary’s separate return tax liability over the allocated consolidated tax liability. AIG Parent agrees to pay each subsidiary for the tax benefits, if any, of net operating losses, net capital losses and tax credits which are not usable by the subsidiary but which are used by other members of the consolidated group.

The following table lists those companies that form part of the 2020 AIG consolidated federal tax return:

Company	Company	Company	Company	Company
A.I. Credit Corp.	AGC Life Insurance Company	AGL Loan Investments Corporation	AGLIC Investments Bermuda Limited	AH SLP 1094 San Lucas, LLC
AH SubGP 1000 Woodwind Lakes, LLC	AH SubGP 1007 Highland Meadow, LLC	AH SubGP 1020 Collingham, LLC	AH SubGP 1045 Montgomery, LLC	AH SubGP 1098 Green Pines, LLC
AH SubGP 1158 Flat Iron, LLC	AH SubGP 1170 Palms at Vero Beach, LLC	AH SubGP 1212 Painted Desert, LLC	AH SubGP 1248 North Vista, LLC	AH SubGP 1263 West Virginia, LLC
AH SubGP 1384 Woodglen, LLC	AH SubGP 1433 Magnolia, LLC	AH SubGP 1450 Timber, LLC	AH SubGP 1470 Palmetto, LLC	AH SubGP 1480 Eastmont Senior, LLC
AH SubGP 1535 Hunter’s Run, LLC	AH SubGP 1548 Walnut, LLC	AH SubGP 1551 Spanish Creek, LLC	AH SubGP 1597 Broadmoor, LLC	AH SubGP 1600 Rainer, LLC
AH SubGP 1631 Broadway, LLC	AH SubGP 1694 Sonoma, LLC	AH SubGP 245 Garland, LLC	AH SubGP 479 Sunrise, LLC	AH SubGP 516 Merrilltown, LLC
AH SubGP 641 McKinney Apartments, LLC	AH SubGP 665 Salinas Bay, LLC	AH SubGP 693 Parkland Pointe, LLC	AH SubGP 716 Villas of Mission Bend, LLC	AH SubGP 759 Parker Commons, LLC
AH SubGP 785 Mayfield, LLC	AH SubGP 787 North Knoll, LLC	AH SubGP 835 Whispering, LLC	AH SubGP 842 Huebner, LLC	AH SubGP 911 Mainland, LLC
AH SubGP 929 Collinwood, LLC	AH SubGP 936 Emmaus, LLC	AH SubGP 997 Maxey, LLC	AH SubGP Crestview Duplexes, LLC	AH SubGP GAG Gandolf, LLC
AH SubGP MDL, LLC	AIG Aerospace Adjustment Services, Inc.	AIG Aerospace Insurance Services, Inc.	AIG Asset Management (U.S.), LLC	AIG Asset Management EU CLO, LLC
AIG Assurance Company	AIG BG Holdings LLC	AIG Capital Corporation	AIG Capital Services, Inc.	AIG Claims, Inc.
AIG Commercial Equipment Finance, Inc.	AIG Consumer Finance Group, Inc.	AIG Credit (Europe) Corporation	AIG Credit Corp.	AIG Direct Insurance Services, Inc.
AIG Employee Services, Inc.	AIG FCOE, Inc.	AIG Federal Savings Bank	AIG Financial Products Corp.	AIG Fund Services, Inc.

54

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

Company	Company	Company	Company	Company
AIG G5, Inc.	AIG Global Asset Management Holdings Corp.	AIG Global Capital Markets Securities, LLC	AIG Global Real Estate Investment Corp.	AIG Insurance Management Services, Inc.
AIG International Inc.	AIG Kirkwood, Inc.	AIG Korean Real Estate Development YH	AIG Life Holdings, Inc.	AIG Life of Bermuda, Ltd.
AIG Markets, Inc.	AIG Matched Funding Corp.	AIG Mortgage Capital, LLC	AIG North America, Inc.	AIG Partnership Holdings Corp.
AIG PC Global Services Inc.	AIG Procurement Services, Inc.	AIG Property Casualty Company	AIG Property Casualty U.S., Inc.	AIG Property Casualty, Inc.
AIG Realty, Inc.	AIG Securities Lending Corp.	AIG Shared Services	AIG Shared Services Corporation	AIG Specialty Insurance Company
AIG Spring Ridge I, Inc.	AIG Technologies, Inc.	AIG Technologies, Inc. (U.K. branch)	AIG Travel, Inc.	AIG Warranty Services of Florida, Inc.
AIG Warranty Services, Inc.	AIG WarrantyGuard, Inc.	AIG.COM, Inc.	AIG-FP Capital Preservation Corp.	AIG-FP Matched Funding Corp.
AIG-FP Pinestead Holdings Corp.	AIGGRE Dakota Springs Investor LLC	AIGGRE DC Ballpark Investor, LLC	AIGGRE Europe Real Estate Fund I	AIGGRE Livermore Longfellow Investor LLC
AIGGRE Market Street II LLC	AIGGRE North Getty Investor LLC	AIGGRE U.S. Real Estate Fund I	AIGGRE U.S. Real Estate Fund II	AIGGRE U.S. Real Estate Fund II GP, LLC
AIGGRE U.S. Real Estate Fund III	AIGGRE VISTA, LLC	AIGT Inc. Hong Kong Branch	AIU Insurance Company	Akita, Inc.
Alabaster Capital LLC	AlphaCat Capital Inc.	AM Holdings LLC	American Athletic Club, Inc.	American General Annuity Service Corporation
American General Assignment	American General Assignment Corporation	American General Insurance Agency, Inc.	American General Life Insurance Company	American General Life Services Company, LLC
American General Realty	American Home Assurance Company	American International Facilities Management	American International Group, Inc.	American International Realty Corporation
American International Reinsurance	Applewood Funding Corp.	Arthur J. Glatfelter Agency, Inc.	Barnegat Funding Corp.	Blackboard Customer Care Insurance Services
Blackboard Insurance Company	Blackboard Services, LLC	Blackboard Specialty Insurance Company	Blackboard U.S. Holdings, Inc.	CAP Investor 1, LLC
CAP Investor 2, LLC	CAP Investor 4, LLC	CAP Investor 5, LLC	CAP Investor 8, LLC	CAP Investor 10, LLC
CAP Investor 14, LLC	Charleston Bay SAHP Corp.	Commerce and Industry Insurance Company	Connective Mortgage Advisory Company	Crop Risk Services, Inc.
Crossings SAHP Corp.	Design Professionals Association	DIL/SAHP Corp.	DSA P&C Solutions, Inc.	Eaglestone Reinsurance Company
Eastgreen, Inc.	First Principles Capital Management, LLC	Forest SAHP Corp.	Fortitude Group Holdings, LLC	Fortitude Group Services, Inc.
Fortitude Life & Annuity Solutions, Inc.	Fortitude Re Investments, LLC	Fortitude Reinsurance Company, Ltd.	Foundry Insurance Agency, Inc.	GIG of Missouri, Inc.
GIG Reinsurance Company, Ltd.	Glatfelter Claims Management, Inc.	Glatfelter Properties, LLC	Glatfelter Underwriting Services, Inc.	Grand Savannah SAHP Corp.
Granite State Insurance Company	Health Direct, Inc.	Illinois National Insurance Co.	Integrated Manufacturing Companies, Inc.	Knickerbocker Corporation

55

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

Company	Company	Company	Company	Company
LBMA Equipment Services, Inc.	Lexington Insurance Company	Lexington Specialty Insurance Agency, Inc.	Livetravel, Inc.	LSTREET I, LLC
LSTREET II, LLC	MG Reinsurance Limited	MIP Mezzanine, LLC	MIP PE Holdings, LLC	Morefar Marketing, Inc.
Mt. Mansfield Company, Inc.	National Union Fire Insurance	National Union Fire Insurance Company	New Hampshire Insurance Company	PCG 2019 Corporate Member Limited
Pearce & Pearce, Inc.	Pine Street Real Estate Holdings Corp.	Prairie SAHP Corp.	Raptor Funding Corp.	Rialto Melbourne Investor LLC
Risk Specialists Companies	SA Affordable Housing, LLC	SA Investment Group, Inc.	SA SubGP 1000 Woodwind Lakes, LLC	SAAHP GP Corp.
SAFG Retirement Services, Inc.	SAHP GA III - SC LLC	SAI Deferred Compensation Holdings, Inc.	Sandstone (2016) Ltd.	SCSP Corp.
Service Net Solutions of Florida, LLC	Service Net Warranty, LLC	SLP Housing GPDNAC, LLC	SNW Insurance Agency, LLC	Spruce Peak Realty, LLC
Stowe Mountain Holdings, Inc.	Stratford Insurance Company	SubGen NT, Inc.	SunAmerica Affordable Housing Partners, Inc.	SunAmerica Asset Management, LLC
SunAmerica Fund Assets 104, LLC	SunAmerica Fund Assets 110, LLC	SunAmerica Fund Assets 112, LLC	SunAmerica Fund Assets 119, LLC	SunAmerica Fund Assets 150, LLC
SunAmerica Fund Assets 163, LLC	SunAmerica Fund Assets, LLC	SunAmerica Life Reinsurance Company	SunAmerica Retirement Markets, Inc.	Susquehanna Agents Alliance, LLC
The Glatfelter Agency, Inc.	The Insurance Company of the State of Pennsylvania	The United States Life Insurance Company of the City of New York	The Variable Annuity Life Insurance Company	Travel Guard Group, Inc.
Tudor Insurance Company	U G Corporation	VALIC Financial Advisors, Inc.	VALIC Retirement Services Company	Validus America, Inc.
Validus Re Americas (New Jersey), Inc.	Validus Reaseguros, Inc.	Validus Services, Inc.	Validus Specialty Underwriting Services, Inc.	Validus Specialty, LLC
Volunteer Firemen’s Insurance Services, Inc.	Webatuck Corp.	Westco Claims Management Services, Inc.	Westco Insurance Managers, Inc.	Western World Insurance Company
Western World Insurance Group, Inc.

15. CAPITAL AND SURPLUS

RBC standards are designed to measure the adequacy of an insurer’s statutory capital and surplus in relation to the risks inherent in its business. The RBC standards consist of formulas that establish capital requirements relating to asset, insurance, business and interest rate risks. The standards are intended to help identify companies that are under-capitalized, and require specific regulatory actions in the event an insurer’s RBC is deficient. The RBC formula develops a risk-adjusted target level of adjusted statutory capital and surplus by applying certain factors to various asset, premium and reserve items. Higher factors are applied to more risky items and lower factors are applied to less risky items. Thus, the target level of statutory surplus varies not only because of the insurer’s size, but also on the risk profile of the insurer’s operations. At December 31, 2020, the Company exceeded RBC requirements that would require any regulatory action.

Dividends that the Company may pay to the Parent in any year without prior approval of the TDI are limited by statute. The maximum amount of dividends in a twelve-month period, measured retrospectively from the date of payment, which the Company can pay without obtaining the prior approval of the TDI is limited to the greater of: (1) 10 percent of the Company’s statutory surplus as regards to policyholders at the preceding December 31; or (2) the Company’s preceding year’s statutory net gain from operations. Additionally, unless prior approval of the TDI is obtained, dividends

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can only be paid out of unassigned surplus. Subject to the TDI requirements, the maximum dividend payout that may be made in 2021 without prior approval of the TDI is $395 million. Dividend payments in excess of positive retained earnings were classified and reported as a return of capital.

Dividends are paid as determined by the Board of Directors and are noncumulative. The following table presents the dividends paid by the Company during 2020, 2019 and 2018:

Date	Type	Cash or Non-cash	Amount (in millions)
2020
September 18, 2020	Ordinary	Cash	$	86
December 18, 2020	Ordinary	Cash		274
2019
March 28, 2019	Extraordinary	Cash	$	174
June 26, 2019	Extraordinary	Cash		174
September 25, 2019	Extraordinary	Cash		274
2018
March 27, 2018	Ordinary	Cash	$	49
June 26, 2018	Ordinary	Cash		100
September 24, 2018	Ordinary	Cash		100
December 26, 2018	Ordinary	Cash		400

16. RETIREMENT PLANS AND SHARE-BASED AND DEFERRED COMPENSATION PLANS

The Company does not directly sponsor any defined benefit or defined contribution plans and does not participate in any multi-employer plans.

Employee Retirement Plan

The Company’s employees participate in various AIG Parent-sponsored defined benefit pension and postretirement plans. AIG Parent, as sponsor, is ultimately responsible for the maintenance of these plans in compliance with applicable laws. The Company is not directly liable for obligations under these plans; its obligation results from AIG Parent’s allocation of the Company’s share of expenses from the plans based on participants’ earnings for the pension plans and on estimated claims less contributions from participants for the postretirement plans.

Effective January 1, 2016, the U.S. defined benefit pension plans were frozen. Consequently, these plans are closed to new participants and current participants no longer earn benefits. However, interest credits continue to accrue on the existing cash balance accounts and participants are continuing to accrue years of service for purposes of vesting and early retirement eligibility and subsidies as they continue to be employed by AIG Parent and its subsidiaries.

The following table presents information about employee-related costs (expense credits) allocated to the Company:

	Years ended December 31,
(in millions)	2020			2019			2018
Defined benefit plans	$	(9	)	$	(2	)	$	(10	)

Defined Contribution Plan

AIG Parent sponsors a 401(k) plan which provides for pre-tax salary reduction contributions by its U.S. employees. The Company made matching contributions of 100 percent of the first six percent of participant contributions, subject to IRS-imposed limitations.

Effective January 1, 2016, AIG Parent provides participants in the plan an additional fully vested, non-elective, non-discretionary employer contribution equal to three percent of the participant’s annual base compensation for the plan

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THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

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year, paid each pay period regardless of whether the participant currently contributes to the plan, and subject to the IRS-imposed limitations.

The Company’s pre-tax expense associated with this plan were $22 million, $20 million and $19 million in 2020, 2019 and 2018, respectively.

Share-based and Deferred Compensation Plans

AIG sponsors Long Term Incentive Plans (“LTIP”) that provide for annual awards to certain employees, including senior executive officers and other highly compensated employees that may be a combination of one or more of the following units: performance share units (“PSUs”), restricted stock units (“RSUs”), or stock options.

The number of PSUs issued on the grant date (the target) provides the opportunity for the LTIP participant to receive shares of AIG Common Stock based on AIG achieving specified performance goals at the end of a three-year performance period. These performance goals are pre-established by AIG’s Compensation and Management Resources Committee for each annual grant and may differ from year to year. The actual number of PSUs earned can vary from zero to 200 percent of the target for the 2020, 2019 and 2018 awards, depending on AIG’s performance relative to a specified peer group and/or the outcome of pre-established financial goals, as applicable. RSUs and stock options are earned based on continued service by the participant.

Vesting occurs on January 1 of the year immediately following the end of the three-year performance period. For awards granted prior to 2017, vesting occurs in three equal installments beginning on January 1 of the year immediately following the end of a performance period and January 1 of each of the next two years. Recipients must be employed at each vesting date to be entitled to share delivery, except upon the occurrence of an accelerated vesting event, such as an involuntary termination without cause, disability, retirement eligibility or death during the vesting period.

LTI awards accrue dividend equivalent units (“DEUs”) in the form of additional PSUs and/or RSUs whenever a cash dividend is declared on shares of AIG Common Stock; the DEUs are subject to the same vesting terms and conditions as the underlying unit.

The Company receives an allocation from AIG for these expenses. The Company recognized compensation expenses of $9 million and $8 million as of December 31, 2020 and 2019, respectively, based on the value of AIG’s common stock on the date of grant of which all was recharged to related parties.

Modification of LTI Awards

During the third quarter of 2019, the Company added a modifier to the 2019 performance share units awarded to certain senior executives to cap payout at 100 percent of target if our total shareholder return for the three-year performance period is below peer median. The Company did not recognize any incremental compensation expense as a result of this modification. During the third quarter of 2020, the Company reduced the performance goals from three to two metrics for the 2018 LTI and 2019 LTI awards for certain PSU recipients.

17. DEBT

The Company is a member of the FHLB of Dallas.

Membership with the FHLB provides the Company with collateralized borrowing opportunities, primarily as an additional source of liquidity or for other uses deemed appropriate by management. The Company’s ownership in the FHLB stock is reported as common stock. Pursuant to the membership terms, the Company elected to pledge such stock to the FHLB as collateral for the Company’s obligations under agreements entered into with the FHLB.

Cash advances obtained from the FHLB are reported in and accounted for as borrowed money. The Company may periodically obtain cash advances on a same-day basis, up to a limit determined by management and applicable laws. The Company is required to pledge certain mortgage-backed securities, government and agency securities and other

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qualifying assets to secure advances obtained from the FHLB. To provide adequate collateral for potential advances, the Company has pledged securities to the FHLB in excess of outstanding borrowings. Upon any event of default by the Company, the recovery by the FHLB would generally be limited to the amount of the Company’s liability under advances borrowed.

The following table presents the aggregate carrying value of stock held with the FHLB of Dallas and the classification of the stock:

	December 31,
(in millions)	2020		2019
Membership stock - Class B	$	7	$	7
Activity stock		9		9
Excess stock		1		1
Total	$	17	$	17
Actual or estimated borrowing capacity as determined by the insurer	$	2,879	$	2,263

The Company did not hold any Class A at either December 31, 2020 or 2019.

The following table presents the amount of collateral pledged, including FHLB common stock held, to secure advances from the FHLB:

	December 31, 2020				December 31, 2019
(in millions)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Amount pledged	$	729	$	782	$	472	$	491
Maximum amount pledged during reporting period	$	984	$	1,029	$	486	$	486

The Company’s borrowing capacity determined quarterly based upon the borrowing limit imposed by statute in the state of domicile.

The following table presents the outstanding funding agreement amounts and maximum borrowings from the FHLB:

	December 31,
(in millions)	2020		2019
Maximum amount borrowed during reporting period	$	209	$	209

While the funding agreements are presented herein to show all amounts received from the FHLB, the funding agreements are treated as deposit-type contracts, consistent with the other funding agreements for which the Company’s intent is to earn a spread and not to fund operations. There were no advances taken by the Company as debt which were outstanding at December 31, 2020 and 2019.

On February 15, 2018, the Company entered into a funding agreement with FHLB of Dallas in the amount of $209 million for a 10-year term with a floating interest rate.

18. COMMITMENTS AND CONTINGENCIES

Commitments

The Company had commitments to provide funding to various limited partnerships totaling $970 million and $600 million at December 31, 2020 and 2019, respectively. The commitments to invest in limited partnerships and other funds are called at the discretion of each fund, as needed and subject to the provisions of such fund’s governing documents, for funding new investments, follow-on investments and/or fees and other expenses of the fund. Of the total commitments at December 31, 2020, $322 million are currently expected to expire in 2021 and the remainder by 2024, based on the expected life cycle of the related fund, and the Company’s historical funding trends for such commitments.

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At December 31, 2020 and 2019, the Company had $162 million and $325 million, respectively, of outstanding commitments related to various funding obligations associated with its investments in commercial mortgage loans. Of the total current commitments, $39 million are expected to expire in 2021 and the remainder by 2029, based on the expected life cycle of the related loans, and the Company’s historical funding trends for such commitments.

The Company has various long-term, noncancelable operating leases, primarily for office space and equipment, which expire at various dates over the next several years. At December 31, 2020, the future minimum lease payments under the operating leases are as follows:

(in millions)
2021	$	3
2022		3
2023		2
2024		1
2025		1
Remaining years after 2025		-
Total	$	10

Rent expense was $4 million in 2020, $4 million in 2019 and $3 million in 2018.

Contingencies

Legal Matters

Various lawsuits against the Company have arisen in the ordinary course of business. The Company believes it is unlikely that contingent liabilities arising from such lawsuits will have a material adverse effect on the Company’s financial position, results of operations or cash flows.

Regulatory Matters

All fifty states and the District of Columbia have laws requiring solvent life insurance companies, through participation in guaranty associations, to pay assessments to protect the interests of policyholders of insolvent life insurance companies. These state insurance guaranty associations generally levy assessments, up to prescribed limits, on member insurers in a particular state based on the proportionate share of the premiums written by member insurers in the lines of business in which the impaired, insolvent or failed insurer is engaged. Such assessments are used to pay certain contractual insurance benefits owed pursuant to insurance policies issued by impaired, insolvent or failed insurers. Some states permit member insurers to recover assessments paid through full or partial premium tax offsets. The Company accrues liabilities for guaranty fund assessments when an assessment is probable and can be reasonably estimated. The Company estimates the liability using the latest information available from the National Organization of Life and Health Insurance Guaranty Associations. While the Company cannot predict the amount and timing of any future guaranty fund assessments, the Company has established reserves it believes are adequate for assessments relating to insurance companies that are currently subject to insolvency proceedings.

The Company had accrued $8 million for these guarantee fund assessments at December 31, 2020 and 2019. The Company had receivables of $3 million at December 31, 2020 and 2019, for expected recoveries against the payment of future premium taxes.

The Company is not subject to the risk-sharing provisions of the Affordable Care Act.

Various federal, state or other regulatory agencies may from time to time review, examine or inquire into the operations, practices and procedures of the Company, such as through financial examinations, subpoenas, investigations, market conduct exams or other regulatory inquiries. Based on the current status of pending regulatory examinations, investigations, and inquiries involving the Company, the Company believes it is not likely that these regulatory examinations or inquiries will have a material adverse effect on the financial position, results of operations or cash flows of the Company.

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The Company provides products and services that are subject to the Employee Retirement Income Security Act of 1974, as amended (ERISA), or the Internal Revenue Code of 1986, as amended (the Internal Revenue Code). Plans subject to ERISA include certain pension and profit sharing plans and welfare plans, including health, life and disability plans. As a result, the Company’s activities are subject to the restrictions imposed by ERISA and the Internal Revenue Code, including the requirement under ERISA that fiduciaries must perform their duties solely in the interests of ERISA plan participants and beneficiaries, and that, fiduciaries may not cause a covered plan to engage in certain prohibited transactions. The applicable provisions of ERISA and the Internal Revenue Code are subject to enforcement by the DOL, the Internal Revenue Service (IRS) and the Pension Benefit Guaranty Corporation.

The Company and its distributors are subject to laws and regulations regarding the standard of care applicable to sales of its products and the provision of advice to its customers. In recent years, many of these laws and regulations have been revised or reexamined while others have been newly adopted. The Company continues to closely follow these legislative and regulatory activities. Changes in standard of care requirements or new standards issued by governmental authorities, such as the DOL, the SEC, the NAIC or state regulators and/or legislators, may affect the Company’s businesses, results of operations and financial condition. While the Company cannot predict the long-term impact of these legislative and regulatory developments on the Company’s business, the Company believes its diverse product offerings and distribution relationships position the Company to compete effectively in this evolving marketplace.

The SECURE Act (Setting Every Community Up for a Retirement Enhancement Act) includes a number of provisions aimed at increasing retirement savings, including repealing the maximum age for traditional IRA contributions, increasing the age for required minimum distributions from retirement accounts and incentivizing small businesses to start new retirement plans for employees. SECURE Act was signed into law as part of broader federal legislation on December 20, 2019, with many provisions effective January 1, 2020. Some of the changes in law made by the SECURE Act are complex and still require further regulatory guidance. We have implemented new processes and procedures, where needed, designed to comply with the new requirements.

19. RELATED PARTY TRANSACTIONS

Events Related to AIG Parent

On October 26, 2020, AIG announced its intention to separate its Life & Retirement business from AIG. No decisions have yet been made regarding the structure of the proposed initial disposition of up to a 19.9% interest in the Life and Retirement business. In addition, any separation transaction will be subject to the satisfaction of various conditions and approvals, including approval by the AIG Board of Directors, receipt of insurance and other required regulatory approvals, and satisfaction of any applicable requirements of the Securities and Exchange Commission. No assurance can be given regarding the form that a separation transaction may take or the specific terms or timing thereof, or that a separation will in fact occur. For further information regarding AIG’s announcement, please refer to AIG’s Form 10-K for the year ended December 31, 2020.

AIG Parent continues to execute initiatives focused on organizational simplification, operational efficiency, and business rationalization. In keeping with AIG’s broad and ongoing efforts to transform for long-term competitiveness, AIG Parent recognized restructuring costs of $435 million, $218 million and $395 million of pre-tax restructuring and other costs in 2020, 2019 and 2018, respectively, primarily comprised of employee severance charges.

CARES Act

On March 27, 2020, the U.S. enacted the Coronavirus Aid, Relief, and Economic Security (CARES) Act to mitigate the economic impacts of the COVID-19 crisis. This legislation contains multiple provisions, including some that provide greater access to assets held in tax-qualified retirement plans and IRAs for qualifying individuals, which have relevance to the products and services offered by the Company. The relief provided in the CARES Act includes, among others, temporary liberalization of access to distributions and loans, and loan repayment suspension, for eligible individuals in many defined contribution retirement plans; a waiver of the 10% additional tax on qualifying distributions which otherwise applies to early distributions (generally, prior to age 59 ¹⁄₂) from retirement plans and IRAs; and a temporary

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THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

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waiver of required minimum distributions due to be taken in 2020 from retirement plans and IRAs. The Company has implemented an array of forms, processes and procedures to assist in making these provisions available to plan sponsors, plan participants and IRA owners. All of these temporary provisions expired by the end of 2020. Any additional liberalization would require enactment of new legislation.

COVID-19

The impact of COVID-19 crisis is evolving rapidly and will depend upon the scope and duration of the crisis as well as the actions taken by governments, regulators and other third parties in response, all of which are highly uncertain at this time. Please refer to AIG’s Form 10-K for the year ended December 31, 2020, for additional information regarding the impact of this event on AIG and its businesses.

Specific to AIG’s Life & Retirement segment, which includes the Company’s businesses, the most significant impacts relating to COVID-19 have been the impact of interest rate and equity market levels on spread and fee income, and adverse mortality. Additionally, we have a diverse investment portfolio with material exposures to various forms of credit risk. Because of the far reaching economic impacts of COVID-19, it is likely that there will be continued impact on the value of the portfolio; however, at this point in time, uncertainty surrounding the duration and severity of the COVID-19 crisis make the short-term or long-term financial impact difficult to quantify. Our management is actively monitoring the Company’s claims activity and evaluating the potential direct and indirect impacts that COVID-19 may have on the Company’s businesses, operations and investments (including resulting from accommodations if any we may provide to our clients during this crisis).

Additional information on AIG Parent is publicly available in AIG Parent’s regulatory filings with the SEC, which can be found at www.sec.gov. Information regarding AIG Parent as described herein is qualified by regulatory filings AIG Parent files from time to time with the SEC.

Selkirk Transactions

During 2013 and 2014, the Company entered into securitization transactions in which portfolios of the Company’s commercial mortgage loans were transferred to special purpose entities, with the Company retaining a significant beneficial interest in the securitized loans. As consideration for the transferred loans, the Company received beneficial interests in certain special purpose entities and cash proceeds from the securitized notes issued to third party investors by other special purpose entities. The transfer was accounted for as a sale and the Company derecognized the commercial mortgage loans transferred. The beneficial interests in loan-backed and structured securities and equity interests received by the Company were initially recognized at fair value as unaffiliated investments, as these securities are non-recourse to the issuer, and interest and principal payments are dependent upon the cash flows from the underlying unaffiliated mortgage loans.

