alterity485b.htm

485BPOS				File Nos. 333-82329
Allianz Alterity				811-05618
		UNITED STATES
		SECURITIES AND EXCHANGE COMMISSION
		WASHINGTON, D.C. 20549
		FORM N-4

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No.
Post-Effective Amendment No.			24		X
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No.			330		X

(Check appropriate box or boxes.)
ALLIANZ LIFE VARIABLE ACCOUNT B
(Exact Name of Registrant)

ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
(Name of Depositor)

5701 Golden Hills Drive, Minneapolis, MN 55416-1297
(Address of Depositor's Principal Executive Offices) (Zip Code)

(763) 765-2913
(Depositor's Telephone Number, including Area Code)

Stewart D. Gregg, Senior Securities Counsel
Allianz Life Insurance Company of North America
5701 Golden Hills Drive
Minneapolis, MN 55416-1297
(Name and Address of Agent for Service)

It is proposed that this filing will become effective (check the appropriate box):
	immediately upon filing pursuant to paragraph (b) of Rule 485
x	on April 30, 2012 pursuant to paragraph (b) of Rule 485
	60 days after filing pursuant to paragraph (a)(1) of Rule 485
	on (date) pursuant to paragraph (a)(1) of Rule 485
If appropriate, check the following:
	this post-effective amendment designates a new effective date for a previously filed post-effective amendment.
Approximate Date of the Proposed Public Offering: April 30, 2012
Titles of Securities Being Registered: Individual Flexible Purchase Payment Variable Deferred Annuity Contracts

PART A – PROSPECTUS

THE ALLIANZ ALTERITY® VARIABLE ANNUITY CONTRACT

ISSUED BY

ALLIANZ LIFE® VARIABLE ACCOUNT B

AND

ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA

This prospectus describes an individual flexible purchase payment variable deferred annuity contract (Contract) issued by Allianz Life Insurance Company of North America (Allianz Life®, we, us, our).

The Contract is a “flexible purchase payment” contract because you (the Owner) can make more than one Purchase Payment, subject to certain restrictions. The Contract is “variable” because the Contract Value and any variable Annuity Payments you receive increase or decrease depending on the performance of the Investment Options you select (in this prospectus, the term “Investment Options” refers only to the variable Investment Choices listed on the following page, and not to any fixed Investment Choices). The Contract is “deferred” because you do not begin receiving regular Annuity Payments immediately.

Please read this prospectus before investing and keep it for future reference. It contains important information about your annuity and Allianz Life that you ought to know before investing. This prospectus is not an offering in any state, country, or jurisdiction in which we are not authorized to sell the Contracts. You should rely only on the information contained in this prospectus. We have not authorized anyone to provide you with information that is different.

Additional information about the Separate Account has been filed with the Securities and Exchange Commission (SEC) and is available upon written or oral request without charge, or on the EDGAR database on the SEC’s website (http://www.sec.gov). A Statement of Additional Information (SAI) dated the same date as this prospectus includes additional information about the annuity offered by this prospectus. The SAI is incorporated by reference into this prospectus. The SAI is filed with the SEC and is available without charge by contacting us at the telephone number or address listed at the back of this prospectus. The SAI’s table of contents appears after the Privacy and Security Statement in this prospectus. The prospectus, SAI and other Contract information are also available on the EDGAR database.

The SEC has not approved or disapproved these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. An investment in this Contract is not a deposit of a bank or financial institution and is not federally insured or guaranteed by the Federal Deposit Insurance Corporation or any other federal government agency. An investment in this Contract involves investment risk including the possible loss of principal. Variable annuity contracts are complex insurance and investment vehicles. Before you invest, be sure to ask your Financial Professional about the Contract’s features, benefits, risks and fees, and whether the Contract is appropriate for you based upon your financial situation and objectives.

Dated: April 30, 2012

The Allianz Alterity® Variable Annuity Contract Prospectus – April 30, 2012

This prospectus contains information on the most recently offered May 2006 Contracts that are no longer offered for sale. Information regarding the product features and expenses specific to previous older versions of the Contracts can be found in the SAI.

We currently offer the Investment Options listed below. You can invest in up to 15 Investment Options at any one time. Currently, the only fixed Investment Choice we offer under our general account is the DCA Fixed Option. One or more of the Investment Choices may not be available in your state. We may add, substitute or remove Investment Choices in the future. Contracts with PRIME Plus Benefit may be subject to Investment Option allocation and transfer restrictions.

INVESTMENT OPTIONS AVAILABLE UNDER THE CONTRACT

ALLIANZ FUND OF FUNDS

AZL® Balanced Index Strategy Fund

AZL FusionSM Balanced Fund

AZL FusionSM Conservative Fund

AZL FusionSM Moderate Fund

AZL® Growth Index Strategy Fund

BLACKROCK

AZL® Money Market Fund

BlackRock Global Allocation V.I. Fund

FIDELITY

Fidelity VIP FundsManager 50% Portfolio

Fidelity VIP FundsManager 60% Portfolio

FRANKLIN TEMPLETON

AZL® Franklin Templeton Founding Strategy Plus Fund

Franklin High Income Securities Fund

Franklin Income Securities Fund

Franklin U.S. Government Fund

Templeton Global Bond Securities Fund

GATEWAY

AZL® Gateway Fund

INVESCO

AZL® Invesco Equity and Income Fund

PIMCO

PIMCO VIT All Asset Portfolio

PIMCO VIT Emerging Markets Bond Portfolio

PIMCO VIT Global Advantage Strategy Bond Portfolio

PIMCO VIT Global Bond Portfolio (Unhedged)

PIMCO VIT Global Multi-Asset Portfolio

PIMCO VIT High Yield Portfolio

PIMCO VIT Real Return Portfolio

PIMCO VIT Total Return Portfolio

PIMCO VIT Unconstrained Bond Portfolio

The Allianz Alterity® Variable Annuity Contract Prospectus – April 30, 2012

TABLE OF CONTENTS

Glossary		4	7.	Expenses	42
Fee Tables		7		Separate Account Annual Expenses	42
	Contract Owner Transaction Expenses	7		Contract Maintenance Charge	43
	Contract Owner Periodic Expenses	8		Withdrawal Charge	43
	Annual Operating Expenses of the Investment Options	9		Transfer Fee	45
	Examples	9		Premium Tax	46
1.	The Variable Annuity Contract	11		Income Tax	46
	Ownership	12		Investment Option Expenses	46
2.	Purchase	13	8.	Taxes	46
	Purchase Payments	13		Annuity Contracts in General	46
	Automatic Investment Plan (AIP)	13		Qualified Contracts	46
	Allocation of Purchase Payments	14		Multiple Contracts	47
	Tax-Free Section 1035 Exchanges	14		Partial 1035 Exchanges	47
	Accumulation Units/ Computing the Contract Value	15		Distributions – Non-Qualified Contracts	48
3.	The Annuity Phase	15		Distributions – Qualified Contracts	49
	Income Date	16		Assignments, Pledges and Gratuitous Transfers	50
	Traditional Annuity Payments	16		Death Benefits	50
	Annuity Options	17		Withholding	50
	Partial Annuitization	19		Federal Estate Taxes	50
4.	Protected Retirement Income Made Easy:			Generation-Skipping Transfer Tax	50
	PRIME Plus Benefit	20		Foreign Tax Credits	50
	Adding PRIME Plus Benefit To Your Contract	21		Annuity Purchases by Nonresident Aliens and
	Removing PRIME Plus Benefit From Your Contract	21		Foreign Corporations	50
	Investment Option Allocation and Transfer			Possible Tax Law Changes	51
	Restricitions Under PRIME Plus Benefit	22		Diversification	51
	PB Value	23		Required Distributions	51
	Using PRIME Plus Benefit	26	9.	Access to Your Money	51
	GPWB Payments	28		Partial Withdrawal Privilege	52
	Taxation of GPWB Payments	30		Waiver of Withdrawal Charge Benefits	53
	When GPWB Ends	30		Systematic Withdrawal Program	53
	GMIB Payments	30		Minimum Distribution Program and Required
	Amount Used to Calculate GMIB Payments	31		Minimum Distribution (RMD) Payments	54
	Taxation of GMIB Payments	31		Suspension of Payments or Transfers	54
	When GMIB Ends	32	10.	Death Benefit	54
	Required Minimum Distributions (RMDs) Under			Traditional Guaranteed Minimum Death Benefit
	Qualified Contracts with PRIME Plus Benefit	32		(Traditional GMDB)	55
5.	Investment Options	33		Enhanced Guaranteed Minimum Death Benefit
	Substitution and Limitation on Further Investments	37		(Enhanced GMDB)	55
	Transfers Between Investment Options	37		Earnings Protections Guaranteed Minimum Death
	Excessive Trading and Market Timing	38		Benefit ( Earnings Protections GMDB)	57
	Dollar Cost Averaging (DCA) Program	40		When the Death Benefit Ends	58
	Flexible Rebalancing	41		Death of the Owner and/or Annuitant Under
	Financial Advisers – Asset Allocation Programs	41		All Other Contracts	59
	Voting Privileges	41		Death Benefit Payment Options During the
6.	Our General Account	42		Accumulation Phase	62

The Allianz Alterity® Variable Annuity Contract Prospectus – April 30, 2012

11.	Other Information	63	Appendix A – Condensed Financial Information		69
	Allianz Life	63	Appendix B – PB Value Calculation Examples		73
	The Separate Account	63	Appendix C – GPWB Under PRIME Plus Benefit		74
	Distribution	63	Appendix D – Death Benefit Calculation Examples		76
	Additional Credits for Certain Groups	64	Appendix E – Withdrawal Charge Examples		78
	Administration/Allianz Service Center	65	For Service or More Information		80
	Legal Proceedings	65		Addresses for mailing checks	80
	Financial Statements	65
	Status Pursuant to Securities Exchange Act of 1934	65
12.	Table of Contents of the Statement of
	Additional Information (SAI)	66
13.	Privacy and Security Statement	67

GLOSSARY

This prospectus is written in plain English. However, there are some technical words or terms that are capitalized and are used as defined terms throughout the prospectus. For your convenience, we included this glossary to define these terms.

The following is a list of common abbreviations used in this prospectus:

AIA	=	Annual Increase Amount	GPWB	=	Guaranteed Partial Withdrawal Benefit
CV Plus	=	Contract Value Plus	MAV	=	Maximum Anniversary Value
GMDB	=	Guaranteed Minimum Death Benefit	PRIME	=	Protected Retirement Income Made Easy
GMIB	=	Guaranteed Minimum Income Benefit

Accumulation Phase – the initial phase of your Contract before you apply your total Contract Value to Annuity Payments. The Accumulation Phase begins on the Issue Date and may occur at the same time as the Annuity Phase if you take Partial Annuitizations.

Accumulation Unit – the units into which we convert amounts invested in the subaccounts that invest in the Investment Options during the Accumulation Phase.

AIA (Annual Increase Amount) – a calculation used in determining the PB Value under PRIME Plus Benefit, and in determining the GMDB value under the Enhanced GMDB.

Annuitant – the individual upon whose life we base the Annuity Payments. Subject to our approval, the Owner designates the Annuitant and can add a joint Annuitant for the Annuity Phase if they take a Full Annuitization. There are restrictions on who can become an Annuitant.

Annuity Options – the income options available to you under the Contract.

Annuity Payments – payments made by us to the Payee pursuant to the chosen Annuity Option.

Annuity Phase – the phase the Contract is in once Annuity Payments begin. This may occur at the same time as the Accumulation Phase for any Contract Value you apply to a Partial Annuitization.

Annuity Unit – the units into which we convert amounts invested in the subaccounts that invest in the Investment Options during the Annuity Phase.

Base Contract – the contract corresponding to this prospectus that does not include PRIME Plus Benefit.

Beneficiary – the person(s) or entity the Owner designates to receive any death benefit.

Business Day – each day on which the New York Stock Exchange is open for trading, except when an Investment Option does not value its shares. Allianz Life is open for business on each day that the New York Stock Exchange is open. Our Business Day closes when regular trading on the New York Stock Exchange closes, which is usually at 4:00 p.m. Eastern Time.

Contract – the deferred annuity contract described by this prospectus.

Contract Anniversary – a 12-month anniversary of the Issue Date or any subsequent 12-month Contract Anniversary.

The Allianz Alterity® Variable Annuity Contract Prospectus – April 30, 2012

Contract Value – on any Business Day, the sum of the values in your selected Investment Choices. It does not include amounts applied to Annuity Payments.

Contract Year – any period of 12 months beginning on the Issue Date or a subsequent Contract Anniversary.

Excess Withdrawal – for Contracts with PRIME Plus Benefit that exercise GPWB, this is an additional withdrawal you take while you are receiving GPWB Payments.

Financial Professional – the person who advises you regarding the Contract.

Full Annuitization – the application of the total Contract Value to Annuity Payments.

Good Order – a request is in “Good Order” if it contains all of the information we require to process the request. If we require information to be provided in writing, “Good Order” also includes provision of information on the correct form, with any required certifications or guarantees, sent to and received by the Service Center from the correct mailing address. If you have questions about the information we require, please contact the Service Center.

GMDB (Guaranteed Minimum Death Benefit) – the three different guaranteed death benefits.

GMIB (Guaranteed Minimum Income Benefit) – a feature under PRIME Plus Benefit that provides a guaranteed minimum fixed income in the form of Annuity Payments based on the PB Value.

GMIB Payments – Annuity Payments we make to the Payee based on the PB Value.

GPWB (Guaranteed Partial Withdrawal Benefit) – a feature under PRIME Plus Benefit that provides a guaranteed minimum amount of income in the form of partial withdrawals based on the PB Value.

GPWB Maximum – under PRIME Plus Benefit, this is the annual limit on GPWB Payments available to you under GPWB.

GPWB Payments – withdrawal payments we make to the Owner based on the PB Value.

Income Date – the date we begin making Annuity Payments to the Payee from the Contract. Because the Contract allows for Partial Annuitizations there may be multiple Income Dates.

Investment Choices – the Investment Options and any general account Investment Choices available under the Contract for Purchase Payments or transfers.

Investment Options – the variable investments available to you under the Contract whose performance is based on the securities in which they invest.

Issue Date – the date shown on the Contract that starts the first Contract Year. Contract Anniversaries and Contract Years are measured from the Issue Date.

Joint Owners – two Owners who own a Contract.

MAV (Maximum Anniversary Value) – a calculation used in determining the PB Value under PRIME Plus Benefit, and in determining the GMDB value under Enhanced GMDB.

Non-Qualified Contract – a Contract that is not purchased under a pension or retirement plan qualified for special tax treatment under sections of the Internal Revenue Code.

Owner – “you,” “your” and “yours.” The person(s) or entity designated at Contract issue and named in the Contract who may exercise all rights granted by the Contract.

Partial Annuitization – the application of only part of the Contract Value to Traditional Annuity Payments (or part of the PB Value to GMIB Payments if your Contract includes PRIME Plus Benefit).

Payee – the person or entity who receives Annuity Payments during the Annuity Phase.

PB Value – the amount used to calculate GPWB Payments and GMIB Payments under PRIME Plus Benefit.

PRIME (Protected Retirement Income Made Easy) Plus Benefit – an optional benefit package that includes a GMIB and GPWB and carries a higher charge.

Purchase Payment – the money you put into the Contract.

The Allianz Alterity® Variable Annuity Contract Prospectus – April 30, 2012

Qualified Contract – a Contract purchased under a pension or retirement plan qualified for special tax treatment under sections of the Internal Revenue Code (for example, 401(a) and 401(k) plans), Individual Retirement Annuities (IRAs), or Tax-Sheltered Annuities (referred to as TSA or 403(b) contracts).

Separate Account – Allianz Life Variable Account B is the Separate Account that issues your Contract. It is a separate investment account of Allianz Life. The Separate Account holds the assets invested in the Investment Options that underlie the Contracts. The Separate Account is divided into subaccounts, each of which invests exclusively in a single Investment Option.

Service Center – the Allianz Service Center. Our Service Center address and telephone number are listed in the following section. The address for sending applications for new Contracts is listed on the application.

Traditional Annuity Payments – Annuity Payments we make to the Payee based on the Contract Value.

Withdrawal Charge Basis – the total amount under your Contract that is subject to a withdrawal charge.

The Allianz Alterity® Variable Annuity Contract Prospectus – April 30, 2012

FEE TABLES

The following tables describe the fees and expenses that you pay when owning and taking a withdrawal from the Contract. For more information, see section 7, Expenses.

The first tables describe the fees and expenses that you pay if you take a withdrawal from the Contract during the Accumulation Phase or if you make transfers.

CONTRACT OWNER TRANSACTION EXPENSES

Withdrawal Charge During the Accumulation Phase(1),(2)

(as a percentage of each Purchase Payment withdrawn)

Number of Complete Contract Years Since We Received Your Purchase Payment	Charge
0	7%
1	6%
2	5%
3	4%
4	3%
5	2%
6 Contract Years or more	0%

Transfer Fee(3) …………………………………....	$25
Premium Tax(4) ………………………………….	0% to 3.5%
(as a percentage of each Purchase Payment)

(1)

The partial withdrawal privilege for each Contract Year is equal to 12% of your total Purchase Payments, less any previous withdrawals taken during that Contract Year under the partial withdrawal privilege or as required minimum distribution payments. We do not deduct a withdrawal charge from amounts withdrawn under the partial withdrawal privilege. There is no partial withdrawal privilege after you exercise the GPWB (if applicable) or during the Annuity Phase. Any unused partial withdrawal privilege in one Contract Year carries over to the next Contract Year. For more details and additional information on other penalty-free withdrawal options, please see the discussion of the partial withdrawal privilege and other information that appears in section 9, Access to Your Money; and section 4, Protected Retirement Income Made Easy: PRIME Plus Benefit – GPWB Payments.

(2)	The total amount under your Contract that is subject to a withdrawal charge is the Withdrawal Charge Basis. The Withdrawal Charge Basis is equal to the total Purchase Payments, less any Purchase Payments withdrawn (excluding any penalty-free withdrawals).

(3)

The first twelve transfers in a Contract Year are free. We count all transfers made in the same Business Day as one transfer. The following transfers are not subject to a transfer fee and do not count against any free transfers we allow: dollar cost averaging transfers, flexible rebalancing transfers, or the allocation and transfer restrictions for PRIME Plus Benefit. Currently, we deduct this fee only during the Accumulation Phase, but we reserve the right to deduct this fee during the Annuity Phase. For more information, please see section 7, Expenses – Transfer Fee.

(4)	It is our current practice not to make deductions from the Contract Value to reimburse ourselves for premium tax that we pay, although we reserve the right to make such a deduction in the future. For more information, please see section 7, Expenses – Premium Tax.

The Allianz Alterity® Variable Annuity Contract Prospectus – April 30, 2012

CONTRACT OWNER PERIODIC EXPENSES

The next tables describe the fees and expenses that you pay periodically during the time that you own your Contract, not including the Investment Options’ fees and expenses. The Separate Account annual expenses include the mortality and expense risk (M&E) charge and the administrative charge.

During the Accumulation Phase:

Contract Maintenance Charge(5) ………………	$40
(per Contract per year)

Separate Account Annual Expenses(6)

The annualized rate is realized on a daily basis as a percentage of each Investment Option’s net asset value.

	Maximum and Current Charges for a Base Contract			Current Charges for a Contract with PRIME Plus Benefit(7),(8)
	M&E Charge	Admin. Charge	Total	M&E Charge	Admin. Charge	Total
Traditional GMDB	1.35%	0.15%	1.50%	2.05%	0.15%	2.20%
Enhanced GMDB	1.65%	0.15%	1.80%	2.25%	0.15%	2.40%
Earnings Protection GMDB	1.65%	0.15%	1.80%	2.30%	0.15%	2.45%

	Maximum Charges(9) for a Contract with PRIME Plus Benefit
	M&E Charge	Admin. Charge	Total
Traditional GMDB	2.50%	0.15%	2.65%
Enhanced GMDB	2.70%	0.15%	2.85%
Earnings Protection GMDB	2.75%	0.15%	2.90%

During the Annuity Phase:

Contract Maintenance Charge(5) ……………..	$40
(per Contract per year)

Separate Account Annual Expenses – if you request variable Traditional Annuity Payments

The annualized rate is realized on a daily basis as a percentage of the net asset value of an Investment Option.

M&E Charge(10)	1.35%
Administrative Charge	0.15%
Total	1.50%

(5)	We waive the contract maintenance charge if the Contract Value is at least $100,000 at the time we are to deduct the charge. For more information, please see section 7, Expenses – Contract Maintenance Charge.

(6)	The Enhanced GMDB, Earnings Protection GMDB and PRIME Plus Benefit may not be available in all states; check with your Financial Professional.

(7)	You can add PRIME Plus Benefit to your Contract once before age 76. The current charges apply if you add PRIME Plus Benefit or if you reset the 7% AIA.

(8)

If you exercise the GPWB, the increased expenses associated with PRIME Plus Benefit continue until both the GPWB and GMIB terminate and the increased expenses associated with the Enhanced GMDB or the Earnings Protection GMDB (if applicable) continue as long as the Enhanced GMDB value or the Earnings Protection GMDB value is greater than zero.

(9)	This is the maximum charge we could impose if you add PRIME Plus Benefit or if you reset the 7% AIA.

(10)

Because the Contract allows Partial Annuitization, it is possible for different portions of the Contract to be in both the Accumulation and Annuity Phases at the same time. It is also possible to have different M&E charges on different portions of the Contract at the same time if you request variable Traditional Annuity Payments under a Partial Annuitization. For more information, please see section 3, The Annuity Phase – Partial Annuitization.

The Allianz Alterity® Variable Annuity Contract Prospectus – April 30, 2012

ANNUAL OPERATING EXPENSES OF THE INVESTMENT OPTIONS

This table describes the total annual operating expenses associated with the Investment Options and shows the minimum and maximum expenses for the period ended December 31, 2011, charged by any of the Investment Options before the effect of any contractual expense reimbursement or fee waiver. We show the expenses as a percentage of an Investment Option’s average daily net assets.

	Minimum	Maximum
Total annual Investment Option operating expenses* (including management fees, distribution or 12b-1 fees, and other expenses) before fee waivers and expense reimbursements	0.65%	1.61%

Some of the Investment Options or their affiliates may also pay service fees to us or our affiliates. The amount of these fees may be different for each Investment Option. The maximum current fee is 0.25%. The amount of these fees, if deducted from Investment Option assets, is reflected in the above table.

EXAMPLES

The expenses for your Contract may be different from those shown in the examples below depending upon which Investment Option(s) you select and the benefits that apply.

These examples are intended to help you compare the cost of investing in a Contract with the cost of investing in other variable annuity contracts. These costs include Contract Owner transaction expenses, Contract Owner periodic expenses, and the annual operating expenses of the Investment Options before the effect of reimbursements and waivers. You should not consider the examples below as a representation of past or future expenses. Actual expenses may be greater or less than those shown.

We deduct the total $40 contract maintenance charge in the examples at the end of each year during the Accumulation Phase. Please note that this charge does not apply during the Accumulation Phase if your Contract Value at the end of year is at least $100,000, or during the Annuity Phase if your Contract Value on the Income Date is at least $100,000 (see section 7, Expenses – Contract Maintenance Charge). A transfer fee may apply, but is not reflected in these examples (see section 7, Expenses – Transfer Fee).

The Allianz Alterity® Variable Annuity Contract Prospectus – April 30, 2012

If you take a full withdrawal at the end of each time period, and assuming a $10,000 investment and a 5% annual return on your money, you may pay expenses as follows.

Maximum charges* for a Contract that has the Earnings Protection GMDB and PRIME Plus Benefit (which carries the highest Separate Account annual expense of 2.90%).

Current charges for a Contract that has the Earnings Protection GMDB and PRIME Plus Benefit (which carries a Separate Account annual expense of 2.45%).

The Base Contract with the Traditional GMDB (which carries the lowest Separate Account annual expense

of 1.50%).

Total annual Investment Option operating expenses before any fee waivers or expense reimbursements of:		1 Year	3 Years	5 Years	10 Years
1.61% (the maximum Investment Option operating expense)	a)	$1,192	$1,983	$2,783	$5,022
	b)	$1,148	$1,855	$2,578	$4,656
	c)	$1,054	$1,580	$2,130	$3,820
0.65% (the minimum Investment Option operating expense)	a)	$1,098	$1,708	$2,340	$4,218
	b)	$1,053	$1,577	$2,125	$3,811
	c)	$ 958	$1,293	$1,654	$2,883

If you do not take a full withdrawal or if you take a Full Annuitization** of the Contract at the end of each time period, and assuming a $10,000 investment and a 5% annual return on your money, you may pay expenses as follows.