Lighthouse VI

During 2013, the Company, along with an affiliate, executed three transactions in which a portfolio of securities was, in each transaction, transferred into a newly established Common Trust Fund (CTF) in exchange for proportionate interests in all assets within each CTF as evidenced by specific securities controlled by and included within the Company’s Representative Security Account (RSA).

In each transaction, a portion of the Company’s securities were transferred to the RSA of the affiliate, AGL, in exchange for other AGL securities.

Ambrose

During 2012, 2013 and 2014, the Company entered into securitization transactions in which the Company transferred portfolios of high grade corporate securities, and structured securities acquired from AIG, to newly formed special purpose entities (the Ambrose entities). As consideration for the transferred securities, the Company received beneficial

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THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

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interests in tranches of structured securities issued by each Ambrose entity. These structured securities were designed to closely replicate the interest and principal amortization payments of the transferred securities.

The Ambrose entities received capital commitments from a non-U.S. subsidiary of AIG, which are guaranteed by AIG. Pursuant to these capital commitments, the promissor will contribute funds to the respective Ambrose entity upon demand.

These capital commitments received by the Ambrose entities range from $200 million to $400 million per entity.

American Home Guarantee

The Company has a General Guarantee Agreement with American Home Assurance Company (American Home), an indirect wholly owned subsidiary of AIG Parent. Pursuant to the terms of the agreement, American Home has unconditionally and irrevocably guaranteed insurance policies that the Company issued between March 3, 2003 and December 29, 2006. American Home’s audited statutory financial statements are filed with the SEC in the Company’s registration statements for variable products that are subject to the Guarantee.

Affiliate Transactions

The Company purchases or sells securities, at fair market value, to or from affiliates in the ordinary course of business.

During the year ended December 31, 2020, the Company purchased or sold securities, at fair market value, from or to one or more of its affiliates in the ordinary course of business. For additional information regarding purchase and sale transactions involving the Company with an affiliate, please refer to the Company’s Annual Registration Statement and monthly amendments filed with the TDI.

On June 2, 2020, in connection with AIG Parent’s completion of the sale of a majority of the interests in Fortitude Group Holdings, LLC, the Company executed an Amended and Restated Modified Coinsurance Agreement (the “Amended and Restated ModCo”) with Fortitude Reinsurance Company, Ltd. (“Fortitude”) with an effective date of June 1, 2020. Fortitude is a wholly owned subsidiary of Fortitude Group Holdings, LLC. The Amended and Restated ModCo amends and restates the Modified Coinsurance Agreement previously executed by the Company with Fortitude in February 2018. Following AIG Parent’s completion of the aforementioned sale, Fortitude is no longer an affiliate of the Company.

In January 2019, VALIC and several of its U.S. insurance company affiliates established AIGGRE U.S. Real Estate Fund III, LP (“U.S. Fund III”), a real estate investment fund managed by AIGGRE. At the closing of U.S. Fund III on January 2, 2019, the Company made a capital commitment to the fund of up to $296 million, which represents approximately 19.7% equity interests in the fund. In connection with the closing of U.S. Fund III, the Company contributed to the fund its interests in certain real estate equity investments with an aggregate fair value of approximately $63.6 million and received a cash payment of approximately $16.8 million. In December 2020, VALIC and several of its U.S. insurance company affiliates sold a portion of their equity interests in U.S. Fund III to third parties. VALIC sold equity interests in the fund representing approximately 3.7% of Fund III to the third parties for a purchase price of approximately $29.8 million. At the close of the sale to the third parties, a portion of the purchase price was paid in cash and the remainder is being paid based on the terms of loan agreements between VALIC and the third parties.

In March 2019, the Company and several of its U.S. insurance company affiliates established AIGGRE Europe Real Estate Fund II, LP (“Europe Fund II), a real estate investment fund managed by AIGGRE. In connection with the closing of Europe Fund II, the Company made a capital commitment to the fund of up to $100.4 million (representing an approximately 21.7% equity interest therein), and contributed to the fund the Company’s interests in certain real estate equity investments (with an aggregate fair value of approximately $20.6 million) and received a cash payment from the fund (approximately $12.8 million).

In 2018, the Company and several of its U.S. insurance company affiliates restructured their respective ownership interests in certain real estate equity investments previously originated by an affiliate, AIG Global Real Estate

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THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

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Investment Corp. (including its investment management affiliates, “AIGGRE”), by contributing such interests to three separate real estate investment funds managed by AIGGRE: AIGGRE U.S. Real Estate Fund I, LP (“U.S. Fund I”), AIGGRE U.S. Real Estate Fund II, LP (“U.S. Fund II” and, together with U.S. Fund I, the “U.S. Funds”), and AIGGRE Europe Real Estate Fund I S.C.SP (“Europe Fund I”). The U.S. Funds each closed on November 1, 2018. In connection with the closing of U.S. Fund I, the Company made a capital commitment to the fund of up to $36 million (representing approximately 3% equity interest therein), and contributed to the fund the Company’s interests in certain real estate equity investments with an aggregate fair value of approximately $66 million and received a cash payment from the fund of approximately $42 million. In connection with the closing of U.S. Fund II, the Company made a capital commitment to the fund of up to $108 million (representing approximately 4% equity interest therein), and contributed to the fund the Company’s interests in certain real estate equity investments with an aggregate fair value of approximately $148.9 million and received a cash payment from the fund of approximately $65.7 million. Further, Europe Fund I closed on November 2, 2018. In connection with the closing of Europe Fund I, the Company made a capital commitment to the fund of up to $19.6 million (representing approximately 3% equity interest therein) and contributed to the fund the Company’s interests in certain real estate equity investments with an aggregate fair value of approximately $19.2 million and received a cash payment from the fund of approximately $6.3 million.

As a result of these transactions, the Company received equity in the Funds equaling the fair value of the assets transferred. The transfer is accounted for at fair value with any gain deferred until permanence of transfer of risk and rewards can be established. Any loss is recognized immediately, if any. The difference between the carrying value of the assets transferred and consideration received is recorded as a basis difference, which will be admitted subject to applicable limits and amortized over the duration of the Funds.

At December 31, 2020, the Company’s unfunded capital commitment to U.S. Fund I, U.S. Fund II, U.S Fund III, Europe Fund I and Europe Fund II were approximately $11.3 million, $14.9 million, $59.3 million, $6 million and $103.3 million, respectively.

At December 31, 2019, the Company’s unfunded capital commitment to U.S. Fund I, U.S. Fund II, U.S Fund III, Europe Fund I and Europe Fund II were approximately $11.7 million, $16.7 million, $179.3 million, $5.5 million and $108.3 million, respectively.

At December 31, 2018, the Company’s unfunded capital commitment to U.S. Fund I, U.S. Fund II and Europe Fund I were approximately $11.9 million, $23.3 million and $8.9 million, respectively.

Financing Agreements

On January 1, 2015, the Company and certain of its affiliates entered into a revolving loan facility with AIG Parent, in which the Company and each such affiliate can borrow monies from AIG Parent subject to certain terms and conditions. Principal amounts borrowed under this facility may be repaid and re-borrowed, in whole or in part, from time to time, without penalty. However, the total aggregate amount of loans borrowed by all borrowers under the facility cannot exceed $500 million. The loan facility also sets forth individual borrowing limits for each borrower, with the Company’s maximum borrowing limit being $500 million.

At December 31, 2020 and 2019, the Company did not have any amounts outstanding under the facility.

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THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

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Investments in Subsidiary, Controlled and Affiliated

The following table presents information regarding the Company’s investments in non-insurance SCA entities as of December 31, 2020:

(in millions)	Gross Amount		Non-admitted Amount		Admitted Asset Amount		Date of NAIC Filing
VALIC Retirement Services Company	$	23	$	23	$	-		NA
VALIC Finl Advisors Inc		99		-		99		April 5, 2019
AIG Life Fund Hldgs Ltd		15		-		15		December 17, 2020
Selkirk No. 3 Investments		1		-		1		Not Applicable
Total	$	138	$	23	$	115

Operating Agreements

The Company has investments in a Liquidity Pool in which funds are managed by an affiliate, AIG Parent Capital Management Corporation, in the amount of $45 million and $206 million at December 31, 2020 and 2019, respectively. These funds were reclassified in 2020 to cash equivalents from short-term investments per NAIC guidelines.

Pursuant to service and expense agreements, AIG and affiliates provide, or cause to be provided, administrative, marketing, investment management, accounting, occupancy, and data processing services to the Company. The allocation of costs for services is based generally on estimated levels of usage, transactions or time incurred in providing the respective services. Generally, these agreements provide for the allocation of costs upon either the specific identification basis or a proportional cost allocation basis which management believes to be reasonable. In all cases, billed amounts pursuant to these agreements do not exceed the cost to AIG or the affiliate providing the service. The Company was charged $427 million, $390 million and $332 million as part of the cost sharing expenses attributed to the Company but incurred by AIG Parent and affiliates in 2020, 2019 and 2018, respectively.

Pursuant to an amended and restated investment advisory agreement, the majority of the Company’s invested assets are managed by an affiliate. The investment management fees incurred were $43 million in 2020, and $39 million in 2019 and $38 million in 2018.

20. SUBSEQUENT EVENTS

Management considers events or transactions that occur after the reporting date, but before the financial statements are issued to provide additional evidence relative to certain estimates or to identify matters that require additional disclosures. The Company has evaluated subsequent events through April 23, 2021, the date the financial statements were issued.

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21. LOAN-BACKED AND STRUCTURED SECURITY IMPAIRMENTS AND STRUCTURED NOTES HOLDINGS

LBaSS

The following table presents the LBaSS held by the Company at December 31, 2020 for which it had recognized non-interest related OTTI subsequent to the adoption of SSAP 43R:

(in thousands)
CUSIP	Amortized Cost Before Current Period OTTI		Present Value of Projected Cash Flows		Recognized OTTI		Amortized Cost After OTTI		Fair Value at Time of OTTI		Date of Financial Statement Where Reported
12669GBA8	$	666	$	653	$	13	$	653	$	590		3/31/2020
16165YAB8		5,440		5,031		409		5,031		5,275		3/31/2020
3622EBAB4		357		347		10		347		353		3/31/2020
05946XSQ7		431		428		3		428		426		3/31/2020
12667GBC6		2,445		2,435		10		2,435		2,405		3/31/2020
172973WZ8		86		85		1		85		85		3/31/2020
55027YAD0		226		222		4		222		217		3/31/2020
86358EFJ0		1,366		1,321		45		1,321		1,276		3/31/2020
59024NAA5		2,274		1,943		331		1,943		2,034		3/31/2020
12669EF50		676		656		20		656		623		3/31/2020
03927NAE3		59		-		59		-		19		3/31/2020
52109PAJ4		7,013		6,934		79		6,934		6,774		3/31/2020
3622N6AA7		3,309		3,293		16		3,293		3,036		3/31/2020
45254NPA9		2,561		2,488		73		2,488		2,464		3/31/2020
126670QT8		32,725		32,508		217		32,508		31,029		3/31/2020
362341FR5		725		712		13		712		624		3/31/2020
45254NML8		4,137		4,005		132		4,005		3,883		3/31/2020
225470UK7		3,687		3,627		60		3,627		3,495		3/31/2020
25150QAA5		13,000		12,706		294		12,706		12,551		3/31/2020
3622EBAA6		668		650		18		650		654		3/31/2020
25151XAA9		8,980		8,798		182		8,798		8,232		3/31/2020
64352VNZ0		14,515		14,129		386		14,129		14,270		3/31/2020
25150WAA2		3,202		3,102		100		3,102		2,926		3/31/2020
040104QP9		8,793		8,530		263		8,530		8,165		3/31/2020
74923WAB4		3,052		2,748		304		2,748		3,028		3/31/2020
058928AN2		1,835		1,799		36		1,799		1,766		3/31/2020
94984MAB0		2,600		2,515		85		2,515		2,523		3/31/2020
68389FKQ6		18,086		17,745		341		17,745		18,064		3/31/2020
02150TAD2		4,298		4,162		136		4,162		4,172		3/31/2020
75114GAA7		5,313		5,291		22		5,291		5,031		3/31/2020
456606EZ1		10,237		9,804		433		9,804		9,339		3/31/2020
007036HY5		3,933		3,862		71		3,862		3,612		3/31/2020
855541AC2		3,258		3,072		186		3,072		2,991		3/31/2020
007036QE9		2,633		2,477		156		2,477		2,464		3/31/2020
02151JAA9		15,429		14,880		549		14,880		14,240		3/31/2020
61915YAC5		4,602		3,673		929		3,673		4,520		3/31/2020
12667FJC0		7,292		7,130		162		7,130		6,835		3/31/2020
12666PBE3		9,718		9,435		283		9,435		9,181		3/31/2020
32055WAB2		2,391		2,263		128		2,263		2,168		3/31/2020
126670FC7		2,968		2,930		38		2,930		2,958		3/31/2020
576433SX5		1,093		1,080		13		1,080		1,027		3/31/2020
007036ET9		1,473		1,449		24		1,449		1,362		3/31/2020
007036FT8		2,385		2,334		51		2,334		2,166		3/31/2020
12669E2W5		3,566		3,464		102		3,464		3,405		3/31/2020
362437AE5		13,219		12,792		427		12,792		13,158		3/31/2020

66

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

(in thousands)
CUSIP	Amortized Cost Before Current Period OTTI		Present Value of Projected Cash Flows		Recognized OTTI		Amortized Cost After OTTI		Fair Value at Time of OTTI		Date of Financial Statement Where Reported
232422AE5	$	7,154	$	7,020	$	134	$	7,020	$	7,058		3/31/2020
225458AQ1		1,973		1,965		8		1,965		1,960		3/31/2020
929227C87		896		894		2		894		844		3/31/2020
36228FND4		834		831		3		831		820		3/31/2020
23247LAD0		10,386		9,954		432		9,954		9,218		3/31/2020
89176EAC4		5,111		5,096		15		5,096		4,488		3/31/2020
81748MCC0		3,458		3,389		69		3,389		2,984		3/31/2020
86361WAA9		9,309		9,137		172		9,137		9,281		3/31/2020
64352VNK3		9,593		9,353		240		9,353		9,362		3/31/2020
83611MGV4		4,297		4,131		166		4,131		3,869		3/31/2020
12652CBE8		327		319		8		319		298		3/31/2020
69374JBU4		105		100		5		100		67		3/31/2020
69372XBS0		272		263		9		263		218		3/31/2020
69372XBQ4		772		761		11		761		693		3/31/2020
69372XBT8		114		106		8		106		103		3/31/2020
69374XBQ2		656		643		13		643		555		3/31/2020
69374XBT6		89		83		6		83		76		3/31/2020
69375BBQ9		735		724		11		724		620		3/31/2020
69375BBT3		61		56		5		56		55		3/31/2020
693684BR2		770		755		15		755		642		3/31/2020
Quarterly Total	$	293,634	$	285,088	$	8,546	$	285,088	$	278,627
75114GAC3	$	3,185	$	3,093	$	92	$	3,093	$	2,794		6/30/2020
74927XAD4		6,640		6,471		169		6,471		4,753		6/30/2020
05530VAA7		3,845		3,755		90		3,755		3,431		6/30/2020
3622MSAA0		510		493		17		493		470		6/30/2020
93364FAC5		16,205		15,994		211		15,994		15,026		6/30/2020
007036UQ7		3,415		3,343		72		3,343		3,098		6/30/2020
026930AA5		2,418		2,350		68		2,350		2,360		6/30/2020
46630KAU0		17,202		16,491		711		16,491		14,462		6/30/2020
126694JT6		7,100		6,985		115		6,985		6,606		6/30/2020
452550AB2		23,149		22,752		397		22,752		21,704		6/30/2020
36242D4W0		9,492		9,417		75		9,417		9,070		6/30/2020
41162DAD1		8,856		8,724		132		8,724		8,350		6/30/2020
126694LE6		3,840		3,790		50		3,790		3,610		6/30/2020
76112BKM1		5,212		5,176		36		5,176		4,887		6/30/2020
61756VAE9		19,104		18,871		233		18,871		17,598		6/30/2020
1729732Z1		1,477		1,278		199		1,278		1,444		6/30/2020
22541QR87		425		361		64		361		420		6/30/2020
45254NQF7		8,263		8,084		179		8,084		7,606		6/30/2020
92922F5W4		4,325		4,285		40		4,285		4,116		6/30/2020
74958TAK9		2,714		2,599		115		2,599		2,476		6/30/2020
Quarterly Total	$	147,377	$	144,312	$	3,065	$	144,312	$	134,281
03072SX59	$	30,169	$	29,508	$	661	$	29,508	$	30,798		9/30/2020
02151RAA1		24,566		23,999		567		23,999		23,478		9/30/2020
126680AB3		25,256		24,810		446		24,810		26,502		9/30/2020
93364CAA6		4,317		4,268		49		4,268		4,021		9/30/2020
94983RAD6		867		855		12		855		844		9/30/2020
92925VAF7		3,148		3,048		100		3,048		3,099		9/30/2020
933634AG2		2,350		2,311		39		2,311		2,270		9/30/2020
93364AAB8		2,643		2,627		16		2,627		2,421		9/30/2020
12669GW56		5,404		5,258		146		5,258		5,229		9/30/2020
05946XR62		5,694		5,621		73		5,621		5,422		9/30/2020
12637HAP3		7,919		7,752		167		7,752		7,538		9/30/2020

67

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

NOTES TO STATUTORY FINANCIAL STATEMENTS (Continued)

(in thousands)
CUSIP	Amortized Cost Before Current Period OTTI		Present Value of Projected Cash Flows		Recognized OTTI		Amortized Cost After OTTI		Fair Value at Time of OTTI		Date of Financial Statement Where Reported
16159GAZ2	$	7,064	$	7,033	$	31	$	7,033	$	6,163		9/30/2020
69372XBR2		1,131		1,117		14		1,117		1,017		9/30/2020
69374XBR0		1,369		1,354		15		1,354		1,132		9/30/2020
Quarterly Total	$	121,897	$	119,561	$	2,336	$	119,561	$	119,934
69374XBS8	$	540	$	529	$	11	$	529	$	460		12/31/2020
69375BBS5		490		477		13		477		433		12/31/2020
69375BBR7		1,465		1,449		16		1,449		1,253		12/31/2020
693684BS0		1,767		1,757		10		1,757		1,467		12/31/2020
693684BT8		588		576		12		576		472		12/31/2020
693684BU5		271		263		8		263		259		12/31/2020
17307GCB2		436		421		15		421		346		12/31/2020
92922FQF8		54		54		-		54		56		12/31/2020
46628FAN1		787		602		185		602		722		12/31/2020
59549RAG9		6,627		6,596		31		6,596		7,274		12/31/2020
76110WTM8		7,619		7,547		72		7,547		7,609		12/31/2020
94986KAA4		56,948		56,433		515		56,433		53,910		12/31/2020
863579B64		4,007		3,801		206		3,801		3,532		12/31/2020
225470FB4		4,931		4,842		89		4,842		4,772		12/31/2020
760985TN1		453		408		45		408		392		12/31/2020
12669FK85		328		181		147		181		93		12/31/2020
94984NAA0		799		725		74		725		798		12/31/2020
69371VBH9		940		930		10		930		1,115		12/31/2020
693680BK5		221		218		3		218		342		12/31/2020
Quarterly Total	$	89,271	$	87,809	$	1,462	$	87,809	$	85,305
				Year-end total	$	15,409

* Structured notes held by the Company that are defined as a Mortgage-Referenced Security by the IAO.

68

Supplemental Information

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

SUPPLEMENTAL SCHEDULE OF ASSETS AND LIABILITIES

(in millions)	December 31, 2020
Investment income earned:
Government bonds	$	27
Other bonds (unaffiliated)		1,650
Preferred stocks (unaffiliated)		1
Common stocks of affiliates		20
Cash and short-term investments		10
Mortgage loans		296
Real estate		2
Contract loans		27
Other invested assets		36
Derivative instruments		10
Miscellaneous income		1
Gross investment income	$	2,080
Real estate owned - book value less encumbrances	$	5
Mortgage loans - book value:
Commercial mortgages	$	6,724
Residential mortgages		248
Mezzanine loans		30
Total mortgage loans	$	7,002
Mortgage loans by standing - book value:
Good standing	$	6,973
Good standing with restructured terms		15
Interest overdue more than 90 days, not in foreclosure		13
Foreclosure in process		1
Total mortgage loans	$	7,002
Bonds and stocks of parents, subsidiaries and affiliates - statement value:
Common stocks	$	138
Bonds, short-term and cash equivalent bond investments by class and maturity:
Bonds, short-term and cash equivalent bond investments by maturity - statement value:
Due within one year or less	$	2,684
Over 1 year through 5 years		8,996
Over 5 years through 10 years		10,915
Over 10 years through 20 years		7,284
Over 20 years		7,750
Total maturity	$	37,629
Bonds, short-term and cash equivalent bond investments by class - statement value:
Class 1	$	20,959
Class 2		13,814
Class 3		1,620
Class 4		861
Class 5		324
Class 6		51
Total by class	$	37,629
Total bonds, short-term and cash equivalent bond investments publicly traded	$	22,328
Total bonds, short-term and cash equivalent bond investments privately placed		15,301
Preferred stocks - statement value	$	3
Common stocks - market value		155
Short-term investments - book value		9
Options, caps and floors owned - statement value		259
Collar, swap and forward agreements open - statement value		(32	)
Futures contracts open - current value		(3	)
Cash on deposit		(114	)

70

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

SUPPLEMENTAL SCHEDULE OF ASSETS AND LIABILITIES (Continued)

(in millions)	December 31, 2020
Life insurance in-force:
Industrial	$	-
Ordinary		2
Credit		-
Group		-
Amount of accidental death insurance in-force under ordinary policies		-
Life insurance policies with disability provisions in-force:
Industrial		-
Ordinary		-
Group life		-
Supplementary contracts in-force:
Ordinary - not involving life contingencies:
Amount on deposit		26
Income payable		6
Ordinary - involving life contingencies:
Amount on deposit		304
Income payable		40
Annuities:
Ordinary:
Immediate - amount of income payable	$	23
Deferred, fully paid - account balance		24,517
Deferred, not fully paid - account balance		-
Group:
Amount of income payable		13
Fully paid - account balance		18,641
Not fully paid - account balance		-
Accident and health insurance - premiums in-force:
Other	$	-
Group		-
Credit		-
Deposit funds and dividend accumulations:
Deposit funds - account balance	$	-
Dividend accumulations - account balance		-
Claim payments in 2020:
Group accident & health:
2020	$	-
2019		-
2018		-
2017		-
2016		-
Prior		-
Other accident & health:
2020		-
2019		-
2018		-
2017		-
2016		-
Prior		-

71

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

SUPPLEMENTAL INVESTMENT RISKS INTERROGATORIES

DECEMBER 31, 2020

(in millions)

1. The Company’s total admitted assets as of December 31, 2020 are $91.1 billion.

The Company’s total admitted assets, excluding separate accounts, as of December 31, 2020 are $49.4 billion.

2. Following are the 10 largest exposures to a single issuer/borrower/investment, by investment category, excluding: (i) U.S. Government, U.S. Government agency securities and those U.S. Government money market funds listed in the Appendix to the IAO Practices and Procedures Manual as exempt, (ii) property occupied by the Company, and (iii) policy loans:

	Issuer	Description of Exposure	Amount		Percentage of Total Admitted Assets
a.	AIG DECO Fund I LP	OIA- LP	$	700		1.40	%
b.	Senior Direct Lending Program LLC	Bonds		278		0.60
c.	AIG Global Real Estate Investment Corp	OIA		247		0.50
d.	Oracle Corporation	Bonds		235		0.50
e.	JPMorgan Chase & Co.	Bonds		219		0.40
f.	Amazon.com, Inc.	Bonds		216		0.40
g.	California, State of	Bonds		185		0.40
h.	Microsoft Corporation	Bonds		180		0.40
i.	Walt Disney Company, The	Bonds		178		0.40
j.	Bank of America Corporation	Bonds		173		0.40

3. The Company’s total admitted assets held in bonds and preferred stocks, by NAIC rating, are:

Bonds and Short-Term Investments						Preferred Stocks
NAIC Rating	Amount		Percentage of Total Admitted Assets			NAIC Rating	Amount		Percentage of Total Admitted Assets
NAIC - 1	$	20,959		42.50	%	P/RP - 1	$	1		-	%
NAIC - 2		13,814		28.00		P/RP - 2		-		-
NAIC - 3		1,620		3.30		P/RP - 3		-		-
NAIC - 4		861		1.70		P/RP - 4		-		-
NAIC - 5		324		0.70		P/RP - 5		2		-
NAIC - 6		51		0.10		P/RP - 6		-		-

4. Assets held in foreign investments:

		Amount		Percentage of Total Admitted Assets
a.	Total admitted assets held in foreign investments	$	8,587		17.40	%
b.	Foreign currency denominated investments		2,331		4.70
c.	Insurance liabilities denominated in that same foreign currency		-		-

72

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

SUPPLEMENTAL INVESTMENT RISKS INTERROGATORIES (CONTINUED)

DECEMBER 31, 2020

(in millions)

5. Aggregate foreign investment exposure categorized by NAIC sovereign rating:

		Amount		Percentage of Total Admitted Assets
a.	Countries rated NAIC - 1	$	7,611		15.40	%
b.	Countries rated NAIC - 2		793		1.60
c.	Countries rated NAIC - 3 or below		182		0.40

6. Two largest foreign investment exposures to a single country, categorized by the country’s NAIC sovereign rating:

		Amount		Percentage of Total Admitted Assets
a.	Countries rated NAIC - 1
	Country 1: United Kingdom	$	2,503		5.10	%
	Country 2: Australia		1,328		2.70
b.	Countries rated NAIC - 2
	Country 1: Mexico		173		0.40
	Country 2: Peru		113		0.20
c.	Countries rated NAIC - 3 or below
	Country 1: Turkey		38		0.10
	Country 2: South Africa		24		-

7. Aggregate unhedged foreign currency exposure:

	Amount		Percentage of Total Admitted Assets
Aggregate unhedged foreign currency exposure	$	2,331		4.70	%

8. Aggregate unhedged foreign currency exposure categorized by NAIC sovereign rating:

		Amount		Percentage of Total Admitted Assets
a.	Countries rated NAIC - 1	$	2,323		4.70	%
b.	Countries rated NAIC - 2		4		-
c.	Countries rated NAIC - 3 or below		4		-

73

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

SUPPLEMENTAL INVESTMENT RISKS INTERROGATORIES (CONTINUED)

DECEMBER 31, 2020

(in millions)

9. Two largest unhedged foreign currency exposures to a single country, categorized by the country’s NAIC sovereign rating:

		Amount		Percentage of Total Admitted Assets
a.	Countries rated NAIC - 1
	Country 1: United Kingdom	$	1,306		2.60	%
	Country 2: Ireland		284		0.60
b.	Countries rated NAIC - 2
	Country 1: Peru		2		-
	Country 2: Mexico		2		-
c.	Countries rated NAIC - 3 or below
	Country 1: Turkey		2		-
	Country 2: South Africa		2		-

10. Ten largest non-sovereign (i.e. non-governmental) foreign issues:

		NAIC Rating	Amount		Percentage of Total Admitted Assets
a.	5555187Get Living London EV Holdco Limited	MORTGAGE LOAN	$	135		0.30	%
b.	Dexus	NAIC 1		122		0.20
c.	Banco Santander, S.A.	NAIC 1 & 2		111		0.20
d.	5555143 GS London Portfolio II Unit Trust	MORTGAGE LOAN		102		0.20
e.	Swan Funding Series 2011-1A	NAIC 1		100		0.20
f.	Vodafone Group Plc	NAIC 2		100		0.20
g.	5555149 DV4 Eadon CO. Limited	MORTGAGE LOAN		95		0.20
h.	GPT Group, The	NAIC 1		85		0.20
i.	Compass Group PLC	NAIC 1		83		0.20
j.	Fosse Master Issuer PLC 2007-1	MORTGAGE LOAN		80		0.20

11. Assets held in Canadian investments are less than 2.5% of the reporting entity’s total admitted assets.

12. Assets held in investments with contractual sales restrictions are less than 2.5 percent of the Company’s total admitted assets.

74

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

SUPPLEMENTAL INVESTMENT RISKS INTERROGATORIES (CONTINUED)

DECEMBER 31, 2020

(in millions)

13. The Company’s admitted assets held in the ten largest equity interests (including investments in the shares of mutual funds, preferred stocks, publicly traded equity securities, and other equity securities and excluding money market and bond mutual funds listed in the Appendix to the SVO Practices and Procedures Manual as exempt or Class 1) are:

		Amount		Percentage of Total Admitted Assets
a.	AIG DECO Fund I LP	$	700		1.40	%
b.	AIG Global Real Estate Investment Corp		247		0.50
c.	AIG Home Loan		88		0.20
d.	Marina		69		0.10
e.	MARSHALL WACE FUNDS		46		0.10
f.	Coatue Management LLC		44		0.10
g.	AIG Equity Alpha Fund LLC		43		0.10
h.	Voleon		38		0.10
i.	Challenger		34		0.10
j.	Carlyle Group		31		0.10

14. Assets held in nonaffiliated, privately placed equities:

		Amount		Percentage of Total Admitted Assets
Aggregate statement value of investment held in nonaffiliated, privately placed equities:		$	1,107		2.20	%
Largest three investments held in nonaffiliated, privately placed equities:
a.	AIG DECO Fund I LP	$	700		1.40	%
b.	AIG Home Loan 3 LLC		88		0.20
c.	Marina		69		0.10

Ten largest fund managers:

Fund Manager		Total Invested		Diversified		Non- diversified
a.	AIG DECO Fund I LP	$	700	$	700	$	-
b.	AIGGRE U.S. Real Estate Fund III LP		247		-		247
c.	AIG Home Loan 3 LLC		88		-		88
d.	Marina		69		69		-
e.	MW Eureka Fund LP		46		46		-
f.	Coatue Qualified Partners LP		44		44		-
g.	AIG Equity Alpha Fund LLC		43		43		-
h.	AIGGRE Europe Real Estate Fund II LR Feeder LLC		38		38		-
i.	Challenger		34		34		-
j.	Voleon Institutional Strategies Fund LP		31		31		-

15. Assets held in general partnership interests are less than 2.5 percent of the Company’s total admitted assets.

75

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

SUPPLEMENTAL INVESTMENT RISKS INTERROGATORIES (CONTINUED)

DECEMBER 31, 2020

(in millions)

16. Mortgage loans reported in Schedule B, include the following ten largest aggregate mortgage interests. The aggregate mortgage interest represents the combined value of all mortgages secured by the same property or same group of properties:

	Amount		Percentage of Total Admitted Assets
a. COMMERCIAL MORTGAGE LOAN, Loan No. 5555187, GBR	$	135		0.30	%
b. COMMERCIAL MORTGAGE LOAN, Loan No. 8002626, NY		114		0.20
c. COMMERCIAL MORTGAGE LOAN, Loan No. 5555143, GBR		102		0.20
d. COMMERCIAL MORTGAGE LOAN, Loan No. 8002642, FL		100		0.20
e. COMMERCIAL MORTGAGE LOAN, Loan No. 8002507, NY		98		0.20
f.  COMMERCIAL MORTGAGE LOAN, Loan No. 5555149, GBR		95		0.20
g. COMMERCIAL MORTGAGE LOAN, Loan No. 8002282, HI		91		0.20
h. COMMERCIAL MORTGAGE LOAN, Loan No. 8002587, NY		87		0.20
i.  COMMERCIAL MORTGAGE LOAN, Loan No. 8002157, NY		86		0.20
j.  COMMERCIAL MORTGAGE LOAN, Loan No. 8002538, CA		81		0.20

Amount and percentage of the reporting entity’s total admitted assets held in the following categories of mortgage loans:

	Amount		Percentage of Total Admitted Assets
a. Construction loans	$	147		0.30	%
b. Mortgage loans over 90 days past due		13		-
c. Mortgage loans in the process of foreclosure		1		-
d. Mortgage loans foreclosed		-		-
e. Restructured mortgage loans		15		-

17. Aggregate mortgage loans having the following loan-to-value ratios as determined from the most current appraisal as of the annual statement date:

	Residential					Commercial					Agricultural
Loan-to-Value	Amount		Percentage of Total Admitted Assets			Amount		Percentage of Total Admitted Assets			Amount		Percentage of Total Admitted Assets
a. above 95%	$	2		-	%	$	25		0.10	%	$	-		-	%
b. 91% to 95%		2		-			-		-			-		-
c. 81% to 90%		19		-			82		0.20			-		-
d. 71% to 80%		45		0.10			188		0.40			-		-
e. below 70%		181		0.40			6,385		12.90			-		-

18. Assets held in each of the five largest investments in one parcel or group of contiguous parcels of real estate reported in Schedule A are less than 2.5 percent of the Company’s total admitted assets.

19. Assets held in mezzanine real estate loans are less than 2.5 percent of the Company’s total admitted assets.

76

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

SUPPLEMENTAL INVESTMENT RISKS INTERROGATORIES (CONTINUED)

DECEMBER 31, 2020

(in millions)

20. The Company’s total admitted assets subject to the following types of agreements as of the following dates:

						Unaudited At End of Each Quarter
	At Year-End					1st Quarter		2nd Quarter		3rd Quarter
	Amount		Percentage of Total Admitted Assets			Amount		Amount		Amount
a. Securities lending (do not include assets held as collateral for such transactions)	$	1,226		2.50	%	$	835	$	737	$	1,323
b. Repurchase agreements		27		0.10			22		32		97
c. Reverse repurchase agreements		-		-			-		-		-
d. Dollar repurchase agreements		-		-			-		-		-
e. Dollar reverse repurchase agreements		-		-			-		-		-

21. The Company’s potential exposure to warrants not attached to other financial instruments, options, caps, and floors:

	Owned					Written
	Amount		Percentage of Total Admitted Assets			Amount		Percentage of Total Admitted Assets
a. Hedging	$	-		-	%	$	-		-	%
b. Income generation		-		-			-		-
c. Other		-		-			-		-

22. The Company’s potential exposure (defined as the amount determined in accordance with the NAIC Annual Statement Instructions) for collars, swaps, and forwards as of the following dates:

						Unaudited At End of Each Quarter
	At Year-End					1st Quarter		2nd Quarter		3rd Quarter
	Amount		Percentage of Total Admitted Assets			Amount		Amount		Amount
a. Hedging	$	49		0.10	%	$	43	$	44	$	44
b. Income generation		-		-			-		-		-
c. Replications		-		-			-		-		-
d. Other		-		-			-		-		-

23. The Company’s potential exposure (defined as the amount determined in accordance with the NAIC Annual Statement Instructions) for futures contracts as of the following dates:

						Unaudited At End of Each Quarter
	At Year-End					1st Quarter		2nd Quarter		3rd Quarter
	Amount		Percentage of Total Admitted Assets			Amount		Amount		Amount
a. Hedging	$	43		0.10	%	$	36	$	42	$	37
b. Income generation		-		-			-		-		-
c. Replications		-		-			-		-		-
d. Other		-		-			-		-		-

77

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

SUPPLEMENTAL SUMMARY INVESTMENT SCHEDULE

DECEMBER 31, 2020

(in millions)	Gross Investment Holdings						Admitted Assets as Reported in the Annual Statement
Investment Categories	Amount			Percentage			Amount			Securities Lending Reinvested Collateral Amount		Total Amount			Percentage
Bonds:
U.S. governments	$	652			1.3	%	$	652		$	-	$	652			1.3	%
All other governments		1,061			2.2			1,061			-		1,061			2.2
U.S. states, territories and possessions, etc. guaranteed		315			0.6			315			-		315			0.6
U.S. political subdivisions of states, territories,																-
and possessions, guaranteed		188			0.4			188			-		188			0.4
U.S. special revenue and special assessment																-
obligations, etc. non-guaranteed		3,656			7.5			3,656			-		3,656			7.5
Industrial and miscellaneous		30,634			63.1			30,634			-		30,634			63.1
Hybrid securities		120			0.2			120			-		120			0.2
Parent, subsidiaries and affiliates		-			-			-			-		-			-
SVO identified funds		-			-			-			-		-			-
Unaffiliated Bank loans		995			2.1			995			-		995			2.1
Total long-term bonds		37,621			77.4			37,621			-		37,621			77.4
Preferred stocks:
Industrial and miscellaneous (Unaffiliated)		3			-			3			-		3			-
Parent, subsidiaries and affiliates		-			-			-			-		-			-
Total preferred stocks		3			-			3			-		3			-
Common stocks:
Industrial and miscellaneous Publicly traded (Unaffiliated)		-			-			-			-		-			-
Industrial and miscellaneous Other (Unaffiliated)		17			-			17			-		17			-
Parent, subsidiaries and affiliates Publicly traded		-			-			-			-		-			-
Parent, subsidiaries and affiliates Other		138			0.3			114			-		114			0.3
Mutual funds		-			-			-			-		-			-
Total common stocks		155			0.3			131			-		131			0.3
Mortgage loans:
Farm mortgages		-			-			-			-		-			-
Residential mortgages		248			0.5			248			-		248			0.5
Commercial mortgages		6,724			13.9			6,724			-		6,724			13.9
Mezzanine real estate loans		30			0.1			30			-		30			0.1
Total valuation allowance		(74	)		(0.2	)		(74	)		-		(74	)		(0.2	)
Total mortgage loans		6,928			14.3			6,928			-		6,928			14.3
Real estate:
Properties occupied by company		5			-			5			-		5			-
Properties held for production of income		-			-			-			-		-			-
Properties held for sale		-			-			-			-		-			-
Total real estate		5			-			5			-		5			-
Cash, cash equivalents and short-term investments:
Cash		(114	)		(0.2	)		(114	)		1,051		937			1.9
Cash equivalents		76			0.2			76			332		408			0.9
Short-term investments		8			-			8			-		8			-
Total cash, cash equivalents and short-term investments		(30	)		-			(30	)		1,383		1,353			2.8
Contract loans		517			1.1			517			-		517			1.1
Derivatives		227			0.5			227			-		227			0.5
Other invested assets		1,688			3.5			1,682			-		1,682			3.5
Receivables for securities		60			0.1			60			-		60			0.1
Securities Lending		1,383			2.8			1,383			XXX		XXX			XXX
Other invested assets		4			-			4			-		4			-
Total invested assets	$	48,561			100.0	%	$	48,531		$	1,383	$	48,531			100.0	%

78

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

SUPPLEMENTAL SCHEDULE OF REINSURANCE DISCLOSURES

DECEMBER 31, 2020

The following information regarding reinsurance contracts is presented to satisfy the disclosure requirements in SSAP No. 61R, Life, Deposit-Type and Accident and Health Reinsurance, which apply to reinsurance contracts entered into, renewed or amended on or after January 1, 1996.

1. Has the Company reinsured any risk with any other entity under a reinsurance contract (or multiple contracts with the same reinsurer or its affiliates) that is subject to Appendix A-791, Life and Health Reinsurance Agreements, and includes a provision that limits the reinsurer’s assumption of significant risks identified in Appendix A-791?

Yes [ ] No [ X ]

If yes, indicate the number of reinsurance contracts to which such provisions apply:                                    

If yes, indicate if deposit accounting was applied for all contracts subject to Appendix A-791 that limit significant risks.

Yes [ ] No [ ] N/A [ X ]

2. Has the Company reinsured any risk with any other entity under a reinsurance contract (or multiple contracts with the same reinsurer or its affiliates) that is not subject to Appendix A-791, for which reinsurance accounting was applied and includes a provision that limits the reinsurer’s assumption of risk?

Yes [ ] No [ X ]

If yes, indicate the number of reinsurance contracts to which such provisions apply:                                    

If yes, indicate whether the reinsurance credit was reduced for the risk-limiting features.

Yes [ ] No [ ] N/A [ X ]

3. Does the Company have any reinsurance contracts (other than reinsurance contracts with a federal or state facility) that contain one or more of the following features which may result in delays in payment in form or in fact:

(a) Provisions that permit the reporting of losses to be made less frequently than quarterly;

(b) Provisions that permit settlements to be made less frequently than quarterly;

(c) Provisions that permit payments due from the reinsurer to not be made in cash within ninety (90) days of the settlement date (unless there is no activity during the period); or

(d) The existence of payment schedules, accumulating retentions from multiple years, or any features inherently designed to delay timing of the reimbursement to the ceding entity.

Yes [ ] No [ X ]

4. Has the Company reflected reinsurance accounting credit for any contracts that are not subject to Appendix A-791 and not yearly renewable term reinsurance, which meet the risk transfer requirements of SSAP No. 61R?

Type of contract:	Response:	Identify reinsurance contract(s):	Has the insured event(s) triggering contract coverage been recognized?
Assumption reinsurance – new for the reporting period	Yes [ ] No [ X ]		N/A
Non-proportional reinsurance, which does not result in significant surplus relief	Yes [ ] No [ X ]		N/A

79

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

SUPPLEMENTAL SCHEDULE OF REINSURANCE DISCLOSURES

DECEMBER 31, 2020

5. Has the Company ceded any risk, which is not subject to Appendix A-791 and not yearly renewable term reinsurance, under any reinsurance contract (or multiple contracts with the same reinsurer or its affiliates) during the period covered by the financial statements, and either:

(a) Accounted for that contract as reinsurance under statutory accounting principles (SAP) and as a deposit under generally accepted accounting principles (GAAP); or

Yes [ ] No [ X ] N/A [ ]

(b) Accounted for that contract as reinsurance under GAAP and as a deposit under SAP?

Yes [ ] No [ X ] N/A [ ]

If the answer to item (a) or item (b) is yes, include relevant information regarding GAAP to SAP differences from the accounting policy footnote to the audited statutory-basis financial statements to explain why the contract(s) is treated differently for GAAP and SAP below:

80

American Home Assurance Company

An AIG Company

NAIC Code: 19380

Statutory Basis Financial Statements

As of December 31, 2020 and 2019

and for the years ended December 31, 2020, 2019 and 2018

AMERICAN HOME ASSURANCE COMPANY

Statutory Basis Financial Statements

As of December 31, 2020 and 2019 and for the years ended December 31, 2020, 2019 and 2018

TABLE OF CONTENTS

	Report of Independent Auditors	3
	Statements of Admitted Assets	5
	Statements of Liabilities, Capital and Surplus	6
	Statements of Operations and Changes in Capital and Surplus	7
	Statements of Cash Flows	8
Note 1	Organization and Summary of Significant Statutory Basis Accounting Policies	9
Note 2	Accounting Adjustments to Statutory Basis Financial Statements	22
Note 3	Investments	24
Note 4	Fair Value of Financial Instruments	28
Note 5	Reserves for Losses and Loss Adjustment Expenses	30
Note 6	Related Party Transactions	35
Note 7	Reinsurance	39
Note 8	Income Taxes	41
Note 9	Capital and Surplus and Dividend Restrictions	48
Note 10	Contingencies	48
Note 11	Other Significant Matters	51
Note 12	Subsequent Events	53

Report of Independent Auditors

To the Board of Directors of American Home Assurance Company:

We have audited the accompanying statutory financial statements of American Home Assurance Company (the “Company”), which comprise the statutory statements of admitted assets and of liabilities, capital and surplus as of December 31, 2020 and 2019, and the related statutory statements of operations and changes in capital and surplus, and of cash flows for each of the three years in the period ended December 31, 2020.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with the accounting practices prescribed or permitted by the New York State Department of Financial Services. Management is also responsible for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on the financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the Company’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Basis for Adverse Opinion on U.S. Generally Accepted Accounting Principles

As described in Note 1B to the financial statements, the financial statements are prepared by the Company on the basis of the accounting practices prescribed or permitted by the New York State Department of Financial Services, which is a basis of accounting other than accounting principles generally accepted in the United States of America.

The effects on the financial statements of the variances between the statutory basis of accounting described in Notes 1B and 1D and accounting principles generally accepted in the United States of America, although not reasonably determinable, are presumed to be material.

Adverse Opinion on U.S. Generally Accepted Accounting Principles

In our opinion, because of the significance of the matter discussed in the “Basis for Adverse Opinion on U.S. Generally Accepted Accounting Principles” paragraph, the financial statements referred to above do not present fairly, in accordance with accounting principles generally accepted in the United States of America, the financial position of the Company as of December 31, 2020 and 2019, or the results of its operations or its cash flows for each of the three years in the period ended December 31, 2020.

Opinion on Statutory Basis of Accounting

In our opinion, the financial statements referred to above present fairly, in all material respects, the admitted assets, liabilities, capital and surplus of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2020, in accordance with the accounting practices prescribed or permitted by the New York State Department of Financial Services described in Note 1B.

Emphasis of Matter

As discussed in Notes 1, 6 and 7 to the financial statements, the Company has entered into significant transactions with certain affiliated entities. Our opinion is not modified with respect to this matter.

/s/ PricewaterhouseCoopers LLP

New York, NY

April 23, 2021

American Home Assurance Company

Statutory Basis Financial Statement

(Dollars in Millions)

Statements of Admitted Assets

	December 31, 2020			December 31, 2019
Cash and invested assets:
Bonds, primarily at amortized cost (fair value: 2020 - $14,633; 2019 - $14,014)	$	13,717		$	13,277
Common stocks, at carrying value (cost: 2020 - $210; 2019 - $235)		250			245
Preferred stocks, at carrying value (cost: 2020 - $0; 2019 - $17)		-			17
Other invested assets (cost: 2020 - $2,200; 2019 - $2,406)		2,571			2,663
Mortgage loans		2,043			2,539
Short-term investments, at amortized cost (approximates fair value)		124			44
Cash and cash equivalents		441			441
Receivable for securities sold		21			112
Total cash and invested assets	$	19,167		$	19,338
Investment income due and accrued	$	137		$	146
Agents’ balances or uncollected premiums:
Premiums in course of collection		1,162			1,278
Premiums and installments booked but deferred and not yet due		140			144
Accrued retrospective premiums		435			490
High deductible policy receivables		40			43
Reinsurance recoverable on paid losses		612			400
Funds held by or deposited with reinsurers		261			215
Net deferred tax assets		621			724
Receivables from parent, subsidiaries and affiliates		94			9
Other assets		198			223
Allowance for uncollectible accounts		(39	)		(45	)
Total admitted assets	$	22,828		$	22,965

See Notes to Statutory Basis Financial Statements

  5        STATEMENTS OF ADMITTED ASSETS – As of December 31, 2020 and 2019

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions, Except Share Information)

Statements of Liabilities, Capital and Surplus

	December 31, 2020			December 31, 2019
Liabilities
Reserves for losses and loss adjustment expenses	$	8,979		$	9,732
Unearned premium reserves		2,731			3,104
Commissions, premium taxes, and other expenses payable		119			135
Reinsurance payable on paid loss and loss adjustment expenses		816			541
Current federal and foreign taxes payable to parent		15			2
Funds held by company under reinsurance treaties		1,809			1,945
Provision for reinsurance		25			16
Ceded reinsurance premiums payable, net of ceding commissions		487			400
Collateral deposit liability		277			276
Payable for securities purchased		246			194
Payable to parent, subsidiaries and affiliates		196			142
Derivative instruments		22			9
Other liabilities		410			474
Total liabilities	$	16,132		$	16,970
Capital and Surplus
Common capital stock, $20 par value, 1,758,158 shares authorized, 1,556,054 shares issued and outstanding	$	31		$	31
Capital in excess of par value		6,730			6,485
Unassigned surplus (deficit)		(870	)		(1,381	)
Special surplus funds from reinsurance		805			860
Total capital and surplus	$	6,696		$	5,995
Total liabilities, capital and surplus	$	22,828		$	22,965

See Notes to Statutory Basis Financial Statements

  6        STATEMENTS OF LIABILITIES, CAPITAL and SURPLUS - As of December 31, 2020 and 2019

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

Statements of Operations and Changes in Capital and Surplus

	For the Years Ended December 31,
		2020			2019			2018
Statements of Operations
Underwriting income:
Premiums earned	$	4,832		$	5,369		$	5,009
Underwriting deductions:
Losses incurred		3,255			2,920			3,945
Loss adjustment expenses		366			814			315
Other underwriting expenses		1,547			1,904			1,858
Total underwriting deductions		5,168			5,638			6,118
Net underwriting loss		(336	)		(269	)		(1,109	)
Investment gain:
Net investment income earned		664			825			1,027
Net realized capital gain (loss) (net of capital gains tax expense: 2020 - $22; 2019 - $42; 2018 - $69)		91			127			(111	)
Net investment gain		755			952			916
Net loss from agents’ or premium balances charged-off		(2	)		(1	)		(3	)
Other expense		(113	)		(96	)		(136	)
Net Income (loss) after capital gains taxes and before federal income taxes		304			586			(332	)
Federal and foreign income tax benefit		(13	)		(35	)		(54	)
Net Income (Loss)	$	317		$	621		$	(278	)
Change in Capital and Surplus
Capital and surplus, as of December 31, previous year	$	5,995		$	5,923		$	6,238
Adjustment to beginning surplus (Note 2)		(9	)		21			71
Capital and surplus, as of January 1,		5,986			5,944			6,309
Cumulative effect of changes in accounting principles		-			(39	)		-
Other changes in capital and surplus:
Net Income (loss)		317			621			(278	)
Change in net unrealized capital gain (loss) (net of capital gain (loss) tax expense (benefit): 2020 - $(15); 2019 - ($1); 2018 - ($50)		178			21			(137	)
Change in net deferred income tax		(77	)		(143	)		31
Change in nonadmitted assets		11			115			(91	)
Change in provision for reinsurance		(9	)		13			(10	)
Capital contribution (Return of Capital)		245			(504	)		150
Change in par value of common stock		-			2			-
Foreign exchange translation		(116	)		(12	)		(20	)
Change in assumed mortgage guaranty contingency reserve		(21	)		(26	)		(31	)
Change in ceded mortgage guaranty contingency reserve		184			-			-
Other surplus adjustments		(2	)		3			-
Total changes in capital and surplus		710			51			(386	)
Capital and Surplus, as of December 31,	$	6,696		$	5,995		$	5,923

See Notes to Statutory Basis Financial Statements

  7        STATEMENTS OF OPERATIONS and CHANGES IN CAPITAL AND SURPLUS - for the years ending December 31, 2020, 2019 and 2018

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

Statements of Cash Flows

	For the Years Ended December 31,
		2020			2019			2018
Cash from Operations:
Premiums collected, net of reinsurance	$	4,809		$	5,118		$	5,292
Net investment income		583			677			839
Miscellaneous income (expense)		(6	)		9			4
Sub-total		5,386			5,804			6,135
Benefit and loss related payments		3,848			4,296			4,832
Commission and other expense paid		2,141			2,510			2,599
Federal and foreign income taxes recovered		(14	)		(8	)		(1	)
Net cash (used in) provided from operations		(589	)		(994	)		(1,295	)
Cash from Investments:
Proceeds from investments sold, matured, or repaid
Bonds		3,708			4,296			3,990
Stocks		51			140			339
Mortgage loans		485			293			111
Other investments		1,338			1,374			1,790
Total proceeds from investments sold, matured, or repaid		5,582			6,103			6,230
Cost of investments acquired:
Bonds		4,434			3,637			3,766
Stocks		46			12			56
Mortgage loans		45			164			748
Other investments		782			914			870
Total cost of investments acquired		5,307			4,727			5,440
Net cash provided from (used in) investing activities		275			1,376			790
Cash from Financing and Miscellaneous Sources:
Capital contributions		245			(15	)		-
Borrowed fund repaid		-			-			(65	)
Intercompany receipts		211			11			599
Net deposit activity on deposit-type contracts and other insurance		(2	)		(1	)		(27	)
Collateral deposit liability (payments) receipts		1			(93	)		(24	)
Other (payments) receipt		(61	)		(75	)		60
Net cash (used in) provided from financing and miscellaneous activities		394			(173	)		543
Net change in cash, cash equivalents, and short-term investments		80			209			38
Cash, cash equivalents, and short-term investments
Beginning of year		485			276			238
End of year	$	565		$	485		$	276

Refer to Note 11D for description of non-cash items.

See Notes to Statutory Basis Financial Statements

  8        STATEMENTS OF CASH FLOW – for the years ended December 31, 2020, 2019 and 2018

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

1. Organization and Summary of Significant Statutory Basis Accounting Policies

A. Basis of Organization and Presentation

Organization

American Home Assurance Company (“the Company” or “American Home”) is a direct wholly-owned subsidiary of AIG Property Casualty U.S., Inc. (“AIG PC US”), a Delaware corporation, which is in turn owned by AIG Property Casualty Inc. (“AIG PC”), a Delaware corporation. The Company’s ultimate parent is American International Group, Inc. (the “Ultimate Parent” or “AIG”). AIG conducts its property and casualty operations through multiple line companies writing substantially all commercial (casualty, property, specialty and financial liability) and consumer (accident & health and personal lines) insurance both domestically and abroad.

The Company is party to an inter-company pooling agreement (the “Combined Pooling Agreement”), among the twelve companies listed below, collectively named the Combined Pool.

The member companies of the Combined Pool, their National Association of Insurance Commissioners (“NAIC”) company codes, inter-company pooling participation percentages under the Combined Pooling Agreement and states of domicile are as follows:

Company	NAIC Company		Pool Participation Percentage	State of Domicile
National Union *		19445	35%	Pennsylvania
American Home		19380	35%	New York
Lexington		19437	30%	Delaware
APCC		19402	0%	Illinois
C&I		19410	0%	New York
ISOP		19429	0%	Illinois
New Hampshire		23841	0%	Illinois
Specialty		26883	0%	Illinois
Assurance		40258	0%	Illinois
Granite		23809	0%	Illinois
Illinois National		23817	0%	Illinois
AIU		19399	0%	New York

* Lead Company of the Combined Pool

The Company accepts commercial business primarily through a network of independent retail and wholesale brokers and through independent agency networks. In addition, the Company accepts consumer business primarily through agents and brokers, as well as through direct marketing and partner organizations. There were no Managing Agents or Third Party Administrators who placed direct written premium with the Company in an amount exceeding more than 5.0 percent of surplus of the Company for the years ending December 31, 2020, 2019, and 2018.