Total annual Investment Option operating expenses before any fee waivers or expense reimbursements of:		1 Year	3 Years	5 Years	10 Years
1.61% (the maximum Investment Option operating expense)	a)	$ 492	$1,483	$2,483	$5,022
	b)	$ 448	$1,355	$2,278	$4,656
	c)	$ 354	$1,080	$1,830	$3,820
0.65% (the minimum Investment Option operating expense)	a)	$ 398	$1,208	$2,040	$4,218
	b)	$ 353	$1,077	$1,825	$3,811
	c)	$ 258	$ 793	$1,354	$2,883

*	If you add PRIME Plus Benefit or if you reset the 7% AIA, your Separate Account annual expense may be less than this amount, but it cannot be greater than this amount.

**	Traditional Annuity Payments are generally not available until after the second Contract Anniversary in most states. GMIB Payments are not available until seven Contract Years after: a) the date PRIME Plus Benefit was added to your Contract, or b) after the date of any 7% AIA reset.

See Appendix A for condensed financial information regarding the Accumulation Unit values (AUVs) for the highest and lowest Separate Account annual expenses. See the appendix to the Statement of Additional Information for condensed financial information regarding the AUVs for other expense levels and for previous older versions of the Contracts.

The Allianz Alterity® Variable Annuity Contract Prospectus – April 30, 2012

1.	THE VARIABLE ANNUITY CONTRACT

The Contract is no longer offered for sale. However, as an existing Owner you can make additional Purchase Payments to your Contract during the Accumulation Phase, subject to certain restrictions.

An annuity is a contract between you (the Owner), and an insurance company (in this case Allianz Life), where you make payments to us and, in turn, we promise to make regular periodic payments (Annuity Payments) to the Payee.

The Contract is tax deferred. You generally are not taxed on any earnings or appreciation on the assets in your Contract until you take money out of your Contract. For Qualified Contracts, the tax deferral is provided through compliance with specialized tax-qualification rules, and you do not receive any additional tax benefit by purchasing the Contract. However, the Contract may offer other features that meet your needs.

The Contract has an Accumulation Phase and an Annuity Phase. You can take withdrawals from the Contract during the Accumulation Phase and, subject to certain restrictions, you can make additional Purchase Payments.

The Accumulation Phase begins on the Issue Date and ends upon the earliest of the following.

·	The Business Day before the Income Date if you take a Full Annuitization.

·	The Business Day we process your request for a full withdrawal.

Upon the death of any Owner (or the Annuitant if the Contract is owned by a non-individual), the Accumulation Phase ends on the Business Day we first receive in Good Order at our Service Center the death benefit payment option and due proof of death, unless the spouse of the deceased continues the Contract.

The Annuity Phase is the period during which we make Annuity Payments from the Contract. Under all Contracts, Traditional Annuity Payments are available during the Annuity Phase. Traditional Annuity Payments must begin on a designated date (the Income Date) that is at least two years after your Issue Date. For Contracts with PRIME Plus Benefit, you can request fixed Annuity Payments under the GMIB (GMIB Payments) beginning seven Contract Years after the date PRIME Plus Benefit is added to your Contract, or seven Contract Years after the date of any 7% AIA reset. If you apply the entire Contract Value to Annuity Payments, we call that a Full Annuitization, and if you apply only part of the Contract Value to Annuity Payments, we call that a Partial Annuitization.* The maximum number of annuitizations you can have at any one time is five. Because the Contract allows Partial Annuitization, it is possible that some portions of the Contract are in the Accumulation Phase and other portions are in the Annuity Phase at the same time. The Annuity Phase begins on the Income Date (or the first Income Date if you take any Partial Annuitizations) and ends when all portion(s) of the Contract that you apply to Annuity Payments have ended, as indicated in section 3, The Annuity Phase.

*	GMIB Partial Annuitizations are based on the PB Value. They are not available after you exercise the GPWB, or if the PB Value is less than the Contract Value.

Your Investment Choices include the Investment Options and any available general account Investment Choice. You cannot invest in more than 15 Investment Options at any one time. Contracts with PRIME Plus Benefit may be subject to Investment Option allocation and transfer restrictions (see section 4, Protected Retirement Income Made Easy: PRIME Plus Benefit). Depending upon market conditions, you can gain or lose value in the Contract based on the investment performance of the Investment Options. The Investment Options are designed to offer the opportunity for a better return than any available general account Investment Choice; however, this is not guaranteed. The amount of Contract Value you are able to accumulate in your Contract during the Accumulation Phase and the amount of any variable Traditional Annuity Payments we make during the Annuity Phase depend in large part upon the investment performance of any Investment Options you select.

We do not make any changes to your Contract without your permission except as may be required by law.

The Contract ends when:

·	the Accumulation Phase ends,

·	the Annuity Phase, if any, ends and/or

·	all applicable death benefit payments have been made.

For example, if you purchased a Contract and later take a full withdrawal of the entire Contract Value, both the Accumulation Phase and the Contract end although the Annuity Phase never began and we did not make any death benefit payments.

The Allianz Alterity® Variable Annuity Contract Prospectus – April 30, 2012

State Specific Contract Restrictions

The Contract is subject to the law of the state in which it was issued. Some of the terms of your Contract may differ from the terms of a Contract delivered in another state because of state-specific legal requirements. Areas in which there may be state-specific Contract provisions may include the following.

·	The withdrawal charge schedule.

·	Availability of Investment Options, Annuity Options, endorsements, and/or riders.

·	Selection of certain Income Dates.

·	Restrictions on your ability to make additional Purchase Payments.

·	Selection of certain assumed investment rates for variable Annuity Payments.

·	Our ability to restrict transfer rights.

All material state variations in the Contract are disclosed in this prospectus. If you would like more information regarding state-specific Contract provisions, you should contact your Financial Professional or contact our Service Center at the toll free number listed at the back of this prospectus.

OWNERSHIP

Owner

You, as the Owner, have all the rights under the Contract. The Owner was designated at Contract issue. You can change Owners at any time subject to our approval. However, Qualified Contracts can only have one Owner and there may be Internal Revenue Service (IRS) or other restrictions on changing the ownership of a Qualified Contract. Upon our approval, any ownership change becomes effective as of the date you sign the request. Changing ownership may be a taxable event. You should consult with your tax adviser before doing this.

Joint Owner

A Non-Qualified Contract can be owned by up to two Owners. Upon the death of either Joint Owner, the surviving Joint Owner becomes the sole primary Beneficiary. We then treat any other Beneficiary designation on record at the time of death as a contingent Beneficiary. You can change Joint Owners under the same conditions as described for an Owner. If a Contract has Joint Owners, we generally require the signature of both Owners on any forms that are submitted to our Service Center.

NOTE: Partial Annuitizations are not available to Joint Owners. There can be only one Owner, the Owner must be the Annuitant, and we do not allow the Owner to add a joint Annuitant.

Annuitant

The Annuitant is the individual on whose life we base Annuity Payments. You designated an Annuitant when you purchased a Contract. For Qualified Contracts, before the Income Date the Owner must be the Annuitant unless the Contract is owned by a qualified plan or is part of a custodial arrangement. You can change the Annuitant on an individually owned Non-Qualified Contract at any time before the Income Date, but you cannot change the Annuitant if the Owner is a non-individual (for example, a qualified plan or trust). Subject to our approval, you can add a joint Annuitant on the Income Date if you take a Full Annuitization. For Qualified Contracts, the ability to add a joint Annuitant is subject to any plan requirements associated with the Contract, and the joint Annuitants must be spouses. For jointly owned Contracts, if the Annuitant dies before the Annuity Date, the younger Owner automatically becomes the new Annuitant, but the Owner can subsequently name another Annuitant.

Designating different persons as Owner(s) and Annuitant(s) can have important impacts on whether a death benefit is paid, and on who would receive it. For example, if a sole Owner dies during the Accumulation Phase of the Contract, we pay a death benefit to the Beneficiary(s). If the Annuitant is not an Owner and he/she dies during the Accumulation Phase of the Contract, the Owner can name a new Annuitant (subject to our approval) and we do not pay a death benefit. If a sole Owner who is not an Annuitant dies during the Annuity Phase, the Beneficiary becomes the Owner, Annuity Payments continue and we do not pay a death benefit. If an Annuitant dies after a Full Annuitization under an Annuity Option with a guaranteed period, Annuity Payments to the Payee continue until the Contract ends and are paid at least as rapidly as they were being paid at the time of the Annuitant’s death. Use care when designating Owners and Annuitants, and consult your Financial Professional if you have questions.

The Allianz Alterity® Variable Annuity Contract Prospectus – April 30, 2012

Payee

The Payee is the person or entity who receives Annuity Payments during the Annuity Phase. The Owner receives tax reporting on those payments. Generally we require the Payee to be an Owner, but we may allow you to name a different Payee subject to our approval. For Qualified Contracts owned by a qualified plan, the qualified plan must be the Payee.

Beneficiary

The Beneficiary is the person(s) or entity you designated at Contract issue to receive any death benefit. You can change the Beneficiary or contingent Beneficiary at any time before your death unless you name an irrevocable Beneficiary. If you do not designate a Beneficiary, any death benefit is paid to your estate.

NOTE FOR JOINT OWNERS: For jointly owned Contracts, the sole primary Beneficiary is the surviving Joint Owner. For Contracts that are jointly owned by spouses, if both spousal Joint Owners die before we pay the death benefit, we pay the death benefit to the contingent Beneficiaries, or to the estate of the Joint Owner who died last if there are no named contingent Beneficiaries. However, if the Joint Owners were not spouses and both Joint Owners die before we pay the death benefit, we pay the death benefit to the estate of the Joint Owner who died last.

Assignment, Changes of Ownership and Other Transfers of a Contract

An authorized request specifying the terms of an assignment (including any collateral assignment, change of ownership or other transfers of a Contract) must be provided to our Service Center and approved by us. To the extent permitted by state law, we reserve the right to refuse to consent to any assignment at any time on a nondiscriminatory basis. We withhold our consent if the assignment would violate or result in noncompliance with any applicable state or federal law or regulation. We are not liable for any payment made or action taken before we consent and record the assignment. An assignment may be a taxable event. We are not responsible for the validity or tax consequences of any assignment. After the death benefit has become payable, an assignment can only be made with our consent. If the Contract is assigned, your rights may only be exercised with the consent of the assignee of record. Qualified Contracts generally cannot be assigned.

PURCHASE

PURCHASE PAYMENTS

A Purchase Payment is the money you put into the Contract. The Purchase Payment requirements for this Contract are as follows.

·	You can make additional Purchase Payments of $50 or more during the Accumulation Phase before you exercise the GPWB, if applicable.

You cannot make any additional Purchase Payments to the Contract after the Income Date that you take a Full Annuitization (including a required Full Annuitization on the maximum permitted Income Date) or after you exercise the GPWB. In certain states, additional Purchase Payments can only be made during the first Contract Year or may be otherwise restricted.

·	The maximum total amount we accept without our prior approval is $1 million (including amounts already invested in other Allianz Life variable annuities).

Purchase Payments to Qualified Contracts are limited by federal law and must be from earned income or a qualified transfer or rollover. Purchase Payments to Qualified Contracts other than from a qualified transfer may be restricted after the Owner reaches age 70½.

We may, at our sole discretion, waive the minimum Purchase Payment requirements. We reserve the right to decline any Purchase Payment, and if mandated under applicable law, we may be required to reject a Purchase Payment.

AUTOMATIC INVESTMENT PLAN (AIP)

The automatic investment plan (AIP) is a program that allows you to make additional Purchase Payments to your Contract during the Accumulation Phase on a monthly or quarterly basis by electronic transfer of money from your savings, checking or brokerage account. You may participate in this program by completing the appropriate form. Our Service Center must receive your form in Good Order by the first of the month in order for AIP to begin that same month. Investments take place on the 20th of the month or the next Business Day if the 20th is not a Business Day. The minimum investment that you can make by AIP is $50. You may stop or change AIP at any time. We must be notified by the first of the month in order to stop or change AIP for that month. If AIP is used for a Qualified Contract, you should consult your tax adviser for advice regarding maximum contributions. AIP is not available if the Qualified Contract is funding a plan that is tax qualified under Section 401 of the Internal Revenue Code.

The Allianz Alterity® Variable Annuity Contract Prospectus – April 30, 2012

You cannot exercise the GPWB and participate in AIP at the same time. AIP is no longer available to you after the Income Date on which you take a Full Annuitization.

ALLOCATION OF PURCHASE PAYMENTS

We allocate your Purchase Payments to the Investment Choices you select. We ask that you allocate your money in whole percentages. Transfers of Contract Value between Investment Choices do not change the future allocation instructions. If you do not change your allocation instructions, we allocate any additional Purchase Payments according to your future Purchase Payment allocation instructions. Contracts with PRIME Plus Benefit may be subject to Investment Option allocation and transfer restrictions (see section 4, Protected Retirement Income Made Easy: PRIME Plus Benefit).

You can change your future allocation instructions at any time without fee, penalty or other charge upon written notice or telephone instructions to our Service Center, or by our website. We do not currently accept future Purchase Payment allocation instructions from you via email or other electronic communications, other than our website. These other communication methods may be available to you in the future. Changes to your future allocation instructions we receive in Good Order, in writing or by telephone at our Service Center, or by our website, are effective on the Business Day that we receive them. If you change your future allocation instructions by writing or telephone, and you are participating in the automatic investment plan, dollar cost averaging program or the flexible rebalancing program, your instructions must include directions for the plan/program. Future allocation instructions that you submit on our website do not change your allocation instructions for the automatic investment plan or flexible rebalancing program. To change your allocation instructions for this plan or program, you must send us your future allocation instructions by phone, fax or mail. We accept changes to future allocation instructions from any Owner unless you instruct otherwise. We may allow you to authorize someone else to change allocation instructions on your behalf.

We reserve the right to limit the number of Investment Options that you can invest in at any one time. Currently, you can invest in up to 15 of the Investment Options at any one time. We may change this in the future; however, we always allow you to invest in at least five Investment Options.

If you make additional Purchase Payments, we add this money to your Contract on the Business Day we receive it in Good Order. Our Business Day closes when regular trading on the New York Stock Exchange closes. If you submit a Purchase Payment to your Financial Professional, we do not begin processing the payment until we receive it. A Purchase Payment is “received” when it arrives at the address for mailing checks listed at the back of this prospectus regardless of how or when you submitted the payment. We forward Purchase Payments we receive at the wrong address to the last address listed at the back of this prospectus (1350 Energy Lane, Suite 200), which may delay processing.

TAX-FREE SECTION 1035 EXCHANGES

Subject to certain restrictions, you can make a “tax-free” exchange under Section 1035 of the Internal Revenue Code for all or a portion of one annuity contract for another, or all of a life insurance policy for an annuity contract. Before making an exchange, you should compare both contracts carefully. Remember that if you exchange a life insurance policy or annuity contract for the Contract described in this prospectus:

·	you might have to pay a withdrawal charge on your previous contract,

·	there is a new withdrawal charge period for this Contract,

·	other charges under this Contract may be higher (or lower),

·	the benefits may be different, and

·	you no longer have access to any benefits from your previous contract.

If the exchange does not qualify for Section 1035 treatment, you also may have to pay federal income tax, including a possible federal penalty tax, on the exchange. You should not exchange an existing life insurance policy or another annuity contract for this Contract unless you determine the exchange is in your best interest and not just better for the person selling you the Contract who generally earns a commission on each sale. You should consult a tax adviser to discuss the potential tax effects before making a 1035 exchange.

The Allianz Alterity® Variable Annuity Contract Prospectus – April 30, 2012

ACCUMULATION UNITS/COMPUTING THE CONTRACT VALUE

Your Contract Value in the subaccounts increase and decrease based upon the investment performance of the Investment Option(s) you choose. Your Contract Value is also affected by the charges of the Contract and any interest you earn on any general account Investment Choices. In order to keep track of your Contract Value in the Separate Account, we use a measurement called an Accumulation Unit. If you request variable Traditional Annuity Payments during the Annuity Phase of the Contract, we call this measurement an Annuity Unit.

When we receive a Purchase Payment, we credit your Contract with Accumulation Units for any portion of your Purchase Payment allocated to an Investment Option at the daily price next determined after receipt of the Purchase Payment at our Service Center. The daily purchase price is normally determined at the end of each Business Day and any Purchase Payment received at or after the end of the current Business Day receives the next Business Day’s price. The Purchase Payments you allocate to the Investment Options are actually placed into subaccounts. Each subaccount invests exclusively in one Investment Option. We determine the number of Accumulation Units we credit to your Contract by dividing the amount of the Purchase Payment allocated to a subaccount by the value of the corresponding Accumulation Unit.

Every Business Day, we determine the value of an Accumulation Unit for each subaccount by multiplying the Accumulation Unit value for the previous Business Day by the net investment factor for the current Business Day. We determine the net investment factor by:

·	Adding declared distributions (daily interest, dividends, long term gains and short term gains) for an Investment Option to its net asset value (NAV).

·	That result is then divided by the NAV the end of the prior business day to determine the overall daily performance in the Investment Option.

·	That calculation is then multiplied by one minus the current Business Day’s mortality and expense risk charge and any additional calendar days since the prior Business Day.

We calculate the value of each Accumulation Unit after regular trading on the New York Stock Exchange closes each Business Day. The value of an Accumulation Unit may go up or down from Business Day to Business Day. We calculate your Contract Value in the Separate Account by multiplying the Accumulation Unit value in each subaccount by the number of Accumulation Units for each subaccount and then adding those results together. (For example, the Contract Value on any Contract Anniversary reflects the number and value of the Accumulation Units at the end of the previous Business Day.)

Example

·	On Wednesday, we receive at our Service Center an additional Purchase Payment of $3,000 from you before the end of the Business Day.

·	When the New York Stock Exchange closes on that Wednesday, we determine that the value of an Accumulation Unit for the Investment Option you chose is $13.25.

We then divide $3,000 by $13.25 and credit your Contract on Wednesday night with 226.415094 subaccount Accumulation Units for the Investment Option you chose. If the $3,000 payment had been received at or after the end of the current Business Day, it would have received the next Business Day’s price.

3.	THE ANNUITY PHASE

You can apply your Contract Value to regular periodic payments (Annuity Payments). A Full Annuitization occurs when you apply the entire Contract Value to Annuity Payments. A Partial Annuitization occurs when you apply only part of your Contract Value to Annuity Payments.* The Payee receives the Annuity Payments. You receive tax reporting on the payments, whether or not you are the Payee. We may require proof of the Annuitant(s)’ age before we make any life contingent Annuity Payment. If you misstate the Annuitant(s)’ age or gender, the amount payable is the amount that would have been provided at the true age or gender.

*	GMIB Partial Annuitizations are based on the PB Value. They are not available after you exercise the GPWB, or if the PB Value is less than the Contract Value. For more information, see section 4, Protected Retirement Income Made Easy: PRIME Plus Benefit – PB Value.

The Allianz Alterity® Variable Annuity Contract Prospectus – April 30, 2012

INCOME DATE

The Income Date is the date Annuity Payments (GMIB Payments and/or Traditional Annuity Payments) begin. Your scheduled Income Date in your Contract is the maximum permitted Income Date allowed for your Contract, which is the first day of the calendar month following the later of: a) the Annuitant’s 90th birthday, or b) the tenth Contract Anniversary. Your scheduled Income Date may be different if the Contract is issued to a charitable remainder trust. An earlier Income Date or a withdrawal may be required to satisfy minimum required distribution rules under certain Qualified Contracts. You can make an authorized request for a different Income Date, but any such request is subject to applicable law and our approval. The extension available to you may vary depending on the Financial Professional you purchased your Contract through and your state of residence. Your Income Date must be the first day of a calendar month and must be at least two years after the Issue Date. To receive the annuity income protection of the GMIB, your Income Date must be within 30 days following a Contract Anniversary beginning seven Contract Years after the date PRIME Plus Benefit is added to your Contract, or seven Contract Years after the date of any 7% AIA reset (and certain other conditions must also be met). The Income Date cannot be later than what is permitted under applicable law.

NOTE: You must take a Full Annuitization of your total Contract Value on the maximum permitted Income Date if, at that time, your Contract Value is greater than zero. We base your Annuity Payments on your Contract Value. If you have not selected an Annuity Option we make payments under the default option described in the “Annuity Payments” discussion of this section. Upon Full Annuitization you no longer have a Contract Value, any periodic withdrawal or payments other than Annuity Payments (which includes GPWB Payments) stop, and the death benefit ends.

TRADITIONAL ANNUITY PAYMENTS

Annuity Payments offer a guaranteed income stream with certain tax advantages and are designed for Owners who are not concerned with continued access to Contract Value.

You can request Traditional Annuity Payments under Annuity Options 1-5 as:

·	a variable payout,

·	a fixed payout, or

·	a combination of both.

Annuity Option 6 is generally only available as a ten-year or more period certain for GMIB Payments. However, in Florida, Annuity Option 6 is also available for fixed Traditional Annuity Payments.

We base Annuity Payments on your Contract Value.

Under a fixed payout, all of the Annuity Payments are the same dollar amount (equal installments) except as provided under Annuity Option 3. Guaranteed fixed Traditional Annuity Payments are based on an interest rate and mortality table specified in your Contract. The payout rates for fixed Traditional Annuity Payments provided by your Contract are guaranteed and in no event do we use lower fixed payout rates to calculate your fixed Traditional Annuity Payments. However, we may use higher fixed payout rates to calculate fixed Traditional Annuity Payments than the guaranteed rates provided by your Contract.

If you choose variable Traditional Annuity Payments, the dollar amount of the payments depend upon the following factors.

·	The Contract Value on the Income Date.

·	The age of the Annuitant and any joint Annuitant on the Income Date.

·	The gender of the Annuitant and any joint Annuitant, where permitted.

·	The Annuity Option you select.

·	The assumed investment rate (AIR) you select.

·	Your Contract’s mortality table.

·	The future performance of the Investment Option(s) you select.

You can choose a 3%, 5% or 7% AIR. The 7% AIR is not available in all states. Using a higher AIR results in a higher initial variable Traditional Annuity Payment, but later payments increase more slowly when investment performance rises and decrease more rapidly when investment performance declines. If the actual performance of your Investment Options exceeds the AIR you selected, the variable Traditional Annuity Payments increase. Similarly, if the actual performance is less than the AIR you selected, the variable Traditional Annuity Payments decrease.

The Allianz Alterity® Variable Annuity Contract Prospectus – April 30, 2012

If you choose a variable payout, you can continue to invest in up to 15 of the available Investment Options. We may change this in the future, but we always allow you to invest in at least five Investment Options. If you do not tell us otherwise, we base variable Traditional Annuity Payments on the investment allocations that were in place on the Income Date. Currently, it is our business practice that your initial Traditional Annuity Payment must be $100 or more.

Each portion of the Contract that you apply to Traditional Annuity Payments ends upon the earliest of the following.

·	Under Annuity Options 1 and 3, the death of the last surviving Annuitant.

Under Annuity Options 2 and 4, the death of the last surviving Annuitant and expiration of the guaranteed period. If we make a lump sum payment of the remaining guaranteed Traditional Annuity Payments at the death of the last surviving Annuitant, this portion of the Contract ends upon payment of the lump sum.

·	Under Annuity Option 5, the death of the Annuitant and payment of any lump sum refund.

·	Under Annuity Option 6, the expiration of the specified period certain.

·	When the Contract ends.

ANNUITY OPTIONS

You can choose one of the Annuity Options described below or any other payment option to which we agree. Before the Income Date, you can select and/or change the Annuity Option with at least 30 days written notice to us. After Annuity Payments begin, you cannot change the Annuity Option.

Annuity Payments usually are lower if you select an Annuity Option that requires us to make more frequent Annuity Payments or to make payments over a longer period of time. If you choose life contingent Annuity Payments, payout rates for a younger Annuitant are lower than the payout rates for an older Annuitant and payout rates for life with a guaranteed period are typically lower than life only payments. Monthly payout rates are lower than annual payout rates, payout rates for a 20-year guaranteed period are less than payout rates for a 10-year guaranteed period, and payout rates for a 50-year-old Annuitant are less than payout rates for a 70-year-old Annuitant.

If you do not choose an Annuity Option before the Income Date, we make variable Annuity Payments to the Payee under Annuity Option 2 with five years of guaranteed monthly payments.

Option 1. Life Annuity. We make Annuity Payments during the life of the Annuitant, and the last payment is the one that is due before the Annuitant’s death. If the Annuitant dies shortly after the Income Date, the Payee may receive less than your investment in the Contract.