  9        NOTES TO FINANCIAL STATEMENTS - As of December 31, 2020 and 2019 and for years ended December 31, 2020, 2019 and 2018.

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

The Company is diversified in terms of classes of its business, distribution network and geographic locations. The Company has direct written premium concentrations of 5.0 percent or more in the following locations:

State / Location	2020		2019		2018
California	$	84	$	90	$	103
Florida		59		62		68
United Arab Emirates		50		61		66
New York		39		32		36
Texas*		14		24		26
Bermuda**		1		57		16
Thailand**		7		27		8

* Texas was below 5% in 2020 and 2019.

**Bermuda and Thailand were below 5% in 2020 and 2018.

Basis of Presentation

The accompanying financial statements of the Company have been prepared in conformity with accounting practices prescribed or permitted by the New York State Department of Financial Services (“NY SAP”). Certain balances relating to prior periods have been reclassified to conform to the current year’s presentation.

Additionally, the financial statements include the Company’s U.S. operations, its Dubai, Caribbean, Jamaica and Argentina branch operations and its participation in the American International Overseas Association (the “Association”).

The Company’s financial information as of and for the years ended December 31, 2020, 2019 and 2018 have been presented in accordance with the terms of the Combined Pooling Agreement.

B. Permitted and Prescribed Practices

NY SAP recognizes only statutory accounting practices prescribed or permitted by the New York State Department of Financial Services (“NY DFS”) for determining and reporting the financial position and results of operations of an insurance company and for the purpose of determining its solvency under the New York Insurance Code. The NAIC Statutory Accounting Principles included within the Accounting Practices and Procedures Manual (“NAIC SAP”) have been adopted as a component of prescribed practices by the NY DFS. The Superintendent of the NY DFS (the “Superintendent”) has the right to permit other specific practices that differ from prescribed practices.

NY SAP has prescribed the practice of discounting workers’ compensation known case loss reserves on a non-tabular basis. This practice is not prescribed under NAIC SAP.

For the affiliated loss portfolio transfer (“LPT”) agreements entered into during 2018, the Company received permitted practices to present the consideration paid in relation to statutory reserves ceded to Fortitude Reinsurance Company Limited (“Fortitude Re”) and Eaglestone Reinsurance Company (“Eaglestone”) within paid losses rather than as premium written and earned. The classification change has no effect on net income or surplus. Refer to Note 5 for further details.

Accounting practices prescribed by the Insurance Department of the Commonwealth of Pennsylvania (“PA SAP”) provide for the availability of certain offsets in the calculation of the Provision for reinsurance, which offsets are not prescribed under NAIC SAP. The Company applied PA SAP with concurrence from the NY DFS to reflect the transfer of collection risk on certain of the Company’s asbestos related reinsurance recoverable balances, to an authorized third party reinsurer, as another form of collateral acceptable to the Commissioner with respect to the reinsurance recoverable balance from the original reinsurers.

The Company applied a permitted practice to account for the retroactive aggregate excess of loss reinsurance arrangement entered into with National Indemnity Company (“NICO”), a subsidiary of Berkshire Hathaway, Inc., (the “ADC”) as prospective reinsurance. However, any gain associated with the ADC has been reported in a segregated surplus account and does not form part of the Company’s Unassigned surplus, subject to the applicable dividend restrictions; such amounts must be restricted in surplus until such time as payments received by NICO exceed premiums paid for the retrocession. For more information, see Note 7.

  10        NOTES TO FINANCIAL STATEMENTS - As of December 31, 2020 and 2019 and for years ended December 31, 2020, 2019 and 2018.

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

The use of the aforementioned permitted and prescribed practices has not affected the Company’s ability to comply with the NY DFS’s risk based capital (“RBC”) and surplus requirements for the 2020, 2019 or 2018 reporting periods.

A reconciliation of the net income (loss) and capital and surplus between NAIC SAP and practices prescribed or permitted by NY SAP is shown below:

December 31,	SSAP #		FS Ref		2020			2019			2018
Net Income (loss), NY SAP					$	317		$	621		$	(278	)
State prescribed or permitted practices - addition (charge):
Change in non-tabular discounting		65		(a)		17			(60	)		13
Adverse Development Cover		62R		(a)		-			-			-
Present the consideration received/paid in relation to the loss reserves within paid losses		62R		(b)		-			-			-
Net Income (loss) , NAIC SAP					$	334		$	561		$	(265	)
Statutory surplus, NY SAP					$	6,696		$	5,995		$	5,923
State prescribed or permitted practices - addition (charge):
Non-tabular discounting		65		(a)		(116	)		(133	)		(73	)
Credits for collection risk on certain asbestos reinsurance recoveries		62R		(c)		(43	)		(54	)		(61	)
Adverse Development Cover		62R		(d)		(799	)		(854	)		(920	)
Present the consideration received/paid in relation to the loss reserves within paid losses		62R		(b)		-			-			-
Statutory surplus, NAIC SAP					$	5,738		$	4,954		$	4,869

(a) Impacts Reserves for losses and loss adjustment expenses within the Statements of Liabilities, Capital and Surplus and Losses incurred within the Statements of Operations and Changes in Capital and Surplus.

(b) Impacts Losses incurred and Premiums earned within the Statements of Operations and Changes in Capital and Surplus.

(c) Impacts Provision for reinsurance within the Statements of Liabilities, Capital and Surplus and the change in Provision for reinsurance within the Statements of Operations and Changes in Capital and Surplus.

(d) Impacts Special surplus funds from reinsurance within the Statements of Liabilities, Capital and Surplus. Although the application of prospective reinsurance treatment to the ADC results in no overall changes to surplus, the permitted practice applied results in any gain being restricted and reported in segregated surplus and does not form part of the Company’s Unassigned surplus.

C. Use of Estimates in the Preparation of the Financial Statements

The preparation of statutory financial statements in accordance with NY SAP requires the application of accounting policies that often involve a significant degree of judgment. The Company’s accounting policies that are most dependent on the application of estimates and assumptions are considered critical accounting estimates and are related to the determination of:

• Reserves for losses and loss adjustment expenses (“LAE”) including estimates and recoverability of the related reinsurance assets;

• Legal contingencies;

• Other than temporary impairment (“OTTI”) losses on investments;

• Fair value of certain financial assets, impacting those investments measured at fair value in the Statements of Admitted Assets and Liabilities, Capital and Surplus, as well as unrealized gains (losses) included in Capital and Surplus; and

• Income tax assets and liabilities, including the recoverability and admissibility of net deferred tax assets and the predictability of future tax operating profitability of the character necessary to realize the net deferred tax asset.

These accounting estimates require the use of assumptions, including some that are highly uncertain at the time of estimation. It is reasonably possible that actual experience may materially differ from the assumptions used and therefore the Company’s statutory financial condition, results of operations and cash flows could be materially affected.

  11        NOTES TO FINANCIAL STATEMENTS - As of December 31, 2020 and 2019 and for years ended December 31, 2020, 2019 and 2018.

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

D. Accounting Policy Differences

NAIC SAP is a comprehensive basis of accounting other than accounting principles generally accepted in the United States of America (“US GAAP”). NAIC SAP varies from US GAAP in certain significant respects, including:

Transactions	NAIC SAP Treatment	US GAAP Treatment
Policy Acquisition Costs Principally brokerage commissions and premium taxes arising from the issuance of insurance contracts.	Costs are immediately expensed and are included in Other Underwriting Expenses, except for reinsurance ceding commissions received in excess of the cost to acquire business which are recognized as a deferred liability and amortized over the period of the reinsurance agreement.	Costs directly related to the successful acquisition of new or renewal insurance contracts are deferred and amortized over the term of the related insurance coverage.
Unearned Premiums, Unpaid Losses and Loss Expense Liabilities	Presented net of reinsurance recoverable.	Presented gross of reinsurance with corresponding reinsurance recoverable assets for ceded unearned premiums and reinsurance recoverable on unpaid losses.
Retroactive reinsurance contracts	Gains and losses are recognized in earnings immediately and surplus is segregated to the extent pretax gains are recognized. Certain retroactive affiliate or related party reinsurance contracts are accounted for as prospective reinsurance if there is no gain in surplus as a result of the transaction.	Gains are deferred and amortized over the settlement period of the ceded claim recoveries. Losses are immediately recognized in the Statements of Operations.
Investments in Bonds held as: 1) available for sale 2) fair value option	Investment grade securities (rated by NAIC as class 1 or 2) are carried at amortized cost. Non-investment grade securities (NAIC rated 3 to 6) are carried at the lower of amortized cost or fair value.	All available for sale investments are carried at fair value with changes in fair value, net of applicable taxes, reported in accumulated other comprehensive income within shareholder’s equity. Fair value option investments are carried at fair value with changes in fair value, net of applicable projected income taxes, reported in Net Investment Income.
Investments in Common Stocks	Carried at fair value with unrealized gains and losses reported, net of applicable taxes, in the Statements of Changes in Capital and Surplus.	All equity securities that do not follow the equity method of accounting, are measured at fair value with changes in fair value recognized in earnings.
Investments in Limited Partnerships, Hedge Funds and Private Equity Interests	Carried at the underlying US GAAP equity with results from the investment’s operations recorded, net of applicable taxes, as unrealized gains (losses) directly in the Statements of Changes in Capital and Surplus.	If aggregate interests allow the holding entity to exercise more than significant influence (typically more than 3%), the investment is recorded as an equity method investment wherein the Company’s pro rata share of income or loss for the period, is recorded as net investment income and adjusted against the carrying value of the asset. Similar equity method investments in investment company entities (eg: hedge funds) is adjusted for the Company’s pro rata share of income or loss for the period which is based on the Net Asset Value (“NAV”) with changes in value recorded to Net Investment Income.
		Where the aggregate interests do not allow the entity to exercise significant influence (typically less than 3%), the investment is recorded at as equity investment fair valued through net investment income. Similar equity investment in investment companies (eg: hedge funds) are recorded at NAV with changes in value recorded to Net Investment Income.

  12        NOTES TO FINANCIAL STATEMENTS - As of December 31, 2020 and 2019 and for years ended December 31, 2020, 2019 and 2018.

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

Transactions	NAIC SAP Treatment	US GAAP Treatment
Investments in Subsidiary, Controlled and Affiliated Entities (SCAs)	Subsidiaries are not consolidated. The equity investment in SCAs are accounted for under the equity method and recorded as Common stock investments. Dividends are recorded within Net Investment Income.	Consolidation is required when there is a determination that the affiliated entity is a variable interest entity (“VIE”) and the reporting entity has a variable interest and the power to direct the activities of the VIE. The VIE assessment would consider various factors including limited partnership (LP) status and inherent rights of equity investors. Investments in SCAs that are voting interest entities (VOE) with majority voting rights are generally consolidated. Investments in SCAs where the holding entity exercises significant influence (generally ownership of>3% voting interests for LPs and similar entities and between 20 percent and 50 percent for other entities) are recorded at equity value. The change in equity is included within operating income.
Statement of Cash Flows	Statutory Statements of Cash Flows must be presented using the direct method. Changes in cash, cash equivalents, and short-term investments and certain sources of cash are excluded from operational cash flows.	The Statements of Cash Flows can be presented using the direct or indirect methods, however are typically presented using the indirect method. Presentation is limited to changes in cash and cash equivalents (short-term investments are excluded).
Deferred Federal Income Taxes	Deferred income taxes are established for the temporary differences between tax and book assets and liabilities, subject to limitations on admissibility of tax assets. Changes in deferred income taxes are recorded within capital and surplus and have no impact on the Statements of Operations.	The provision for deferred income taxes is recorded as a component of income tax expense, as a component of the Statements of Operations, except for changes associated with items that are included within other comprehensive income where such items are recorded net of applicable income taxes.
Statutory Adjustments (applied to certain assets including goodwill, furniture and equipment, deferred taxes in excess of limitations, prepaid expenses, overdue receivable balances and unsecured reinsurance amounts)	Certain asset balances designated as nonadmitted, such as some intangible assets and certain investments in affiliated entities are excluded from the Statements of Admitted Assets and are reflected as deductions from capital and surplus.	All assets and liabilities are included in the financial statements. Provisions for uncollectible receivables are established as valuation allowances and are recognized as expense within the Statements of Operations.

The effects on the financial statements of the variances between NAIC SAP and US GAAP, although not reasonably determinable, are presumed to be material.

E. Significant Statutory Accounting Policies

Premiums

Premiums for insurance and reinsurance contracts are recorded as gross premiums written as of the effective date of the policy. Premiums are earned primarily on a pro-rata basis over the term of the related insurance coverage. Premiums collected prior to the effective date of the policy are recorded as advance premiums, reported as a liability and not considered income until due. Extended reporting endorsements are reflected as premiums written and are earned on a pro-rata basis over the stated term of the endorsement unless the term of the endorsement is indefinite in which case premiums are fully earned at inception of the endorsement along with the recognition of associated loss and LAE.

  13        NOTES TO FINANCIAL STATEMENTS - As of December 31, 2020 and 2019 and for years ended December 31, 2020, 2019 and 2018.

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

Unearned premium reserves are established on an individual policy basis, reflecting the terms and conditions of the coverage being provided. Unearned premium reserves represent the portion of premiums written relating to the unexpired terms of coverage as of the date of the financial statements. For policies with coverage periods equal to or greater than thirteen months and generally not subject to cancellation or modification by the Company, premiums are earned using a prescribed percentage of completion method. Additional unearned premium reserves for policies exceeding thirteen months are established as greater of three prescribed tests.

Reinsurance premiums are typically earned over the same period as the underlying policies, or risks, covered by the contracts. As a result, the earnings pattern of a reinsurance contract generally written for a 12-month term may extend up to 24 months, reflecting the inception dates of the underlying attaching policies throughout the 12-month period of the reinsurance contract. Reinsurance premiums ceded are recognized as a reduction in revenues over the period reinsurance coverage is provided.

Insurance premiums billed and outstanding for 90 days or more are nonadmitted and charged against Unassigned surplus.

Premiums for retrospectively rated contracts are initially recorded based on the expected loss experience and are earned on a pro-rata basis over the term of the related insurance coverage. Additional or returned premium is recorded if the estimated loss experience differs from the initial estimate and is immediately recognized in earned premium. The Company records accrued retrospectively rated premiums as written premiums. Adjustments to premiums for changes in the level of exposure to insurance risk are generally determined based upon audits conducted after the policy expiration date.

Gross written premiums net of ceded written premiums (“Net written premiums”) that were subject to retrospective rating features as of December 31, 2020, 2019 and 2018 were as follows:

Years ended December 31,	2020		2019		2018
Net written premiums subject to retrospectively rated contracts	$	67	$	91	$	93
Percentage of total net written premiums		1.5%		1.7%		1.9%

As of December 31, 2020 and 2019, the admitted portion of accrued premiums related to the Company’s retrospectively rated contracts were $435 and $490, respectively, which will be billed in future periods based primarily on the payment of the underlying expected losses and LAE. Unsecured amounts associated with these accrued retrospective premiums were $36 and $41 as of December 31, 2020 and 2019, respectively. Ten percent of the amount of accrued retrospective premiums receivable not offset by retrospective return premiums or other liabilities to the same party, other than loss and LAE reserves, or collateral (collectively referred to as the unsecured amount) have been nonadmitted in the amount of $6 and $6 as of December 31, 2020 and 2019, respectively.

High Deductible

The Company establishes loss reserves for high deductible policies net of the insured’s contractual deductible (such deductibles are referred to as “reserve credits”). The Company establishes a nonadmitted asset for ten percent of paid losses recoverable in excess of collateral held on an individual insured basis, or for one hundred percent of paid losses recoverable where no collateral is held and amounts are outstanding for more than ninety days. Additionally, the Company establishes an allowance for doubtful accounts for such paid losses recoverable in excess of collateral and after nonadmitted assets. Similarly, the Company does not recognize reserve credit offsets to its estimate of loss reserves where such credits are deemed uncollectible, as the Company ultimately bears credit risk on the underlying policies’ insurance obligations.

The following table shows the counterparty exposure on unpaid claims and billed recoverable on paid claims for high deductibles by line of business as of December 31, 2020 and 2019:

December 31, 2020	Gross Loss Reserves		Reserve Credits on Unpaid Claims		Recoverable on Paid Claims		Total
Allied Lines	$	485	$	485	$	7	$	492
General Liabilities		550		550		6		556
Workers Compensation		3,353		3,353		32		3,385
Total	$	4,388	$	4,388	$	45	$	4,433

  14        NOTES TO FINANCIAL STATEMENTS - As of December 31, 2020 and 2019 and for years ended December 31, 2020, 2019 and 2018.

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

As of December 31, 2020, both on-balance sheet and off-balance sheet collateral pledged to the Company related to deductible and paid recoverables was $150 and $3,094, respectively. Unsecured high deductible amounts related to unpaid claims and for paid recoverables for 2020 were $1,188, or 27% of the total high deductible. Additionally, as of December 31, 2020, the Company had recoverables on paid claims greater than 90 days overdue of $15, of which $4 have been nonadmitted.

December 31, 2019	Gross Loss Reserves		Reserve Credits on Unpaid Claims		Recoverable on Paid Claims		Total
Allied Lines	$	423	$	423	$	7	$	430
General Liabilities		481		481		6		487
Workers Compensation		3,352		3,352		35		3,387
Total	$	4,256	$	4,256	$	48	$	4,304

As of December 31, 2019, both on-balance sheet and off-balance sheet collateral pledged to the Company related to deductible and paid recoverables was $150 and $3,013, respectively. Unsecured high deductible amounts related to unpaid claims and for paid recoverables for 2019 were $1,142, or 27% of the total high deductible. Additionally, as of December 31, 2019, the Company had recoverables on paid claims greater than 90 days overdue of $23, of which $6 have been nonadmitted.

The following table shows the deductible amounts for the highest ten unsecured high deductible policies as of December 31, 2020 and 2019:

Counterparty* Unsecured High Deductible Amounts

December 31,		2020		2019
Counterparty 1	$	155	$	142
Counterparty 2		100		89
Counterparty 3		53		86
Counterparty 4		50		74
Counterparty 5		50		69
Counterparty 6		47		54
Counterparty 7		40		51
Counterparty 8		39		35
Counterparty 9		34		22
Counterparty 10		25		21

*Actual counterparty is not named and may vary year over year. Additionally, a group of entities under common control is regarded as a single counterparty.

Deposit Accounting

Direct insurance transactions where management determines there is insufficient insurance risk transfer are recorded as deposits unless the policy was issued (i) in respect of the insured’s requirement for evidence of coverage pursuant to applicable statutes (insurance statutes or otherwise), contractual terms or normal business practices, (ii) in respect of an excess insurer’s requirement for an underlying primary insurance policy in lieu of self-insurance, or (iii) in compliance with filed forms, rates and/or rating plans.

Assumed and ceded reinsurance contracts which do not transfer a sufficient amount of insurance risk are recorded as deposits with the net consideration paid or received recognized as a deposit asset or liability, respectively. Deposit assets are admitted if (i) the assuming company is licensed, accredited or qualified by the PA DOI, or (ii) the collateral (i.e., funds withheld, letters of credit or trusts) provided by the reinsurer meets all the requirements of the NY SAP, as applicable. The deposit asset or liability is adjusted by calculating the effective yield on the deposit to reflect the actual payments made or received to date and expected future payments with a corresponding credit or charge to Other income (expense) in the Statements of Operations.

Deposit assets are recorded to Other assets within the Statements of Admitted Assets, refer to Note 11A. Deposit liabilities are recorded to Other liabilities within the Statements of Liabilities, Capital and Surplus, refer to Note 11B.

  15        NOTES TO FINANCIAL STATEMENTS - As of December 31, 2020 and 2019 and for years ended December 31, 2020, 2019 and 2018.

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

Premium Deficiency

The Company periodically reviews its expected ultimate losses with respect to its unearned premium reserves. A premium deficiency loss and related liability is established if the unearned premium reserves and related future investment income are collectively not sufficient to cover the expected ultimate loss projection. For purposes of premium deficiency tests, contracts are grouped in a manner consistent with how policies are marketed, serviced, and measured for the profitability of such contracts. As of December 31, 2020 and 2019, the Company did not incur any premium deficiency losses.

Retroactive Reinsurance

Reinsurance transactions involving the transfer of loss and LAE reserves associated with loss events that occurred prior to the effective date of the transfer are recorded as retroactive reinsurance and reported separately from Reserves for losses and loss adjustment expenses in the Statements of Liabilities, Capital and Surplus. Initial pre-tax gains or losses are recorded in Retroactive reinsurance gain within the Statements of Operations and Changes in Capital and Surplus with surplus gains recorded as Special surplus funds from reinsurance which is a component of Capital and Surplus that is restricted from dividend payment. Amounts recorded in Special surplus funds from reinsurance are considered to be earned surplus (i.e., transferred to Unassigned surplus) only when, and to the extent that, cash recoveries from the assuming entity exceed the consideration paid by the ceding entity. Special surplus funds from retroactive reinsurance are maintained separately for each respective retroactive reinsurance agreement; Special surplus funds from retroactive reinsurance account write-in entry on the balance sheet is adjusted, upward or downward, to reflect any subsequent increase or reduction in reserves ceded. The reduction in the special surplus funds is limited to the lesser of amounts recovered by the Company in excess of consideration paid or the surplus gain in relation to such agreement.

To the extent that the transfer of loss and LAE reserves associated with loss events that occurred prior to the effective date of the transfer is between affiliated entities and neither entity records a gain or loss in surplus, the transaction qualifies as an exception in the NAIC SAP accounting guidance and is accounted for as prospective reinsurance.

Insurance Related Acquisition Costs

Commissions, premium taxes, and certain underwriting costs are expensed as incurred and are included in Other underwriting expenses. The Company records an unearned ceding commission accrual equal to the excess of the ceding commissions received from reinsurers compared to the anticipated acquisition cost of the business ceded. This amount is amortized as an increase to income over the effective period of the reinsurance agreement in proportion to the amount of insurance coverage provided.

Provisions for Allowances and Unauthorized or Overdue Reinsurance

The recoverability of certain assets, including insurance receivables with counterparties, is reviewed periodically by management. A minimum reserve, as required under the NAIC Annual Statement Instructions for Property and Casualty Companies for Schedule F–Provision for Overdue Reinsurance for uncollectible reinsurance is recorded with an additional reserve required if an entity’s experience indicates that a higher amount should be provided. The minimum reserve is recorded as a liability and the change between years is recorded as a gain or loss directly to Unassigned fund (surplus) in the Statement of Liabilities, Capital and Surplus. Any reserve over the minimum amount is recorded on the statement of operations by reversing the accounts previously utilized to establish the reinsurance recoverable. Various factors are taken into consideration when assessing the recoverability of these asset balances including: the age of the related amounts due and the nature of the unpaid balance; disputed balances, historical recovery rates and any significant decline in the credit standing of the counterparty. PA SAP is applied in the determination of the Company’s Provision for reinsurance with concurrence from the NY DFS.

Reserves for Losses and Loss Adjustment Expenses

Reserves for case incurred but not reported (“IBNR”) and LAE losses are determined on the basis of actuarial specialists’ evaluations and other estimates, including historical loss experience. The methods of making such estimates and for establishing the resulting reserves are reviewed and updated based on available information, and any resulting adjustments are recorded in the current period. Accordingly, newly established reserves for losses and LAE, or subsequent changes, are charged to income as incurred. In the event of loss recoveries through reinsurance agreements, loss and LAE reserves are reported net of reinsurance amounts recoverable for unpaid losses and LAE. Losses and LAE ceded through reinsurance are netted against losses and LAE incurred. Amounts recoverable from reinsurers are estimated in a manner consistent with the claim liability associated with the reinsurance policy based upon the terms of the underlying contract. See Note 5 for further discussion of policies and methodologies for estimating the liabilities and losses.

Workers’ compensation reserves are discounted in accordance with NY DFS statutes; see Note 5 for further details.

  16        NOTES TO FINANCIAL STATEMENTS - As of December 31, 2020 and 2019 and for years ended December 31, 2020, 2019 and 2018.

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

Salvage and subrogation recoverables are estimated using past experience adjusted for current trends, and any other factors that would modify past experience. Estimated salvage and subrogation recoveries (net of associated expenses) are deducted from the liability for unpaid claims or losses.

Structured Settlements

In the ordinary course of business, the Company enters into structured settlements to settle certain claims. Structured settlements involve the purchase of an annuity by the Company, generally from life insurers, to fund future claim obligations. In the event the life insurers providing the annuity do not meet their obligations, the Company would, in certain cases, become liable for the payments of benefits. As of December 31, 2020 there were no incurred losses, there has been no default by any of the participating life insurers and the Company has not reduced its loss reserves for any annuities purchased where it is both the owner and the payee. Management believes that based on the financial strength of the life insurers involved (mostly affiliates) the likelihood of the Company becoming liable, or incurring an incremental loss, is remote.

The estimated loss reserves eliminated by such structured settlement annuities and the unrecorded loss contingencies as of December 31, 2020 and 2019 were $1,264 and $1,303, respectively.

As of December 31, 2020, the Company had annuities with aggregate statement values in excess of one percent of its policyholders’ surplus with life insurer affiliates as follows:

Life Insurance Company	State of Domicile	Licensed in New York	Statement Value
American General Life Insurance Company of Texas	Texas	No	$    152
American General Life Insurance Company of Delaware	Delaware	No	248
The United State Life Insurance Company in the City of New York	New York	Yes	812

Fair Value of Financial Instruments

The degree of judgment used in measuring the fair value of financial instruments generally inversely correlates with the level of observable valuation inputs. The Company maximizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value. Financial instruments with quoted prices in active markets generally have more pricing observability and less judgment is used in measuring fair value. Conversely, financial instruments for which no quoted prices are available have less observability and are measured at fair value using valuation models or other pricing techniques that require more judgment. Pricing observability is affected by a number of factors, including the type of financial instrument, whether the financial instrument is new to the market and not yet established, the characteristics specific to the transaction, liquidity and general market conditions.

Assets and liabilities recorded at fair value are measured and classified in accordance with a fair value hierarchy consisting of three ‘levels’ based upon the observability of inputs available in the marketplace as discussed below:

• Level 1: Fair value measurements that are based upon quoted prices (unadjusted) in active markets that we have the ability to access for identical assets or liabilities. Market price data generally is obtained from exchange or dealer markets. The quoted price for such instruments is not subject to adjustment.

• Level 2: Fair value measurements based on inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs other than quoted prices that are observable for the asset or liability, such as interest rates and yield curves that are observable at commonly quoted intervals.