Option 2. Life Annuity with Payments Over 5, 10, 15 or 20 Years Guaranteed. We make Annuity Payments during the life of the Annuitant. If the Annuitant dies before the end of the selected guaranteed period, we continue to make Annuity Payments to the Payee for the rest of the guaranteed period. If the Payee and Annuitant were the same person, we make payments to the Owner. If the Payee, Annuitant and Owner were the same person, we make payments to the Beneficiary(s). If the Annuitant dies after the selected period, the last payment is the one that is due before the Annuitant’s death. Alternatively, the Owner may elect to receive a lump sum payment. The lump sum payment is equal to the present value of the remaining guaranteed Annuity Payments as of the date we receive proof of the Annuitant’s death and a payment election form at our Service Center. For variable Traditional Annuity Payments, in most states, we base the remaining guaranteed Traditional Annuity Payments on the current value of the Annuity Units and we use the assumed investment rate to calculate the present value. For fixed payouts, in most states, we calculate the present value of the remaining guaranteed Annuity Payments using the Statutory Calendar Year Interest Rate based on the NAIC Standard Valuation Law for Single Premium Immediate Annuities corresponding to the Income Date. However, some states require us to use different interest rates for variable and fixed payouts for the present value calculation. We require proof of the Annuitant’s death and return of the Contract before we make any lump sum payment. There are no additional costs associated with a lump sum payment.

Option 3. Joint and Last Survivor Annuity. We make Annuity Payments during the lifetimes of the Annuitant and the joint Annuitant. Upon the death of one Annuitant, Annuity Payments to the Payee continue during the lifetime of the surviving joint Annuitant, at a level of 100%, 75% or 50% selected by the Owner when he or she chose this Annuity Payment option. Annuity Payments stop with the last payment that is due before the last surviving joint Annuitant’s death. If both Annuitants die shortly after the Income Date, the Payee may receive less than your investment in the Contract. This Annuity Option is not available to you under a Partial Annuitization.

The Allianz Alterity® Variable Annuity Contract Prospectus – April 30, 2012

Option 4. Joint and Last Survivor Annuity with Payments Over 5, 10, 15 or 20 Years Guaranteed. We make Annuity Payments during the lifetimes of the Annuitant and the joint Annuitant. Upon the death of one Annuitant, Annuity Payments continue to the Payee during the lifetime of the surviving joint Annuitant at 100% of the amount that was paid when both Annuitants were alive. However, if both joint Annuitants die before the end of the selected guaranteed period, we continue to make Annuity Payments to the Payee for the rest of the guaranteed period. If the Payee and Annuitant were the same person, we make payments to the Owner. If the Payee, Annuitant and Owner were the same person, we make payments to the Beneficiary(s). If the Annuitant dies after the selected period, the last payment is the one that is due before the Annuitant’s death. Alternatively, the Owner may elect to receive a lump sum payment equal to the present value of the remaining guaranteed Annuity Payments as of the date we receive proof of the last surviving joint Annuitant’s death and a payment election form at our Service Center. For variable Traditional Annuity Payments, in most states, we base the remaining guaranteed Traditional Annuity Payments on the current value of the Annuity Units and we use the assumed investment rate to calculate the present value. For fixed payouts, in most states, we calculate the present value of the remaining guaranteed Annuity Payments using the Statutory Calendar Year Interest Rate based on the NAIC Standard Valuation Law for Single Premium Immediate Annuities corresponding to the Income Date. However, some states require us to use different interest rates for variable and fixed payouts for the present value calculation. We require proof of death of both joint Annuitants and return of the Contract before we make any lump sum payment. There are no additional costs associated with a lump sum payment. This Annuity Option is not available to you under a Partial Annuitization.

Option 5. Refund Life Annuity. We make Annuity Payments during the lifetime of the Annuitant, and the last payment is the one that is due before the Annuitant’s death. After the Annuitant’s death, the Payee may receive a lump sum refund. For a fixed payout, the amount of the refund equals the amount applied to this Annuity Option minus the total of all Annuity Payments made under this option.

For variable Traditional Annuity Payments, the amount of the refund depends on the current Investment Option allocation and is the sum of refund amounts attributable to each Investment Option. We calculate the refund amount for a given Investment Option using the following formula.

(A) x {[(B) x (C) x (D)/(E)] - [(D) x (F)]}

where:

(A)

Annuity Unit value of the subaccount for that given Investment Option when due proof of the Annuitant’s death is received at our Service Center.

(B)

The amount applied to variable Traditional Annuity Payments on the Income Date.

(C)

Allocation percentage in a given subaccount (in decimal form) when due proof of the Annuitant’s death is received at our Service Center.

(D)

The number of Annuity Units used in determining each variable Traditional Annuity Payment attributable to that given subaccount when due proof of the Annuitant’s death is received at our Service Center.

(E)

Dollar value of first variable Traditional Annuity Payment.

(F)

Number of variable Traditional Annuity Payments made since the Income Date.

We base this calculation upon the allocation of Annuity Units actually in force at the time due proof of the Annuitant’s death is received at our Service Center. We do not pay a refund if the total refund determined using the above calculation is less than or equal to zero.

EXAMPLE

·	The Contract has one Owner who is a 65-year-old male. He elects variable Annuity Payments under Annuity Option 5 based on a Contract Value of $100,000 (item “B”).

·	The Owner who is also the Annuitant allocates all the Contract Value to one Investment Option, so the allocation percentage in this subaccount is 100% (item “C”).

·	The purchase rate for the selected assumed investment rate is $6.15 per month per thousand dollars of Contract Value annuitized. Therefore, the first variable Annuity Payment is: $6.15 x ($100,000 / $1,000) = $615 (item “E”).

·	Assume the Annuity Unit value on the Income Date is $12, then the number of Annuity Units used in determining each Annuity Payment is: $615 / $12 = 51.25 (item “D”).

·	The Owner who is also the Annuitant dies after receiving 62 Annuity Payments (item “F”) and the Annuity Unit value for the subaccount on the date the Service Center receives due proof of death is $10 (item “A”).

The Allianz Alterity® Variable Annuity Contract Prospectus – April 30, 2012

We calculate the refund as follows:

(A) x {[(B) x (C) x (D)/(E)] – [(D) x (F)]} = 10 x {[100,000 x 1.00 x (51.25 / 615)] – [51.25 x 62]} =

10 x {[100,000 x 0.083333] – 3,177.50} = 10 x {8,333.33 – 3,177.50} = 10 x 5,155.83 = $51,558.30

NOTE: For Contracts issued in Oregon, liquidations are available under Annuity Option 2 (life annuity with payments over 5, 10, 15 or 20 years guaranteed) and Annuity Option 4 (joint and last survivor with payments over 5, 10, 15 or 20 years guaranteed) if you select variable Traditional Annuity Payments. While an Annuitant is alive and the number of variable Traditional Annuity Payments made is less than the guaranteed number of payments elected, you may request a partial withdrawal (partial liquidation) of up to 75% of the total liquidation value, less any previously liquidated amounts. The total liquidation value is equal to the present value of the remaining guaranteed variable Traditional Annuity Payments, to the end of the guaranteed period, using the selected assumed investment rate as the interest rate for the present value calculation. The minimum amount that you can liquidate is $500, or the remaining portion of the total liquidation value available (whichever is less). We process partial liquidations within seven days after your written request is received in good order at our Service Center. After a partial liquidation, we reduce the subsequent variable Traditional Annuity Payments during the remaining guaranteed period by the percentage of liquidation value withdrawn. After we have made the guaranteed number of variable Traditional Annuity Payments, we restore the number of Annuity Units used in calculating the variable Traditional Annuity Payments to their original values as if no liquidation had taken place.

Option 6. Specified Period Certain Annuity. This option is generally only available as a ten-year or more period certain for GMIB Payments. However, in Florida, it is also available for fixed Traditional Annuity Payments based on your Contract Value. Under this option, we make Annuity Payments for a specified period of time. You select the specified period, which must be a whole number of years from five to 30. If the last Annuitant dies before the end of the specified period certain, then we continue to make Annuity Payments to the Payee for the rest of the period certain. If the Payee and Annuitant were the same person, we make payments to the Owner. If the Payee, Annuitant and Owner were the same person, we make payments to the Beneficiary(s). If the Annuitant dies after the selected period, the last payment is the one that is due before the Annuitant’s death. This Annuity Option is not available to you under a Partial Annuitization.

NOTE: For Owners that are younger than age 59½, your Annuity Payments under Annuity Option 6 may be subject to a 10% federal penalty tax if the specified period certain you select is less than your life expectancy.

PARTIAL ANNUITIZATION

Partial Annuitizations are not available to everyone. There can be only one Owner, the Owner must be the Annuitant, and we do not allow the Owner to add a joint Annuitant.

You can take Partial Annuitizations as Traditional Annuity Payments after the second Contract Anniversary, and/or as GMIB Payments (if applicable) beginning seven Contract Years after the date PRIME Plus Benefit is added to your Contract, or after the date of any 7% AIA reset. However, if your Contract includes PRIME Plus Benefit, you cannot take a Partial Annuitization after you exercise the GPWB, and you cannot take a GMIB Partial Annuitization if the PB Value is less than the Contract Value. Partial Annuitizations are also not available after you take a Full Annuitization. If you take a Full Annuitization, the Accumulation Phase of the Contract ends.

You can take one Partial Annuitization every 12 months. The maximum number of annuitizations we allow at any one time is five. We do not allow you to allocate additional Contract Value (or PB Value) to an existing stream of Annuity Payments. You also cannot transfer any amounts allocated to a stream of Annuity Payments to any other portion of the Contract. If you have four Partial Annuitizations and you would like to take a fifth, you must take a Full Annuitization and apply the entire remaining Contract Value to Annuity Payments, and the Accumulation Phase of the Contract ends. The amounts you apply to a Partial Annuitization and Annuity Payments we make under a Partial Annuitization are not subject to the withdrawal charge.

A Partial Annuitization decreases the Contract Value, the Withdrawal Charge Basis, the GMDB value, and for Contracts with PRIME Plus Benefit, it also decreases the PB Value. This decreases the amounts available for withdrawals (including GPWB Payments), additional Annuity Payments (including GMIB Payments), and payment of the death benefit. The type of Annuity Payments (traditional or GMIB) you request under a Partial Annuitization reduces the PB Value and GMDB values differently. For more information, see the discussion of the PB Value in section 4, Protected Retirement Income Made Easy: PRIME Plus Benefit; section 7, Expenses – Withdrawal Charge; and see the discussion of the GMDB that applies to your Contract in section 10, Death Benefit.

The Allianz Alterity® Variable Annuity Contract Prospectus – April 30, 2012

For tax purposes, Annuity Payments we make under a Partial Annuitization are treated as partial withdrawals and not as annuity payments. However, once the entire Contract Value has been reduced to zero, we intend to treat all Annuity Payments we make after that as annuity payments (and not withdrawals) for tax purposes. If you take a Partial Annuitization(s) and subsequently take a full withdrawal of the entire remaining Contract Value, all Annuity Payments we make on or after the Business Day you take the withdrawal, should be treated as annuity payments (and not withdrawals) for tax purposes.

NOTE: A recent tax law change allows a Partial Anuitization under a life Annuity Option on a Non-Qualified Contract to receive the same income tax treatment as a Full Annuitization. However, this income tax treatment does not apply to a Partial Annuitization on a Qualified Contract. You should consult a tax adviser before requesting a Partial Annuitization.

4.	PROTECTED RETIREMENT INCOME MADE EASY: PRIME PLUS BENEFIT

PRIME Plus Benefit is not available in the state of Oregon.

PRIME Plus Benefit provides a guaranteed minimum fixed income stream and is designed for Owners who want flexibility in the way they access income and can wait at least seven years before taking income.

PRIME Plus Benefit includes a Guaranteed Minimum Income Benefit (GMIB) and a Guaranteed Partial Withdrawal Benefit (GPWB) and carries an additional M&E charge. We calculate the additional M&E charge as discussed in section 7, Expenses – Separate Account Annual Expenses. These benefits are provided as a package and are not available individually. The additional M&E charge for PRIME Plus Benefit reduces the performance of your selected Investment Options, and in the long term may provide less Contract Value to you than would otherwise be available from the same Contract without PRIME Plus Benefit. PRIME Plus Benefit does not create Contract Value or guarantee the performance of any Investment Option.

We designed PRIME Plus Benefit to give you options for turning your accumulated retirement assets into a stream of retirement income. GMIB provides a guaranteed minimum fixed income in the form of Annuity Payments (GMIB Payments). Depending on the Annuity Option you select, GMIB can provide guaranteed lifetime income, but if the Annuitant(s) die shortly after the Income Date, the Payee may receive less than your investment in the Contract. GPWB provides a guaranteed minimum amount of income in the form of annual partial withdrawals (GPWB Payments). However, GPWB Payments are not guaranteed for life and you could outlive your payment stream. You must wait seven complete Contract Years after the date PRIME Plus Benefit is added to your Contract, or seven complete Contract Years after the date of any 7% AIA reset, before you can exercise a GMIB or GPWB and they can only be exercised within 30 days after a Contract Anniversary.

Because PRIME Plus Benefit carries a higher Contract expense it may not be appropriate if you:

·	do not intend to exercise either GMIB or GPWB,

·	do not intend to hold the Contract for the entire seven year waiting period, or

·	intend to take a Full Annuitization before the end of the seven year waiting period.

If your Contract includes PRIME Plus Benefit and you do not exercise either GMIB or GPWB, you incur higher Contract expenses without receiving any advantage from PRIME Plus Benefit. Be sure to discuss with your Financial Professional whether or not PRIME Plus Benefit is appropriate for your situation.

Contracts with PRIME Plus Benefit may be subject to Investment Option allocation and transfer restrictions if limits on volatility or risk are exceeded.

The Allianz Alterity® Variable Annuity Contract Prospectus – April 30, 2012

ADDING PRIME PLUS BENEFIT TO YOUR CONTRACT

PRIME Plus Benefit is available for selection once before the older Owner’s 76th birthday (or the Annuitant’s 76th birthday if the Contract is owned by a non-individual). You cannot add PRIME Plus Benefit to a Contract after the older Owner reaches age 76. PRIME Plus Benefit may not be appropriate for Owners who are nearing age 75 because benefit values are limited after age 81. You can select PRIME Plus Benefit within 30 days before a Contract Anniversary by completing the appropriate form. We process your request to add PRIME Plus Benefit on the Contract Anniversary* that occurs after we receive your request in good order at our Service Center and the rider effective date is that Contract Anniversary. If you add PRIME Plus Benefit to your Contract, we increase the M&E charge as of the rider effective date. We guarantee that it is not more than the maximum M&E charge for Contracts with PRIME Plus Benefit that is set forth in the Fee Tables. Because we change the M&E charge, we change the number of Accumulation Units so that the Contract Value on the rider effective date remains the same. Because the performance of the Investment Options causes the Accumulation Unit values to fluctuate, the adjustment to the number of Accumulation Units may be positive or negative.

*	Or on the next Business Day if the Contract Anniversary is not a Business Day.

NOTE: For Contracts issued in Pennsylvania, PRIME Plus Benefit rider has a ten-day right-to-examine period. If you change your mind about PRIME Plus Benefit, you can remove it from your Contract within ten days after receiving the rider. If you remove PRIME Plus Benefit rider from your Contract, we treat the rider as if we had not issued it and it is not available for future selection.

REMOVING PRIME PLUS BENEFIT FROM YOUR CONTRACT

You can elect to remove PRIME Plus Benefit from the Contract after selecting it any time before you exercise GMIB or GPWB. You cannot remove PRIME Plus Benefit after you exercise GMIB or GPWB and if you remove PRIME Plus Benefit from the Contract, it is not available for future selection. You can request the removal of PRIME Plus Benefit within 30 days before a Contract Anniversary by completing the appropriate form. We process your request on the Contract Anniversary* that occurs immediately after we receive your request in good order at our Service Center. If you remove PRIME Plus Benefit from your Contract, we decrease the M&E charge to equal the charge shown in the Fee Table for a Contract with your selected death benefit as of the rider removal date. Because we decrease the M&E charge, we change the number of Accumulation Units so that the Contract Value on the rider removal date remains the same. Because the performance of the Investment Options causes the Accumulation Unit values to fluctuate, the adjustment to the number of Accumulation Units may be positive or negative.

*	Or on the next Business Day if the Contract Anniversary is not a Business Day.

Although you cannot remove PRIME Plus Benefit from your Contract after you exercise GPWB or GMIB, you can end GPWB by electing to stop GPWB Payments and instead do one of the following.

·	Take an Excess Withdrawal of the entire Contract Value, less any withdrawal charge (available at any time).

·	Request Traditional Annuity Payments under a Full Annuitization based on the entire Contract Value (available at any time).

·	Request GMIB Payments under a Full Annuitization based on the entire remaining PB Value (only available within 30 days following a Contract Anniversary and before we make the next GPWB Payment).

If you take an Excess Withdrawal of the entire Contract Value, the Contract ends and you may receive less money than you would have received under GPWB. If you request fixed Traditional Annuity Payments or GMIB Payments, GPWB ends and we no longer assess the Separate Account annual expense on that portion of the Contract. If you request variable Traditional Annuity Payments, GPWB ends and we reduce the Separate Account annual expense to 1.50% on that portion of the Contract.

Although you can elect to stop GPWB Payments, you cannot elect to stop GMIB Payments. If you do elect to stop GPWB Payments:

·	GPWB ends,

·	the Accumulation Phase of the Contract ends,

·	GMDB ends, and

·	if you request Annuity Payments, that portion of the Contract ends as indicated in section 3, The Annuity Phase.

The Allianz Alterity® Variable Annuity Contract Prospectus – April 30, 2012

INVESTMENT OPTION ALLOCATION AND TRANSFER RESTRICTIONS UNDER PRIME PLUS BENEFIT

These restrictions apply to Contracts with PRIME Plus Benefit as described below. By selecting PRIME Plus Benefit, you allow us to reallocate your Contract Value in accordance with the procedures described in this section and in your Contract.

Contracts with PRIME Plus Benefit may be subject to Investment Option allocation and transfer restrictions. We put these restrictions in place to support PRIME Plus Benefit’s guarantees, and not to meet your investment objectives. To the extent that these restrictions limit your investment flexibility, they may limit the upside potential to your Investment Option returns, which may limit your Contract Value and PB Value.

For Contracts with PRIME Plus Benefit, we restrict your selection and allocation of certain Investment Options if any of the following limits on volatility or risk are triggered based on aggregate Investment Option assets held by Contracts with PRIME Plus Benefit:

·	the average one year volatility* is greater than 15%.

·	the average three year volatility* is greater than 15%.

·	the average one year risk** is greater than 75%.

·	the average three year risk** is greater than 75%.

*	As measured by standard deviation. This means that if the standard deviation in regard to aggregate Owner assets in the Investment Options held by Contracts with PRIME Plus Benefit is greater than 0.15, this limit will be exceeded.

As measured by the beta compared to the Standard & Poor’s® 500 Composite Price Index (S&P 500®). This means that if the beta in regard to aggregate Owner assets in the Investment Options held by Contracts with PRIME Plus Benefit as compared to the S&P 500® is greater than 0.75, this limit will be exceeded.

We monitor these limits on volatility and risk on the first of each calendar month, or the next Business Day if the first is not a Business Day. If any of these limits are triggered, we may implement the following restrictions based on the Investment Option groups:

·	Group A Investment Options are no longer available to you.

·	You cannot have more than 70% of your total Contract Value in Group B Investment Options.

·	There are no restrictions on allocations to Group C Investment Options.

Currently, there are no Investment Options available in Groups A or B.

Group C Investment Options

AZL Balanced Index Strategy Fund

AZL Franklin Templeton Founding Strategy Plus Fund

AZL Fusion Balanced Fund

AZL Fusion Conservative Fund

AZL Fusion Moderate Fund

AZL Gateway Fund

AZL Growth Index Strategy Fund

AZL Invesco Equity and Income Fund

AZL Money Market Fund

BlackRock Global Allocation V.I. Fund

Fidelity VIP FundsManager 50% Portfolio

Fidelity VIP FundsManager 60% Portfolio

Franklin High Income Securities Fund

Franklin Income Securities Fund

Franklin U.S. Government Fund

PIMCO VIT All Asset Portfolio

PIMCO VIT Emerging Markets Bond Portfolio

PIMCO VIT Global Advantage Strategy Bond Portfolio

PIMCO VIT Global Bond Portfolio (Unhedged)

PIMCO VIT Global Multi-Asset Portfolio

PIMCO VIT High Yield Portfolio

PIMCO VIT Real Return Portfolio

PIMCO VIT Total Return Portfolio

PIMCO VIT Unconstrained Bond Portfolio

Templeton Global Bond Securities Fund

If Investment Options are made available in Groups A or B in the future, the following restrictions would apply:

If any of the volatility or risk limits are triggered, we send you written notice at least 30 days before implementing any restrictions. At that time, we ask you to reallocate any Contract Value you have in Group A Investment Options, and any amount in excess of 70% of your Contract Value you have in Group B Investment Options. We implement restrictions 60 days after any of the volatility or risk limits are triggered. If we receive instructions from you before the implementation date, we reallocate your Contract Value according to those instructions. If we do not receive any instructions from you by the implementation date, or if your Contract is still in violation of the allocation or transfer restrictions, we reallocate your Contract Value on the implementation date in the following order.

The Allianz Alterity® Variable Annuity Contract Prospectus – April 30, 2012

First, if you have Contract Value in Group A Investment Options:

If your most recent allocation instructions include both Group B and Group C Investment Options, we transfer all Contract Value out of Group A Investment Options and apply it to Group B and Group C Investment Options according to your most recent allocation instructions (excluding any allocations you made to Group A Investment Options).

If your most recent allocation instructions include only Group B Investment Options, we transfer all Contract Value out of Group A Investment Options and apply it to Group B Investment Options according to your most recent allocation instructions (excluding any allocations you made to Group A Investment Options).

If your most recent allocation instructions include only Group C Investment Options, we transfer all Contract Value out of Group A Investment Options and apply it to Group C Investment Options according to your most recent allocation instructions (excluding any allocations you made to Group A Investment Options).

·	If your most recent allocation instructions do not include any Group B or Group C Investment Options, we transfer all Contract Value out of Group A Investment Options and apply it to the AZL Money Market Fund.

Then, if you have more than 70% of total Contract Value in Group B Investment Options (including any Contract Value transferred out of Group A Investment Options as previously described):

If your most recent allocation instructions include any Group C Investment Options, we transfer the excess Contract Value* out of Group B Investment Options proportionately and apply it to Group C Investment Options according to your most recent allocation instructions (excluding any allocations you made to Group A and Group B Investment Options).

·	If your most recent allocation instructions do not include any Group C Investment Options, we transfer the excess Contract Value out of Group B Investment Options and apply it to the AZL Money Market Fund.

*	The amount of Contract Value in Group B Investment Options that is in excess of 70% of the total Contract Value.

After we implement the allocation or transfer restrictions, Group A Investment Options are no longer available for allocations or transfers, and we only allow you to make allocations or transfers to Group B Investment Options as long as the Contract Value in Group B options would be 70% or less of your total Contract Value after the allocation or transfer. In addition, we monitor your Contract Value in Group B Investment Options to ensure that it does not exceed 70% of the total Contract Value on the first of each calendar month, or the next Business Day if the first is not a Business Day. If you have more than 70% of the total Contract Value in Group B Investment Options we reallocate your Contract Value as indicated above without providing any advance written notice. Once we implement these restrictions, they remain in effect until GMIB and GPWB end. You may continue to make allocations or transfers to Group C Investment Options after we implement these restrictions without limitation as to the amount of Contract Value.

We do not recategorize the Investment Options currently available under the Contract, but we may add or remove Investment Options from your Contract in the future. If we do, we provide written notice regarding changes to the Investment Option groupings. We secure all necessary SEC and other governmental approvals before adding or removing an Investment Option.

PB VALUE

GMIB and/or GPWB Payments under PRIME Plus Benefit are based on the PB Value. You can only access the PB Value by exercising GMIB or GPWB.

The PB Value before the date of any Owner’s death or exercise of GPWB is equal to either:

·	the 7% AIA;

·	the MAV; or

·	the Contract Value.

If you exercise GMIB, the PB Value is equal to the MAV if it is greater than the 7% AIA. However, if the 7% AIA is greater than the MAV, you can decide whether to set the PB Value equal to the 7% AIA or the MAV.

If you exercise GPWB and select the 5% payment option, the PB Value is equal to the greater of: a) the MAV, b) the 7% AIA, or c) the Contract Value as of the most recent Contract Anniversary, less any withdrawals and adjusted for any Partial Annuitization taken since that anniversary. If you exercise GPWB and select the 10% payment option the PB Value is equal to the greater of: a) the MAV, or b) the Contract Value as of the most recent Contract Anniversary, less any withdrawals and adjusted for any Partial Annuitization taken since that anniversary.

The Allianz Alterity® Variable Annuity Contract Prospectus – April 30, 2012

The 7% AIA may be more limited than the MAV because:

·	under the 7% AIA, the 7% increase is only applied to Purchase Payments received in the first five Contract Years and the 7% AIA is subject to a maximum of two times Purchase Payments received in the first five Contract Years;

·	under GMIB, there are fewer available Annuity Options; and

·	under GPWB, you can only receive GPWB Payments of up to 5% of the PB Value each year.

If you take a GMIB Partial Annuitization, the 7% AIA and MAV decrease, but continue to be calculated. If you take a GMIB Full Annuitization or exercise GPWB, we establish a PB Value and the 7% AIA and MAV end. After you exercise GPWB, only the PB Value remains and continues to be calculated.

7% AIA Resets

Before the older Owner’s 80th birthday (or the Annuitant’s 80th birthday if the Contract is owned by a non-individual) and before you exercise either GPWB or GMIB, you can reset the 7% AIA to equal the Contract Value if that amount is greater than the 7% AIA on any Contract Anniversary. You cannot request a reset: a) after the older Owner reaches age 80 (or after the Annuitant reaches age 80 if the Contract is owned by a non-individual), b) after you exercise GPWB or GMIB (including taking a GMIB Partial Annuitization), c) after you take a Full Annuitization, or d) if the Contract Value is less than the 7% AIA. If you reset the 7% AIA, you have to wait seven Contract Years from the reset anniversary before you can begin GMIB or GPWB Payments. You can request a reset within 30 days following a Contract Anniversary. If your request is in good order, we process it as of the current Contract Anniversary* and we increase the 7% AIA to equal the Contract Value on that anniversary. If you reset the 7% AIA, on the reset anniversary we change the additional M&E charge for PRIME Plus Benefit to the additional M&E charge that is in effect for a newly issued Contract as of the reset anniversary. We guarantee that the M&E charge is not more than the maximum M&E charge for Contracts with PRIME Plus Benefit that is set forth in the Fee Tables. If we change the M&E charge, we change the number of Accumulation Units so that the Contract Value on the reset anniversary remains the same. Because the performance of the Investment Options causes the Accumulation Unit values to fluctuate, the adjustment to the number of Accumulation Units may be positive or negative.

*	Or on the next Business Day if the Contract Anniversary is not a Business Day.

Calculating the 7% AIA

If the rider effective date is the Issue Date, the 7% AIA on the Issue Date is equal to the Purchase Payment received on the Issue Date. If the rider effective date occurs after the Issue Date, or if you reset the 7% AIA, the 7% AIA on the rider effective date or reset anniversary is equal to the Contract Value on that date.

On each Business Day other than a Contract Anniversary, the 7% AIA is equal to:

·	its value on the immediately preceding Business Day,

·	plus any additional Purchase Payments received that day,

·	reduced proportionately by the percentage of Contract Value applied to a traditional Partial Annuitization or withdrawn that day (including any withdrawal charge), and

·	if you took a GMIB Partial Annuitization that day based on the:

–

7% AIA, we reduce the 7% AIA by the dollar amount applied to GMIB Payments.

–

MAV, we reduce the 7% AIA proportionately by the percentage of the MAV applied to GMIB Payments.

For each of the first five Contract Anniversaries that occur after the later of the rider effective date or the reset anniversary and before the older Owner’s 81st birthday (or the Annuitant’s 81st birthday if the Contract is owned by a non-individual), the 7% AIA is equal to its value on the immediately preceding Business Day increased by 7%. We then process any transactions we received on that Contract Anniversary (such as additional Purchase Payments, withdrawals and Partial Annuitizations) in the same way that we do on each Business Day other than a Contract Anniversary.

For each Contract Anniversary that occurs after the fifth, and after the later of the rider effective date or the reset anniversary, and before the older Owner’s 81st birthday (or the Annuitant’s 81st birthday if the Contract is owned by a non-individual), the 7% AIA is equal to the sum of a) plus b) where:

a)	is all Purchase Payments received on or after the later of the fifth Contract Anniversary or the reset anniversary.

b)	is the difference of i) minus ii) with the result increased by 7% where:

is the 7% AIA on the immediately preceding Business Day, and

ii)

is all Purchase Payments received on or after the later of the fifth Contract Anniversary or the reset anniversary.

The Allianz Alterity® Variable Annuity Contract Prospectus – April 30, 2012

We then process any transactions we received on that Contract Anniversary (such as additional Purchase Payments, withdrawals and Partial Annuitizations) in the same way that we do on each Business Day other than a Contract Anniversary.

Beginning with the Contract Anniversary that occurs on or after the older Owner’s 81st birthday (or the Annuitant’s 81st birthday if the Contract is owned by a non-individual), we calculate the 7% AIA in the same way that we do on each Business Day other than a Contract Anniversary.

If the rider effective date or reset anniversary occurs before the fifth Contract Anniversary, we limit the 7% AIA to the following maximum.

If the rider effective date is the Issue Date, the 7% AIA cap on the Issue Date is equal to two times the initial Purchase Payment received on the Issue Date. If the rider effective date occurs after the Issue Date, or if you reset the 7% AIA, the 7% AIA cap on the rider effective date or reset anniversary is equal to two times the Contract Value on that date.

On each Business Day before the fifth Contract Anniversary, the 7% AIA cap is equal to:

·	its value on the immediately preceding Business Day,

·	plus two times any additional Purchase Payments received that day,

·	reduced proportionately by the percentage of any Contract Value applied to a traditional Partial Annuitization or withdrawn that day (including any withdrawal charge), and

·	reduced proportionately by the percentage of the PB Value applied to a GMIB Partial Annuitization that day.

Beginning on the fifth Contract Anniversary, the 7% AIA cap no longer increases unless you reset the 7% AIA, but does decrease if you take a partial withdrawal or Partial Annuitization in the same way that it does on each Business Day before the fifth Contract Anniversary.

If the rider effective date or reset anniversary occurs on or after the fifth Contract Anniversary, we limit the 7% AIA to the following maximum.

On the rider effective date or the reset anniversary, the 7% AIA cap is equal to two times the Contract Value on that date. The 7% AIA cap no longer increases after the rider effective date or the reset anniversary unless you reset the 7% AIA, but does decrease if you take a partial withdrawal or Partial Annuitization as follows:

·	reduced proportionately by the percentage of Contract Value applied to a traditional Partial Annuitization or withdrawn (including any withdrawal charge) for each traditional annuitization or withdrawal taken, and

·	reduced proportionately by the percentage of the PB Value applied to each GMIB Partial Annuitization.

Calculating the MAV

If the rider effective date is the Issue Date, the MAV on the Issue Date is initially equal to the Purchase Payment received on the Issue Date. If the rider effective date is after the Issue Date, the MAV on the rider effective date is initially equal to the Contract Value on the rider effective date.

On each Business Day other than a Contract Anniversary, the MAV is equal to:

·	its value on the immediately preceding Business Day,

·	plus any additional Purchase Payments received that day,

·	reduced proportionately by the percentage of Contract Value applied to a traditional Partial Annuitization or withdrawn that day (including any withdrawal charge), and

·	if you take a GMIB Partial Annuitization that day based on the:

–

MAV, we reduce the MAV by the dollar amount applied to GMIB Payments, and

–

the 7% AIA, we reduce the MAV proportionately by the percentage of the 7% AIA applied to GMIB Payments.

On each Contract Anniversary before the older Owner’s 81st birthday (or the Annuitant’s 81st birthday if the Contract is owned by a non-individual), the MAV is equal to the greater of its value on the immediately preceding Business Day, or the Contract Value that occurs on that Contract Anniversary before we process any transactions. We then process any transactions we received on that Contract Anniversary (such as additional Purchase Payments, withdrawals, and Partial Annuitizations) in the same way that we do on each Business Day other than a Contract Anniversary.

The Allianz Alterity® Variable Annuity Contract Prospectus – April 30, 2012

Beginning with the Contract Anniversary that occurs on or after the older Owner’s 81st birthday (or the Annuitant’s 81st birthday if the Contract is owned by a non-individual), we calculate the MAV in the same way that we do on each Business Day other than a Contract Anniversary.

Any traditional Partial Annuitizations or withdrawals you take may reduce the 7% AIA or the MAV by more than the amount annuitized or withdrawn. If the Contract Value at the time of annuitization or withdrawal is less than the 7% AIA (or MAV as appropriate), we deduct more than the amount annuitized or withdrawn from the 7% AIA (or MAV).

If you exercise GPWB and select the 5% payment option, the PB Value only increases after you begin receiving GPWB Payments as a result of any step ups. If you exercise GPWB and select the 10% payment option, the PB Value stops increasing on the date you begin receiving GPWB Payments. In addition, if you exercise GPWB, the PB Value decreases:

·	on a dollar for dollar basis for withdrawals (GPWB Payments and Excess Withdrawals) that do not exceed the GPWB Maximum; and

·	proportionately by the percentage of any Contract Value taken as a withdrawal (including both GPWB Payments and Excess Withdrawals), including any withdrawal charge, for each withdrawal you take that exceeds the GPWB Maximum.

Please see Appendix B for examples of the calculations of the PB Value.

Step Ups Under GPWB With the 5% Payment Option

Step ups are not available under the 10% payment option and are not available once the older Owner reaches age 91. On every third Contract Anniversary after you exercise GPWB, if you elect the 5% payment option, we automatically step up the PB Value to equal the Contract Value, if that amount is greater than the PB Value.

Step ups continue to happen automatically until the earliest of: a) the older Owner’s 91st birthday (or the Annuitant’s 91st birthday if the Contract is owned by a non-individual), or b) the PB Value is zero.

If we step up the PB Value, we also step up the GPWB Maximum to equal 5% of the increased PB Value if that amount is greater than the current GPWB Maximum. However, we do not also automatically step up the GPWB Payment. If we increase the GPWB Maximum, you can request to increase the amount of next year’s GPWB Payments by submitting a written request to our Service Center. (For more information, please see the discussion of “GPWB Payments” later in this section.)

Step ups increase the total amount available to you under GPWB. When the amount available to you is increased by a step up, the length of time over which you can receive GPWB Payments also increases, unless you elect to increase your GPWB Payments. Step ups may or may not increase the GPWB Maximum, as demonstrated in Appendix C – GPWB Under PRIME Plus Benefit. Appendix C contains examples showing the effect of the step up available under the 5% payment option and the effect of an Excess Withdrawal on GPWB Payments.

USING PRIME PLUS BENEFIT

GPWB guarantees a minimum amount of income in the form of partial withdrawals (GPWB Payments) during the Accumulation Phase. In addition, if you select the 5% GPWB Payment option, we increase (step up) the total amount of money you can withdraw (the PB Value) on every third Contract Anniversary after you exercise GPWB and before the older Owner’s 91st birthday to “lock in” any gains that are present in the remaining Contract Value as long as there is PB Value remaining in the Contract.

GMIB guarantees a minimum amount of fixed income in the form of Annuity Payments (GMIB Payments) during the Annuity Phase. Depending on the Annuity Option you select, GMIB can provide guaranteed lifetime income, but if the Annuitant(s) die shortly after the Income Date, the Payee may receive less than your investment in the Contract.

GPWB and GMIB do not create Contract Value or guarantee the performance of any Investment Option. Be sure to discuss with your Financial Professional if GPWB and GMIB are appropriate for your situation.

You must hold your Contract for seven complete Contract Years after the date PRIME Plus Benefit is added to your Contract, or after the date of any 7% AIA reset, before you can exercise GPWB or GMIB and you can only exercise GPWB or GMIB within 30 days following a Contract Anniversary. You cannot exercise GPWB or GMIB before the expiration of the seven-year waiting period.

The Allianz Alterity® Variable Annuity Contract Prospectus – April 30, 2012

If you exercise GPWB:

·	You can no longer remove PRIME Plus Benefit from the Contract.

·	You can no longer make additional Purchase Payments to the Contract and the automatic investment plan (AIP) is no longer available to you. If you are participating in AIP, your participation ends.

·	Partial Annuitizations are no longer available.

·	The additional M&E charge for PRIME Plus Benefit continues until both GPWB and GMIB end.

·	If you have Enhanced GMDB or Earnings Protection GMDB, the additional M&E charge for GMDB continues as long as the Enhanced GMDB value or the Earnings Protection GMDB value is greater than zero.

·	The partial withdrawal privilege is no longer available to you; however, you can still take GPWB Payments and Excess Withdrawals up to the annual GPWB Maximum without a withdrawal charge.

·	The systematic withdrawal and minimum distribution programs are no longer available to you and if you are participating in these programs, your participation ends.

·	The Contract Value continues to fluctuate as a result of market performance, and decreases on a dollar for dollar basis with each GPWB Payment and any Excess Withdrawals.

·	The GMDB value no longer increases, and each GPWB Payment and any Excess Withdrawals reduces the GMDB value proportionately by the percentage of Contract Value withdrawn.

·	The PB Value no longer increases if you elect the 10% payment option and 7% AIA resets are no longer available.

·	If you select the 5% payment option, the PB Value may increase (step up) on every third Contract Anniversary after you exercise GPWB and before the older Owner’s 91st birthday as long as there is PB Value. If we step up the PB Value we may also step up the GPWB Maximum.

·	Each withdrawal (GPWB Payment and/or Excess Withdrawal) reduces the PB Value as follows:

–

withdrawals taken during the Contract Year that do not exceed the GPWB Maximum reduce the PB Value on a dollar for dollar basis, and

–

withdrawals taken during the Contract Year that do exceed the GPWB Maximum reduce the PB Value proportionately by the percentage of Contract Value withdrawn (including any withdrawal charge).

Withdrawals (GPWB Payments and/or Excess Withdrawals) that do not exceed the annual GPWB Maximum do not reduce the Withdrawal Charge Basis, but withdrawals that exceed the annual GPWB Maximum (including GPWB Payments) may be subject to a withdrawal charge and reduces the Withdrawal Charge Basis, as set out in section 7, Expenses – Withdrawal Charge.

Excess Withdrawals do not affect the GPWB Payment amount or frequency, but they may decrease the time over which you receive GPWB Payments.

If you exercise GMIB under a Full Annuitization:

·	You can no longer remove PRIME Plus Benefit from the Contract and 7% AIA resets are no longer available.

·	The Accumulation Phase ends and the Annuity Phase begins.

·	The portion of the Contract that you apply to GMIB is no longer subject to the Separate Account annual expense, but any portion of the Contract that has been applied to variable Traditional Annuity Payments continues to be subject to a 1.50% Separate Account annual expense.

·	If you have not exercised GPWB, it is no longer available to you, and you cannot make additional Purchase Payments to the Contract.

·	If you exercised GPWB, GPWB Payments stop and GPWB ends.

·	GMDB ends.

The Allianz Alterity® Variable Annuity Contract Prospectus – April 30, 2012

If you exercise GMIB under a Partial Annuitization*:

·	You can no longer remove PRIME Plus Benefit from the Contract and 7% AIA resets are no longer available.

·	The Annuity Phase begins and the Accumulation Phase continues.

The portion of the Contract that you apply to GMIB is no longer subject to the Separate Account annual expense, but any portion of the Contract that is in the Accumulation Phase or that has been applied to variable Traditional Annuity Payments continue to be subject to the appropriate Separate Account annual expense.

·	GPWB continues to be available to you.

·	If any portion of the Contract is still in the Accumulation Phase, you may be able to make additional Purchase Payments to the Contract, but you cannot make additional Purchase Payments to any portion of the Contract that is in the Annuity Phase.

·	The Partial Annuitization reduces each Purchase Payment, the Contract Value and GMDB value proportionately by the percentage of PB Value you apply to GMIB.

·	GMIB Payments do not affect the Contract Value available under the portion of the Contract that is in the Accumulation Phase.

*	Not available after you exercise GPWB, or if the PB Value is less than the Contract Value.

In addition, if you exercise GPWB after taking a GMIB Partial Annuitization, all payments (GMIB Payments and GPWB Payments) are treated as withdrawals and not annuity payments for tax purposes. However, once the entire Contract Value has been applied to Annuity Payments, we intend to treat all Annuity Payments we make after that as annuity payments (and not withdrawals) for tax purposes.

Under PRIME Plus Benefit, the Owner controls:

·	when to exercise a benefit,

·	which benefit(s) to exercise,

·	the amount of the GPWB Payment (subject to the GPWB Maximum) and Excess Withdrawals from the portion of the Contract that is in the Accumulation Phase,*

·	the frequency of GPWB Payments,* and

·	whether to stop or restart GPWB Payments on an annual basis.

*	Owners do not have this flexibility under GMIB.

GPWB PAYMENTS

In order to begin receiving GPWB Payments, you must submit a GPWB Payment election form to our Service Center after the expiration of the seven-year waiting period and within 30 days following a Contract Anniversary. GPWB Payments do not begin until your request has been received at our Service Center and determined to be in good order.

If you exercise GPWB, we ask you to select either the 5% payment option or the 10% payment option. Once you select a payment option, you cannot change it. The payment option you select determines the GPWB Maximum, the PB Value and whether or not you receive an automatic increase or “step up” feature. The GPWB Maximum is the largest annual GPWB Payment that is available to you each Contract Year. Under the 5% payment option the GPWB Maximum is 5% of the PB Value each year, and under the 10% payment option it is 10% of the PB Value each year. Under the 5% payment option, the PB Value is the greater of the MAV, 7% AIA, or the Contract Value. Under the 10% payment option, the PB Value is the greater of the MAV or Contract Value. The 5% payment option contains an automatic step up* feature. Step ups are not available under the 10% payment option.

* See the discussion of “Step Ups Under GPWB with the 5% Payment Option” earlier in this section.

If you exercise GPWB, we also ask you to select the amount of the annual GPWB Payment you would like to receive subject to the GPWB Maximum. You cannot request GPWB Payments that would exceed the GPWB Maximum in a given Contract Year. Because GPWB Payments are non-cumulative, if you elect to receive less than the GPWB Maximum in a given year, it does not carry over to the next Contract Year.

The Allianz Alterity® Variable Annuity Contract Prospectus – April 30, 2012

If you request an Excess Withdrawal while you are receiving GPWB Payments and the amount you request plus your GPWB Payments exceeds the annual GPWB Maximum, the amount that exceeds the GPWB Maximum is subject to any applicable withdrawal charge* and reduces:

·	the Withdrawal Charge Basis,**

·	the Contract Value,

·	the PB Value (which determines the amount available for future GPWB Payments and/or future GMIB Payments), and

·	the GMDB value.

*	Amounts paid as part of a required minimum distribution are never subject to a withdrawal charge.

**	GPWB Payments and Excess Withdrawals that do not exceed the annual GPWB Maximum do not reduce the Withdrawal Charge Basis.

Excess Withdrawals do not affect the GPWB Payment amount or frequency, but they may decrease the time over which you receive GPWB Payments. If you take no Excess Withdrawals while GPWB is in effect, we would pay the PB Value to you:

·	within ten years if you elect the 10% payment option and take the maximum allowable payment each year, or

·	within 20 years if you elect the 5% payment option and take the maximum allowable payment each year (assuming no step ups).

You can elect to receive GPWB Payments on an annual, semi-annual, quarterly, or monthly basis. If the scheduled GPWB Payment date does not fall on a Business Day, we make payment to you on the next Business Day. Each GPWB Payment is be equal to the annual GPWB Payment divided by the number of payments you elected to receive during the Contract Year, until the PB Value is less than the GPWB Payment amount. Once the PB Value is less than the GPWB Payment amount, you receive one last GPWB Payment that is equal to the remaining PB Value.

The initial GPWB Payment must be at least $100. If we are unable to structure the initial GPWB Payment so that it is at least $100, GPWB is not available and we contact you to discuss alternate arrangements.

Once each Contract Year, you can elect to:

·	change the frequency of next year’s GPWB Payments,

·	change the amount of next year’s GPWB Payment subject to the GPWB Maximum, or

·	stop GPWB Payments for the next GPWB Year.

You must provide notice of any of these requested changes to GPWB Payments to our Service Center at least 30 days before a Contract Anniversary. We make any change on the Contract Anniversary and the change remains in effect for the entire following Contract Year.

The following changes are available at any time and are effective when we receive your request in good order at our Service Center.

·	Stop GPWB Payments completely and have us make GMIB Payments under a Full Annuitization based on the entire remaining PB Value.

·	Stop GPWB Payments completely and take an Excess Withdrawal of the entire Contract Value (less any withdrawal charge).

·	Stop GPWB Payments completely and have us make Traditional Annuity Payments under a Full Annuitization based on the entire Contract Value.

In addition, if you request an Excess Withdrawal while you are receiving GPWB Payments you can instruct us to stop GPWB Payments that are due for the remainder of the Contract Year at the time you request the Excess Withdrawal.

We deduct each GPWB Payment proportionately from the Investment Choices.

You can continue to receive GPWB Payments until the PB Value is exhausted or GPWB ends, even if you have no remaining Contract Value. If there is Contract Value remaining after you exhaust the PB Value, you can elect to either:

·	receive a lump sum payment of the entire remaining Contract Value (less any withdrawal charges), the Accumulation Phase of the Contract ends, and the Contract ends+; or

·	request Traditional Annuity Payments under a Full Annuitization based on the entire remaining Contract Value.

The Allianz Alterity® Variable Annuity Contract Prospectus – April 30, 2012

We send you notice at least 30 days before the last GPWB Payment date to ask for your instructions. If we do not receive any instructions from you by the date we make the last GPWB Payment, we pay you the entire remaining Contract Value (less any withdrawal charges) in a lump sum, the Accumulation Phase ends, and the Contract ends+.

+	If you took a Partial Annuitization, those portions of the Contract continue and we continue to make Annuity Payments as provided for in the selected Annuity Option.

NOTE: You are required to take a Full Annuitization of your Contract on or before the maximum permitted Income Date. (For more information see section 3, The Annuity Phase.) Upon such a Full Annuitization, GPWB is no longer available and any GPWB Payments you were receiving stop.

TAXATION OF GPWB PAYMENTS

GPWB Payments are withdrawals and are treated as such for tax purposes. This means that for Non-Qualified Contracts, Contract gains from the entire Contract are considered to be distributed first and are subject to ordinary income tax. Purchase Payments are distributed after gains have been paid out and are generally considered to be a return of your investment and are not subject to income tax. For Qualified Contracts, the entire GPWB Payment is most likely subject to ordinary income tax. In addition, if any Owner is younger than age 59½, GPWB Payments may be subject to a 10% federal penalty tax. GPWB Payments are not subject to a withdrawal charge as long as you withdraw no more than your GPWB Maximum in any Contract Year. However, if you take an Excess Withdrawal and exceed your annual GPWB Maximum, the amount that exceeds the GPWB Maximum (including GPWB Payments) is subject to a withdrawal charge* based on the date of Purchase Payment receipt and reduces the Withdrawal Charge Basis, as indicated in section 7, Expenses – Withdrawal Charge.

*	Amounts paid as part of a required minimum distribution are never subject to a withdrawal charge.

WHEN GPWB ENDS

GPWB ends upon the earliest of the following.

·	When PRIME Plus Benefit ends.

·	The Business Day you take an Excess Withdrawal of the entire Contract Value.

·	The Business Day that the PB Value and Contract Value are both zero.

·	The Business Day before the Income Date that you take a Full Annuitization.

·	When the Contract ends.

·	The death of any Owner (unless the deceased Owner’s spouse continues the Contract as the new Owner).

GMIB PAYMENTS

The annuity income protection provided by GMIB applies only under the following circumstances.

·	Your Income Date must be within 30 days following a Contract Anniversary beginning seven Contract Years after the date PRIME Plus Benefit is added to your Contract, or seven Contract Years after the date of any 7% AIA reset.

·	GMIB Payments can only be made as fixed payments, regardless of the Annuity Option* you select.

·	Annuity Option 6* is only available if the PB Value is the MAV and the duration of the period certain must be at least ten years.

·	If the PB Value is the 7% AIA, your available Annuity Options* are restricted to Annuity Option 2 or 4 and the duration of the period certain must be at least ten years.

·	We base all GMIB Payments on an interest rate of 1% per year.

*	For more information see section 3, The Annuity Phase – Annuity Options.

In order to begin receiving GMIB Payments, you must submit an income option election form to our Service Center after the expiration of the seven-year waiting period and within 30 days following a Contract Anniversary. GMIB Payments begin after your request has been received at our Service Center and is determined to be in good order. We make GMIB Payments to you beginning on the 30th day after your Contract Anniversary. If the scheduled GMIB Payment date does not fall on a Business Day, we make payment to you on the next Business Day.