• Level 3: Fair value measurements based on valuation techniques that use significant inputs that are unobservable. Both observable and unobservable inputs may be used to determine the fair values of positions classified in Level 3. The circumstances for using these measurements include those in which there is little, if any, market activity for the asset or liability. Therefore, we must make certain assumptions as to the inputs a hypothetical market participant would use to value that asset or liability. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

  17        NOTES TO FINANCIAL STATEMENTS - As of December 31, 2020 and 2019 and for years ended December 31, 2020, 2019 and 2018.

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

The Company’s policy is to recognize transfers in and out at the end of the reporting period, consistent with the date of the determination of fair value (See Note 4 for the balance and activity of financial instruments). The valuation methods and assumptions used in estimating the fair values of financial instruments are as follows:

• The fair values of bonds, mortgage loans, unaffiliated common stocks and preferred stocks are based on fair values that reflect the price at which a security would sell in an arm’s length transaction between a willing buyer and seller. As such, sources of valuation include third party pricing sources, stock exchanges, brokers or custodians or the NAIC Capital Markets and Investment Analysis Office (“NAIC IAO”).

• The fair value of derivatives is determined using quoted prices in active markets and other market evidence whenever possible, including market-based updates, broker or dealer quotations or alternative pricing sources.

• The carrying value of all other financial instruments approximates fair value due to the short term nature.

Cash Equivalents and Short Term Investments

Cash equivalents are short-term, highly liquid investments, with original maturities of three months or less, that are both; (a) readily convertible to known amounts of cash; and (b) so near their maturity that they present insignificant risk of changes in value because of changes in interest rates. Highly liquid debt securities with maturities of greater than three months but less than twelve months from the date of purchase are classified as short-term investments. Short-term investments are carried at amortized cost which approximates fair value.

Bonds and Loan Backed and Structured Securities

Bonds include any securities representing a creditor relationship, whereby there is a fixed schedule for one or more future payments such as US government agency securities, municipal securities, corporate and convertible bonds, and fixed income instruments. Loan-backed and structured securities (“LBaSS”) include residential mortgage-backed securities (“RMBS”), commercial mortgage-backed securities (“CMBS”), and asset-backed securities (“ABS”), pass-through securities, lease-backed securities, equipment trust certificates, loan-backed securities issued by special purpose corporations or trusts, and securities where there is not direct recourse to the issuer.

Bonds and LBaSS with an NAIC IAO designation of “1” or “2” (considered to be investment grade) are carried at amortized cost. Bonds and LBaSS with an NAIC designation of “3”, “4”, “5”, “5GI”, “6” or “6*” (considered to be non-investment grade) are carried at the lower of amortized cost or fair value. LBaSS fair values are primarily determined using independent pricing services and broker quotes. Bonds and LBaSS that have not been filed with the NAIC IAO, and have not received a designation in over a year, are assigned a 5GI or 6* designation depending on if the obligor is current on contracted principal and interest. Bond and LBaSS securities are assigned a 5GI designation when the following conditions are met: a) the documentation required for a full credit analysis did not exist, b) the issuer/obligor has made all contractual interest and principal payments, and c) an expectation of repayment of interest and principal exists. Amortization of premium or discount on bonds and LBaSS is calculated using the effective yield method.

Additionally, mortgage-backed securities (“MBS”) and ABS prepayment assumptions are obtained from an outside vendor or internal estimates. The retrospective adjustment method is used to account for the effect of unscheduled payments affecting high credit quality securities, while securities with less than high credit quality and securities for which the collection of all contractual cash flows is not probable are both accounted for using the prospective adjustment method.

Mortgage Loans

Mortgage loans on real estate are carried at unpaid principal balances, net of unamortized premiums, discounts and impairments. Pre-payments of principal are recorded as a reduction in the mortgage loan balance. If a mortgage loan provides for a prepayment penalty or acceleration fee in the event the loan is liquidated prior to its scheduled termination date, such fees are reported as investment income when received. Interest income includes interest collected, the change in interest income due and accrued, the change in unearned interest income as well as amortization of premiums, discounts, and deferred fees and recorded as earned in investment income in the statement of operations.

Impaired loans are identified by management as loans in which it is probable that all amounts due according to the contractual terms of the loan agreement will not be collected. The Company accrues income on impaired loans to the extent it is deemed collectible and the loan continues to perform under its original or restructured contractual terms. Non-performing loan interest income that is delinquent more than 90 days is generally recognized on a cash basis.

  18        NOTES TO FINANCIAL STATEMENTS - As of December 31, 2020 and 2019 and for years ended December 31, 2020, 2019 and 2018.

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

Mortgage loans are considered impaired when collection of all amounts due under contractual terms is not probable. Impairment is measured using either i) the present value of expected future cash flows discounted at the loan’s effective interest rate, ii) the loan’s observable market price, if available, or iii) the fair value of the collateral if the loan is collateral dependent. An allowance is typically established for the difference between the impaired value of the loan and its current carrying amount. Additional allowance amounts are established for incurred but not specifically identified impairments, based on statistical models primarily driven by past due status, debt service coverage, loan-to-value ratio, property occupancy, profile of the borrower and of the major property tenants, and economic trends in the market where the property is located. When all or a portion of a loan is deemed uncollectible, the uncollectible portion of the carrying amount of the loan is charged off against the allowance.

Internal credit risk ratings are assigned based on the consideration of risk factors including past due status, debt service coverage, loan-to-value ratio or the ratio of the loan balance to the estimated value of the property, property occupancy, profile of the borrower and of the major property tenants, economic trends in the market where the property is located, and condition of the property.

Preferred Stocks

Perpetual preferred stocks with an NAIC rating of “P1” or “P2”, having characteristics of equity securities are carried at fair value. Redeemable preferred stocks with an NAIC rating of “RP1” or “RP2”, which have characteristics of debt securities, are carried at book value. All preferred stocks with an NAIC rating of “3” through “6” are carried at the lower of book or fair value.

Unaffiliated Common Stock Securities

Unaffiliated common stock investments are carried at fair value with changes in fair value recorded as unrealized gains (losses) in Unassigned surplus, or as realized losses in the event a decline in value is determined to be other than temporary. For FHLB capital stock, which is only redeemable at par, the fair value shall be presumed to be par, unless considered other-than-temporarily impaired.

Investments in subsidiaries and affiliated companies

Investments in non-publicly traded affiliates are recorded based on the underlying equity of the respective entity’s financial statements as presented on a basis consistent with the nature of the affiliates’ operations (including any nonadmitted amounts). The Company’s share of undistributed earnings and losses of affiliates is recorded as unrealized gains (losses) in Unassigned surplus.

Investments in joint ventures, partnerships and limited liability companies

Other invested assets include joint ventures and partnerships and are accounted for under the equity method, based on the most recent financial statements of the entity. Changes in carrying value are recorded as unrealized gains (losses). Additionally, other invested assets include investments in collateralized loans that are recorded at the lower of amortized cost and the fair value of the underlying collateral. Changes in carrying value resulting from adjustments where the fair value is less than amortized cost are recorded as unrealized gains (losses) in Unassigned surplus, while changes resulting from amortization are recorded as Net investment income.

Derivatives

Derivative financial instruments are accounted for at fair value using quoted prices in active markets and other market evidence whenever possible, including market-based inputs to valuation models, broker or dealer quotations or alternative pricing sources, reduced by the amount of collateral held or posted by the Company with respect to the derivative position. Changes in carrying value are recorded as unrealized gains (losses) in Unassigned surplus.

Net investment income and gain/loss

Investment income is recorded as earned and includes interest, dividends and earnings from subsidiaries, loans and joint ventures. Realized gains or losses on the disposition or impairment of investments are determined on the basis of specific identification.

Investment income due and accrued is assessed for collectability. The Company records a valuation allowance on investment income receivable when it is probable that an amount is uncollectible by recording a charge against investment income in the period such determination is made. Any amounts receivable over 90 days past due, or 180 days past due for mortgage loans, that do not have a valuation allowance are nonadmitted by the Company.

  19        NOTES TO FINANCIAL STATEMENTS - As of December 31, 2020 and 2019 and for years ended December 31, 2020, 2019 and 2018.

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

Evaluating Investments for Other-Than-Temporary Impairment

If a bond is determined to have an OTTI in value the cost basis is written down to fair value as its new cost basis, with the corresponding charge to Net realized capital gains (losses) as a realized loss.

For bonds, other than loan-backed and structured securities, an OTTI shall be considered to have occurred if it is probable that the Company will not be able to collect all amounts due under the original contractual terms.

For loan-backed and structured securities, an OTTI shall be considered to have occurred if the fair value of a security is below its amortized cost and management intends to sell or does not have the ability and intent to retain the security until recovery of the amortized cost (i.e., intent based impairment). When assessing the intent to sell a security, management evaluates relevant facts and circumstances including, but not limited to, decisions to rebalance the investment portfolio, sales of securities to meet cash flow needs and sales of securities to take advantage of favorable pricing.

In general, a security is considered a candidate for OTTI evaluation if it meets any of the following criteria:

• The Company may not realize a full recovery on their investment based on lack of ability or intent to hold a security to recovery;

• Fundamental credit risk of the issuer exists; and/or

• Other qualitative/quantitative factors exist indicating an OTTI has occurred.

When a credit-related OTTI is present, the amount of OTTI recognized as a realized capital loss is equal to the difference between the investment’s amortized cost basis and the present value of cash flows expected to be collected regardless of management’s ability or intent to hold the security.

Common and preferred stock investments whose fair value is less than their carrying value or is at a significant discount to acquisition value are considered to be potentially impaired. For securities with unrealized losses, an analysis is performed. Factors include:

• If management intends to sell a security that is in an unrealized loss position then an OTTI loss is considered to have occurred;

• If the investments are trading at a significant (25 percent or more) discount to par, amortized cost (if lower) or cost for an extended period of time based on facts and circumstances of the investment; or

• If a discrete credit event occurs resulting in: (i) the issuer defaulting on a material outstanding obligation; (ii) the issuer seeking protection from creditors under bankruptcy law or any similar laws intended for court supervised reorganization of insolvent enterprises; or, (iii) the issuer proposing a voluntary reorganization pursuant to which creditors are asked to exchange their claims for cash or securities having a fair value substantially lower than par value of their claims; or

• If there are other factors precluding a full recovery of the investment.

Limited partnership investments whose fair value is less than its book value with a significant unrealized loss are considered candidates for OTTI. OTTI factors that are periodically considered include:

• If an order of liquidation or other fundamental credit issues with the partnership exists;

• If there is a significant reduction in scheduled cash flow activities between the Company and the partnership or fund during the year;

• If there is an intent to sell, or the Company may be required to sell, the investment prior to the recovery of cost of the investment; or

• If other qualitative/quantitative factors indicating an OTTI exist based on facts and circumstances of the investment.

Equities in Pools & Associations

The Company accounts for its participation in the business pooled via the Association (see Note 6) and its deposit in the Association by recording the Company’s share of:

• direct and assumed premium as gross premium,

• underwriting and net investment income results in the Statements of Operations and Changes in Capital and Surplus,

• insurance and reinsurance balances in the Statements of Admitted Assets,

• all other non-insurance assets and liabilities held by the Association, all of which are on its members’ behalf, as Equities in Underwriting Pools and Associations in the Statements of Admitted Assets, and

• cashflows in the Statements of Cash Flows.

  20        NOTES TO FINANCIAL STATEMENTS - As of December 31, 2020 and 2019 and for years ended December 31, 2020, 2019 and 2018.

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

Foreign Currency Translation

Foreign currency denominated assets and liabilities are translated into U.S. dollars using rates of exchange prevailing at the period end date. Revenues, expenses, gains, losses and surplus adjustments, of non-U.S. operations are translated into U.S. dollars based on weighted average exchange rate for the period. All gains or losses due to translation adjustments are recorded as unrealized gains (losses) within Unassigned surplus in the Statements of Liabilities, Capital and Surplus. All realized gains and losses due to exchange differences between settlement date and transaction date resulting from foreign currency transactions, not in support of foreign insurance operations, are included in Net realized capital gains (losses) in the Statements of Operations and Changes in Capital and Surplus.

Retirement Plans, Deferred Compensation, Postemployment Benefits and Compensated Absences and Other Postretirement Benefit Plans

The Company’s employees participate in various AIG-sponsored defined benefit pension and postretirement plans. AIG, as sponsor, is ultimately responsible for the maintenance of these plans in compliance with applicable laws. The Company is not directly liable for obligations under these plans. AIG charges the Company and its insurance company affiliates pursuant to intercompany expense sharing agreements; the expenses are then shared by the pool participants in accordance with the pooling agreement.

The Company incurred employee related costs related to defined benefit and defined contribution plans during 2020, 2019 and 2018 of $5, $7 and $5, respectively.

Income Taxes

The Company files a consolidated U.S. federal income tax return with AIG. AIG has more than 300 subsidiaries which form part of this tax return. A complete listing of the participating subsidiaries is included in Note 8.

The Company is allocated U.S. federal income taxes based upon a tax sharing agreement (the “Tax Sharing Agreement”) with AIG, effective January 1, 2018, and approved by the Company’s Board of Directors. This agreement provides that the Company shall incur tax results that would have been paid or received by such company if it had filed a separate federal income tax return, with limited exceptions.

Additionally, while the agreement described above governs the current and deferred income tax recorded in the income tax provision, the amount of cash that will be paid or received for U.S. federal income taxes may at times be different. The terms of this agreement are based on principles consistent with the allocation of income tax expense or benefit on a separate company basis, except that:

• The sections of the Internal Revenue Code relating to the Base Erosion Anti-abuse Tax (“BEAT”) are applied, but only if the AIG consolidated group is subject to BEAT in the Consolidated Tax Liability, and;

• The impact of Deferred Intercompany Transactions (as defined in Treas. Reg. §1.1502-13(b)(1), if the “intercompany items” from such transaction, as defined in Treas. Reg. §1.1502-13(b)(2), have not been taken into account pursuant to the “matching rule” of Treas. Reg. §1.1502-13(c)), are excluded from current taxation, provided however, that the Company records the appropriate deferred tax asset and/or deferred tax liability related to the gain or loss and includes such gain or loss in its separate return tax liability in the subsequent tax year when the deferred tax liability or deferred tax asset becomes current.

The Company has an enforceable right to recoup federal income taxes in the event of future net losses that it may incur or to recoup its net losses carried forward as an offset to future net income subject to federal income taxes.

Under the Tax Sharing Agreement, income tax liabilities related to uncertain tax positions and tax authority audit adjustments (“TAAAs”) shall remain with the Company for which the income tax liabilities relate. Furthermore, if and when such income tax liabilities are realized or determined to no longer be necessary, the responsibility for any additional income tax liabilities, benefits or rights to any refunds due, remains with the Company.

In accordance with Circular Letter 1979-33 issued by the NY DFS, AIG shall establish and maintain an escrow account for amounts where the Company’s separate return liability exceeds the AIG consolidated tax liability. As of December 31, 2020, the Company’s separate return liability did not exceed the AIG consolidated tax liability and therefore no amounts were maintained in escrow.

  21        NOTES TO FINANCIAL STATEMENTS - As of December 31, 2020 and 2019 and for years ended December 31, 2020, 2019 and 2018.

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

Deferred Taxes

The Company evaluates the recoverability of deferred tax assets and establishes a valuation allowance, if necessary, to reduce the deferred tax asset to an amount that is more likely than not to be realized (“adjusted gross deferred tax asset”). The evaluation of the recoverability of the deferred tax asset and the need for a valuation allowance requires management to weigh all positive and negative evidence to reach a conclusion that it is more likely than not that all or some portion of the deferred tax asset will not be realized. The weight given to the evidence is commensurate with the extent to which it can be objectively verified. The more negative evidence that exists, the more positive evidence is necessary and the more difficult it would be to support a conclusion that a valuation allowance is not needed.

The Company’s framework for assessing the recoverability of deferred tax assets requires it to consider all available evidence, including:

• the nature, frequency, and amount of cumulative financial reporting income and losses in recent years;

• the sustainability of recent operating profitability of our subsidiaries;

• the predictability of future operating profitability of the character necessary to realize the net deferred tax asset;

• the carryforward periods for the net operating loss, capital loss and foreign tax credit carryforwards, including the effect of reversing taxable temporary differences; and

• prudent and feasible actions and tax planning strategies that would be implemented, if necessary, to protect against the loss of the deferred tax asset.

The adjusted gross deferred tax asset is then assessed for statutory admissibility. The reversing amount eligible for loss carryback or the amount expected to be realized in three years is admissible, subject to the defined surplus limitation. The remaining adjusted gross deferred tax asset can be admitted to the extent of offsetting deferred tax liabilities.

2. Accounting Adjustments to Statutory Basis Financial Statements

A. Change in Accounting Principles

2020 Changes

In 2020, there were no significant changes or modifications in the Statements of Statutory Accounting Principles (“SSAP”).

2019 Changes

In 2019, the Company revised its accounting policy of investments in hedge funds accounted for as equity method investments. These investments were no longer accounted for using a one month lag. The cumulative impact on the Company’s surplus as of December 31, 2018 was a decrease of $39 and was reflected as a Cumulative effect of changes in accounting principles within surplus.

In 2019, there were no significant changes or modifications in the SSAP.

2018 Changes

In 2018, there were no significant changes or modifications in the SSAP.

  22        NOTES TO FINANCIAL STATEMENTS - As of December 31, 2020 and 2019 and for years ended December 31, 2020, 2019 and 2018.

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

B. Adjustments to Surplus

During 2020, 2019 and 2018 the Company identified corrections that resulted in after-tax statutory adjustments to beginning capital and surplus of $(9), $21 and $72, respectively. In accordance with SSAP No. 3, Accounting Changes and Corrections of Errors (“SSAP 3”), the corrections of errors have been reported in the 2020, 2019 and 2018 statutory financial statements as adjustments to Unassigned surplus. The impact of the 2020 corrections would have decreased the 2019 and 2018 pre-tax income by $2 and $0, respectively. Management has concluded that the effects of these errors on the previously issued financial statements were immaterial based on a quantitative and qualitative analysis. The impact to surplus, assets and liabilities as of January 1, 2020, 2019 and 2018 is presented in the following tables:

2020 Adjustments	Policyholders’ Surplus			Total Admitted Assets			Total Liabilities
Balance at December 31, 2019	$	5,995		$	22,965		$	16,970
Adjustments to beginning Capital and Surplus:
Asset corrections		-			-			-
Liability corrections		-			-			-
Income tax corrections		(9	)		(9	)		-
Total adjustments to beginning Capital and Surplus		(9	)		(9	)		-
Balance at January 1, 2020 as adjusted	$	5,986		$	22,956		$	16,970

An explanation for each of the adjustments for prior period corrections is described below:

Income tax corrections – The decrease in the tax assets is primarily the result of a) corrections to prior period balances for adjustments to the current and deferred tax assets and liabilities and b) the tax effect of the corresponding change in asset realization and liability corrections.

2019 Adjustments	Policyholders’ Surplus		Total Admitted Assets		Total Liabilities
Balance at December 31, 2018	$	5,923	$	24,667	$	18,744
Adjustments to beginning Capital and Surplus:
Asset corrections		-		-		-
Liability corrections		9		-		(9	)
Income tax corrections		12		12		-
Total adjustments to beginning Capital and Surplus		21		12		(9	)
Balance at January 1, 2019 as adjusted	$	5,944	$	24,679	$	18,735

An explanation for each of the adjustments for prior period corrections is described below:

Liability corrections – The decrease in total liabilities is primarily the result of a) Premium overstatement and b) foreign exchange translation correction on Japan Yen business.

Income tax corrections – The increase in the tax assets is primarily the result of a) corrections to prior period balances for adjustments to the current and deferred tax assets and liabilities and b) the tax effect of the corresponding change in asset realization and liability corrections.

2018 Adjustments	Policyholders’ Surplus		Total Admitted Assets		Total Liabilities
Balance at December 31, 2017	$	6,238	$	25,638	$	19,400
Adjustments to beginning Capital and Surplus:
Asset corrections		56		56		-
Liability corrections		6		-		(6	)
Income tax corrections		10		10		-
Total adjustments to beginning Capital and Surplus		72		66		(6	)
Balance at January 1, 2018 as adjusted	$	6,310	$	25,704	$	19,394

  23        NOTES TO FINANCIAL STATEMENTS - As of December 31, 2020 And 2019 And for years ended December 31, 2020, 2019 And 2018.

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

An explanation for each of the adjustments for prior period corrections is described below:

Asset corrections – The increase in net admitted assets is primarily the result of a) an understatement in the carrying value of an investment impacting 2017 financials; b) deposit accounting not recorded within contract terms.

Liability corrections – The decrease in total liabilities is primarily the result of a) a net decrease in unearned premium reserves on multi-year direct policies; partially offset by b) an increase due to an over-cession of premiums and losses on a specific program.

Income tax corrections – The increase in the tax assets is primarily the result of a) corrections to prior period balances for adjustments to the current and deferred tax assets and liabilities and b) the tax effect of the corresponding change in asset realization and liability corrections.

3. Investments

A. Bond Investments

The reconciliations from carrying value to fair value of the Company’s bond investments as of December 31, 2020 and 2019 are outlined in the tables below:

December 31, 2020	Carrying Value		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
U.S. governments	$	175	$	8	$	(1	)	$	182
All other governments		120		3		(2	)		121
States, territories and possessions		248		52		-			300
Political subdivisions of states, territories and possessions		208		10		-			218
Special revenue and special assessment obligations and all non-guaranteed obligations of agencies and authorities and their political subdivisions		2,503		152		(4	)		2,651
Industrial and miscellaneous		10,463		732		(34	)		11,161
Total	$	13,717	$	957	$	(41	)	$	14,633
December 31, 2019	Carrying Value		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
U.S. governments	$	267	$	3	$	-		$	270
All other governments		116		2		(2	)		116
States, territories and possessions		361		34		-			395
Political subdivisions of states, territories and possessions		298		9		-			307
Special revenue and special assessment obligations and all non-guaranteed obligations of agencies and authorities and their political subdivisions		2,492		97		(2	)		2,586
Industrial and miscellaneous		9,743		614		(17	)		10,340
Total	$	13,277	$	759	$	(21	)	$	14,014

  24        NOTES TO FINANCIAL STATEMENTS - As of December 31, 2020 and 2019 and for years ended December 31, 2020, 2019 and 2018.

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

The carrying values and fair values of bonds at December 31, 2020, by contractual maturity, are shown below. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay certain obligations with or without call or prepayment penalties.

December 31, 2020	Carrying Value		Fair Value
Due in one year or less	$	533	$	537
Due after one year through five years		2,287		2,397
Due after five years through ten years		1,659		1,758
Due after ten years		1,407		1,597
Structured securities		7,954		8,469
Total	$	13,840	$	14,758

B. Mortgage Loan Investments

The minimum and maximum lending rates for mortgage loans during 2020 were:

Category	Minimum Lending Rate %	Maximum Lending Rate %
Office	2.3%	3.5%
Hotel/Motel	12.0%	12.0%
Residential	2.9%	4.5%

The maximum percentage of any one loan to the value of security at the time of the loan, exclusive of insured or guaranteed or purchase money mortgages was 80 percent. The Company’s mortgage loan portfolio is current as to payments of principal and interest, for both periods presented. There were no significant amounts of nonperforming mortgages (defined as those loans where payment of contractual principal or interest is more than 90 days past due) during any of the periods presented. The Company did not have any advanced amounts for taxes or assessments. The following table details an analysis of mortgage loans as of December 31, 2020 and 2019:

			Residential				Commercial
	Farm		Insured		All Other		Insured		All Other		Mezzanine		Total
2020
Recorded Investment
Current	$	-	$	-	$	194	$	-	$	1,824	$	-	$	2,018
30 - 59 days past due		-		-		-		-		-		-		-
60 - 89 days past due		-		-		1		-		-		-		1
90 - 179 days past due		-		-		-		-		24		-		24
Greater than 180 days past due		-		-		1		-		-		-		1
Total	$	-	$	-	$	196	$	-	$	1,848	$	-	$	2,044
2019
Recorded Investment
Current	$	-	$	-	$	398	$	-	$	2,066	$	73	$	2,537
30 - 59 days past due		-		-		-		-		-		-		-
60 - 89 days past due		-		-		1		-		-		-		1
90 - 179 days past due		-		-		1		-		-		-		1
Greater than 180 days past due		-		-		-		-		-		-		-
Total	$	-	$	-	$	400	$	-	$	2,066	$	73	$	2,539

C. Loan-Backed and Structured Securities

The Company did not record any non-credit OTTI losses during 2020, 2019 and 2018 for LBaSS.

As of December 31, 2020, 2019 and 2018, the Company held LBaSS for which it recognized $31, $13 and $43, respectively, of credit-related OTTI based on the present value of projected cash flows being less than the amortized cost of the securities.

  25        NOTES TO FINANCIAL STATEMENTS - As of December 31, 2020 and 2019 and for years ended December 31, 2020, 2019 and 2018.

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

The following table shows the aggregate unrealized losses and related fair value relating to those securities for which an OTTI has not been recognized as of the reporting date and the length of time that the securities have been in a continuous unrealized loss position:

Years Ended December 31,	2020		2019
Aggregate unrealized losses:
Less than 12 Months	$	28	$	9
12 Months or longer	$	13	$	10
Aggregate related fair value of securities with unrealized losses:
Less than 12 Months	$	1,158	$	1,013
12 Months or longer	$	449	$	511

D. Unrealized losses

The fair value of the Company’s bonds and stocks that had gross unrealized losses (where fair value is less than amortized cost) as of December 31, 2020 and 2019 are set forth in the tables below:

December 31, 2020	Less than 12 Months					12 Months or Longer					Total
Description of Securities	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
U.S. governments	$	8	$	(1	)	$	-	$	-		$	8	$	(1	)
All other governments		17		(11	)		4		(5	)		21		(16	)
States, territories and possessions		17		-			-		-			17		-
Political subdivisions of states, territories and possessions		-		-			-		-			-		-
Special revenue and special assessment obligations and all non-guaranteed obligations of agencies and authorities and their political subdivisions		339		(4	)		1		-			340		(4	)
Industrial and miscellaneous		1,376		(45	)		477		(29	)		1,853		(74	)
Total bonds	$	1,757	$	(61	)	$	482	$	(34	)	$	2,239	$	(95	)
Non-affiliated		10		(1	)		-		-			10		(1	)
Total common stocks	$	10	$	(1	)	$	-	$	-		$	10	$	(1	)
Total bonds and stocks	$	1,767	$	(62	)	$	482	$	(34	)	$	2,249	$	(96	)

December 31, 2019	Less than 12 Months					12 Months or Longer					Total
Description of Securities	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
U.S. governments	$	22	$	-		$	-	$	-		$	22	$	-
All other governments		13		(7	)		7		(6	)		20		(13	)
States, territories and possessions		-		-			-		-			-		-
Political subdivisions of states, territories and possessions		4		-			-		-			4		-
Special revenue and special assessment obligations and all non-guaranteed obligations of agencies and authorities and their political subdivisions		126		(1	)		149		(1	)		275		(2	)
Industrial and miscellaneous		1,289		(25	)		444		(17	)		1,733		(42	)
Total bonds	$	1,454	$	(33	)	$	600	$	(24	)	$	2,054	$	(57	)
Non-affiliated		26		-			-		-			26		-
Total common stocks	$	26	$	-		$	-	$	-		$	26	$	-
Total bonds and stocks	$	1,480	$	(33	)	$	600	$	(24	)	$	2,080	$	(57	)

  26        NOTES TO FINANCIAL STATEMENTS - As of December 31, 2020 and 2019 and for years ended December 31, 2020, 2019 and 2018.