The Allianz Alterity® Variable Annuity Contract Prospectus – April 30, 2012

Under GMIB you can take either a Full Annuitization, or before you exercise GPWB, you can take Partial Annuitization(s) if the PB Value is greater than the Contract Value. Any GMIB Partial Annuitization reduces the Contract Value and GMDB value proportionately by the percentage of PB Value you apply to GMIB. If you take a Partial Annuitization you cannot:

·	transfer any amounts you allocated to GMIB Payments back to any portion of the Contract that is in the Accumulation Phase;

·	transfer amounts from one Annuity Payment stream to another; or

·	allocate additional PB Value (or Contract Value) to an existing stream of Annuity Payments.

You can elect to receive GMIB Payments on an annual, semi-annual, quarterly, or monthly basis. Each GMIB Payment is equal to the annual GMIB Payment divided by the number of payments you elected to receive during the Contract Year. If the scheduled GMIB Payment date does not fall on a Business Day, we make payment to you on the next Business Day.

AMOUNT USED TO CALCULATE GMIB PAYMENTS

GMIB guarantees that the GMIB Payments are equal to the guaranteed fixed payout rates applied to the PB Value. There may be situations where the PB Value is greater than the Contract Value, but the GMIB Payments are less than fixed Traditional Annuity Payments based on the Contract Value. This may occur because the guaranteed fixed payout rates available with GMIB may be less than the current fixed payout rates that are otherwise available under Traditional Annuity Payments. We base your Annuity Payments on whichever amount (PB Value or Contract Value) produces the greater payment. However, if we use the Contract Value and the current fixed payout rates to calculate Traditional Annuity Payments, you incur higher Contract expenses without receiving any explicit benefit from GMIB.

While the 7% AIA may be larger than the MAV, it may produce a lower GMIB Payment because under the 7% AIA you have fewer available Annuity Options.

If the GMIB Payment available under the 7% AIA would always be less than the GMIB Payment available under the MAV, we base GMIB Payments on the amount that produces the largest payment. However, it is possible that the GMIB Payments under the 7% AIA may be more or less than the GMIB Payments available under the MAV depending on the Annuity Option you select. In these instances, we allow you to select the amount we use to calculate GMIB Payments and the Annuity Option that you feel is most appropriate.

TAXATION OF GMIB PAYMENTS

If you take a GMIB Partial Annuitization, GMIB Payments are treated as withdrawals and not annuity payments for tax purposes. This means that for tax purposes, any Contract earnings in the entire Contract are considered to be distributed before Purchase Payments and may be subject to ordinary income tax and a 10% federal penalty tax. For Non-Qualified Contracts, gains are generally subject to ordinary income tax and Purchase Payments are not. For Qualified Contracts, the entire GMIB Payment under a Partial Annuitization is most likely subject to ordinary income taxes. For more information on Partial Annuitizations, please see section 3, The Annuity Phase – Partial Annuitization.

If you take a Full Annuitization under GMIB, GMIB Payments should be treated as annuity payments for tax purposes. If you take a GMIB Partial Annuitization, GMIB Payments should be treated as annuity payments (and not withdrawals) for tax purposes only after the Income Date on which you have applied the entire remaining Contract Value to Annuity Payments under GMIB and/or Traditional Annuity Payments, that is, the Income Date after the Contract has been fully annuitized. For Non-Qualified Contracts that have been fully annuitized, a portion of each payment may be treated as gains that are subject to tax as ordinary income, and the remaining portion of the payment is considered to be a return of your investment and is not subject to income tax. Once we have paid out all of your Purchase Payments, however, the full amount of each GMIB Payment is subject to tax as ordinary income. For Qualified Contracts, the entire GMIB Payment is most likely subject to tax as ordinary income. Once you apply the entire Contract Value to Annuity Payments, GMIB Payments generally are not subject to the 10% federal penalty tax.

The Allianz Alterity® Variable Annuity Contract Prospectus – April 30, 2012

WHEN GMIB ENDS

If you have not exercised GMIB, it ends upon the earliest of the following.

When PRIME Plus Benefit ends.

·	The Business Day that the PB Value and Contract Value are both zero.

·	The Business Day before the Income Date you take a Full Annuitization and request Traditional Annuity Payments.

·	When the Contract ends.

·	The death of any Owner (unless the deceased Owner’s spouse continues the Contract as the new Owner).

If you exercise GMIB, each portion of the Contract that you apply to GMIB Payments ends upon the earliest of the following.

·	Under Annuity Options 1 and 3, the death of the last surviving Annuitant.

·	Under Annuity Options 2 and 4, the death of the last surviving Annuitant and expiration of the guaranteed period.*

·	Under Annuity Option 5, the death of the Annuitant and payment of any lump sum refund.

·	Under Annuity Option 6, the expiration of the specified period certain.

·	When PRIME Plus Benefit ends.

·	When the Contract ends.

*	If we make a lump sum payment of the remaining guaranteed GMIB Payments at the death of the last surviving Annuitant, this portion of the Contract ends upon payment of the lump sum.

REQUIRED MINIMUM DISTRIBUTIONS (RMDs) UNDER QUALIFIED CONTRACTS WITH PRIME PLUS BENEFIT

GMIB and GPWB under PRIME Plus Benefit may have limited usefulness if you purchased a Qualified Contract that is subject to a RMD. If your Contract includes PRIME Plus Benefit and you do not exercise GMIB on or before the date RMD payments must begin under a qualified plan, the Owner or Beneficiary may not be able to exercise GMIB due to the restrictions imposed by the minimum distribution requirements. You should consider whether GMIB is appropriate for your situation if you plan to exercise GMIB after your RMD beginning date.

You also cannot participate in the minimum distribution program available under this Contract if you elect to receive GPWB Payments. If you exercise GPWB, we ask you to select either the 5% payment option or the 10% payment option. Once you select a payment option, you cannot change it. Therefore, under a Qualified Contract that is subject to RMDs, you may not be able to adjust your GPWB Payment to meet your required minimum distribution needs. If you own a Qualified Contract that is subject to RMDs and your RMD payment is greater than the GPWB Maximum, you cannot meet your RMD needs without taking Excess Withdrawals. In addition, RMD payments reduce your PB Value.

The Allianz Alterity® Variable Annuity Contract Prospectus – April 30, 2012

5.	INVESTMENT OPTIONS

The Contract offers the Investment Options listed in the following table. Each Investment Option has its own investment objective. In the future, we may add, eliminate or substitute Investment Options to the extent permitted by the federal securities laws and, when required, the Securities & Exchange Commission. Depending on market conditions, you can gain or lose value by investing in the Investment Options.

You should read the Investment Options’ prospectuses carefully. The Investment Options invest in different types of securities and follow varying investment strategies. There are potential risks associated with each of these types of securities and investment strategies. For example, an Investment Option’s performance may be affected by risks specific to certain types of investments, such as foreign securities, derivative investments, non-investment grade debt securities, initial public offerings (IPOs) or companies with relatively small market capitalizations. IPOs and other investment techniques may have a magnified performance impact on an Investment Option with a small asset base. An Investment Option may not experience similar performance as its assets grow. The operation of the Investment Options and the various risks associated with the Investment Options are described in the Investment Options’ prospectuses. To obtain a current prospectus for any of the Investment Options, contact your Financial Professional or call us at the toll free telephone number listed at the back of this prospectus.

Certain Investment Options issue two or more classes of shares and certain share classes may have Rule 12b-1 fees. For more information about share classes, see the Investment Options’ prospectuses.

Currently, the Investment Options are not publicly traded mutual funds. They are available only as investment options in variable annuity contracts or variable life insurance policies issued by life insurance companies or in some cases, through participation in certain qualified pension or retirement plans.

The names, investment objectives and policies of certain Investment Options may be similar to the names, investment objectives and policies of other portfolios that the same investment advisers manage. Although the names, objectives and policies may be similar, the investment results of the Investment Options may be higher or lower than the results of such portfolios. The investment advisers cannot guarantee, and make no representation, that the investment results of similar funds will be comparable even though the Investment Options have the same names, investment advisers, objectives and policies.

Each of the Investment Options offered by the Allianz Variable Insurance Products Fund of Funds Trust (Allianz VIP Fund of Funds Trust), is a “fund of funds” and diversifies its assets by investing primarily in the shares of several other affiliated mutual funds.

The underlying funds may pay 12b-1 fees to the distributor of the Contracts, our affiliate, Allianz Life Financial Services, LLC, for distribution and/or administrative services. The underlying funds do not pay service fees or 12b-1 fees to the Allianz VIP Fund of Funds Trust and the Allianz VIP Fund of Funds Trust does not charge service fees or 12b-1 fees. The underlying funds of the Allianz VIP Fund of Funds Trust or their advisers may pay service fees to us and our affiliates for providing customer service and other administrative services to Contract Owners. The amount of such service fees may vary depending on the underlying fund.

We offer other variable annuity contracts that may invest in the same Investment Options. These contracts may have different charges and may offer different benefits more appropriate to your needs. For more information about these contracts, please contact our Service Center.

The following advisers and subadvisers are affiliated with us: Allianz Investment Management LLC and Pacific Investment Management Company LLC. The following is a list of the Investment Options available under the Contract, the investment advisers and subadvisers for each Investment Option, the investment objectives for each Investment Option, and the primary investments of each Investment Option.

The Allianz Alterity® Variable Annuity Contract Prospectus – April 30, 2012

INVESTMENT OPTIONS

Investment Management Company and Adviser/Subadviser	Name of Investment Option	Asset Category	Objective(s)	Primary Investments (Normal market conditions)
ALLIANZ FUND OF FUNDS
Managed by Allianz Investment Management LLC	AZL Balanced Index Strategy Fund	A “Fund of Funds” Model Portfolio	Long-term capital appreciation with preservation of capital as an important consideration	Invests primarily in a combination of five underlying bond and equity index funds, to achieve a range generally from 40% to 60% of assets in the underlying equity index funds and 40% to 60% in the underlying bond index fund.
	AZL Fusion Balanced Fund	A “Fund of Funds” Model Portfolio	Long-term capital appreciation with preservation of capital as an important consideration	Allocation among the underlying investments, to achieve a range generally from 40% to 60% of assets in equity funds and approximately 40% to 60% invested in fixed income funds.
	AZL Fusion Conservative Fund	A “Fund of Funds” Model Portfolio	Long-term capital appreciation with preservation of capital as an important consideration	Allocation among the underlying investments, to achieve a range generally from 25% to 45% of assets in equity funds and approximately 55% to 75% invested in fixed income funds.
	AZL Fusion Moderate Fund	A “Fund of Funds” Model Portfolio	Long-term capital appreciation	Allocation among the underlying investments, to achieve a range generally from 55% to 75% of assets in equity funds and approximately 25% to 45% invested in fixed income funds.
	AZL Growth Index Strategy Fund	A “Fund of Funds” Model Portfolio	Long-term capital appreciation	Invests primarily in a combination of five underlying bond and equity index funds, to achieve a range generally from 65% to 85% of assets in the underlying equity index funds and 15% to 35% in the underlying bond index fund.
BLACKROCK
Managed by Allianz Investment Management LLC/BlackRock Advisors, LLC	AZL Money Market Fund	Cash Equivalent	Current income consistent with stability of principal	Invests in a broad range of short-term, high quality U.S. dollar-denominated money market instruments, including government, U.S. and foreign bank, commercial and other obligations. During extended periods of low interest rates, and due in part to contract fees and expenses, the yield of the AZL Money Market Fund may also become extremely low and possibly negative.
Managed by BlackRock Advisors, LLC/BlackRock Investment Management, LLC and BlackRock International Limited	BlackRock Global Allocation V.I. Fund	Specialty	High total investment return	Invests in both equity and debt securities, including money market securities, of issuers located around the world. Seeks diversification across markets, industries, and issuers. May invest in securities of companies of any market capitalization and in REITs.
FIDELITY
Managed by Strategic Advisers, Inc.	Fidelity VIP FundsManager 50% Portfolio	Model Portfolio (Fund of Funds)	High total return	Invests in a combination of underlying Fidelity retail and variable insurance products funds using a target allocation of approximately 35% domestic equity funds, 15% international equity funds, 40% fixed income funds and 10% money market funds, to achieve portfolio characteristics similar to the VIP FundsManager 50% Composite Index.
	Fidelity VIP FundsManager 60% Portfolio	Model Portfolio (Fund of Funds)	High total return	Invests in a combination of underlying Fidelity retail and variable insurance products funds using a target allocation of approximately 42% domestic equity funds, 18% international equity funds, 35% fixed income funds and 5% money market funds, to achieve portfolio characteristics similar to the VIP FundsManager 60% Composite Index.

The Allianz Alterity® Variable Annuity Contract Prospectus – April 30, 2012

Investment Management Company and Adviser/Subadviser	Name of Investment Option	Asset Category	Objective(s)	Primary Investments (Normal market conditions)
FRANKLIN TEMPLETON
Managed by Allianz Investment Management LLC/Franklin Mutual Advisers, LLC, Templeton Global Advisors Limited, and Franklin Advisers, Inc.	AZL Franklin Templeton Founding Strategy Plus Fund	Specialty	Long-term capital appreciation, with income as a secondary goal	Invests in a combination of subportfolios or strategies, each of which is managed by an asset manager that is part of Franklin Templeton. The strategies invest primarily in U.S. and foreign equity and fixed income securities.
Managed by Franklin Advisers, Inc.	Franklin High Income Securities Fund	High-Yield Bonds	High current income with capital appreciation as a secondary goal	Invests primarily to predominantly in high yield, lower-rated debt securities (“junk bonds”) and preferred stocks.
	Franklin Income Securities Fund	Specialty	Maximize income while maintaining prospects for capital appreciation	Normally invests in debt and equity securities.
	Franklin U.S. Government Fund	Intermediate-Term Bonds	Income	At least 80% of its net assets in U.S. government securities.
	Templeton Global Bond Securities Fund	Intermediate-Term Bonds	High current income, consisent with preservation of capital, with capital appreciation as a secondary consideration	Normally invests at least 80% of its net assets in bonds, which include debt securities of any maturity, such as bonds, notes, bills and debentures.
GATEWAY
Managed by Allianz Investment Management LLC/Gateway Investment Advisors, LLC	AZL Gateway Fund	Specialty	Capture equity market investment returns, while exposing investors to less risk than other equity investments	Normally invests in a broadly diversified portfolio of common stocks, while also selling index call options and purchasing index put options. May invest in companies with small, medium or large market capitalizations and in foreign securities traded in U.S. markets.
INVESCO
Managed by Allianz Investment Management LLC/Invesco Advisers, Inc.	AZL Invesco Equity and Income Fund	Specialty	Highest possible income consistent with safety of principal. Secondary objective of long-term growth of capital	Invests at least 80% of its net assets in equity and income securities. Invests at least 65% of its total assets in income-producing equity securities and also invests in investment grade quality debt securities. May invest up to 15% of total assets in REITs and up to 25% ot total assets in foreign securities, including emerging market securities.
PIMCO
Managed by Pacific Investment Management Company LLC	PIMCO VIT All Asset Portfolio	Specialty (Fund of Funds)	Maximum real return consistent with preservation of real capital and prudent investment management	Invests substantially all of its assets in institutional class shares of the underlying PIMCO Funds.
	PIMCO VIT Emerging Markets Bond Portfolio	Intermediate-Term Bonds	Maximum total return, consistent with preservation of capital and prudent investment management	At least 80% of its assets in fixed income instruments of issuers that economically are tied to emerging markets countries.

The Allianz Alterity® Variable Annuity Contract Prospectus – April 30, 2012

Investment Management Company and Adviser/Subadviser	Name of Investment Option	Asset Category	Objective(s)	Primary Investments (Normal market conditions)
	PIMCO VIT Global Advantage Strategy Bond Portfolio	Intermediate-Term Bonds	Total return, which exceeds that of its benchmarks, consistent with prudent investment management	At least 80% of its assets in fixed income instruments that are economically tied to at least three countries (one of which may be the United States), which may be represented by forwards or derivatives such as options, futures contracts, or swap agreements.
	PIMCO VIT Global Bond Portfolio (Unhedged)	Intermediate-Term Bonds	Maximum total return, consistent with preservation of capital and prudent investment management	At least 80% of its assets in fixed income instruments of issuers in at least three countries (one of which may be the U.S.), which may be represented by forwards or derivatives. May invest, without limitation, in securities economically tied to emerging market countries.
	PIMCO VIT Global Multi-Asset Portfolio	Specialty	Total return which exceeds a blend of 60% MSCI World Index/40% Barclays Capital U.S. Aggregate Index	Invests in a combination of affiliated and unaffiliated funds, fixed income instruments, equity securities, forwards and derivatives. Typically invests 20% to 80% of total assets in equity-related investments.
	PIMCO VIT High Yield Portfolio	High-Yield Bonds	Maximum total return, consistent with preservation of capital and prudent investment management	At least 80% of assets in a diversified portfolio of high-yield securities (“junk bonds”) rated below investment grade, but at least Caa by Moody’s or equivalently rated by S&P or Fitch. May invest up to 20% of total asets in securities denominated in foreign currencies.
	PIMCO VIT Real Return Portfolio	Intermediate-Term Bonds	Maximum real return, consistent with preservation of real capital and prudent investment management	At least 80% of its net assets in inflation-indexed bonds of varying maturities issued by the U.S. and non-U.S. governments, their agencies or instrumentalities and corporations.
	PIMCO VIT Total Return Portfolio	Intermediate-Term Bonds	Maximum total return, consistent with preservation of capital and prudent investment management	At least 65% of total assets in a diversified portfolio of fixed income instruments of varying maturities, which may be represented by forwards or derivatives such as options, futures contracts, or swap agreements.
	PIMCO VIT Unconstrained Bond Portfolio	Specialty	Maximum long-term return, consistent with preservation of capital and prudent investment management	At least 80% of its assets in a diversified portfolio of fixed income instruments of varying maturities, which may be represented by forwards or derivatives such as options, futures contracts, or swap agreements.

Shares of the Investment Options may be offered in connection with certain variable annuity contracts and variable life insurance policies of various insurance companies that may or may not be affiliated with us. Certain Investment Options may also be sold directly to pension and retirement plans that qualify under Section 401 of the Internal Revenue Code. As a result, a material conflict of interest may arise between insurance companies, owners of different types of contracts and retirement plans or their participants. Each Investment Option’s Board of Directors monitor for the existence of any material conflicts, and determine what action, if any, should be taken.

The Allianz Alterity® Variable Annuity Contract Prospectus – April 30, 2012

We may enter into certain arrangements under which we, or our affiliate Allianz Life Financial Services, LLC, the principal underwriter for the Contracts, are compensated by the Investment Options’ advisers, distributors and/or affiliates for the administrative services and benefits that we provide to the Investment Options. The amount of the compensation usually is based on the aggregate assets of the Investment Options or other investment portfolios that are attributable to contracts that we issue or administer. Some advisers may pay us more or less than others. The maximum fee that we currently receive is at the annual rate of 0.50% of the average aggregate amount invested by us in the Investment Options. In addition, our affiliate Allianz Life Financial Services, LLC, may receive Rule 12b-1 fees deducted from certain Investment Option assets attributable to the Contract for providing distribution and support services to some Investment Options. Because 12b-1 fees are paid out of an Investment Option’s assets on an ongoing basis, over time they increase the cost of an investment in the Investment Option.

SUBSTITUTION AND LIMITATION ON FURTHER INVESTMENTS

We may substitute another Investment Option for one of your selected Investment Options, for any reason in our sole discretion. To the extent required by the Investment Company Act of 1940 or other applicable law, we do not substitute any shares without SEC approval and providing you notice. We may make substitutions with respect to your existing allocations, future Purchase Payment allocations, or both. New or substitute Investment Options may have different fees and expenses, and their availability may be limited to certain purchaser classes. We may limit further Investment Option allocations if marketing, tax or investment considerations warrant, or for any reason in our sole discretion. We may also close Investment Options to additional allocations. The fund companies that sell Investment Option shares to us, pursuant to participation agreements, may end those agreements and discontinue offering us their shares.

TRANSFERS BETWEEN INVESTMENT OPTIONS

Contracts with PRIME Plus Benefit are subject to Investment Option transfer restrictions if these Contracts exceed certain limits on volatility or risk. For more information, see section 4, Protected Retirement Income Made Easy: PRIME Plus Benefit.

You can make transfers among the Investment Choices, subject to certain restrictions. Currently there is no maximum limit on the number of transfers we allow, but we may change this in the future. Transfers may be subject to a transfer fee. For more information, see section 7, Expenses – Transfer Fee.

The following applies to any transfer.

The minimum amount that you can transfer is $1,000 ($500 in New Jersey) or the entire amount in the Investment Choice, if less. We waive this requirement if the transfer is made under the dollar cost averaging or flexible rebalancing programs or the allocation and transfer restrictions for PRIME Plus Benefit.

·	Your request for a transfer must clearly state:

–

which Investment Choices are involved in the transfer; and

–

how much you wish to transfer.

·	After the Income Date, you cannot make a transfer from a fixed Annuity Payment stream to a variable Annuity Payment stream.

·	After the Income Date, you can make a transfer from a variable Annuity Payment stream to establish a new fixed Annuity Payment stream.

·	Your right to make transfers is subject to the Excessive Trading and Market Timing policy discussed later in this section.

·	Transfer instructions apply equally to the accumulation and annuitization portions of the Contract. You cannot make transfers selectively within different portions of the Contract.

·	Transfers of Contract Value between Investment Options do not change the allocation instructions for any future Purchase Payments.

When you make a transfer request, we process the request based on the Accumulation Unit values and/or Annuity Unit values next determined after receipt of the request in Good Order at our Service Center. The Accumulation Unit values and Annuity Unit values are normally determined at the end of each Business Day and any transfer request received at or after the end of the current Business Day receives the next Business Day’s Accumulation Unit values and/or Annuity Unit values.

The Allianz Alterity® Variable Annuity Contract Prospectus – April 30, 2012

Electronic Transfers

You can currently request transfers by telephone, fax, or by website at http:// www.allianzlife.com. We do not currently accept transfer instructions from you through any other form of electronic communication. Unless you instruct us not to, we accept transfer instructions from any Owner. We may also allow you to authorize someone else to request transfers on your behalf. We use reasonable procedures to confirm that electronic instructions given to us are genuine. If we do not use such procedures, we may be liable for any losses due to unauthorized or fraudulent instructions. We record all telephone instructions and log all website instructions. We reserve the right to deny any transfer request and to discontinue or modify our electronic transfer privileges at any time and for any reason.

When you make an electronic transfer request, we process the request based on the Accumulation Unit values next determined after receipt of the request at our Service Center. If a Service Center representative does not receive your transfer request before the end of the current Business Day, even if due to our delay in answering your call or a delay caused by our electronic systems, you receive the next Business Day’s Accumulation Unit values.

Please note that telephone, fax and/or the website may not always be available. Any electronic system, whether it is ours, yours, your service provider’s, or your Financial Professional’s, can experience outages or slowdowns for a variety of reasons, which may delay or prevent our processing of your request or allocation instruction change. Although we have taken precautions to help our systems handle heavy use, we cannot promise complete reliability. If you are experiencing problems, you should submit your transfer request in writing to our Service Center.

By authorizing electronic transfers, you authorize us to accept and act upon such instructions for your Contract. There are risks associated with electronic transactions that do not occur if you submit a written request. Anyone authorizing or making such requests bears those risks. You should protect your website password, because the website is available to anyone who provides your password; we cannot verify that the person providing electronic transfer instructions via the website is you or is authorized by you.

EXCESSIVE TRADING AND MARKET TIMING

We may restrict or modify your right to make transfers to prevent any use that we consider to be part of a market timing program.

Frequent transfers, programmed transfers, transfers into and then out of an Investment Option in a short period of time, and transfers of large amounts at one time (collectively referred to as “potentially disruptive trading”) may have harmful effects for other Owners, Annuitants and Beneficiaries. These risks and harmful effects include the following.

·	Dilution of the interests of long-term investors in an Investment Option, if market timers or others transfer into an Investment Option at prices that are below their true value, or transfer out at prices above their true value.

·	An adverse effect on portfolio management, such as causing an Investment Option to maintain a higher level of cash or causing an Investment Option to liquidate investments prematurely.

·	Increased brokerage and administrative expenses.

We attempt to protect our Owners and the Investment Options from potentially disruptive trading through our excessive trading and market timing policies and procedures. Under these policies and procedures, we could modify your transfer privileges for some or all of the Investment Options. Unless prohibited by your Contract or applicable state law, we may:

·	Limit transfer frequency (for example, prohibit more than one transfer a week, or more than two a month, etc.).

·	Restrict the transfer method (for example, requiring all transfers be sent by first class U.S. mail and rescinding electronic transfer privileges).

Require a minimum time period between each transfer into or out of the same Investment Option. Our current policy, which is subject to change without notice, prohibits “round trips” within 14 calendar days. We do not include transfers into and/or out of the AZL Money Market Fund when available in your Contract. Round trips are transfers into and back out of the same Investment Option, or transfers out of and back into the same Investment Option.

·	Refuse transfer requests made on your behalf by an asset allocation and/or market timing service.

·	Limit the dollar amount of any single Purchase Payment or transfer request to an Investment Option.

·	Prohibit transfers into specific Investment Options.

·	Impose other limitations or restrictions to the extent permitted by federal securities laws.

We also reserve the right to reject any specific Purchase Payment allocation or transfer request from any person if in the investment adviser’s, subadviser’s or our judgment, an Investment Option may be unable to invest effectively in accordance with its investment objectives and policies.

The Allianz Alterity® Variable Annuity Contract Prospectus – April 30, 2012

Currently, we attempt to deter disruptive trading as follows. If a transfer(s) is/are identified as potentially disruptive trading, we may (but are not required to) send a warning letter. If the conduct continues and we determine it constitutes disruptive trading, we also impose transfer restrictions. Transfer restrictions may include refusing electronic transfers and requiring all transfers be sent by first-class U.S. mail. We do not enter into agreements permitting market timing and would not permit activities determined to be disruptive trading to continue. We also reserve the right to impose transfer restrictions if we determine, in our sole discretion, that transfers disadvantage other Owners. We notify you in writing if we impose transfer restrictions on you.

We do not include automatic transfers made under any of our programs or Contract features when applying our market timing policy.

We adopted these policies and procedures as a preventative measure to protect all Owners from the potential effects of disruptive trading, while also abiding by your legitimate interest in diversifying your investment and making periodic asset re-allocations based on your personal situation or overall market conditions. We attempt to protect your interests in making legitimate transfers by providing reasonable and convenient transfer methods that do not harm other Owners.

We may make exceptions when imposing transfer restrictions if we determine a transfer is appropriate, although it may technically violate our policies and procedures discussed here. In determining if a transfer is appropriate, we may, but are not required to, take into consideration its relative size, whether it was purely a defensive transfer into the AZL Money Market Fund, and whether it involved an error or similar event. We may also reinstate electronic transfer privileges after we revoke them, but we do not reinstate these privileges if we believe they might be used for future disruptive trading.

We cannot guarantee the following.

·	Our monitoring will be 100% successful in detecting all potentially disruptive trading activity.

·	Revoking electronic transfer privileges will successfully deter all potentially disruptive trading.

In addition, some of the Investment Options are available to other insurance companies and we do not know if they adopted policies and procedures to detect and deter potentially disruptive trading, or what their policies and procedures might be. Because we may not be completely successful at detecting and preventing market timing activities, and other insurance companies that offer the Investment Options may not have adopted adequate market timing procedures, there is some risk that market timing activity may occur and negatively affect other Owners.

We may, without prior notice to any party, take whatever action we deem appropriate to comply with any state or federal regulatory requirement. In addition, purchase orders for an Investment Option’s shares are subject to acceptance by that Investment Option’s manager. We reserve the right to reject, without prior notice, any Investment Option transfer request or Purchase Payment if the purchase order is rejected by the investment manager. We have entered into agreements required under SEC Rule 22c-2 (Rule 22c-2 agreements) whereby, upon request by an underlying fund or its designee, we must provide information about you and your trading activities to the underlying fund or its designee. Under the terms of the Rule 22c-2 agreements, we are required to: (1) provide details concerning every purchase, redemption, transfer, or exchange of Investment Options during a specified period; and (2) restrict your trading activity if the party receiving the information so requests. Under certain Rule 22c-2 agreements, if we fail to comply with a request to restrict trading activity, the underlying fund or its designee may refuse to accept buy orders from us until we comply.

Investment Options may add or change policies designed to restrict market timing activities. For example, Investment Options may impose restrictions on transfers between Investment Options in an affiliated group if the investment adviser to one or more of the Investment Options determines that the person requesting the transfer has engaged, or is engaging in, market timing or other abusive trading activities. In addition, an Investment Option may impose a short-term trading fee on purchases and sales within a specified period. You should review the Investment Options’ prospectuses regarding any applicable transfer restrictions and the imposition of any fee to discourage short-term trading. The imposition of these restrictions would occur as a result of Investment Option restrictions and actions taken by the Investment Options’ managers.

NOTE: This Contract is not designed for professional market timing organizations, other entities or persons using programmed, large, or frequent transfers, and we may restrict excessive or inappropriate transfer activity.

The Allianz Alterity® Variable Annuity Contract Prospectus – April 30, 2012

We retain some discretion in determining what actions constitute potentially disruptive trading and in determining when and how to impose trading restrictions. Therefore, persons engaging in potentially disruptive trading may be subjected to some uncertainty as to when and how we apply trading restrictions, and persons not engaging in potentially disruptive trading may not know precisely what actions will be taken against a person engaging in potentially disruptive trading. For example, if we determine a person is engaging in potentially disruptive trading, we may revoke that person’s electronic transfer privileges and require all future requests to be sent by first class U.S. mail. In the alternative, if the disruptive trading affects only a single Investment Option, we may prohibit transfers into or Purchase Payment allocations to that Investment Option. We notify the person or entity making the potentially disruptive trade when we revoke any transfer privileges.

The retention of some level of discretion by us may result in disparate treatment among persons engaging in potentially disruptive trading, and it is possible that some persons could experience adverse consequences if others are able to engage in potentially disruptive trading practices that have negative effects.

DOLLAR COST AVERAGING (DCA) PROGRAM

The dollar cost averaging (DCA) program allows you to systematically transfer a set amount of money each month or quarter from any one of the available Investment Choices to other Investment Options. The Investment Option you transfer from may not be the Investment Option you transfer to in this program. You cannot dollar cost average to a general account Investment Choice. The only general account Investment Choice that you can dollar cost average from is the DCA Fixed Option. By allocating amounts on a regularly scheduled basis, as opposed to allocating the total amount at one particular time, your Contract Value may be less susceptible to the impact of market fluctuations. However, dollar cost averaging does not directly result in a Contract Value gain or protect against a market loss. You may only participate in this program during the Accumulation Phase.

There may be two DCA options available to you. Both options require a $1,500 minimum allocation. The first option is the DCA Fixed Option. It is only available for a period of either 6 or 12 months for additional Purchase Payments. Under the DCA Fixed Option, you receive a fixed interest rate guaranteed for the period by us. The DCA Fixed Option may not be available in your state. The second option is the Standard DCA Option. It requires participation for at least six months. Only the Investment Options are available with this option.

All DCA transfers are made on the tenth of the month or the next Business Day if the tenth is not a Business Day. We must receive your DCA program form in Good Order at our Service Center by 4 p.m. Eastern Time on the Business Day before we process these transfers, or your program participation does not begin until next month. You can elect either program by properly completing the DCA form provided by us.

Your participation in the program ends when any of the following occurs.

·	The number of desired transfers has been made.

·	You do not have enough money in the Investment Choices to make the transfer (if less money is available, that amount is dollar cost averaged and the program ends).

·	You request to end the program (your request must be received at our Service Center by 4:00 p.m. Eastern Time on the Business Day immediately before the tenth to end that month).

·	your Contract ends.

If you participate in the DCA program, there are no fees for the transfers made under this program and we do not currently count these transfers against the free transfers that we allow. We reserve the right to discontinue or modify the DCA program at any time and for any reason.

The Allianz Alterity® Variable Annuity Contract Prospectus – April 30, 2012

FLEXIBLE REBALANCING

You can choose to have us rebalance your account. Once your money has been invested, the performance of the Investment Options may cause your chosen allocation to shift. Flexible rebalancing is designed to help you maintain your specified allocation mix among the different Investment Options. The general account Investment Choices are not part of the flexible rebalancing program. You can direct us to automatically readjust your balance in the Investment Options on a quarterly, semi-annual or annual basis to return to your selected Investment Option allocations. Flexible rebalancing transfers are made on the 20th of the month or the previous Business Day if the 20th is not a Business Day. We must receive your flexible rebalancing program form in Good Order at our Service Center by 4 p.m. Eastern Time on the Business Day before we process this rebalancing, or you program does not begin until next month. If you participate in the flexible rebalancing program, there are no fees for the transfers made under this program and we do not currently count these transfers against any free transfers that we allow. We reserve the right to discontinue or modify the flexible rebalancing program at any time and for any reason. To end your participation in this program, your request must also be received at our Service Center by 4:00 p.m. Eastern Time on the Business Day immediately before the 20th to end that month.

FINANCIAL ADVISERS – ASSET ALLOCATION PROGRAMS

If you have an investment adviser and want to pay their fees from this Contract, you can submit a written request to our Service Center on a form satisfactory to us. If we approve your request, we withdraw the fee and pay it to your adviser. We treat this fee payment as a withdrawal. For tax purposes, withdrawals from Non-Qualified Contracts are considered to come from earnings first, not Purchase Payments. If any Owner is under age 59½, withdrawals may be subject to a 10% federal penalty tax. You should consult a tax adviser regarding the tax treatment of adviser fee payments.

Your investment adviser acts on your behalf, not ours. We are not party to your advisory agreement or responsible for your adviser’s actions. We do not set your adviser’s fee or receive any part of it. Any adviser fee you pay is in addition to this Contract’s fees and expenses. You should ask your adviser about compensation they receive for this Contract.

You can submit a written request to our Service Center on a form satisfactory to us to allow your adviser to make Investment Option transfers on your behalf. However, we reserve the right to review an adviser’s trading history before allowing him or her to make transfers. If, in our sole discretion, we believe the adviser's trading history indicates excessive trading, we can deny your request. If we approve it, your adviser is subject to the same trading restrictions that apply to Owners. We can deny or revoke trading authority in our sole discretion.

VOTING PRIVILEGES

We legally own the Investment Option shares. However, when an Investment Option holds a shareholder vote that affects your investment, we ask you to give us voting instructions. We then vote all of our shares, including any we own on our behalf, in proportion to those instructions. Because most Owners do not give us instructions and we vote shares proportionally, a small number of Owners may determine a vote’s outcome. If we determine we no longer need to get your voting instructions, we will decide how to vote the shares. Only Owners have voting privileges. Annuitants, Beneficiaries, Payees and other persons have no voting privileges unless they are also Owners.

We determine your voting interest in an Investment Option as follows.

·	You can provide voting instructions based on the dollar value of the Investment Option’s shares in your Contract’s subaccount. We calculate this value based on the number and value of accumulation/annuity units for your Contract on the record date. We count fractional units.

·	You receive proxy materials and a voting instruction form.

The Allianz Alterity® Variable Annuity Contract Prospectus – April 30, 2012

6.	OUR GENERAL ACCOUNT

Our general account holds all our assets other than our separate account assets. We own our general account assets and use them to support our insurance and annuity obligations, other than those funded by our separate accounts. These assets are subject to our general business operation liabilities, and may lose value. Subject to applicable law, we have sole investment discretion over our general account assets.

We have not registered our general account as an investment company under the Investment Company Act of 1940, nor have we registered our general account interests under the Securities Act of 1933. As a result, the SEC has not reviewed our general account prospectus disclosures.

Currently, we only offer a DCA Fixed Option as an Investment Choice under our general account during the Accumulation Phase. Any amounts you allocate to this Investment Choice under our general account become part of our general account. Any guaranteed values provided by this Contract that are in excess of the Contract Value are subject to our claims paying ability and the priority rights of our other creditors. Additionally, any amounts that you allocate to provide fixed Annuity Payments during the Annuity Phase become part of our general account. We may change the terms of the general account Investment Choices in the future. Please contact us for the most current terms.

EXPENSES

There are charges and other expenses associated with the Contract that reduce your investment return. These charges and expenses are described in detail in this section.

SEPARATE ACCOUNT ANNUAL EXPENSES

Each Business Day during the Accumulation and Annuity Phases, we make a deduction from your Separate Account assets for the mortality and expense risk (M&E) charge and the administrative charge (together they are called the Separate Account annual expenses). We do this as part of our calculation of the value of the Accumulation and Annuity Units. The charges are an annualized rate that is realized on a daily basis as a percentage of the net asset value of an Investment Option, and we use that net asset value to calculate the Accumulation Unit value during the Accumulation Phase and the Annuity Unit value during the Annuity Phase. We assess the Separate Account annual expenses during the Annuity Phase on any Contract Value you apply to variable Annuity Payments; there are no Separate Account annual expenses during the Annuity Phase on any Contract Value you apply to fixed Annuity Payments. The amount of the M&E charge during the Accumulation Phase depends on the benefit options that apply. The annual administrative charge is equal to 0.15% during both phases of your Contract. Some or all of the guaranteed benefits may not be available in all states. During the Accumulation Phase, the current Separate Account annual expenses are as follows:

	Base Contract			Charges for a Contract with PRIME Plus Benefit
	M&E Charge	Admin. Charge	Total	M&E Charge	Admin. Charge	Total
Traditional GMDB	1.35%	0.15%	1.50%	2.05%	0.15%	2.20%
Enhanced GMDB	1.65%	0.15%	1.80%	2.25%	0.15%	2.40%
Earnings Protection GMDB	1.65%	0.15%	1.80%	2.30%	0.15%	2.45%

If you exercise GPWB, the increased expenses associated with PRIME Plus Benefit continue until both GPWB and GMIB benefits end and the increased expenses associated with Enhanced GMDB or Earnings Protection GMDB (if applicable) continue as long as the Enhanced GMDB value or Earnings Protection GMDB value is greater than zero.

During the Annuity Phase, if you request variable Traditional Annuity Payments, the Separate Account annual expenses are equal, on an annual basis, to 1.50%. Because the Contract allows Partial Annuitization, it is possible for one portion of the Contract to be in the Accumulation Phase and other portions to be in the Annuity Phase at the same time. It is also possible to have a different M&E charge on different portions of the Contract at the same time if you take a variable traditional Partial Annuitization.

The Allianz Alterity® Variable Annuity Contract Prospectus – April 30, 2012

Mortality and Expense Risk (M&E) Charge

This charge compensates us for all the insurance benefits provided by your Contract, for example:

·	our contractual obligation to make Annuity Payments,

·	the death, income, and withdrawal benefits under the Contract,

·	certain expenses related to the Contract, and

·	for assuming the risk (expense risk) that the current charge is insufficient in the future to cover the cost of administering the Contract.

If the M&E charge is sufficient to cover such costs and risks, any excess is profit to us. We anticipate making such a profit, and using it to cover distribution expenses as well as the cost of providing certain features under the Contract.

Administrative Charge

This charge is equal to 0.15% of the average daily assets invested in a subaccount on an annual basis. We deduct this charge during both the Accumulation and Annuity Phases. This charge, together with the contract maintenance charge (which is explained next), is for all the expenses associated with the administration and maintenance of the Contracts.

CONTRACT MAINTENANCE CHARGE

Your annual contract maintenance charge is $40. This charge is for Contract administration and maintenance expenses. We waive this charge as follows:

During the Accumulation Phase for all your Alterity Contracts if the total Contract Value is at least $100,000 at the time we are to deduct the charge. We determine the total Contract Value for all individually owned Contracts by using the Owner’s social security number, and for non-individually owned Contracts we use the Annuitant’s social security number.

·	During the Annuity Phase if the Contract Value on the Income Date is at least $100,000.

·	When paying death benefits under death benefit payment options A, B, or C.

During the Accumulation Phase, we deduct the contract maintenance charge on a dollar for dollar basis from the Contract Value determined at the end of the last Business Day before the Contract Anniversary. If you take a full withdrawal from your Contract (other than on a Contract Anniversary), we deduct the full contract maintenance charge.

WITHDRAWAL CHARGE

You can take withdrawals from the portion of the Contract that is in the Accumulation Phase. A withdrawal charge applies if any part of the withdrawal comes from a Purchase Payment that is still within six complete Contract Years before the withdrawal. The withdrawal charge compensates us for expenses associated with selling the Contract. We do not assess the withdrawal charge on: amounts deducted to pay a transfer fee or the contract maintenance charge, Annuity Payments (including GMIB Payments), death benefits, withdrawals taken under the waiver of withdrawal charge benefit, or amounts paid as part of a minimum distribution payment under our minimum distribution program. We also do not assess the withdrawal charge on GPWB Payments and/or Excess Withdrawals unless they exceed the GPWB Maximum. (For more information, see section 4, Protected Retirement Income Made Easy: PRIME Plus Benefit – GPWB Payments; and the “Waiver of Withdrawal Charge Benefits” and “The Minimum Distribution Program and Required Minimum Distribution (RMD) Payments” discussions in section 9, Access to Your Money.) In the Contract or marketing materials, the withdrawal charge may also be referred to as the surrender charge or contingent deferred sales charge (CDSC) and withdrawals may be referred to as surrenders.

The total amount under your Contract that is subject to a withdrawal charge is the Withdrawal Charge Basis. The Withdrawal Charge Basis is equal to the total Purchase Payments, less any Purchase Payment withdrawn (excluding any penalty-free withdrawals). We do not reduce the Withdrawal Charge Basis for any penalty-free withdrawals or the deduction of a transfer fee or the contract maintenance charge. This means that if you take a full withdrawal while the withdrawal charge applies and you have taken penalty-free withdrawals, you may be assessed a withdrawal charge on more than the amount you are withdrawing. Penalty-free withdrawals include the following amounts: withdrawals under the GPWB of PRIME Plus Benefit that do not exceed the GPWB Maximum, withdrawals under the partial withdrawal privilege, withdrawals under the waiver of withdrawal charge benefit, and any amounts paid as part of a required minimum distribution. We also do not adjust the Withdrawal Charge Basis for any withdrawal charge, or any gains or losses on your Investment Options.

The Allianz Alterity® Variable Annuity Contract Prospectus – April 30, 2012

This means that on a full withdrawal, if the Contract Value has declined due to poor performance of your selected Investment Options, the withdrawal charge may be greater than the amount available for withdrawal. Because we assess the withdrawal charge against the Withdrawal Charge Basis, in some instances, the Contract Value may be positive, but you will not receive a distribution due to the amount of the withdrawal charge. For more information, please see the examples in Appendix E.

NOTE: Amounts applied to Partial Annuitizations reduce each Purchase Payment proportionately by the percentage of Contract Value or GMIB value you annuitize. This reduction also applies to the Withdrawal Charge Basis.

For purposes of calculating any withdrawal charge, we withdraw Purchase Payments on a “first-in-first-out” (FIFO) basis and we make withdrawals from your Contract in the following order.

First, we withdraw any Purchase Payments that are beyond your Contract’s withdrawal charge period (for example, Purchase Payments that we have had for six or more complete Contract Years). We do not assess a withdrawal charge on these Purchase Payments. This withdrawal reduces the Withdrawal Charge Basis.

Then, we withdraw any Purchase Payments that are under the partial withdrawal privilege and we do not assess a withdrawal charge. However, the partial withdrawal privilege is not available if you are taking a full withdrawal. For more information, see section 9, Access to Your Money – Partial Withdrawal Privilege. This withdrawal does not reduce the Withdrawal Charge Basis.

Next, on a FIFO basis, we withdraw Purchase Payments that are within the withdrawal charge period shown in your Contract. We do assess a withdrawal charge on these Purchase Payments, but we withdraw them on a FIFO basis, which may help reduce the total withdrawal charge you pay because the withdrawal charge declines over time. We determine your total withdrawal charge by multiplying each of these payments by the applicable withdrawal charge percentage and then totaling the charges. This withdrawal reduces the Withdrawal Charge Basis.

4.	Finally, we withdraw any Contract earnings. We do not assess a withdrawal charge on Contract earnings. This withdrawal does not reduce the Withdrawal Charge Basis.

We keep track of each Purchase Payment we receive. The amount of the withdrawal charge depends upon the length of time since we received each Purchase Payment. The charge as a percentage of each Purchase Payment withdrawn is as follows.

Number of Complete Contract Years Since We Received Your Purchase Payment	Charge
0	7%
1	6%
2	5%
3	4%
4	3%
5	2%
6 Contract Years or more	0%

After we have had a Purchase Payment for six complete Contract Years, there is no charge when you withdraw that Purchase Payment.

We calculate the withdrawal charge at the time of each withdrawal. For a full withdrawal that is subject to a withdrawal charge, we deduct the withdrawal charge as a percentage of the Withdrawal Charge Basis from the amount withdrawn. For partial withdrawals, we deduct the charge from the remaining Contract Value and we deduct it proportionately from the selected Investment Choices.

The Allianz Alterity® Variable Annuity Contract Prospectus – April 30, 2012

Example: You purchased a Contract with an initial Purchase Payment of $10,000 and made another Purchase Payment in the first month of the second Contract Year of $90,000. In the third month of the third Contract Year, your Contract Value is $110,000 and you request a withdrawal of $52,000. We would withdraw money from the Contract Value and compute the withdrawal charge as follows.

1)	Purchase Payments that are beyond the withdrawal charge period. All payments are still within the withdrawal charge period so this does not apply.

Amounts available under the partial withdrawal privilege. You can withdraw 12% of total purchase payments per year, and any unused partial withdrawal privilege in one Contract Year carries over to the next Contract Year. This is the third Contract Year and you have not taken any other withdrawals, so you can withdraw up to 36% of your total payments (or $36,000) without incurring a withdrawal charge.

3)	Purchase Payments on a FIFO basis. The total amount we deduct from the first Purchase Payment is $10,000, which is subject to a 5% withdrawal charge, and we pay you this entire amount. A withdrawal charge of $500 is also tracked. We determine the withdrawal charge on this amount as follows:

$10,000

0.050

$500

Next we determine how much we need to deduct from the second Purchase Payment. So far we have deducted $46,000 ($36,000 under the partial withdrawal privilege and $10,000 from the first Purchase Payment), so we would need to deduct $6,000 from the second Purchase Payment to get you the $52,000 you requested. The second Purchase Payment is subject to a 6% withdrawal charge. We determine the withdrawal charge on this amount this amount as follows:

$6,000

0.060

$360

4)	Contract earnings. The withdrawal charges of $860 are deducted from contract earnings.

In total we withdrew $52,860 from your Contract, of which you received $52,000 and paid a withdrawal charge of $860.

NOTE: Withdrawals may have tax consequences and, if taken before age 59½, may be subject to a 10% federal penalty tax. For tax purposes, under Non-Qualified Contracts, withdrawals are considered to have come from the last money you put into the Contract. Thus, for tax purposes, earnings are considered to come out first.

Reduction or Elimination of the Withdrawal Charge

We may have reduced or eliminated the withdrawal charge when the Contract was sold under circumstances that reduced its sales expenses. For example, if a large group of individuals purchased the Contract, or if a purchaser already had a relationship with us. We may choose not to deduct a withdrawal charge under a Contract issued to an officer, director, or employee of Allianz Life or any of its affiliates. Also, we may reduce or waive the withdrawal charge for a Contract sold by a Financial Professional appointed with Allianz Life to any members of his or her immediate family and the Financial Professional waives their commission. We require our prior approval for any reduction or elimination of the withdrawal charge.

TRANSFER FEE

You can currently make 12 free transfers every Contract Year. If you make more than 12 transfers in a Contract Year, we deduct a transfer fee of $25 for each additional transfer. Currently, we deduct this fee only during the Accumulation Phase, but we reserve the right to deduct it during the Annuity Phase. The deduction of a transfer fee decreases your Contract Value (and Bonus Value, if applicable) on a dollar for dollar basis, but it does not decrease your partial withdrawal privilege, the Withdrawal Charge Basis, or any of the guaranteed values available under the optional benefits. We deduct a transfer fee from the Investment Choice from which the transfer is made. If you transfer the entire amount in the Investment Choice, then we deduct a transfer fee from the amount transferred. If you are transferring from multiple Investment Choices, we treat the transfer as a single transfer and we deduct any transfer fee proportionately from the Investment Choices if you transfer less than the entire amount that is in the Investment Choice. If the transfer is made under the dollar cost averaging or flexible rebalancing programs, or the allocation and transfer restrictions for PRIME Plus Benefit, there is no fee for the transfer and we currently do not count these transfers against any free transfers we allow.

The Allianz Alterity® Variable Annuity Contract Prospectus – April 30, 2012

PREMIUM TAX

Premium tax is based on your state of residence at the time you make each Purchase Payment. In states that assess a premium tax, we do not currently deduct it, although we reserve the right to do so in the future. Premium tax normally ranges from 0% to 3.5% of the Purchase Payment, depending on the state or governmental entity.