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

E. Realized Gains Losses

Proceeds from sales and associated gross realized gains (losses) for the years ended December 31, 2020, 2019 and 2018 were as follows:

Years ended December 31	2020					2019					2018
	Bonds			Equity Securities		Bonds			Equity Securities		Bonds			Equity Securities
Proceeds from sales	$	1,222		$	34	$	2,020		$	108	$	1,924		$	339
Gross realized gains		89			-		88			8		14			21
Gross realized losses		(30	)		-		(17	)		-		(27	)		-

F. Derivative Financial Instruments

The Company holds currency as well as interest rate derivative financial instruments in the form of currency swaps, interest rate swaps, and currency forwards and futures to manage risk from currency exchange rate fluctuations, and the impact of such fluctuations to surplus and cash flows on investments or loss reserves. While not accounted for under hedge accounting, the currency derivatives are economic hedges of the Company’s exposure to fluctuations in the value of receipts on certain investments held by the Company denominated in foreign currencies (primarily GBP and EUR), or of the Company’s exposure to fluctuations in recorded amounts of loss reserves denominated in foreign currencies (primarily JPY). Additionally, interest rate derivatives were entered into to manage risk from fluctuating interest rates in the market, and the impact of such fluctuations to surplus and cash flows on investments or loss reserves. The interest rate derivatives are cash flow hedges of the company’s exposure to fluctuations in LIBOR/EURIBOR rates on investments in collateralized loan obligations.

Market Risk

The Company is exposed under these types of contracts to fluctuations in value of the swaps and forwards and variability of cash flows due to changes in interest rates and exchange rates.

Credit Risk

The current credit exposure of the Company’s derivative contracts is limited to the fair value of such contracts. Credit risk is managed by entering into transactions with creditworthy counterparties and obtaining collateral.

Cash Requirements

The Company is subject to collateral requirements on its currency and interest rate derivative contracts. Additionally, the Company is required to make currency exchanges on fixed dates and fixed amounts or fixed exchange rates, or make a payment in the amount of foreign currency physically received on certain foreign denominated investments. For interest rate swaps, the Company is required to make payments based on a floating rate (LIBOR/EURIBOR) on a fixed payment date.

The Company has determined that the currency and interest rate derivatives do not qualify for hedge accounting under the criteria set forth in SSAP No. 86, Accounting for Derivative Instruments and Hedging Transactions (“SSAP 86”). As a result, the Company’s currency and interest rate contracts are accounted for at fair value and the changes in fair value are recorded as unrealized gains (losses) within the Statements of Operations and Changes in Capital and Surplus until the contract expires, paid down or is redeemed early. In the event a contract is fully redeemed before its expiration, the related unrealized amounts will be recognized in Net realized capital gains (losses). Furthermore, if the contract has periodic payments or fully matures, any related unrealized amounts are recognized in Net investment income earned.

The Company did not apply hedge accounting to any of its derivatives for any period in these financial statements. The following tables summarize the outstanding notional amounts, the fair values and the realized and unrealized gains or losses of the derivative financial instruments held by the Company for the years ended December 31, 2020 and 2019.

  27        NOTES TO FINANCIAL STATEMENTS - As of December 31, 2020 and 2019 and for years ended December 31, 2020, 2019 and 2018.

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

	December 31, 2020					Year ended December 31, 2020
Derivative Financial Instrument	Outstanding Notional Amount		Fair Value			Realized capital gains/ (losses)		Unrealized capital gains / (losses)
Swaps	$	2,185	$	(39	)	$	2	$	(29	)
Forwards		956		17			-		17
Total	$	3,141	$	(22	)	$	2	$	(12	)

	December 31, 2019					Year ended December 31, 2019
Derivative Financial Instrument	Outstanding Notional Amount		Fair Value			Realized Capital gains/(losses)		Unrealized capital gains / losses
Swaps	$	2,075	$	(9	)	$	-	$	(13	)
Forwards		54		-			-		-
Total	$	2,129	$	(9	)	$	-	$	(13	)

G. Other Invested Assets

During 2020, 2019 and 2018, the Company recorded OTTI losses on investments in joint ventures and partnerships of $56, $48, and $91, respectively.

H. Investment Income

The Company did not have any accrued investment income receivables over 90 days past due as of December 31, 2020 and 2019. Investment expenses of $29, $30 and $36 were included in Net investment income earned for the years ended December 31, 2020, 2019 and 2018, respectively.

I. Restricted Assets

The Company had securities deposited with regulatory authorities, as required by law, with a carrying value of $1,948 and $1,604 as of December 31, 2020 and 2019, respectively.

4. Fair Value of Financial Instruments

The following tables present information about financial instruments carried at fair value on a recurring basis and indicate the level of the fair value measurement as of December 31, 2020 and 2019:

December 31, 2020	Level 1		Level 2			Level 3		Total
Bonds	$	-	$	283		$	46	$	329
Common stocks		10		-			-		10
Mutual funds		-		-			1		1
Derivative assets		-		50			-		50
Derivative liabilities		-		(72	)		-		(72	)
Total	$	10	$	261		$	47	$	318

December 31, 2019	Level 1		Level 2			Level 3		Total
Bonds	$	-	$	227		$	139	$	366
Common stocks		14		-			37		51
Mutual funds		-		-			2		2
Derivative assets		-		29			-		29
Derivative liabilities		-		(37	)		-		(37	)
Total	$	14	$	219		$	178	$	411

  28        NOTES TO FINANCIAL STATEMENTS - As of December 31, 2020 and 2019 and for years ended December 31, 2020, 2019 and 2018.

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

A. Fair Value Measurements in Level 3 of the Fair Value Hierarchy

The following tables show the balance and activity of financial instruments classified as level 3 in the fair value hierarchy for the years ended December 31, 2020 and 2019.

	Beginning Balance at January 1, 2020		Transfers into Level 3		Transfers out of Level 3			Total Gains (Losses) included in Net Income			Total Gains (Losses) Included in Surplus			Purchases, Sales, Issuances, Settlements, Net			Balance at December 31, 2020
Bonds	$	139	$	116	$	(117	)	$	(4	)	$	-		$	(88	)	$	46
Common stocks		37		28		-			(2	)		(3	)		(60	)		-
Mutual funds		2		-		-			-			-			-			2
Total	$	178	$	144	$	(117	)	$	(6	)	$	(3	)	$	(148	)	$	48

	Beginning Balance at January 1, 2019		Transfers into Level 3		Transfers out of Level 3			Total Gains (Losses) included in Net Income			Total Gains (Losses) included in Surplus		Purchases, Sales, Issuances, Settlements, Net			Balance at December 31, 2019
Bonds	$	96	$	203	$	(67	)	$	(3	)	$	10	$	(100	)	$	139
Common stocks		25		-		-			(2	)		-		14			37
Mutual funds		-		1		-			-			1		-			2
Total	$	121	$	204	$	(67	)	$	(5	)	$	11	$	(86	)	$	178

Assets are transferred out of Level 3 when circumstances change such that significant inputs can be corroborated with market observable data or when the asset is no longer carried at fair value. This may be due to a significant increase in market activity for the asset, a specific event, one or more significant inputs becoming observable or when a long-term interest rate significant to a valuation becomes short-term and this observable. Transfers out of Level 3 can also occur due to favorable credit migration resulting in a higher NAIC designation. Securities are generally transferred into Level 3 due to a decrease in market transparency, downward credit migration and an overall increase in price disparity for certain individual security types. The Company’s policy is to recognize transfers in and out at the end of the reporting period, consistent with the date of the determination of fair value.

The table below presents information about the significant unobservable inputs used for recurring fair value measurements for certain Level 3 instruments, and includes only those instruments for which information about the inputs is reasonably available to us, such as data from independent third-party valuation service providers and from internal valuation models. Because input information from third-parties with respect to certain Level 3 instruments may not be reasonably available to the Company, balances shown below may not equal total amounts reported for such Level 3 assets.

	Fair Value at December 31, 2020	Valuation Technique		Unobservable Input	Range (Weighted Average)
Assets:
Bonds	$5		Discounted cash flow	Yield	4.14%-5.72% (4.73%)

  29        NOTES TO FINANCIAL STATEMENTS - As of December 31, 2020 and 2019 and for years ended December 31, 2020, 2019 and 2018.

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

B. Fair Value of all Financial Instruments

The table below details the fair value of all financial instruments except for those accounted for under the equity method as of December 31, 2020 and 2019:

December 31, 2020	Aggregate Fair Value			Admitted Assets			Level 1		Level 2			Level 3		Not Practicable (Carry Value)
Bonds	$	14,633		$	13,717		$	-	$	11,016		$	3,617	$	-
Cash equivalents and short term investments		155			155			23		60			73		-
Common stocks		17			17			10		7			-		-
Derivative assets		50			50			-		50			-		-
Derivative liabilities		(72	)		(72	)		-		(72	)		-		-
Mortgage loans		2,141			2,043			-		-			2,141		-
Mutual funds		1			1			-		-			1		-
Total	$	16,925		$	15,911		$	33	$	11,061		$	5,832	$	-

December 31, 2019	Aggregate Fair Value			Admitted Assets			Level 1		Level 2			Level 3		Not Practicable (Carry Value)
Bonds	$	14,014		$	13,277		$	2	$	10,277		$	3,735	$	-
Cash equivalents and short term investments		342			342			280		61			-		-
Common stocks		61			61			14		9			37		-
Derivative assets		29			29			-		29			-		-
Derivative liabilities		(37	)		(37	)		-		(37	)		-		-
Mortgage loans		2,615			2,539			-		-			2,615		-
Mutual funds		2			2			-		-			2		-
Preferred stocks		71			17			-		71			-		-
Total	$	17,097		$	16,230		$	296	$	10,410		$	6,389	$	-

5. Reserves for Losses and Loss Adjustment Expenses

A roll forward of the Company’s net reserves for losses and LAE as of December 31, 2020, 2019 and 2018, is set forth in the table below:

December 31,	2020			2019			2018
Reserves for losses and LAE, end of prior year	$	9,732		$	10,935		$	12,115
Incurred losses and LAE related to:
Current accident year		3,599			3,772			4,000
Prior accident year		22			(39	)		260
Total incurred losses and LAE	$	3,621		$	3,733		$	4,260
Paid losses and LAE related to:
Current accident year		(1,307	)		(1,214	)		(1,182	)
Prior accident year		(3,067	)		(3,722	)		(4,258	)
Total paid losses and LAE		(4,374	)		(4,936	)		(5,440	)
Reserves for losses and LAE, end of current year	$	8,979		$	9,732		$	10,935

During 2020, after applying the impact of the ADC, the Company reported net unfavorable incurred loss and LAE of approximately $22. This was due to the changes in discount of $8 as a result of interest rate fluctuations. This results in an unfavorable prior year development (“PYD”) of $30.

• Unfavorable development in U.S. Financial Lines, notably D&O, Employment Practices Liability (“EPLI”), Mergers and Acquisitions, Cyber and Non-Medical Professional Errors & Omissions business where the Company reacted to increasing frequency and severity in recent accident years;

• Unfavorable development in Personal Lines where the Company reacted to adverse development in Homeowners and Umbrella.

  30        NOTES TO FINANCIAL STATEMENTS - As of December 31, 2020 and 2019 and for years ended December 31, 2020, 2019 and 2018.

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

During 2019, after applying the impact of the ADC, the Company reported net favorable incurred loss and LAE of approximately $39. This was due to the changes in discount of $37 as a result of interest rate fluctuations. This results in a favorable prior year development (“PYD”) of $2.

The favorable prior year development is generally a result of the following:

• Favorable development on 2017 Hurricanes and 2017 California Wildfires subrogation recoverables in Commercial Property and Personal Lines;

• Favorable development on Workers Compensation, both guaranteed cost business and large deductible and Defense Base Act business (covering government contractors serving at military bases overseas) where we reacted to favorable loss trends in recent accident years.

During 2018, after applying the impact of the ADC, the Company reported net unfavorable prior year development on loss and LAE reserves of approximately $260, which includes a decrease in loss reserve discount on prior accident years of $24. Under the ADC, 80 percent of the reserve risk on substantially all of our commercial long-tail exposures for accident years 2015 and prior is ceded to NICO. Excluding the impact of the ADC, the Company recognized unfavorable prior year loss reserve development of $491.

The 2018 unfavorable prior year development is generally a result of the following:

• Unfavorable prior year development in excess casualty, driven by the combination of construction defect and construction wrap claims from accident years 2015 and prior where we reacted to significant increases in severity and longer claim reporting patterns, as well as higher than expected loss severity in accident years 2016 and 2017, which led to an increase in estimates for these accident years;

• Unfavorable prior year development in financial lines, primarily from directors & officers (D&O) and employment practices liability (EPLI) policies covering corporate and national insureds as well as private and not-for-profit insureds. This development was predominantly in accident years 2014-2017 and resulted largely from increases in severity as the frequency of class action lawsuits increased in those years; and

• Unfavorable prior year development in personal lines reflecting an increase in estimates in respect of the California Wildfires and Hurricane Irma.

The Company’s reserves for losses and LAE have been reduced for anticipated salvage and subrogation of $234, $310 and $249 for the years ended December 31, 2020, 2019 and 2018, respectively. The Company paid $5, $13 and $9 in the reporting period to settle 137, 148 and 204 claims related to extra contractual obligations or bad faith claims stemming from lawsuits for the years ended December 31, 2020, 2019 and 2018, respectively.

A. Asbestos/Environmental Reserves

The Company has indemnity claims asserting injuries from toxic waste, hazardous substances, asbestos and other environmental pollutants and alleged damages to cover the clean-up costs of hazardous waste dump sites (environmental claims). Estimation of environmental claims loss reserves is a difficult process, as these claims, which emanate from policies written in 1986 and prior years, cannot be estimated by conventional reserving techniques. Environmental claims development is affected by factors such as inconsistent court resolutions, the broadening of the intent of policies and scope of coverage and increasing number of new claims. The Company and other industry members have and will continue to litigate the broadening judicial interpretation of policy coverage and the liability issues. If the courts continue in the future to expand the intent of the policies and the scope of the coverage, as they have in the past, additional liabilities would emerge for amounts in excess of reserves held. This emergence cannot now be reasonably estimated, but could have a material impact on the Company’s future operating results or financial position.

  31        NOTES TO FINANCIAL STATEMENTS - As of December 31, 2020 and 2019 and for years ended December 31, 2020, 2019 and 2018.

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

The Company has exposure to asbestos and/or environmental losses and LAE costs arising from pre-1986 general liability, product liability, commercial multi-peril and excess liability insurance or reinsurance policies as noted below:

	Asbestos Losses									Environmental Losses
December 31,	2020			2019			2018			2020			2019			2018
Direct
Loss and LAE reserves, beginning of year	$	734		$	727		$	797		$	307		$	285		$	215
Incurred losses and LAE		(61	)		54			(17	)		(1	)		51			97
Calendar year paid losses and LAE		(55	)		(47	)		(53	)		(20	)		(29	)		(27	)
Loss and LAE Reserves, end of year	$	618		$	734		$	727		$	286		$	307		$	285
Assumed reinsurance
Loss and LAE reserves, beginning of year	$	305		$	316		$	258		$	18		$	17		$	19
Incurred losses and LAE		1			4			76			1			2			(1	)
Calendar year paid losses and LAE		(14	)		(15	)		(18	)		(1	)		(1	)		(1	)
Loss and LAE Reserves, end of year	$	292		$	305		$	316		$	18		$	18		$	17
Net of reinsurance
Loss and LAE reserves, beginning of year	$	1		$	1		$	1		$	-		$	-		$	-
Incurred losses and LAE		-			-			-			-			-			-
Calendar year paid losses and LAE		-			-			-			-			-			-
Loss and LAE Reserves, end of year	$	1		$	1		$	1		$	-		$	-		$	-

The Company estimates the full impact of the asbestos and environmental exposure by establishing case basis reserves on all known losses and establishes bulk reserves for IBNR losses and LAE based on management’s judgment after reviewing all the available loss, exposure, and other information.

Included in the above table are loss and LAE - IBNR and bulk reserves arising from pre-1986 general liability, product liability, commercial multi-peril and excess liability insurance or reinsurance policies as noted below:

Asbestos	Loss Reserves				LAE Reserves
December 31,	2020		2019		2020		2019
Direct basis:	$	233	$	364	$	26	$	40
Assumed reinsurance basis:		106		116		12		13
Net of ceded reinsurance basis:		-		-		-		-

Environmental	Loss Reserves				LAE Reserves
December 31,	2020		2019		2020		2019
Direct basis:	$	119	$	133	$	51	$	57
Assumed reinsurance basis:		5		6		2		2
Net of ceded reinsurance basis:		-		-		-		-

B. Loss Portfolio Transfer

On February 12, 2018, the Company and certain AIG affiliated insurers (collectively, the “Reinsureds” (as cedants), each of which is a member of the Combined Pool) commuted certain loss portfolio reinsurance agreements with Eaglestone (as reinsurer). The commuted reinsurance agreements with Eaglestone related to environmental impairment liability and related exposures, pre-1986 environmental, public entity, occupational accident exposures, miscellaneous run-off general liability and workers’ compensation exposures, and selected physicians and surgeons professional liability policies. The commutation settlement was equal to the statutory balances as of the January 1, 2017 effective date.

On the same date, the Reinsureds (as cedants), Eaglestone (as original reinsurer), and Fortitude Re (as replacement reinsurer), and registered Class 4 and Class E reinsurer in Bermuda, entered into a novation agreement whereby obligations of excess workers’ compensation business previously ceded by the Reinsureds to Eaglestone were transferred to Fortitude Re. The novation consideration was equal to the total statutory reserves ceded to Eaglestone as of the January 1, 2017 effective date.

  32        NOTES TO FINANCIAL STATEMENTS - As of December 31, 2020 and 2019 and for years ended December 31, 2020, 2019 and 2018.

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

Further, and also on the same date, a book of assumed reinsurance business of the Reinsureds, which was previously embedded in one of the LPTs that was commuted, was ceded back to Eaglestone as a separate LPT (“Re-ceded Portfolio”) on a fund transferred basis with settlement equal to the statutory balances as of the January 1, 2017 effective date, resulting in no gain in surplus to the Reinsureds.

Finally, the Reinsureds (as cedants) ceded substantially all commuted business as detailed above through various LPT reinsurance agreements to Fortitude Re (as replacement reinsurer). Additionally, at the same time, the Reinsureds also ceded to Fortitude Re additional business related to certain excess workers’ compensation (accident years 2011 and 2012), certain pollution legal liability, buffer trucking, some healthcare primary and excess product coverages businesses. The consideration for the above reinsurance agreements is equal to the statutory book value of the ceded liabilities as of the January 1, 2017 effective date, resulting in no gain in surplus to the Reinsureds. The consideration was settled on a funds withheld basis. Interest on the funds withheld is determined by the total return of a certain earmarked portfolio of assets owned by the Reinsureds.

The recording of these transactions by the Reinsureds in the first quarter of 2018 required the reversal of interest expense on funds held due to Eaglestone on the commuted portfolios and the recognition of interest expense due to Fortitude Re on the commuted portfolios and the new cessions, in order to record the effect of the transaction as of the stated effective date of January 1, 2017.

A reconciliation of change in reserves and corresponding consideration (paid) received for the above transactions between Eaglestone, Fortitude Re and the Reinsureds for the effective date of January 1, 2017 are shown below:

Company	Novation			Commutation			LPTs (Previously commuted business and 2016 Exit Portfolio)			Re-ceded Portfolio			Total
Reserves
Eaglestone Reinsurance Company	$	(1,577	)	$	(2,895	)	$	-		$	41		$	(4,431	)
Fortitude Reinsurance Company		1,577			-			4,013			-			5,590
Combined Pool Companies:
National Union Fire Ins. Co. of Pittsburgh, Pa.		-			1,013			(1,405	)		(14	)		(406	)
American Home Assurance Company		-			1,013			(1,405	)		(14	)		(406	)
Lexington Insurance Company		-			869			(1,203	)		(13	)		(347	)
Total Combined Pool		-			2,895			(4,013	)		(41	)		(1,159	)
Consideration (Paid) Received as Funds Held, Cash and Securities
Eaglestone Reinsurance Company		(1,734	)		(2,895	)		-			41			(4,588	)
Fortitude Reinsurance Company		1,734			-			4,013			-			5,747
Combined Pool Companies:
National Union Fire Ins. Co. of Pittsburgh, Pa.		-			1,013			(1,405	)		(14	)		(406	)
American Home Assurance Company		-			1,013			(1,405	)		(14	)		(406	)
Lexington Insurance Company		-			869			(1,203	)		(13	)		(347	)
Total Combined Pool		-			2,895			(4,013	)		(41	)		(1,159	)

  33        NOTES TO FINANCIAL STATEMENTS - As of December 31, 2020 and 2019 and for years ended December 31, 2020, 2019 and 2018.

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

The below table presents the reserves as of December 31, 2017 that were transferred during 2018 between Eaglestone, Fortitude Re and the Reinsureds for the above transactions:

Company	Novation			Commutation			LPTs (Previously commuted business and 2016 Exit Portfolio)			Re-ceded Portfolio			Total Change in Reserves
Eaglestone Reinsurance Company	$	(1,477	)	$	(2,567	)	$	-		$	32		$	(4,012	)
Fortitude Reinsurance Company		1,477			-			3,442			-			4,919
Combined Pool Companies:
National Union Fire Ins. Co. of Pittsburgh, Pa.		-			898			(1,205	)		(11	)		(318	)
American Home Assurance Company		-			898			(1,205	)		(11	)		(318	)
Lexington Insurance Company		-			771			(1,032	)		(10	)		(271	)
Total Combined Pool		-			2,567			(3,442	)		(32	)		(907	)

C. Discounting of Liabilities for Unpaid Losses or Unpaid Loss Adjustment Expenses

The Company discounts its workers’ compensation (both tabular and non-tabular) reserves.

The calculation of the Company’s tabular discount is based upon the mortality table used in the 2007 US Decennial Life Table, and applying a 5.0 percent and 3.5 percent interest rate as of December 31, 2020 and 2019, respectively. Only case basis reserves are subject to tabular discounting. The December 31, 2020 and 2019 liabilities include $631 and $570 of such discounted reserves, respectively.

Tabular Reserve Discount

The table below presents the amount of tabular discount applied to the Company’s reserves as of December 31, 2020, 2019 and 2018.

Lines of Business	2020		2019		2018
Workers’ Compensation
Case Reserves	$	161	$	124	$	135

As of December 31, 2020, 2019 and 2018, the tabular case reserve discount is presented net of the ceded discount related to the ADC of $301, $203, and $184, respectively.

Non-Tabular Discount

The Company’s non-tabular workers’ compensation case reserves are discounted using the Company’s own payout pattern and a 5 percent interest rate, as prescribed by NY SAP. The table below presents the amount of non-tabular discount applied to the Company’s reserves as of December 31, 2020, 2019 and 2018.

Lines of Business	2020		2019		2018
Workers’ Compensation
Case Reserves	$	116	$	133	$	73

As of December 31, 2020, 2019 and 2018, the non-tabular case reserve discount is presented net of the ceded discount related to the ADC of $19, $142, and $193, respectively.

  34        NOTES TO FINANCIAL STATEMENTS - As of December 31, 2020 and 2019 and for years ended December 31, 2020, 2019 and 2018.

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

6. Related Party Transactions

A. American International Overseas Association

AIG formed the Association, a Bermuda exempted limited partnership, in 1976, as the pooling mechanism for AIG’s international general insurance operations. At the time of forming the Association, the member companies thereto entered into an Inter-Reinsurance Agreement (“IRA”) to govern the business pooled in the Association. Immediately prior to June 1, 2019, the participation percentages for the Association pool members companies are set forth in the table below:

Member Company	NAIC Co. Code		Participation Percent
Combined Pool Member companies, as follows:
National Union		19445		78%
New Hampshire		23841		12%
American Home		19380		10%

Effective June 1, 2019, the IRA was commuted. Notwithstanding the commutation, all of the business at issue continues to be pooled in accordance with the Combined Pooling Agreement referenced in Note 6A.

Therefore, the commutation has no net impact to the member companies of the Combined Pool. However, the commutation, together with associated operational changes, has resulted in an increase in direct underwriting activity being reported by certain member companies of the Combined Pool.

B. Significant Transactions

The following table summarizes transactions (excluding reinsurance and cost allocation transactions) that occurred during 2020, 2019 and 2018 between the Company and affiliated companies in which the value exceeded one-half of one percent of the Company’s admitted assets as of December 31, 2020, 2019 and 2018:

			2020
			Assets Received by the Company			Assets Transferred by the Company
Date of Transaction	Explanation of Transaction	Name of Affiliate	Statement Value		Description	Statement Value		Description
03/25/20	Purchase of securities	National Union	$	183	Securities	$	183	Cash
06/09/20	Capital Contribution	AIG PC US		245	Cash		-	-
12/29/20	Purchase of securities	National Union		115	Securities		115	Cash
Various	Capital Contribution	AHAC DECO Sub LLC		-	-		302	Securities

			2019
			Assets Received by the Company			Assets Transferred by the Company
Date of Transaction	Explanation of Transaction	Name of Affiliate	Statement Value		Description	Statement Value		Description
01/30/19	Purchase of securities	National Union	$	154	Securities	$	154	-
02/13/19	Return of Capital	AIG PC US		-	-		486	Securities

			2018
			Assets Received by the Company				Assets Transferred by the Company
Date of Transaction	Explanation of Transaction	Name of Affiliate	Statement Value		Description		Statement Value		Description
12/31/18	Capital Contribution	AIG PC US	$	150		Receivables	$	-		-

  35        NOTES TO FINANCIAL STATEMENTS - As of December 31, 2020 and 2019 and for years ended December 31, 2020, 2019 and 2018.

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

Glatfelter Insurance Group Reinsurance Company (“GIG Re”) Novation

On January 1, 2020, GIG Re novated its Munich Re 2019 & prior in-force reinsurance business to National Union accounted for as retroactive reinsurance and reported separately from Reserves for losses and loss adjustment expenses in the Statements of Liabilities, Capital and Surplus. The novation consideration was equal to the total statutory reserves and resulted in no gain or loss on the transaction. Further, GIG RE commuted its National Union business back to National Union. As a result, total reserves transferred to the Combined Pool were $261 of Loss and LAE and $129 of unearned premium of which the Company’s proportionate share was $91 of Loss and LAE and $45 of unearned premium.

The novation was accounted for as retroactive reinsurance in accordance with SSAP 62R.

Lexington Insurance Company (“Lexington”) and American International Reinsurance Company, Ltd. (“AIRCO”) Commutation

During 2020, Lexington and AIRCO entered into a commutation agreement which partially commutes the Casualty Quota Share Reinsurance Contract (“QS Agreement”) which was in effect since January 1, 2010. As a result of the commutation, the companies settled the obligations and liabilities known and unknown of Lexington under the 2016-2019 accident years of the QS Agreement. Any obligations or liabilities of the companies under the 2010-2015 and 2020 Accident Years will continue to be settled under modified QS Agreement.

As a result of the commutation, Lexington transferred reserves back to AIRCO of $397 for Loss and LAE, of which the Company’s proportionate share after pooling was $139 for Loss and LAE.

The partial commutation of the original arrangement was accounted for in accordance with SSAP 62R as prospective reinsurance with the consideration paid reflected as paid losses within Loss and LAE line of the Income Statement.

AIG Europe SA (“AESA”) Commutation

Effective November 30, 2020, the 55% All Lines Assumed Quota Share Arrangement (“ALQS”) originally entered into in 2019 between the Combined Pool members and AESA was partially commuted, maintaining the accident year stop-loss arrangement in effect. As a result of the commutation, the Combined Pool members transferred reserves back to AESA of $1,010 for Loss and LAE, and $543 of unearned premium, of which the Company’s proportionate share was $354 for loss and LAE, and $190 of unearned premium.

The partial commutation of the original arrangement was accounted for in accordance with SSAP 62R as prospective reinsurance with the consideration paid reflected as paid losses within Loss and LAE line of the Income Statement.

AIRCO Retrocession

Effective December 31, 2020, the Company, with other members of the Pool, entered into a prospective reinsurance arrangement with AIRCO, whereby members of the Pool retroceded 100 percent of their future reinsurance obligations associated with certain underlying mortgage insurance policies stemming from a previously executed assumed quota-share arrangement. The arrangement is accounted for prospectively, on a funds withheld basis, in accordance with SSAP 62R. As part of the arrangement, a contra mortgage guaranty contingency reserve, in the amount of $525 was recorded by the Pool, of which the Company’s proportionate share was $184 as of December 31, 2020.

Share Repurchase

On January 23, 2019, NY DFS approved American Home’s plan to distribute an amount of up to approximately $504 to its immediate parent, an increase in the par value of its common stock from $17 per share to $20 per share and a decrease in the minimum number of directors from 13 to 7. The distribution via a share repurchase agreement with the per share repurchase price equal to the American Home’s statutory book value per share was calculated as of September 30, 2018.

On February 14, 2019, American Home repurchased 139,000 shares of its issued and outstanding common stock, resulting in a distribution to its immediate parent of $502 and a reduction in its common capital stock and gross paid in and contributed surplus of $2 and $500, respectively. On that same date, American Home filed an amendment to its charter with DFS to increase the par value of the American Home’s common stock from $17 to $20 per share. The increase to the par value resulted in an increase of $5 to the American Home’s common capital stock and a reduction to its gross paid in and contributed surplus of the same amount, post share repurchase.

  36        NOTES TO FINANCIAL STATEMENTS - As of December 31, 2020 And 2019 And for years ended December 31, 2020, 2019 And 2018.

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

AIG Global Real Estate Investment Corp. (“AIGGRE”) Restructure

In 2018, the Company and several of its U.S. insurance company affiliates restructured their respective ownership interests in certain real estate equity investments previously originated by an affiliate, AIGGRE (including its investment management affiliates), by contributing such interests to three separate real estate investment funds managed by AIGGRE – AIGGRE U.S. Real Estate Fund I, LP (“U.S. Fund I”), AIGGRE U.S. Real Estate Fund II, LP (“U.S. Fund II” and, together with U.S. Fund I, the “U.S. Funds”), and AIGGRE Europe Real Estate Fund I S.C.SP (“Europe Fund I”). The U.S. Funds each closed on November 1, 2018.

In connection with the closing of U.S. Fund I, the Company made a capital commitment to the fund of up to $276 (representing an approximately 23% equity interest therein), and contributed the Company’s interests in certain real estate equity investments (with an aggregate fair value of approximately $209) and received a cash payment from the fund of approximately $24.

In connection with the closing of U.S. Fund II, the Company made a capital commitment to the fund of up to $621 (representing approximately 23% equity interest therein), and contributed to the fund the Company’s interests in certain real estate equity investments (with an aggregate fair value of approximately $702) and received a cash payment from the fund of approximately $224.

Further, Europe Fund I closed on November 2, 2018. In connection with the closing of Europe Fund I, the Company made a capital commitment to the fund of up to $52 (representing an approximately 8% equity interest therein), and contributed cash to the fund (approximately $34).

In 2019, the Company and several of its U.S. insurance company affiliates established AIGGRE US Real Estate Fund III LP (US Fund III), a real estate investment fund managed AIGGRE. At the closing of US Fund III, on January 2, 2019, the Company made a capital commitment to the fund of up to $146 (representing an approximately 9.73% equity interest therein). In connection with the closing of US Fund III, the Company contributed cash (approximately $23).

AIGGRE Europe Real Estate Fund II S.C.SP (“Europe II Fund”) closed on March 8, 2019. In connection with the closing of Europe II Fund, the Company made a capital commitment to the fund of $43 (representing an approximate 7% equity interest therein), and contributed cash to the fund (approximately $4).

In December 2020, the Company and several of its U.S. insurance company affiliates sold a portion of their equity interests in U.S. Fund III to third parties. The Company sold all of its equity interests in the fund representing approximately 9.73% of U.S. Fund III to the third parties for a purchase price of approximately $78. After the close of the sale to third parties, the Company had no remaining capital commitments to U.S. Fund III. At the close of the sale to the third parties, a portion of the purchase price was paid in cash and the remainder is being paid based on the loan agreements between the Company and the third parties.

At December 31, 2020, the Company’s unfunded capital commitment to U.S. Fund I, U.S. Fund II, Europe Fund I, and Europe Fund II, after certain additional capital was called, was approximately $87, $86, $16, and $34, respectively. As of December 31, 2020 the Company’s balance in U.S. Fund I, U.S. Fund II, Europe Fund I, and Europe Fund II was $31, $148, $22 and $13, respectively.

At December 31, 2019, the Company’s unfunded capital commitment to U.S. Fund I, U.S. Fund II, U.S. Fund III, Europe Fund I, and Europe Fund II, after certain additional capital was called, was approximately $91, $99, $97, $16, and $38, respectively. As of December 31, 2019 the Company’s balance in U.S. Fund I, U.S. Fund II, U.S. Fund III, Europe Fund I, and Europe Fund II was $41, $215, $53, $23 and $4, respectively.

The AIGGRE investments are presented as Other invested assets on the Statement of Admitted Assets.

  37        NOTES TO FINANCIAL STATEMENTS - As of December 31, 2020 and 2019 and for years ended December 31, 2020, 2019 and 2018.

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

C. Amounts Due to or from Related Parties

At December 31, 2020 and 2019, the Company reported the following receivables/payables balances from/to its Ultimate Parent, subsidiaries and affiliates (excluding reinsurance transactions). Intercompany agreements have defined settlement terms and related receivables are reported as nonadmitted if balances due remain outstanding more than ninety days past the due date as specified in the agreement.

As of December 31,	2020		2019
Balances with other member pool companies	$	81		-
Balances with other affiliates		13		9
Receivable from parent, subsidiaries and affiliates	$	94	$	9
Balances with National Union	$	188	$	117
Balances with other member pool companies		-		17
Balances with other affiliates		8		8
Payable to parent, subsidiaries and affiliates	$	196	$	142

Current federal and foreign income taxes (payable) recoverable under the Tax Sharing Agreement at December 31, 2020 and 2019 were $(15) and $(2), respectively.

The Company did not change its methods of establishing terms regarding any transactions with its affiliates during the years ended December 31, 2020 or 2019.

D. Guarantees or Contingencies for Related Parties

The Company has issued guarantees whereby it unconditionally and irrevocably guarantees all present and future obligations and liabilities arising from the policies of insurance issued by certain insurers who, as of the guarantee issue date, were members of the AIG holding company group. The guarantees were provided in order to secure or maintain the guaranteed companies’ rating status issued by certain rating agencies, as disclosed in Note 10.

E. Management, Service Contract and Cost Sharing Arrangements

As an affiliated company of AIG, the Company utilizes centralized services from AIG and its affiliates. The Company is allocated a charge for these services, based on the amount of incremental expense associated with operating the Company as a separate legal entity. The amount of expense allocated to the Company each period was determined based on an analysis of services provided to the Company.

The following table summarizes fees incurred related to affiliates that exceeded one-half of one percent of the Company’s admitted assets during 2020, 2019 and 2018:

Affiliates	2020		2019		2018
AIG Claims Inc.	$	152	$	172	$	192
AIG PC Global Services, Inc.*		108		124		66
Total	$	260	$	296	$	258

*AIG PC Global Services, Inc. is below one-half of one percent in 2020 and 2018.

F. Borrowed Money

The Company (among other affiliates) is a borrower under a Loan Agreement, with AIG, as lender, pursuant to which the Company may borrow funds from AIG from time to time (the “Loan Facility”). The aggregate amount of all loans that may be outstanding under the Loan Facility at a given time is $500. As of December 31, 2020 and 2019, the Company had no outstanding liability pursuant to this Loan Facility.

  38        NOTES TO FINANCIAL STATEMENTS - As of December 31, 2020 And 2019 And for years ended December 31, 2020, 2019 And 2018.

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

Significant debt terms and covenants include the following:

• The Company must preserve and maintain its legal existence while maintaining all rights, privileges and franchises necessary to the normal conduct of its business;

• The Company must take, or cause to be taken, all other actions reasonably necessary or desirable to preserve and defend the rights of the Lender to payment hereunder, and to assure to the Lender the benefits hereof, and;

• The Company must not merge with or into or consolidate with any other person, sell, transfer or dispose of all or substantially all of its assets or undergo any change in the control of its voting stock unless (a) such merger or consolidation is with or into a wholly-owned subsidiary of Lender, (b) such sale or transfer is to a wholly-owned subsidiary of the Lender or (c) The Company receives the prior written authorization from the Lender.

There have been no violations of the terms and covenants associated with the debt issuance.

Refer to Note 11 E regarding funds borrowed from FHLB.

7. Reinsurance

In the ordinary course of business, the Company may use both treaty and facultative reinsurance to minimize its net loss exposure to a) any single catastrophic loss event; b) an accumulation of losses from a number of smaller events; or c) provide greater risk diversification. Based on the terms of the reinsurance contracts, a portion of expected IBNR losses will be recoverable in accordance with terms of the reinsurance protection purchased. This determination is necessarily based on the estimate of IBNR and accordingly, is subject to the same uncertainties as the estimate of IBNR. Ceded amounts related to paid and unpaid losses and loss expenses with respect to these reinsurance agreements are generally substantially collateralized. The Company remains liable to the extent that the reinsurers do not meet their obligation under the reinsurance contracts after any collateral is exhausted, and as such, the financial condition of the reinsurers is regularly evaluated and monitored for concentration of credit risk. In addition, the Company assumes reinsurance from other insurance companies.

The following table presents direct, assumed reinsurance and ceded reinsurance written and earned premiums for the years ended December 31, 2020, 2019 and 2018:

Years Ended December 31,	2020				2019				2018
	Written		Earned		Written		Earned		Written		Earned
Direct premiums	$	396	$	438	$	508	$	631	$	482	$	672
Reinsurance premiums assumed:
Affiliates		7,816		8,148		8,252		8,162		7,221		7,322
Non-affiliates		187		221		105		100		147		192
Gross premiums		8,399		8,807		8,865		8,893		7,850		8,186
Reinsurance premiums ceded:
Affiliates		1,562		1,702		1,482		1,490		1,063		1,268
Non-affiliates		2,440		2,272		2,181		2,034		1,803		1,909
Net premiums	$	4,397	$	4,833	$	5,202	$	5,369	$	4,984	$	5,009

  39        NOTES TO FINANCIAL STATEMENTS - As of December 31, 2020 and 2019 and for years ended December 31, 2020, 2019 and 2018.

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

As of December 31, 2020 and 2019, and for the years then ended, the Company’s unearned premium reserves, paid losses and LAE, and reserves for losses and LAE (including IBNR), have been reduced for reinsurance ceded as follows:

	Unearned Premium Reserves		Paid Losses and LAE		Reserves for Losses and LAE
December 31, 2020:
Affiliates	$	644	$	56	$	6,951
Non-affiliates		815		557		9,603
Total	$	1,459	$	613	$	16,554
December 31, 2019:
Affiliates	$	781	$	63	$	8,519
Non-affiliates		648		337		8,374
Total	$	1,429	$	400	$	16,893

A. Reinsurance Return Commission

The maximum amount of return commission which would have been due to reinsurers if all of the Company’s reinsurance had been cancelled as of December 31, 2020 and 2019 with the return of the unearned premium reserve is as follows:

	Assumed Reinsurance				Ceded Reinsurance				Net
	Premium Reserve		Commission Equity		Premium Reserve		Commission Equity		Premium Reserve			Commission Equity
December 31, 2020
Affiliates	$	3,899	$	869	$	644	$	130	$	3,255		$	739
All Other		89		20		815		165		(726	)		(145	)
Total	$	3,988	$	889	$	1,459	$	295	$	2,529		$	594
December 31, 2019
Affiliates	$	4,172	$	978	$	781	$	163	$	3,391		$	815
All Other		122		29		648		135		(526	)		(106	)
Total	$	4,294	$	1,007	$	1,429	$	298	$	2,865		$	709

B. Unsecured Reinsurance Recoverable

The aggregate unsecured reinsurance balances (comprising recoverables for paid and unpaid losses and LAE and unearned premium reserves) in excess of three percent of policyholders’ surplus at December 31, 2020 and 2019 with respect to an individual reinsurer, and each of such reinsurer’s related group members having an unsecured aggregate reinsurance balance with the company, are as follows:

Reinsurer	2020		2019
Affiliates:
Combined Pool*	$	6,721	$	7,080
Eaglestone		577		605
Other affiliates		179		8
Total affiliates	$	7,477	$	7,693
Berkshire Hathaway Group		96		81
Swiss Reinsurance Group		538		467
Munich Reinsurance Group**		250		128
Hannover Re Group**		211		177
Total Non-affiliates		1,095		853
Total affiliates and non-affiliates	$	8,572	$	8,546

* Includes intercompany pooling impact of $437 related to Unearned Premium Reserve, $6,143 related to Reserves for Losses and LAE and $8 related to Paid losses and LAE as of and for the year ended December 31, 2020, and $634, $6,248, and $6, respectively, as of and for the year ended December 31, 2019.

**Munich Reinsurance Group and Hannover Re Group were below 3% in 2019.

  40        NOTES TO FINANCIAL STATEMENTS - As of December 31, 2020 And 2019 And for years ended December 31, 2020, 2019 And 2018.

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

C. Reinsurance Recoverable in Dispute

At December 31, 2020 and 2019, the aggregate of all disputed items did not exceed ten percent of capital and surplus and there were no amounts in dispute for any single reinsurer that exceeded five percent of capital and surplus. The total reinsurance recoverable balances in dispute are $35 and $37 as of December 31, 2020 and 2019, respectively.

D. Retroactive Reinsurance

On January 20, 2017, the Combined Pool entered into an adverse development reinsurance agreement with NICO under which the Combined Pool ceded to NICO eighty percent of its reserve risk above an attachment point on substantially all of its U.S. Commercial long-tail exposures for accident years 2015 and prior. Under this agreement, the Combined Pool ceded to NICO eighty percent of net paid losses on subject business on or after January 1, 2016 in excess of $25,000 of net paid losses, up to an aggregate limit of $25,000. At NICO’s 80 percent share, NICO’s limit of liability under the contract is $20,000. The Combined Pool paid consideration of approximately $10,188 in February 2017, including interest at 4 percent per annum from January 1, 2016 through date of payment. American Home’s share of the consideration paid was $3,566. NICO placed the consideration received into a collateral trust account as security for NICO’s claim payment obligations, and Berkshire Hathaway Inc. has provided a parental guarantee to secure NICO’s obligations under the agreement.

American Home accounted for this transaction as prospective reinsurance, except that the surplus gain associated with the ADC has been reported in a segregated surplus account and does not form a part of the Company’s Unassigned funds.

The total surplus gain recognized by the Combined Pool as of December 31, 2020, 2019 and 2018 was $2,287, $2,176 and $1,984, respectively. American Home’s share of this gain as of December 31, 2020, 2019 and 2018 was $799, $854 and $920, respectively. The surplus gain is presented as segregated surplus and subject to the applicable dividend restrictions. This amount must be restricted in surplus until such time as the actual retroactive reinsurance recovered from NICO exceeds the consideration paid for the cession.

E. Reinsurance Agreements Qualifying for Reinsurer Aggregation

In 2011, the Combined Pool companies entered into a loss portfolio transfer reinsurance agreement with Eaglestone, an affiliate, which provides coverage up to a limit of $5,000 for the Pool’s net asbestos exposures. Effective the same date, Eaglestone retroceded the majority of this exposure to NICO, an unaffiliated company. NICO provides coverage up to a limit of $3,500 for subject business covered under the agreement. NICO administers claims and pursues amounts recoverable from the Combined Pool companies’ reinsurers with respect to paid losses and loss adjustment expenses. To the extent that the prior reinsurers pay, the amounts are collected and retained by NICO. NICO maintains funds in trust for the benefit of Eaglestone under the contract; as of December 31, 2020 and 2019 the amount in trust was $3,743 and $4,326, respectively. The amount of the unexhausted limit under the NICO agreement as of December 31, 2020 and 2019 was $1,164 and $1,201, respectively. The Company has accounted for its cession to Eaglestone as prospective reinsurance.

8. Income Taxes

U.S. TAX REFORM OVERVIEW

On December 22, 2017, the United States enacted Public Law 115-97, known as the Tax Cuts and Jobs Act (“the Tax Act”). The Tax Act reduced the statutory rate of U.S. federal corporate income tax to 21 percent and enacted numerous other changes impacting the Company.

The Tax Act includes provisions for Global Intangible Low-Taxed Income (“GILTI”), under which taxes on foreign income are imposed on the excess of a deemed return on tangible assets of foreign corporations and for Base Erosion and Anti-Abuse Tax (“BEAT”), under which taxes are imposed on certain base eroding payments to affiliated foreign companies. While the U.S. tax authorities issued formal guidance, including recently issued proposed and final regulations for BEAT and other provisions of the Tax Act, there are still certain aspects of the Tax Act that remain unclear and subject to substantial uncertainties. Additional guidance is expected in future periods. Such guidance may result in changes to the interpretations and assumptions we made and actions we may take, which may impact amounts recorded with respect to international provisions of the Tax Act, possibly materially. Consistent with accounting guidance, we treat BEAT as a period tax charge in the period the tax is incurred and have made an accounting policy election to treat GILTI taxes in a similar manner.

No provision for income tax related to GILTI or BEAT was recorded as of December 31, 2020.

  41        NOTES TO FINANCIAL STATEMENTS - As of December 31, 2020 and 2019 and for years ended December 31, 2020, 2019 and 2018.

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars In Millions)

On March 27, 2020, the U.S. enacted the Coronavirus Aid, Relief, and Economic Security (CARES) Act to mitigate the economic impacts of the COVID-19 crisis. The tax provisions of the CARES Act have not had and are currently not expected to have a material impact on the Company’s U.S. federal tax liabilities.

The components of the Company’s net deferred tax assets/liabilities (“DTA”/“DTL”) as of December 31, 2020 and 2019 are as follows:

	12/31/2020								12/31/2019									Change
	Ordinary		Capital			Total			Ordinary			Capital			Total			Ordinary				Capital				Total
Gross DTA	$	792		$	249		$	1,041		$	892		$	241		$	1,133		$	(100	)		$	8			$	(92	)
Statutory Valuation Allowance		15			17			32			13			53			66			2				(36	)			(34	)
Adjusted Gross DTA		777			232			1,009			879			188			1,067			(102	)			44				(58	)
Nonadmitted DTA		52			-			52			31			-			31			21				-				21
Subtotal Admitted DTA		725	-		232	-		957	-		848	-		188	-		1,036	-		(123	)	-		44		-		(79	)
DTL		104			232			336			123			188			311			(19	)			44				25
Net Admitted DTA/(DTL)	$	621		$	-		$	621		$	725		$	-		$	725		$	(104	)		$	-			$	(104	)

At December 31, 2020, the Company recorded gross deferred tax assets (“DTA”) of $1,041. A valuation allowance of $15 was established on deferred tax assets related to foreign tax credits and $17 on net capital deferred tax assets, as it is management’s belief that they will not be realized in the foreseeable future. Tax planning strategies had no impact on the determination of the net admitted DTA.

The following table shows the summary of the calculation for the net admitted DTA as of December 31, 2020 and 2019:

	12/31/2020						12/31/2019						Change
	Ordinary		Capital		Total		Ordinary		Capital		Total		Ordinary			Capital		Total
Adjusted gross DTAs realizable within 36 months or 15 percent of statutory surplus (the lesser of 1 and 2 below)		621		-		621		725		-		725		(104	)		-		(104	)
1. Adjusted gross DTAs realizable within 36 months		621		-		621		725		-		725		(104	)		-		(104	)
2. 15 percent of statutory surplus		NA		NA		912		NA		NA		790		NA			NA		122
Adjusted gross DTAs that can be offset against DTLs		104		232		336		123		188		311		(19	)		44		25
Total DTA admitted as the result of application of SSAP 101	$	725		232		957	$	848	$	188	$	1,036	$	(123	)	$	44	$	(79	)

	2020			2019
Ratio percentage used to determine recovery period and threshold limitation amount		489	%		413	%
Amount of adjusted capital and surplus used to determine recovery period and threshold limitation in (2) above.	$	6,073		$	5,271

The following table shows the components of the current income tax expense (benefit) for the periods listed:

For the years ended December 31,	2020			2019			Change
Federal income tax	$	(22	)	$	(42)		$	20
Foreign income tax		8			7			1
Subtotal		(14	)		(35	)		21
Federal income tax on net capital gains		22			42			(20	)
Federal and foreign income taxes incurred	$	8		$	7		$	1

  42        NOTES TO FINANCIAL STATEMENTS - As of December 31, 2020 and 2019 and for years ended December 31, 2020, 2019 and 2018.

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

The following table shows the components of the DTA split between ordinary and capital DTA as of December 31, 2020 and 2019:

	2020		2019		Change
Ordinary
Discounting of unpaid losses	$	120	$	128	$	(8	)
Nonadmitted assets		13		15		(2	)
Unearned premium reserve		156		147		9
Bad debt expense		8		9		(1	)
Net operating loss carry forward		322		406		(84	)
Foreign tax credit carry forward		81		80		1
Investments		46		26		20
Mortgage Contingency Reserve		-		34		(34	)
Intangible Assets		11		13		(2	)
Other temporary differences		35		34		1
Subtotal		792		892		(100	)
Statutory valuation allowance adjustment		15		13		2
Nonadmitted		52		31		21
Admitted ordinary deferred tax assets	$	725	$	848	$	(123	)
Capital
Investments	$	231	$	228	$	3
Unrealized capital losses		18		13		5
Subtotal		249		241		8
Statutory valuation allowance		17		53		(36	)
Admitted capital deferred tax assets		232		188		44
Admitted deferred tax assets	$	957	$	1,036	$	(79	)

The following table shows the components of the DTL split between ordinary and capital DTL as of December 31, 2020 and 2019:

	2020		2019		Change
Ordinary
Investments	$	69	$	80	$	(11	)
Tax Act adjustment to discounting of unpaid losses		27		32		(5	)
Compensation and benefits accrual		7		7		-
Other temporary differences		2		5		(3	)
Subtotal		105		124		(19	)
Capital
Investments	$	153	$	128	$	25
Unrealized capital gains (losses)		79		59		20
Other temporary differences		1		1		-
Subtotal		233		188		45
Deferred tax liabilities		336		312		24
Net deferred tax assets/liabilities	$	621	$	724	$	(103	)

  43        NOTES TO FINANCIAL STATEMENTS - As of December 31, 2020 and 2019 and for years ended December 31, 2020, 2019 and 2018.

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

The change in net deferred tax assets is comprised of the following:

	2020			2019			Change
Adjusted gross deferred tax assets	$	1,010		$	1,067		$	(57	)
Total deferred tax liabilities		(337	)		(312	)		(25	)
Net deferred tax assets/ (liabilities)		673			755			(82	)
Tax effect of unrealized gains (losses)								(15	)
Total change in net deferred tax							$	(67	)
Change in deferred tax - current year								(81	)
Change in deferred tax - current year - other surplus items								5
Change in deferred tax - current year - total								(76	)
Change in deferred tax – prior period correction								9
Total change in deferred tax - current year							$	(67	)

The following table shows the components of opening surplus adjustments on current and deferred taxes for the year ended December 31, 2020:

	Current		Deferred			Total
SSAP 3 impact:
SSAP 3 - general items	$	3	$	(8	)	$	(5	)
SSAP 3 - statutory valuation allowance		-		17			17
Subtotal SSAP 3		3		9			12
SSAP 3 - unrealized gain/loss		-		-			-
SSAP 3 - adjusted tax assets and liabilities		3		9			12
SSAP 3 - nonadmitted impact		-		(21	)		(21	)
Total SSAP 3 impact	$	3	$	(12	)	$	(9	)

The provision for federal and foreign income taxes is different from that which would be obtained by applying the statutory federal income tax rate to income before income taxes. The following table presents a reconciliation of such differences in arriving at total taxes related to the Company for the years ended December 31, 2020, 2019 and 2018:

  44        NOTES TO FINANCIAL STATEMENTS - As of December 31, 2020 and 2019 and for years ended December 31, 2020, 2019 and 2018.

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

	2020						2019						2018
Description	Amount			Tax Effect			Amount			Tax Effect			Amount			Tax Effect
Net Income (Loss) Before Federal Income Taxes and Capital Gains Taxes	$	325		$	68		$	628		$	132		$	(263	)	$	(55	)
Book to Tax Adjustments:
Tax Exempt Income, net of proration		(11	)		(2	)		(18	)		(4	)		(34	)		(7	)
Stock Options And Other Compensation		9			2			10			2			-			-
Change in Nonadmitted Assets		10			2			18			4			28			6
Statutory Valuation Allowance		-			(17	)		-			19			-			40
Return to Provision		-			(1	)		-			(2	)		-			(1	)
Change in contingency reserve		162			34			(26	)		(5	)		(31	)		(7	)
FTC carryforward expiration		-			3			-			-			-			-
Other		(20	)		(3	)		(14	)		4			36			8
Total Book to Tax Adjustments		150			18			(30	)		18			(1	)		39
Total Income Tax	$	475		$	86		$	598		$	150		$	(264	)	$	(16	)
Federal and Foreign Income Taxes Incurred		-			(13	)		-			(35	)		-			(54	)
Federal Income Tax on Net Capital Gains		-			22			-			42			-			69
Change in Net Deferred Income Taxes		-			77			-			143			-			(31	)
Total Income Tax	$	-		$	86		$	-		$	150		$	-		$	(16	)

Operating loss and tax credit carry-forwards
At December 31, 2020 the Company had net operating loss carry forwards expiring through the year 2038 of:	$	1,532
At December 31, 2020 the Company had foreign tax credits expiring through the year 2030 of:	$	81

There were no deposits reported as admitted assets under Section 6603 of the Internal Revenue Service (IRS) Code as of December 31, 2020. The Company does not believe that the liability related to any federal or foreign tax loss contingencies will significantly change within the next 12 months. A reasonable estimate of such change cannot be made at this time.