INCOME TAX

Currently, we do not deduct any Contract related income tax we incur, although we reserve the right to do so in the future.

INVESTMENT OPTION EXPENSES

There are deductions from the assets of the various Investment Options for operating expenses (including management fees) that are described in the Fee Tables in this prospectus and in the prospectuses for the Investment Options. These charges apply during the Accumulation and Annuity Phases if you make allocations to the Investment Options. These expenses reduce the performance of the Investment Options and, therefore, negatively affect your Contract Value and the amounts available for withdrawals and Annuity Payments. They may also negatively impact the death benefit proceeds. The investment advisers for the Investment Options provided the fee and expense information and we did not independently verify it.

TAXES

NOTE: We have prepared the following information on taxes as a general discussion of the subject. The Contract offers flexibility regarding how distributions can be taken. Not all of these distributions (or their attendant tax consequences) are discussed in this section. This information is not intended as tax advice. You should, therefore, consult your own tax adviser about your own circumstances. We have included additional information regarding taxes in the Statement of Additional Information. For more information on the taxation of Annuity Payments made under a Partial Annuitization, see section 3, The Annuity Phase – Partial Annuitization. For more information on the taxation of GPWB Payments, see section 4, Protected Retirement Income Made Easy: PRIME Plus Benefit – Taxation of GPWB Payments. For more information on the taxation of GMIB Payments, see section 4, Protected Retirement Income Made Easy: PRIME Plus Benefit – Taxation of GMIB Payments.

ANNUITY CONTRACTS IN GENERAL

Annuity contracts are a means of setting aside money for future needs – usually retirement. Congress recognized how important saving for retirement was and provided special rules in the Internal Revenue Code (Code) for annuities.

These rules generally provide that you are not taxed on any earnings on the money held in your annuity until you take the money out. This is called tax deferral. There are different rules regarding how you are taxed, depending upon how you take the money out and whether the annuity is Qualified or Non-Qualified (see the following discussion in this section).

If you did not purchase the Contract under a tax qualified retirement plan, the Contract is referred to as a Non-Qualified Contract. When a Non-Qualified Contract is owned by a non-individual (for example, a corporation or certain other entities other than a trust holding the Contract as an agent for an individual), the Contract generally is not treated as an annuity for tax purposes. This means that the Contract may not receive the benefits of tax deferral and Contract earnings may be taxed as ordinary income every year.

QUALIFIED CONTRACTS

If you purchased the Contract under a pension or retirement plan that is qualified under the Code, the Contract is referred to as a Qualified Contract. Qualified Contracts are subject to special rules. Adverse tax consequences may result if contributions, distributions, and transactions in connection with the Qualified Contract do not comply with the law.

A Qualified Contract does not provide any necessary or additional tax deferral if it is used to fund a qualified plan that is tax deferred. However, the Contract has features and benefits other than tax deferral that may make it an appropriate investment for a qualified plan.

The Allianz Alterity® Variable Annuity Contract Prospectus – April 30, 2012

We may have issued the following types of Qualified Contracts.

Traditional Individual Retirement Annuity. Section 408 of the Code permits eligible individuals to maintain Individual Retirement Annuities (IRAs). IRA contributions are limited each year to the lesser of a dollar amount specified in the Code or 100% of the amount of earned income included in the Owner’s income. You cannot make contributions once the Owner reaches age 70½. Contributions may be tax deductible based on the Owner’s income. The limit on the amount contributed to an IRA does not apply to distributions from certain other types of qualified plans that are “rolled over” on a tax-deferred basis into an IRA.

Roth IRA. Section 408A of the Code permits certain eligible individuals to contribute to a Roth IRA. Contributions to a Roth IRA are limited each year to the lesser of a dollar amount specified in the Code or 100% of the amount of earned income included in the Owner’s income. Contributions are also limited or prohibited if the Owner’s income is above certain limits. Contributions must be made in cash or as a rollover or transfer from another Roth IRA.

Conversions to a Roth IRA from a Traditional IRA or other eligible qualified retirement plan are permitted regardless of an individual’s income. A conversion to a Roth IRA results in a taxable event, but not a 10% federal penalty tax for early withdrawal if certain qualifications are met (please consult your tax adviser for more details).

Distributions from a Roth IRA generally are not subject to income tax if the Roth IRA has been held for five years (starting with the year in which the first contribution is made to any Roth IRA) and the Owner satisfies a triggering event such as attaining age 59½, death, disability or a first time homebuyer (subject to a $10,000 lifetime limit).

Distribution before satisfying the five year period or triggering event requirement may subject the distribution to ordinary income tax and the 10% federal penalty tax for early withdrawal. Please be aware that each Roth IRA conversion has its own five year holding period requirement.

Simplified Employee Pension (SEP) IRA. Employers may establish Simplified Employee Pension (SEP) IRAs under Code Section 408(k) to provide IRA contributions on behalf of their employees. In addition to all of the general rules governing IRAs, such plans are subject to additional requirements and different contribution limits.

Qualified Plans. A qualified plan is a retirement or pension plan that meets the requirements for tax qualification under the Code. If the Contract is an investment for assets of a qualified plan under Section 401 of the Code, the plan is both the Owner and the Beneficiary. The authorized signatory or plan trustee for the plan must have made representations to us that the plan was qualified under the Code on the Issue Date and was intended to continue to be qualified for the entire Accumulation Phase of the Contract, or as long as the qualified plan owns the Contract. The qualified plan may designate a third party administrator to act on its behalf. All tax reporting is the responsibility of the plan. In the event the qualified plan instructs us to roll the plan assets into an IRA for the Annuitant under this Contract, we change the qualification type of the Contract to an IRA and make the Annuitant the Owner. The qualified plan is responsible for any reporting required for the rollover transactions.

MULTIPLE CONTRACTS

Section 72(e)(12) of the Code provides that multiple Non-Qualified deferred annuity contracts that are issued within a calendar year period to the same owner by one company or its affiliates are treated as one annuity contract for purposes of determining the tax consequences of any distribution. Such treatment may result in adverse tax consequences, including more rapid taxation of the distributed amounts from such combination of contracts. For purposes of this rule, contracts received in a Section 1035 exchange are considered issued in the year of the exchange.

PARTIAL 1035 EXCHANGES

Section 1035 of the Code provides that an annuity contract may be exchanged in a tax-free transaction for another annuity contract. Historically, it was presumed that only the exchange of an entire contract (as opposed to a partial exchange) would be accorded tax-free status. Guidance from the IRS, however, confirmed that the direct transfer of a portion of an annuity contract into another annuity contract can qualify as a non-taxable exchange. IRS guidance provides that this direct transfer can go into an existing annuity contract as well as a new annuity contract. If you perform a partial 1035 exchange, please be aware that no distributions or withdrawals can occur from the old or new annuity contract within 12 months of the partial exchange, unless you qualify for an exception to this rule. IRS guidance also provides that certain partial exchanges may not qualify as tax-free exchanges. Therefore, Owners should consult their own tax advisers before entering into a partial exchange of an annuity contract.

The Allianz Alterity® Variable Annuity Contract Prospectus – April 30, 2012

DISTRIBUTIONS – NON-QUALIFIED CONTRACTS

You, as the Owner, generally are not taxed on increases in the value of the Contract until an actual or deemed distribution occurs – either as a withdrawal or as Traditional Annuity Payments or GMIB Payments.

Section 72 of the Code governs treatment of distributions. When a withdrawal from a Non-Qualified Contract occurs, the amount received generally is treated as ordinary income subject to tax up to an amount equal to the excess (if any) of the Contract Value immediately before the distribution over your investment in the Contract (generally, the Purchase Payments or other consideration paid for the Contract, reduced by any amount previously distributed from the Contract that was not subject to tax) at that time. GPWB Payments are treated as partial withdrawals. If you exercise the GPWB and the PB Value is greater than the Contract Value, it is possible that the IRS could assert that the amount you receive is taxable as ordinary income up to an amount equal to the excess of the PB Value immediately before the withdrawal over your investment in the Contract at that time. In the case of a full withdrawal under a Non-Qualified Contract, the amount received generally is taxable only to the extent it exceeds your investment in the Contract.

If you take an annuitization, different rules apply. Periodic installments (for example, GMIB Payments) scheduled to be received at regular intervals (for example, monthly) should be treated as annuity payments (and not withdrawals) for tax purposes. Upon annuitization, a portion of each Annuity Payment may be treated as a partial return of your Purchase Payment and is not taxed. The remaining portion of the payment is treated as ordinary income. How the Annuity Payment is divided between taxable and non-taxable portions depends upon the period over which we expect to make the payments. Once we have paid out all of your Purchase Payment(s), the entire Annuity Payment is taxable as ordinary income.

Section 72 of the Code further provides that any amount received under an annuity contract, which is included in income, may be subject to a federal penalty tax. The amount of the federal penalty tax is equal to 10% of the amount that is included in income. Some distributions are exempt from the federal penalty tax. There is an exception to this 10% federal penalty tax for amounts:

1)	paid on or after you reach age 59½;

2)	paid after you die;

3)	paid if you become totally disabled (as that term is defined in Section 72(m)(7) of the Code);

4)	paid in a series of substantially equal payments made annually (or more frequently) under a lifetime annuity;

5)	paid as annuity payments under an immediate annuity; or

6)	that come from Purchase Payments made before August 14, 1982.

With respect to (4) above, if the series of substantially equal periodic payments is modified before the later of your attaining age 59½ or the close of the five year period that began on the Income Date, then the tax for the year of the modification is increased by the 10% federal penalty tax, plus interest, for the tax years in which the exception was used. A partial withdrawal taken after a series of substantially equal periodic payments has begun, will result in the modification of the series of substantially equal payments and therefore result in the imposition of the 10% federal penalty tax and interest for the period as described above. Adding Purchase Payments to a Contract that is making substantially equal periodic payments also results in a modification of the payments.

NOTE: Beginning in 2013, distributions from Non-Qualified Contracts will be considered investment income for purposes of the newly enacted Medicare tax on investment income. Thus, in certain circumstances, a 3.8% tax may apply to some or all of the taxable portion of distributions (e.g. earnings) to individuals whose income exceeds certain threshold amounts ($200,000 for filing single, $250,000 for married filing jointly and $125,000 for married filing separately.) Please consult a tax advisor for more information.

The Allianz Alterity® Variable Annuity Contract Prospectus – April 30, 2012

DISTRIBUTIONS – QUALIFIED CONTRACTS

Distributions from Qualified Contracts are subject to ordinary income tax. Special rules may apply to withdrawals from certain types of Qualified Contracts, including Roth IRAs. You should consult with your qualified plan sponsor and tax adviser to determine how these rules affect the distribution of your benefits.

Section 72(t) of the Code provides that any amount received under a Qualified Contract, which is included in income, may be subject to a federal penalty tax. The amount of the federal penalty tax is equal to 10% of the amount that is included in income. Some distributions are exempt from the federal penalty tax. There is an exception to this 10% federal penalty tax for:

1)	distributions made on or after the date you (or the Annuitant as applicable) reach age 59½;

2)	distributions following your death or disability (or the Annuitant as applicable) (for this purpose disability is as defined in Section 72(m)(7) of the Code);

3)	after separation from service, paid in a series of substantially equal payments made annually (or more frequently) under a lifetime annuity;

4)	distributions made to you to the extent such distributions do not exceed the amount allowed as a deduction under Code Section 213 for amounts paid during the tax year for medical care;

5)	distributions made on account of an IRS levy upon the Qualified Contract;

distributions from an IRA for the purchase of medical insurance (as described in Section 213(d)(1)(D) of the Code) for you and your spouse and dependents if you have received unemployment compensation for at least 12 weeks (this exception no longer applies after you have been re-employed for at least 60 days);

7)	distributions from an IRA made to you, to the extent such distributions do not exceed your qualified higher education expenses (as defined in Section 72(t)(7) of the Code) for the tax year;

8)	distributions from an IRA which are qualified first-time homebuyer distributions (as defined in Section 72(t)(8) of the Code);

9)	distributions made to an alternate Payee pursuant to a qualified domestic relations order (does not apply to an IRA); and

10)	a reservist called to active duty during the period between September 11, 2001 and December 31, 2007, for a period in excess of 179 days (or for an indefinite period), distributions from IRAs or amounts attributable to elective deferrals under a 401(k) plan made during such active period.

The exception stated in (3) above applies to an IRA without the requirement that there be a separation from service. With respect to (3) above, if the series of substantially equal periodic payments is modified before the later of the Annuitant attaining age 59½ or the close of the five year period that began on the Income Date, then the tax for the year of the modification is increased by the 10% federal penalty tax, plus interest for the tax years in which the exception was used. A partial withdrawal taken after a series of substantially equal periodic payments has begun, will result in the modification of the series of substantially equal payments and therefore result in the imposition of the 10% federal penalty tax and interest for the period as described above, unless another exception to the federal penalty tax applies. You should obtain competent tax advice before you take any partial withdrawals from your Contract. Adding Purchase Payments to a Contract that is making substantially equal periodic payments also results in a modification of the payments.

Distributions from a Qualified Contract must commence no later than the required beginning date. For Roth IRAs, no distributions are required during the Owner’s lifetime. For IRAs other than Roth IRAs, the required beginning date is April 1 of the calendar year following the year in which you attain age 70½. Under a qualified plan, the required beginning date is generally April 1 of the calendar year following the later of the calendar year in which you reach age 70½ or retire. Generally, required minimum distributions must be made over a period not exceeding the life or life expectancy of the individual or the joint lives or life expectancies of the individual and his or her designated Beneficiary. If the required minimum distributions are not made, a 50% federal penalty tax is imposed as to the amount not distributed. It is unclear whether a partial withdrawal taken after an Income Date has an adverse impact on the determination of required minimum distributions. If you are attempting to satisfy these rules through partial withdrawals, the present value of future benefits provided under the Contract may need to be included in calculating the amount required to be distributed. If you are receiving Annuity Payments or are age 70½ or older, you should consult with a tax adviser before taking a partial withdrawal.

The Allianz Alterity® Variable Annuity Contract Prospectus – April 30, 2012

ASSIGNMENTS, PLEDGES AND GRATUITOUS TRANSFERS

Other than in the case of Qualified Contracts (which generally cannot be assigned or pledged), any assignment or pledge of (or agreement to assign or pledge) the Contract Value is treated for federal income tax purposes as a full withdrawal. The investment in the Contract is increased by the amount includible as income with respect to such amount or portion, though it is not affected by any other aspect of the assignment or pledge (including its release). If an Owner transfers a Contract without adequate consideration to a person other than the Owner’s spouse (or to a former spouse incidental to divorce), the Owner is taxed on the difference between his or her Contract Value and the investment in the Contract at the time of transfer and for each subsequent year until the assignment is released. In such case, the transferee’s investment in the Contract is increased to reflect the increase in the transferor’s income.

The transfer or assignment of ownership of the Contract, the designation of an Annuitant, the selection of certain Income Dates, or the exchange of the Contract may result in certain other tax consequences that are not discussed here. An Owner contemplating any such transfer, assignment, or exchange should consult a tax adviser as to the tax consequences.

DEATH BENEFITS

Any death benefits paid under the Contract are taxable to the recipient as ordinary income. The rules governing the taxation of payments from an annuity contract generally apply to the payment of death benefits and depend on whether the death benefits are paid as a lump sum or as Annuity Payments. Estate taxes may also apply.

WITHHOLDING

Annuity distributions are generally subject to withholding for the recipient’s federal income tax liability. Recipients can, however, generally elect not to have tax withheld from distributions unless they are subject to mandatory state withholding.

“Eligible rollover distributions” from qualified plans are subject to a mandatory federal income tax withholding of 20%. An eligible rollover distribution is any distribution to an employee (or employee’s spouse or former spouse as Beneficiary or alternate Payee) from such a plan, except required minimum distributions as required by the Code, a series of substantially equal periodic payments made for life or a period of ten years or more, or hardship distributions. The 20% withholding does not apply, however, to nontaxable distributions or if the employee chooses a “direct rollover” from the Contract plan to a qualified plan, IRA, TSA or 403(b) plan, or to a governmental Section 457 plan that agrees to separately account for rollover contributions.

FEDERAL ESTATE TAXES

While no attempt is being made to discuss the federal estate tax implications of the Contract, an Owner should keep in mind that the value of an annuity contract owned by a decedent and payable to a Beneficiary by virtue of surviving the decedent is included in the decedent’s gross estate. Depending on the terms of the annuity contract, the value of the annuity included in the gross estate may be the value of the lump sum payment payable to the designated Beneficiary or the actuarial value of the payments to be received by the Beneficiary. Consult an estate planning adviser for more information.

GENERATION-SKIPPING TRANSFER TAX

Under certain circumstances, the Code may impose a “generation-skipping transfer tax” when all or part of an annuity contract is transferred to, or a death benefit is paid to, an individual two or more generations younger than the Owner. Regulations issued under the Code may require us to deduct the tax from your Contract, or from any applicable payment, and pay it directly to the IRS.

FOREIGN TAX CREDITS

We may benefit from any foreign tax credits attributable to taxes paid by certain funds to foreign jurisdictions to the extent permitted under the federal tax law.

ANNUITY PURCHASES BY NONRESIDENT ALIENS AND FOREIGN CORPORATIONS

The preceding discussion provides general information regarding federal income tax consequences to Owners that are U.S. citizens or residents. Owners that are not U.S. citizens or residents generally are subject to federal withholding tax on taxable distributions from annuity contracts at a 30% rate, unless a lower treaty rate applies. In addition, Owners may be subject to state and/or municipal taxes and taxes that may be imposed by the Owners’ country of citizenship or residence.

The Allianz Alterity® Variable Annuity Contract Prospectus – April 30, 2012

POSSIBLE TAX LAW CHANGES

Although the likelihood of legislative or regulatory changes is uncertain, there is always the possibility that the tax treatment of the Contract could change by legislation, regulation or otherwise. Consult a tax adviser with respect to legislative or regulatory developments and their effect on the Contract.

We have the right to modify the Contract in response to legislative or regulatory changes that could otherwise diminish the favorable tax treatment that annuity owners currently receive. We make no guarantee regarding the tax status of any contract and do not intend the above discussion as tax advice.

DIVERSIFICATION

The Code provides that the underlying investments for a Non-Qualified variable annuity must satisfy certain diversification requirements in order to be treated as an annuity contract. We believe that the Investment Options are being managed so as to comply with the requirements.

In some circumstances, owners of variable annuities who retain excessive control over the investment of the underlying separate account assets may be treated as the owners of those assets and may be subject to tax on income produced by those assets. Although published guidance in this area does not address certain aspects of the policies, we believe that the Owner should not be treated as the owner of the Separate Account assets. We reserve the right to modify the Contract to bring it into conformity with applicable standards should such modification be necessary to prevent Owners from being treated as the owners of the underlying Separate Account assets.

REQUIRED DISTRIBUTIONS

Section 72(s) of the Code requires that, to be treated as an annuity contract for federal income tax purposes, a Non-Qualified Contract must contain certain provisions specifying how amounts are distributed in the event of the death of an Owner of the Contract. Specifically, Section 72(s) requires that: (a) if any Owner dies on or after you take a Full Annuitization, but before the time the entire interest in the Contract has been distributed, the entire interest in the Contract must be distributed at least as rapidly as under the method of distribution being used as of the date of the Owner’s death; and (b) if any Owner dies before you take a Full Annuitization, the entire interest in the Contract must be distributed within five years after the date of the Owner’s death. These requirements are considered satisfied as to any portion of an Owner’s interest that is payable to or for the benefit of a designated Beneficiary and that is distributed over the life of such designated Beneficiary, or over a period not extending beyond the life expectancy of that Beneficiary, provided that such distributions begin within one year of the Owner’s death. The designated Beneficiary refers to an individual designated by the Owner as a Beneficiary and to whom ownership of the Contract passes by reason of death. However, if the designated Beneficiary is the surviving spouse of the deceased Owner, the Contract may be continued with the surviving spouse as the new Owner.

Non-Qualified Contracts contain provisions that are intended to comply with these Code requirements.

Other rules may apply to Qualified Contracts.

9.	ACCESS TO YOUR MONEY

The money in the Contract is available under the following circumstances:

·	by taking a withdrawal (including GPWB Payments);

·	by taking required minimum distributions (Qualified Contracts only);

·	by taking Annuity Payments; or

·	when we pay a death benefit.

You can only take withdrawals during the Accumulation Phase. We process any request for a withdrawal based on the Accumulation Unit values next determined after receipt of the request in Good Order at our Service Center. The Accumulation Unit values are normally determined at the end of each Business Day. Any withdrawal request received at or after the end of the current Business Day receives the next Business Day’s Accumulation Unit values.

The Allianz Alterity® Variable Annuity Contract Prospectus – April 30, 2012

When you take a full withdrawal, we process the withdrawal on the Business Day we receive the request in Good Order at our Service Center:

·	based upon the number of Accumulation Units held by the Contract on that Business Day and valued at the next available daily price,

·	less any applicable withdrawal charge, and

·	less any contract maintenance charge.

See the Fee Tables and section 7, Expenses for a discussion of the charges.

Any partial withdrawal must be for at least $500.* The Contract Value after a partial withdrawal must be at least $2,000.* We reserve the right to treat a request for a partial withdrawal that would reduce the Contract Value below this minimum as a request for a full withdrawal of the Contract. Unless you instruct us otherwise, we deduct any partial withdrawal (including any withdrawal charge) proportionately from the Investment Choices.

*	These limitations do not apply to GPWB Payments.

We pay the amount of any withdrawal from the Investment Options within seven days of when we receive your request in Good Order at our Service Center, unless the suspension of payments or transfers provision is in effect (see the “Suspension of Payments or Transfers” discussion later in this section).

Upon withdrawal, we assess the withdrawal charge against the Withdrawal Charge Basis. Penalty-free withdrawals and amounts withdrawn to pay transfer fees or the contract maintenance charge do not reduce the Withdrawal Charge Basis, but any other withdrawals of Purchase Payments reduce the Withdrawal Charge Basis. Penalty-free withdrawals include the following amounts: withdrawals under the GPWB of PRIME Plus Benefit that do not exceed the GPWB Maximum, withdrawals under the partial withdrawal privilege, withdrawals under the waiver of withdrawal charge benefit, and any amounts paid as part of a required minimum distribution. We also do not adjust the Withdrawal Charge Basis for any current withdrawal charge or any gains or losses on your Investment Options. This means that if you take a full withdrawal while the withdrawal charge applies and you have taken penalty-free withdrawals or you have had losses in your Investment Options, you may be assessed a withdrawal charge on more than the amount you are withdrawing. In some instances, you will not receive a distribution due to the amount of the withdrawal charge. For more information, please see section 7, Expenses – Withdrawal Charge and the examples in Appendix E.

We may be required to provide information about you or your Contract to government regulators. We may also be required to stop disbursements from your Contract and thereby refuse any request for transfers, and refuse to pay any withdrawals, surrenders, or death benefits until instructions are received from the appropriate regulator. If, pursuant to SEC rules, the AZL Money Market Fund suspends payment of redemption proceeds in connection with a fund liquidation, we will delay payment of any transfer, partial withdrawal, surrender, or death benefit from the AZL Money Market Fund subaccount until the fund is liquidated.

Ordinary income taxes, tax penalties and certain restrictions may apply to any withdrawal you take.

PARTIAL WITHDRAWAL PRIVILEGE

The partial withdrawal privilege for each Contract Year is equal to 12% of your total Purchase Payments, less any previous withdrawals taken during that Contract Year under the partial withdrawal privilege or as required minimum distribution payments. We do not deduct a withdrawal charge from amounts withdrawn under the partial withdrawal privilege. Any unused partial withdrawal privilege in one Contract Year carries over to the next Contract Year. There is no partial withdrawal privilege after you exercise the GPWB (if applicable) or during the Annuity Phase. However, if you exercise the GPWB (if applicable) you can still take GPWB Payments and Excess Withdrawals up to the annual GPWB Maximum without a withdrawal charge. Excess Withdrawals (including a full withdrawal of the Contract Value) are available while you are receiving GPWB Payments, however, amounts withdrawn in excess of the annual GPWB Maximum (including GPWB Payments) are subject to a withdrawal charge as set out in section 7, Expenses – Withdrawal Charge.

You may not take a withdrawal under the partial withdrawal privilege in the same Contract Year that you take a withdrawal under a waiver of withdrawal charge benefits. For more information, see “Waiver of Withdrawal Charge Benefits” next in this section.