As of December 31, 2020, there was a $3 receivable related to tax return errors and omissions and a $17 liability related to uncertain tax positions.

The U.S is the only major tax jurisdiction of the Company. The statute of limitations for all tax years prior to 2000 has expired for the consolidated federal income tax return. The Company is currently under examination for the tax years 2007 through 2013 and open to examination through 2019.

  45        NOTES TO FINANCIAL STATEMENTS - As of December 31, 2020 and 2019 and for years ended December 31, 2020, 2019 and 2018.

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

The following table lists those companies that form part of the 2020 AIG consolidated federal income tax return:

Company	Company	Company	Company	Company
A.I. Credit Corp.	AGC Life Insurance Company	AGL Loan Investments Corporation	AGLIC Investments Bermuda Limited	AH SLP 1094 San Lucas, LLC
AH SubGP 1000 Woodwind Lakes, LLC	AH SubGP 1007 Highland Meadow, LLC	AH SubGP 1020 Collingham, LLC	AH SubGP 1045 Montgomery, LLC	AH SubGP 1098 Green Pines, LLC
AH SubGP 1158 Flat Iron, LLC	AH SubGP 1170 Palms at Vero Beach, LLC	AH SubGP 1212 Painted Desert, LLC	AH SubGP 1248 North Vista, LLC	AH SubGP 1263 West Virginia, LLC
AH SubGP 1384 Woodglen, LLC	AH SubGP 1433 Magnolia, LLC	AH SubGP 1450 Timber, LLC	AH SubGP 1470 Palmetto, LLC	AH SubGP 1480 Eastmont Senior, LLC
AH SubGP 1535 Hunter’s Run, LLC	AH SubGP 1548 Walnut, LLC	AH SubGP 1551 Spanish Creek, LLC	AH SubGP 1597 Broadmoor, LLC	AH SubGP 1600 Rainer, LLC
AH SubGP 1631 Broadway, LLC	AH SubGP 1694 Sonoma, LLC	AH SubGP 245 Garland, LLC	AH SubGP 479 Sunrise, LLC	AH SubGP 516 Merrilltown, LLC
AH SubGP 641 McKinney Apartments, LLC	AH SubGP 665 Salinas Bay, LLC	AH SubGP 693 Parkland Pointe, LLC	AH SubGP 716 Villas of Mission Bend, LLC	AH SubGP 759 Parker Commons, LLC
AH SubGP 785 Mayfield, LLC	AH SubGP 787 North Knoll, LLC	AH SubGP 835 Whispering, LLC	AH SubGP 842 Huebner, LLC	AH SubGP 911 Mainland, LLC
AH SubGP 929 Collinwood, LLC	AH SubGP 936 Emmaus, LLC	AH SubGP 997 Maxey, LLC	AH SubGP Crestview Duplexes, LLC	AH SubGP GAG Gandolf, LLC
AH SubGP MDL, LLC	AIG Aerospace Adjustment Services, Inc.	AIG Aerospace Insurance Services, Inc.	AIG Asset Management (U.S.), LLC	AIG Asset Management EU CLO, LLC
AIG Assurance Company	AIG BG Holdings LLC	AIG Capital Corporation	AIG Capital Services, Inc.	AIG Claims, Inc.
AIG Commercial Equipment Finance, Inc.	AIG Consumer Finance Group, Inc.	AIG Credit (Europe) Corporation	AIG Credit Corp.	AIG Direct Insurance Services, Inc.
AIG Employee Services, Inc.	AIG FCOE, Inc.	AIG Federal Savings Bank	AIG Financial Products Corp.	AIG Fund Services, Inc.
AIG G5, Inc.	AIG Global Asset Management Holdings Corp.	AIG Global Capital Markets Securities, LLC	AIG Global Real Estate Investment Corp.	AIG Insurance Management Services, Inc.
AIG International Inc.	AIG Kirkwood, Inc.	AIG Korean Real Estate Development YH	AIG Life Holdings, Inc.	AIG Life of Bermuda, Ltd.
AIG Markets, Inc.	AIG Matched Funding Corp.	AIG Mortgage Capital, LLC	AIG North America, Inc.	AIG Partnership Holdings Corp.
AIG PC Global Services Inc.	AIG Procurement Services, Inc.	AIG Property Casualty Company	AIG Property Casualty U.S., Inc.	AIG Property Casualty, Inc.
AIG Realty, Inc.	AIG Securities Lending Corp.	AIG Shared Services	AIG Shared Services Corporation	AIG Specialty Insurance Company
AIG Spring Ridge I, Inc.	AIG Technologies, Inc.	AIG Technologies, Inc. (U.K. branch)	AIG Travel, Inc.	AIG Warranty Services of Florida, Inc.
AIG Warranty Services, Inc.	AIG WarrantyGuard, Inc.	AIG.COM, Inc.	AIG-FP Capital Preservation Corp.	AIG-FP Matched Funding Corp.
AIG-FP Pinestead Holdings Corp.	AIGGRE Dakota Springs Investor LLC	AIGGRE DC Ballpark Investor, LLC	AIGGRE Europe Real Estate Fund I	AIGGRE Livermore Longfellow Investor LLC
AIGGRE Market Street II LLC	AIGGRE North Getty Investor LLC	AIGGRE U.S. Real Estate Fund I	AIGGRE U.S. Real Estate Fund II	AIGGRE U.S. Real Estate Fund II GP, LLC
AIGGRE U.S. Real Estate Fund III	AIGGRE VISTA, LLC	AIGT Inc. Hong Kong Branch	AIU Insurance Company	Akita, Inc.
Alabaster Capital LLC	AlphaCat Capital Inc.	AM Holdings LLC	American Athletic Club, Inc.	American General Annuity Service Corporation
American General Assignment	American General Assignment Corporation	American General Insurance Agency, Inc.	American General Life Ins. Co. Non-Insulated	American General Life Insurance Co. - Insulat

  46        NOTES TO FINANCIAL STATEMENTS - As of December 31, 2020 And 2019 And for years ended December 31, 2020, 2019 And 2018.

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

Company	Company	Company	Company	Company
American General Life Insurance Company	American General Life Services Company, LLC	American General Realty	American Home Assurance Company	American International Facilities Management
American International Group, Inc.	American International Realty Corporation	American International Reinsurance	Applewood Funding Corp.	Arthur J. Glatfelter Agency, Inc.
Barnegat Funding Corp.	Blackboard Customer Care Insurance Services	Blackboard Insurance Company	Blackboard Services, LLC	Blackboard Specialty Insurance Company
Blackboard U.S. Holdings, Inc.	CAP Investor 1, LLC	CAP Investor 10, LLC	CAP Investor 14, LLC	CAP Investor 2, LLC
CAP Investor 4, LLC	CAP Investor 5, LLC	CAP Investor 8, LLC	Charleston Bay SAHP Corp.	Commerce and Industry Insurance Company
Connective Mortgage Advisory Company	Crop Risk Services, Inc.	Crossings SAHP Corp.	Design Professionals Association	DIL/SAHP Corp.
DSA P&C Solutions, Inc.	Eaglestone Reinsurance Company	Eastgreen, Inc.	First Principles Capital Management, LLC	Forest SAHP Corp.
Fortitude Group Holdings, LLC	Fortitude Group Services, Inc.	Fortitude Life & Annuity Solutions, Inc.	Fortitude Re Investments, LLC	Fortitude Reinsurance Company, Ltd.
Foundry Insurance Agency, Inc.	GIG of Missouri, Inc.	GIG Reinsurance Company, Ltd.	Glatfelter Claims Management, Inc.	Glatfelter Properties, LLC
Glatfelter Underwriting Services, Inc.	Grand Savannah SAHP Corp.	Granite State Insurance Company	Health Direct, Inc.	Illinois National Insurance Co.
Integrated Manufacturing Companies, Inc.	Knickerbocker Corporation	LBMA Equipment Services, Inc.	Lexington Insurance Company	Lexington Specialty Insurance Agency, Inc.
Livetravel, Inc.	LSTREET I, LLC	LSTREET II, LLC	MG Reinsurance Limited	MIP Mezzanine, LLC
MIP PE Holdings, LLC	Morefar Marketing, Inc.	Mt. Mansfield Company, Inc.	National Union Fire Insurance	National Union Fire Insurance Company
New Hampshire Insurance Company	PCG 2019 Corporate Member Limited	Pearce & Pearce, Inc.	Pine Street Real Estate Holdings Corp.	Prairie SAHP Corp.
Raptor Funding Corp.	Rialto Melbourne Investor LLC	Risk Specialists Companies	SA Affordable Housing, LLC	SA Investment Group, Inc.
SA SubGP 1000 Woodwind Lakes, LLC	SAAHP GP Corp.	SAFG Retirement Services, Inc.	SAHP GA III - SC LLC	SAI Deferred Compensation Holdings, Inc.
Sandstone (2016) Ltd.	SCSP Corp.	Service Net Solutions of Florida, LLC	Service Net Warranty, LLC	SLP Housing GPDNAC, LLC
SNW Insurance Agency, LLC	Spruce Peak Realty, LLC	Stowe Mountain Holdings, Inc.	Stratford Insurance Company	SubGen NT, Inc.
SunAmerica Affordable Housing Partners, Inc.	SunAmerica Asset Management, LLC	SunAmerica Fund Assets 104, LLC	SunAmerica Fund Assets 110, LLC	SunAmerica Fund Assets 112, LLC
SunAmerica Fund Assets 119, LLC	SunAmerica Fund Assets 150, LLC	SunAmerica Fund Assets 163, LLC	SunAmerica Fund Assets, LLC	SunAmerica Life Reinsurance Company
SunAmerica Retirement Markets, Inc.	Susquehanna Agents Alliance, LLC	The Glatfelter Agency, Inc.	The Insurance Company of the	The United States Life Insurance
The United States Life Insurance Company	The Variable Annuity Life - Insulated	The Variable Annuity Life - Non-Insulated	The Variable Annuity Life Insurance Company	Travel Guard Group, Inc.
Tudor Insurance Company	U G Corporation	VALIC Financial Advisors, Inc.	VALIC Retirement Services Company	Validus America, Inc.
Validus Re Americas (New Jersey), Inc.	Validus Reaseguros, Inc.	Validus Services, Inc.	Validus Specialty Underwriting Services, Inc.	Validus Specialty, LLC
Volunteer Firemen’s Insurance Services, Inc.	Webatuck Corp.	Westco Claims Management Services, Inc.	Westco Insurance Managers, Inc.	Western World Insurance Company
Western World Insurance Group, Inc.

  47        NOTES TO FINANCIAL STATEMENTS - As of December 31, 2020 And 2019 And for years ended December 31, 2020, 2019 And 2018.

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

9. Capital and Surplus and Dividend Restrictions

A. Dividend Restrictions

Under New York law, the Company may pay dividends only from Unassigned surplus determined on a statutory basis.

New York domiciled companies are restricted (on the basis of the lower of 10 percent of statutory earned surplus as defined in NY Insurance Law section 4105, adjusted for special surplus items, as of the last statement on file with the Superintendent, or 100 percent of adjusted net investment income for the preceding thirty-six month period ended as of the last statement on file with the Superintendent) as to the amount of ordinary dividends they may declare or pay in any twelve-month period without the prior approval of the NY DFS. The maximum dividend amount the Company can pay in 2021, as of December 31, 2020 is $0.

Other than the limitations above, there are no restrictions placed on the portion of Company profits that may be paid as ordinary dividends to the stockholders.

The Company did not pay any dividends in 2020 and 2019.

B. Capital & Surplus

Changes in balances of special surplus funds are due to adjustments in the amounts of reserves transferred under retroactive reinsurance agreements and when cash recoveries exceed the consideration paid.

The portion of Unassigned surplus at December 31, 2020 and 2019 represented or reduced by each item below is as follows:

Years Ended December 31,	2020			As Adjusted* 2019			2019
Unrealized gains and losses (net of taxes)	$	312		$	129		$	130
Nonadmitted asset values		(112	)		(123	)		(102	)
Provision for reinsurance		(25	)		(16	)		(16	)
* As Adjusted includes SSAP 3 prior year adjustments

The Company exceeded minimum RBC requirements at both December 31, 2020 and 2019.

10. Contingencies

A. Legal Proceedings

In the normal course of business, AIG and its subsidiaries are, like others in the insurance and financial services industries in general, subject to regulatory and government investigations and actions, and litigation and other forms of dispute resolution in a large number of proceedings pending in various domestic and foreign jurisdictions. Certain of these matters involve potentially significant risk of loss due to potential for significant jury awards and settlements, punitive damages or other penalties. Many of these matters are also highly complex and seek recovery on behalf of a class or similarly large number of plaintiffs. It is therefore inherently difficult to predict the size or scope of potential future losses arising from these matters. In AIG’s insurance and reinsurance operations, litigation and arbitration concerning the scope of coverage under insurance and reinsurance contracts, and litigation and arbitration in which its subsidiaries defend or indemnify their insureds under insurance contracts, are generally considered in the establishment of loss reserves. Separate and apart from the foregoing matters involving insurance and reinsurance coverage, AIG, its subsidiaries and their respective officers and directors are subject to a variety of additional types of legal proceedings brought by holders of AIG securities, customers, employees and others, alleging, among other things, breach of contractual or fiduciary duties, bad faith and violations of federal and state statutes and regulations. With respect to these other categories of matters not arising out of claims for insurance or reinsurance coverage, the Company establishes reserves for loss contingencies when it is probable that a loss will be incurred and the amount of the loss can be reasonably estimated. In many instances, the Company is unable to determine whether a loss is probable or to reasonably estimate the amount of such a loss and, therefore, the potential future losses arising from legal proceedings may exceed the amount of liabilities that has been recorded in its financial statements covering these matters. While such potential future charges could be material, based on information currently known to management, management does not believe, other than may be discussed below, that any such charges are likely to have a material adverse effect on the Company’s financial position or results of operation.

  48        NOTES TO FINANCIAL STATEMENTS - As of December 31, 2020 And 2019 And for years ended December 31, 2020, 2019 And 2018.

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

Additionally, from time to time, various regulatory and governmental agencies review the transactions and practices of AIG and its subsidiaries in connection with industry-wide and other inquiries into, among other matters, the business practices of current and former operating insurance subsidiaries. The Company has cooperated, and will continue to cooperate, in producing documents and other information in response to such requests.

B. Leases

Lease expenses are allocated to the Company based upon the percentage of space occupied with the final share of cost based upon its percentage participation in the Combined Pool.

C. Other Commitments

As part of its hedge fund, private equity and real estate equity portfolio investments, as of December 31, 2020, the Company may be called upon for additional capital investments of up to $996.

At December 31, 2020 the Company had $304 of outstanding commitments related to various funding obligations associated with investments in commercial and residential mortgage loans.

D. Guarantees

The Company had issued guarantees whereby it unconditionally and irrevocably guaranteed all present and future obligations and liabilities arising from the policies of insurance issued by certain insurers who, as of the guarantee issue date, were members of the AIG holding company group. The guarantees were provided in order to secure or maintain the guaranteed companies’ rating status issued by certain rating agencies. The Company would be required to perform under the guarantee in the event that a guaranteed entity failed to make payments due under policies of insurance issued during the period of the guarantee. The Company has not been required to perform under any of the guarantees. The Company remains contingently liable for all policyholder obligations associated with insurance policies issued by the guaranteed entity during the period in which the guarantee was in force.

Each guaranteed entity has reported invested assets in excess of their direct (prior to reinsurance) policyholder liabilities. Additionally, the Company is party to an agreement with AIG whereby AIG has agreed to make any payments due under the guarantees in the Company’s place and stead. Furthermore, for any former affiliate that has been sold, the purchaser has provided the Company with hold harmless agreements relative to the guarantee of the divested affiliate. Accordingly, management believes that the likelihood of payment under any of the guarantees is remote.

  49        NOTES TO FINANCIAL STATEMENTS - As of December 31, 2020 and 2019 and for years ended December 31, 2020, 2019 and 2018.

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

The following schedule sets forth the effective and termination dates (agreements with guarantees in run off), of each guarantee, the amount of direct policyholder obligations guaranteed, the invested assets and policyholder surplus for each guaranteed entity as of December 31, 2020:

Guaranteed Company			Date Issued		Date Terminated		Policyholder Obligations @ 12/31/2020		Invested Assets @ 12/31/2020		Estimated Loss @ 12/31/2020		Policyholders’ Surplus 12/31/2020
21st Century Advantage Insurance Company (f/k/a AIG Advantage Insurance Company )				12/15/1997		8/31/2009	$	-	$	21	$	-	$	22
21st Century North America Insurance Company (f/k/a American International Insurance Company )				11/5/1997		8/31/2009		9		611		-		613
21st Century Pinnacle Insurance Company (f/k/a American International Insurance Company of New Jersey)				12/15/1997		8/31/2009		1		19		-		20
AIG Edison Life Insurance Company (f/k/a GE Edison Life Insurance Company)				8/29/2003		3/31/2011		7,248		92,029		-		2,507
American General Life and Accident Insurance Company	*			3/3/2003		9/30/2010		1,469		199,832		-		7,511
American General Life Insurance Company	*			3/3/2003		12/29/2006		7,588		199,832		-		7,511
American International Assurance Company (Australia) Limited	*	*		11/1/2002		10/31/2010		443		1,799		-		574
Chartis Europe, S.A. (f/k/a AIG Europe, S.A.)	*			9/15/1998		12/31/2012		4,968		7,005		-		2,074
AIG Seguros Mexico, S.A. de C.V. (f/k/a AIG Mexico Seguros Interamericana, S.A. de C.V.)	*			12/15/1997		3/31/2015		83		98		-		146
Chartis UK (f/k/a Landmark Insurance Company, Limited (UK))	*			3/2/1998		11/30/2007		148		5,816		-		2,439
Farmers Insurance Hawaii (f/k/a AIG Hawaii Insurance Company, Inc.)				11/5/1997		8/31/2009		-		25		-		26
Lloyd’s Syndicate (1414) Ascot (Ascot Underwriting Holdings Ltd.)				1/20/2005		10/31/2007		6		831		-		57
SunAmerica Annuity and Life Assurance Company (Anchor National Life Insurance Company)	*			1/4/1999		12/29/2006		718		199,832		-		7,511
SunAmerica Life Insurance Company	*			1/4/1999		12/29/2006		2,092		199,832		-		7,511
The United States Life Insurance Company in the City of New York	*			3/3/2003		4/30/2010		3,181		29,451		-		1,790
The Variable Annuity Life Insurance Company	*			3/3/2003		12/29/2006		4,357		90,247		-		2,906
Total							$	32,311	$	1,027,280	$	-	$	43,218

* Current affiliates

** AIA was formerly as subsidiary of AIG, Inc. In previous years AIA provided the direct policyholder obligations as of each year end. However, starting in 2014 AIA declined to provide financial information related to these guarantees. The financial information reflects amounts as of December 31, 2012, at which time the guaranteed entities had invested assets in excess of direct policyholder obligations and were in a positive surplus position. Such amounts continue to remain the Company’s best estimate given available financial information. The guaranteed policyholder obligations will decline as the policies expire.

  50        NOTES TO FINANCIAL STATEMENTS - As of December 31, 2020 and 2019 and for years ended December 31, 2020, 2019 and 2018.

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

E. Joint and Several Liabilities

AIUI and the Company are jointly and severally obligated to the policyholders of their Japan branches, in connection with transfers of the business of those Japan branches to Japan-domiciled affiliates in 2013 and 2014, respectively. Under the terms of the transfer agreement, the Japan affiliates have agreed to be responsible for 100% of the obligations associated with such policies, and management expects such companies to satisfy their obligation. The Company carries no reserves with respect to such liabilities. The Japanese affiliates carried $14 and $13 of loss reserves in respect of such policies as of December 31, 2020 and 2019, respectively. As of December 31, 2020, if the Japan affiliates were to fail to satisfy their obligations, the Company’s share of the aggregate exposure under the pooling agreement is $8.

Each Pool member is also jointly and severally obligated to the other Pool members, in proportion to their pool share, in the event any other Pool member fails.

11. Other Significant Matters

A. Other Assets

As of December 31, 2020 and 2019, other admitted assets as reported in the accompanying Statements of Admitted Assets were comprised of the following balances:

Other admitted assets	2020		2019
Deposit accounting assets		11		10
Equities in underwriting pools and associations		36		43
Guaranty funds receivable on deposit		2		9
Loss funds on deposit		68		74
Other assets		81		87
Total other admitted assets	$	198	$	223

B. Other Liabilities

As of December 31, 2020 and 2019, other liabilities as reported in the accompanying Statements of Liabilities, Capital and Surplus were comprised of the following balances:

Other liabilities	2020			2019
Assumed Mortgage Guaranty Contingency Reserve	$	184		$	162
Ceded Mortgage Guaranty Contingency Reserve		(184	)		-
Escrow Deposit Liability		138			132
Other accrued liabilities		114			152
Retroactive reinsurance reserves - assumed		99			-
Retroactive reinsurance reserves - ceded		(26	)		(27	)
Deferred commission earnings		57			36
Escrow funds (NICO)		22			29
Accrued retrospective premiums		13			15
Servicing carrier liability		11			-
Remittances and items not allocated		4			-
Paid loss clearing contra liability (loss reserve offset for paid claims)		(22	)		(25	)
Total other liabilities	$	410		$	474

  51        NOTES TO FINANCIAL STATEMENTS - As of December 31, 2020 and 2019 and for years ended December 31, 2020, 2019 and 2018.

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

C. Other (Expense) Income

For the years ended December 31, 2020, 2019 and 2018, other (expense) income as reported in the accompanying Statements of Operations and Changes in Capital and Surplus were comprised of the following balances:

Other (expense) income	2020			2019			2018
Fee income on deposit programs	$	-		$	2		$	1
Interest expense on reinsurance program		(79	)		(111	)		(148	)
Other (expense) income		(34	)		13			11
Total other (expense) income	$	(113	)	$	(96	)	$	(136	)

D. Non-Cash items

For the years ended December 31, 2020, 2019 and 2018, the amounts reported in the Statements of Cash Flow are net of the following non-cash items:

Non-cash transactions	2020			2019			2018
Capital contribution from parent:
Return of Capital		-			(486	)		-
Receivable		-			-			150
AESA Commutation:								-
Premiums collected		(81	)		-			-
Benefit and loss related payments		20			-			-
Commissions		60			-			-
Funds Held:
Premiums collected		(22	)		(36	)		(62	)
Benefit and loss related payments		87			195			(15	)
Interest		(74	)		(107	)		(146	)
Commission and other expense paid		19			52			23
Funds held		10			104			200
Securities received/transferred:
Securities received		809			875			1,244
Securities transferred		(1,230	)		(1,267	)		(1,662	)

E. Federal Home Loan Bank (“FHLB”) Agreements

The Company is a member of the FHLB of New York. Such membership requires ownership of stock in the FHLB. The Company owned an aggregate of $7 and $9 of stock in the FHLB at December 31, 2020 and 2019, respectively.

Through its membership, the Company has conducted business activity (borrowings) with the FHLB. The Company utilizes the FHLB facility to supplement liquidity or for other uses deemed appropriate by management. The outstanding borrowings are being used primarily for interest rate risk management purposes in connection with certain reinsurance arrangements, and the balances are expected to decline as underlying premiums are collected. The Company is required to pledge certain mortgage-backed securities, government and agency securities and other qualifying assets to secure advances obtained from the FHLB. The FHLB applies a haircut to collateral pledged to determine the amount of borrowing capacity it will provide to its member. As of December 31, 2020, the Company had an actual borrowing capacity of $988 based on qualified pledged collateral. At December 31, 2020, the Company had borrowings of $0 from the FHLB.

F. Insurance-Linked Securities

As of December 31, 2020 and 2019, the Company was not a ceding insurer in catastrophe bond reinsurance transactions in force.

  52        NOTES TO FINANCIAL STATEMENTS - As of December 31, 2020 and 2019 and for years ended December 31, 2020, 2019 and 2018.

American Home Assurance Company

Statutory Basis Financial Statements

(Dollars in Millions)

G. COVID-19 Premium Refunds, Rate Reductions, and Policyholder Dividends

The impact of COVID-19 is evolving and will ultimately depend upon the scope, severity and duration of the crisis as well as the actions taken by governments, legislative bodies or regulators and other third parties in response, all of which are highly uncertain at this time. Please refer to AIG’s Form 10-K for year-end 2020 for additional information regarding the impact of this event on AIG and its businesses.

During 2020, the Company reported voluntary premium refunds and rate reductions resulting from COVID-19 in the amount of $41 and $5, respectively. The Company accounts for premium refunds and rate reductions consistent with SSAP 53 and SSAP 66, and are recognized as a reduction to written or earned premium with the unearned premium reserve adjusted accordingly.

12. Subsequent Events

Subsequent events have been considered through April 23, 2021 for these Financial Statements issued on April 23, 2021.

Type I – Recognized Subsequent Events:

None.

Type II – Nonrecognized Subsequent Events:

Effective January 1, 2021, the Combined Pooling Agreement was amended and restated among the twelve companies listed below. The new pool participation percentages of the pool members, as compared to those as of December 31, 2020, are as follows:

Company	NAIC Company Code	Pool Participation Percentage as of January 1, 2021	Pool Participation Percentage as of December 31, 2020	State of Domicile
National Union Fire Insurance Company of Pittsburgh, Pa. (National Union)*	19445	35%	35%	Pennsylvania
American Home Assurance Company (American Home)	19380	32%	35%	New York
Lexington Insurance Company (Lexington)	19437	30%	30%	Delaware
AIG Property Casualty Company (APCC)	19402	0%	0%	Illinois
Commerce and Industry Insurance Company (C&I)	19410	3%	0%	New York
The Insurance Company of the State of Pennsylvania (ISOP)	19429	0%	0%	Illinois
New Hampshire Insurance Company (New Hampshire)	23841	0%	0%	Illinois
AIG Specialty Insurance Company (Specialty)	26883	0%	0%	Illinois
AIG Assurance Company (Assurance)	40258	0%	0%	Illinois
Granite State Insurance Company (Granite)	23809	0%	0%	Illinois
Illinois National Insurance Co. (Illinois National)	23817	0%	0%	Illinois
AIU Insurance Company (AIU)	19399	0%	0%	New York

* Lead Company of the Combined Pool

  53        NOTES TO FINANCIAL STATEMENTS - As of December 31, 2020 and 2019 and for years ended December 31, 2020, 2019 and 2018.