The Allianz Alterity® Variable Annuity Contract Prospectus – April 30, 2012

If you withdraw Purchase Payments that are beyond the withdrawal charge period, those withdrawals are not subject to a withdrawal charge and they do not reduce your partial withdrawal privilege. If you withdraw a Purchase Payment that is subject to a withdrawal charge and the withdrawal is more than the partial withdrawal privilege, the excess amount is subject to a withdrawal charge and reduces the Withdrawal Charge Basis unless the excess amount is part of a penalty-free withdrawal. If you take a full withdrawal, we assess a withdrawal charge with no reduction for any partial withdrawal privilege in that year. Amounts withdrawn under the partial withdrawal privilege do not reduce the Withdrawal Charge Basis.

The minimum distribution program allows you to take withdrawals without the deduction of the withdrawal charge under certain circumstances. For more information, see “The Minimum Distribution Program and Required Minimum Distribution (RMD) Payments” discussion later in this section.

WAIVER OF WITHDRAWAL CHARGE BENEFITS

Under certain circumstances, after the first Contract Year, we permit you to take money out of the Contract without deducting a withdrawal charge if any Owner becomes:

·	confined to a nursing home for a period of at least 90 consecutive days;

·	terminally ill, which is defined as life expectancy of 12 months or less (we require a full withdrawal of the Contract in this instance); or

·	totally disabled for a period of at least 90 consecutive days.

The waiver does not apply if any of the above conditions existed on the Issue Date. If the Contract is owned by a non-individual, we base this benefit on the Annuitant.

Also, after the first Contract Year, if you become unemployed for a period of at least 90 consecutive days, you can take up to 50% of your Contract Value out of the Contract without incurring a withdrawal charge. This benefit is available only once during the life of the Contract. You may not use both this benefit and the partial withdrawal privilege in the same Contract Year. When the Contract is owned by a qualified plan, this waiver does not apply.

We must receive proof of these conditions in Good Order before we waive the withdrawal charge. Amounts withdrawn under this benefit do not reduce the Withdrawal Charge Basis.

These waivers vary from state to state and may not be available in all states. Check with your Financial Professional for details on the waivers available in your state.

SYSTEMATIC WITHDRAWAL PROGRAM

If your Contract Value is at least $25,000, the systematic withdrawal program provides automatic monthly or quarterly payments to you. The minimum amount you can withdraw under this program is $500. There is no restriction on the maximum you may withdraw under this program if your Purchase Payments are no longer subject to a withdrawal charge. While the withdrawal charge is in effect, the systematic withdrawal program is subject to the partial withdrawal privilege. The total systematic withdrawals that you can take each Contract Year without incurring a withdrawal charge is limited to your partial withdrawal privilege amount for that Contract Year. With the exception of penalty-free withdrawals, any withdrawals in a Contract Year (including systematic withdrawals) are subject to any applicable withdrawal charge. For more information, see section 7, Expenses – Withdrawal Charge and the “Partial Withdrawal Privilege” discussion that appears earlier in this section.

All systematic withdrawals are made on the ninth of the month, or the Business Day before if the ninth is not a Business Day. We must receive your systematic withdrawal program form instructions in Good Order at our Service Center by 4 p.m. Eastern Time on the Business Day before we process these withdrawals, or your program will not begin until the next month.

Ordinary income taxes, tax penalties and certain restrictions may apply to systematic withdrawals. You cannot participate in the systematic withdrawal program and the minimum distribution program at the same time. You also cannot exercise the GPWB and participate in the systematic withdrawal program at the same time.

The Allianz Alterity® Variable Annuity Contract Prospectus – April 30, 2012

MINIMUM DISTRIBUTION PROGRAM AND REQUIRED MINIMUM DISTRIBUTION (RMD) PAYMENTS

If you own a Qualified Contract, you can participate in the minimum distribution program during the Accumulation Phase of the Contract. Under this program, we make payments to you from your Contract designed to meet the applicable minimum distribution requirements imposed by the Code for this Qualified Contract. We can make payments to you on a monthly, quarterly, or annual basis. However, if your Contract Value is less than $25,000, we only make annual payments. RMD payments from this Contract are not subject to a withdrawal charge and do not reduce the Withdrawal Charge Basis. However, they count against your partial withdrawal privilege. You cannot aggregate RMD payments between this Contract and other qualified contracts that you own. Any RMD payments from this Contract that exceed the RMD amount calculated for this Contract are subject to any applicable withdrawal charge.

Contracts with PRIME Plus Benefit include a GMIB and GPWB. These benefits may have limited usefulness under a Qualified Contract subject to a RMD. If your Contract includes PRIME Plus Benefit and you do not exercise GMIB on or before the date, RMD payments must begin under a qualified plan, the Owner or Beneficiary may not be able to exercise GMIB due to the restrictions imposed by the minimum distribution requirements. You should consider whether GMIB is appropriate for your situation if you plan to exercise GMIB after your RMD beginning date. You also cannot participate in the minimum distribution program available under this Contract if you elect to receive GPWB Payments. Once you choose your GPWB Payment option, you cannot change it. Therefore, you may not be able to adjust your GPWB Payment to meet your RMD needs. In addition, RMD payments reduce your GMDB value, and PB Values.

You cannot participate in systematic withdrawal and minimum distribution programs at the same time. You also cannot exercise GPWB and participate in the minimum distribution program at the same time.

SUSPENSION OF PAYMENTS OR TRANSFERS

We may be required to suspend or postpone transfers or payments for withdrawals (including GPWB Payments if available) or transfers for any period when:

·	the New York Stock Exchange is closed (other than customary weekend and holiday closings);

·	trading on the New York Stock Exchange is restricted;

·	an emergency (as determined by the SEC) exists as a result of which disposal of the Investment Option shares is not reasonably practicable or we cannot reasonably value the Investment Option shares; or

·	during any other period when the SEC, by order, so permits for the protection of Owners.

We reserve the right to defer payment for a withdrawal or transfer from any general account Investment Choice for the period permitted by law, but not for more than six months.

10.	DEATH BENEFIT

At Contract issue, you were asked to select a death benefit. If you did not make a selection, you received the Traditional GMDB. The death benefit is only available during the Accumulation Phase of the Contract.

The use of the term “you” in this section refers to the Owner, or the Annuitant if the Contract is owned by a non-individual.

If you die during the Accumulation Phase, we process the death benefit based on the Accumulation Unit values determined after we receive in Good Order at our Service Center the death benefit payment option and due proof of death. We consider due proof of death to be any of the following: a copy of the certified death certificate, a decree of court of competent jurisdiction as to the finding of death, or any other proof that we consider to be satisfactory. The Accumulation Unit values are normally determined at the end of each Business Day and due proof of death and an election of the death benefit payment option received at or after the end of the current Business Day receives the next Business Day’s Accumulation Unit values.

If a Beneficiary dies before you, that Beneficiary’s interest in this Contract ends unless your Beneficiary designation specifies otherwise. If there are no remaining primary Beneficiaries, we pay any remaining contingent Beneficiary(ies). If there are no remaining Beneficiaries, or no named Beneficiaries, we pay the death benefit to your estate.

The Allianz Alterity® Variable Annuity Contract Prospectus – April 30, 2012

If there are multiple Beneficiaries, each Beneficiary receives the portion of the death benefit they are entitled to when we receive their required information in Good Order at our Service Center. Unless you instruct us to pay Beneficiaries a specific percentage of the death benefit, they each receive an equal share. Any part of the death benefit amount that had been invested in the Investment Options remains in the Investment Options until distribution begins. From the time the death benefit is determined until we make a complete distribution, any amount in the Investment Options continues to be subject to investment risk that is borne by the recipient. Once we receive notification of death, we no longer accept additional Purchase Payments and we do not process requested transfers.

TRADITIONAL GUARANTEED MINIMUM DEATH BENEFIT (TRADITIONAL GMDB)

If the Traditional GMDB applies, the amount of the death benefit is the greater of 1 or 2.

1.	The Contract Value, determined as of the end of the Business Day during which we receive in Good Order at our Service Center the death benefit payment option and due proof of death.

2.	The Traditional GMDB value, which is the total of all Purchase Payments received before you exercise the GPWB (if applicable), reduced as follows.

Proportionately by the percentage of Contract Value applied to a traditional Partial Annuitization or withdrawn (including any withdrawal charge) for each traditional annuitization or withdrawal taken (including GPWB Payments, Excess Withdrawals, and any applicable withdrawal charge).

Proportionately by the percentage of PB Value applied to each GMIB Partial Annuitization taken before you exercise the GPWB (if applicable).

For multiple Beneficiaries, we determine the Traditional GMDB value for each surviving Beneficiary’s portion of the death benefit at the time we first receive in Good Order at our Service Center the death benefit payment option and due proof of death. We determine the Contract Value for each surviving Beneficiary’s portion of the death benefit as of the end of the Business Day during which we receive in Good Order at our Service Center their selected death benefit payment option.

Any withdrawals and/or amounts applied to Partial Annuitizations may reduce the Traditional GMDB value by more than the amount withdrawn and/or annuitized. If the Contract Value (or PB Value if taking a GMIB Partial Annuitization) at the time of withdrawal and/or annuitization is less than the Traditional GMDB value, we deduct more than the amount withdrawn and/or annuitized from the Traditional GMDB value.

ENHANCED GUARANTEED MINIMUM DEATH BENEFIT (ENHANCED GMDB)

If the Enhanced GMDB applies, the amount of the death benefit is the greater of 1 or 2.

1.	The Contract Value, determined as of the end of the Business Day during which we receive in Good Order at our Service Center the death benefit payment option and due proof of death.

2.	The Enhanced GMDB value, determined as of the end of the Business Day during which we receive in Good Order at our Service Center the death benefit payment option and due proof of death.

For multiple Beneficiaries, we determine the Enhanced GMDB value for each surviving Beneficiary’s portion of the death benefit at the time we first receive in Good Order at our Service Center the death benefit payment option and due proof of death. We determine the Contract Value for each surviving Beneficiary’s portion of the death benefit as of the end of the Business Day during which we receive in Good Order at our Service Center their selected death benefit payment option.

The Enhanced GMDB value is equal to the greater of: A.) the 3% Annual Increase Amount (AIA), or B.) the Maximum Anniversary Value (MAV). We only calculate the 3% AIA and the MAV until the date of any Owner’s death.

The Allianz Alterity® Variable Annuity Contract Prospectus – April 30, 2012

A. Annual Increase Amount (3% AIA)

The 3% AIA on the Issue Date is equal to the initial Purchase Payment received on the Issue Date.

On each Business Day other than a Contract Anniversary and before the exercise of the GPWB (if applicable), the 3% AIA is equal to:

·	its value on the immediately preceding Business Day,

·	plus any additional Purchase Payments received that day,

·	reduced proportionately by the percentage of Contract Value applied to a traditional Partial Annuitization or withdrawn that day (including GPWB Payments, Excess Withdrawals and any applicable withdrawal charge), and

·	reduced proportionately by the percentage of PB Value applied to a GMIB Partial Annuitization that day (if applicable).

On each Contract Anniversary before the older Owner’s 81st birthday (or the Annuitant’s 81st birthday if the Contract is owned by a non-individual) and before the exercise of the GPWB (if applicable), the 3% AIA is equal to its value on the immediately preceding Business Day, increased by 3%. We then process any transactions we received on that Contract Anniversary (such as additional Purchase Payments, withdrawals, and Partial Annuitizations) in the same way that we do on each Business Day other than a Contract Anniversary.

Beginning with the Contract Anniversary that occurs on or after the older Owner’s 81st birthday (or the Annuitant’s 81st birthday if the Contract is owned by a non-individual) and before the exercise of the GPWB (if applicable), we calculate the 3% AIA in the same way that we do on each Business Day other than a Contract Anniversary.

We limit the 3% AIA to a maximum of 1.5 times your total Purchase Payments, reduced as follows:

proportionately, by the percentage of PB Value applied to each GMIB Partial Annuitization (if applicable).

proportionately, by the percentage of Contract Value withdrawn (including any withdrawal charge) and/or annuitized for each of the following: withdrawals taken before you exercise the GPWB, amounts applied to traditional Partial Annuitizations (not subject to a withdrawal charge), GPWB Payments (not subject to a withdrawal charge), and/or Excess Withdrawals.

B. Maximum Anniversary Value (MAV)

The MAV on the Issue Date is equal to your initial Purchase Payment received on the Issue Date.

On each Business Day other than a Contract Anniversary and before the exercise of the GPWB (if applicable), the MAV is equal to:

·	its value on the immediately preceding Business Day,

·	plus any additional Purchase Payments received that day,

·	reduced proportionately by the percentage of Contract Value applied to a traditional Partial Annuitization or withdrawn that day (including GPWB Payments, Excess Withdrawals and any applicable withdrawal charge), and

·	reduced proportionately by the percentage of PB Value applied to a GMIB Partial Annuitization that day (if applicable).

On each Contract Anniversary before the older Owner’s 81st birthday (or the Annuitant’s 81st birthday if the Contract is owned by a non-individual) and before the exercise of the GPWB (if applicable), the MAV is equal to the greater of its value on the immediately preceding Business Day, or the Contract Value that occurs on that Contract Anniversary before we process any transactions. We then process any transactions received on that Contract Anniversary (such as additional Purchase Payments, withdrawals and Partial Annuitizations) in the same way that we do on each Business Day other than a Contract Anniversary.

Beginning with the Contract Anniversary that occurs on or after the older Owner’s 81st birthday (or the Annuitant’s 81st birthday if the Contract is owned by a non-individual) and before the exercise of the GPWB (if applicable), we calculate the MAV in the same way that we do on each Business Day other than a Contract Anniversary.

Any withdrawals and/or amounts applied to Partial Annuitizations may reduce the 3% AIA and MAV by more than the amount withdrawn and/or annuitized. If the Contract Value (or PB Value if taking a GMIB Partial Annuitization) at the time of withdrawal and/or annuitization is less than the 3% AIA (or MAV as applicable), we deduct more than the amount withdrawn and/or annuitized from the 3% AIA (or MAV as applicable).

The Allianz Alterity® Variable Annuity Contract Prospectus – April 30, 2012

EARNINGS PROTECTION GUARANTEED MINIMUM DEATH BENEFIT

(EARNINGS PROTECTION GMDB)

If Earnings Protection GMDB applies, the amount of the death benefit is the greater of 1 or 2.

1.	The Contract Value, determined as of the end of the Business Day during which we receive in Good Order at our Service Center the death benefit payment option and due proof of death.

2.	Earnings Protection GMDB value, determined as of the end of the Business Day during which we receive in Good Order at our Service Center the death benefit payment option and due proof of death.

For multiple Beneficiaries, we determine the Earnings Protection GMDB value for each surviving Beneficiary’s portion of the death benefit at the time we first receive in Good Order at our Service Center the death benefit payment option and due proof of death. We determine the Contract Value for each surviving Beneficiary’s portion of the death benefit as of the end of the Business Day during which we receive in Good Order at our Service Center their selected death benefit payment option.

Earnings Protection GMDB value is equal to the greater of C. Total Payments, or D. Contract Value Plus (CV Plus). We only calculate these values until the Business Day during which we receive in Good Order at our Service Center the death benefit payment option and due proof of death.

Earnings Protection GMDB carries a higher charge than Traditional GMDB, and may carry a higher charge than Enhanced GMDB. We assess this charge even if the death benefit under Earnings Protection GMDB is no greater than the death benefit under Traditional GMDB or Enhanced GMDB because you have not experienced any earnings under your Contract.

C.	Total Payments
	Total Purchase Payments received before you exercise the GPWB (if applicable), less adjusted partial withdrawals.
For withdrawals (including GPWB Payments and Excess Withdrawals) or traditional Partial Annuitizations, an adjusted partial withdrawal is equal to: ……………………………………………………………………………………...					PW x DB
					CV

For GMIB Partial Annuitizations, an adjusted partial withdrawal is equal to: ……………………………………….				GMIBPA x DB
				PA
PW		=	The amount of any Contract Value applied to a traditional Partial Annuitization or withdrawn (including any withdrawal charge).
GMIBPA		=	The amount of any PB Value applied to a GMIB Partial Annuitization.
DB		=	The greater of: (a) Contract Value, or (b) total Purchase Payments minus prior adjusted partial withdrawals, on the date of (but before) the current partial withdrawal.
CV		=	The Contract Value on the date of (but before) the partial withdrawal.
PA		=	The PB Value on the date of (but before) the partial withdrawal.

Any withdrawals and/or amounts applied to Partial Annuitizations may reduce the total payments by more than the amount withdrawn and/or annuitized. If the Contract Value (or PB Value if taking a GMIB Partial Annuitization) at the time of withdrawal and/or annuitization is less than the total payments, we deduct more than the amount withdrawn and/or annuitized from the total payments.

D.	Contract Value Plus (CV Plus)
	Before exercise of the GPWB (if applicable), CV Plus is equal to the Contract Value,
	Plus
	·	If you were age 69 or younger on the Issue Date, 50% of the lesser of (a) or (b), or
	·	If you were age 70 or older on the Issue Date, 30% of the lesser of (a) or (b), where:
		(a)	Is the Contract Value as determined in number 1 above, minus total Purchase Payments received.
		(b)	Is three times the total Purchase Payments received in the first two Contract Years.

The Allianz Alterity® Variable Annuity Contract Prospectus – April 30, 2012

NOTE FOR CONTRACTS WITH PRIME PLUS BENEFIT:

If you exercise the GPWB, then on and after the exercise date:

the Traditional GMDB value, Enhanced GMDB value, or Earnings Protection GMDB value that applies to your Contract stops increasing, and each GPWB Payment we make and any Excess Withdrawals you take reduces the GMDB value proportionately by the percentage of Contract Value withdrawn (including any withdrawal charge);

·	the death benefit that is equal to your Contract Value continues to fluctuate with market performance but decreases with each GPWB Payment we make and any Excess Withdrawals you take; and

·	the increased M&E charge associated with the Enhanced GMDB or Earnings Protection GMDB (if applicable) continues as long as the Enhanced GMDB value or the Earnings Protection GMDB value is greater than zero.

Please see Appendix D for examples of calculations of the death benefit.

WHEN THE DEATH BENEFIT ENDS

The GMDB that applies to your Contract ends upon the earliest of the following.

·	The Business Day before the Income Date that you take a Full Annuitization.

·	The Business Day that the GMDB value and Contract Value are both zero.

·	When the Contract ends.

The Allianz Alterity® Variable Annuity Contract Prospectus – April 30, 2012

DEATH OF THE OWNER AND/OR ANNUITANT UNDER ALL OTHER CONTRACTS

The following tables are intended to help you better understand what happens upon the death of any Owner and/or Annuitant under the different portions of the Contract. Designating different persons as Owner(s) and Annuitant(s) can have an important impact on whether a death benefit is paid, and on who receives it. Use care when designating Owners and Annuitants, and consult your Financial Professional if you have questions.

UPON THE DEATH OF A SOLE OWNER
Action under the portion of the Contract that is in the Accumulation Phase		Action under any portion of the Contract applied to Annuity Payments
·	We pay a death benefit to the Beneficiary.(1) For a description of the payout options, see the “Death Benefit Payment Options” discussion later in this section.	·	The Beneficiary becomes the Owner.
		·	If the deceased was not an Annuitant, Annuity Payments to the Payee continue. No death benefit is payable.
·	If the GPWB was in effect, it ends unless the deceased Owner’s spouse continues the Contract.	·	If the deceased was the only surviving Annuitant, Annuity Payments to the Payee continue until that portion of the Contract ends and are paid at least as rapidly as they were being paid at the Annuitant’s death. For more information on when any portion of the Contract applied to Traditional Annuity Payments ends, see section 3, The Annuity Phase – Traditional Annuity Payments. For more information on when any portion of the Contract applied to GMIB Payments ends, see section 4, Protected Retirement Income Made Easy: PRIME Plus Benefit – When GMIB Ends. No death benefit is payable under Annuity Options 1, 3, or 6. However, there may be a lump sum available under Annuity Options 2, 4, or 5. For more information, see section 3, The Annuity Phase – Annuity Options.

		·	If the deceased was an Annuitant and there is a surviving joint Annuitant, Annuity Payments to the Payee continue during the lifetime of the surviving joint Annuitant. No death benefit is payable.
( 1)	If the Beneficiary is the spouse of the deceased Owner, he or she may be able to continue the Contract instead of receiving a death benefit payout. If the Contract continues, we increase the Contract Value to equal the death benefit if that amount is greater than the Contract Value as of the Business Day we receive in Good Order at our Service Center the death benefit payment election and due proof of death.

The Allianz Alterity® Variable Annuity Contract Prospectus – April 30, 2012

UPON THE DEATH OF A JOINT OWNER (NOTE: We do not allow Joint Owners to take Partial Annuitizations)
Action under the portion of the Contract that is in the Accumulation Phase		Action under any portion of the Contract applied to Annuity Payments
·	The surviving Joint Owner is the sole primary Beneficiary. If the Joint Owners were spouses there may also be contingent Beneficiaries.	·	The surviving Joint Owner becomes the sole Owner.
		·	If the deceased was not an Annuitant, Annuity Payments to the Payee continue. No death benefit is payable.
·	We pay a death benefit to the surviving Joint Owner.(1) For a description of the payout options available, see the “Death Benefit Payment Options” discussion later in this section.	·	If the deceased was the only surviving Annuitant, Annuity Payments to the Payee continue until that portion of the Contract ends and are paid at least as rapidly as they were being paid at the Annuitant’s death. For more information on when any portion of the Contract applied to Traditional Annuity Payments ends, see section 3, The Annuity Phase – Traditional Annuity Payments. For more information on when any portion of the Contract applied to GMIB Payments ends, see section 4, Protected Retirement Income Made Easy: PRIME Plus Benefit – When GMIB Ends. No death benefit is payable under Annuity Options 1, 3, or 6. However, there may be a lump sum available under Annuity Options 2, 4, or 5. For more information, see section 3, The Annuity Phase – Annuity Options.
·	If the GPWB was in effect, it ends unless the Joint Owners were spouses and the surviving spouse who is also the Joint Owner continues the Contract.
		·	If the deceased was an Annuitant and there is a surviving joint Annuitant, Annuity Payments to the Payee continue during the lifetime of the surviving joint Annuitant. No death benefit is payable.
(1)	If the surviving Joint Owner is the spouse of the deceased Owner, he or she may be able to continue the Contract instead of receiving a death benefit payout. If the Contract continues, we increase the Contract Value to equal the death benefit if that amount is greater than the Contract Value as of the Business Day we receive in Good Order at our Service Center an the death benefit payment election and due proof of death. If both spousal Joint Owners die before we pay the death benefit, we pay any contingent Beneficiaries or the estate of the Joint Owner who died last if there are no contingent Beneficiaries. If the Joint Owners were not spouses and they both die before we pay the death benefit, for tax reasons, we pay the estate of the Joint Owner who died last.

The Allianz Alterity® Variable Annuity Contract Prospectus – April 30, 2012

UPON THE DEATH OF THE ANNUITANT AND THERE IS NO SURVIVING JOINT ANNUITANT
Action under the portion of the Contract that is in the Accumulation Phase		Action under any portion of the Contract applied to Annuity Payments
· · ·	If the Contract is owned by a non-individual (for example, a qualified plan or a trust), we treat the death of the Annuitant as the death of an Owner; we pay the Beneficiary(1) a death benefit, and a new Annuitant cannot be named. If the GPWB was in effect, it ends unless the deceased Annuitant’s spouse continues the Contract. If the deceased Annuitant was not an Owner, and the Contract is owned only by an individual(s), no death benefit is payable. The Owner can name a new Annuitant subject to our approval. If the GPWB was in effect, it continues. If the deceased Annuitant was a sole Owner, we pay the Beneficiary(1) a death benefit. If the GPWB was in effect, it ends unless the deceased Owner’s spouse continues the Contract.	·	Annuity Payments to the Payee continue until that portion of the Contract ends and are paid at least as rapidly as they were being paid at the Annuitant’s death. For more information on when any portion of the Contract applied to Traditional Annuity Payments ends, see section 3, The Annuity Phase – Traditional Annuity Payments. For more information on when any portion of the Contract applied to GMIB Payments ends, see section 4, Protected Retirement Income Made Easy: PRIME Plus Benefit – When GMIB Ends. No death benefit is payable under Annuity Options 1, 3, or 6. However, there may be a lump sum available under Annuity Options 2, 4, or 5. For more information, see section 3, The Annuity Phase – Annuity Options.
·	If the deceased Annuitant was a Joint Owner and there is a surviving Joint Owner, the surviving Joint Owner is the sole primary Beneficiary. If the Joint Owners were spouses, there may also be contingent Beneficiaries. We pay a death benefit to the surviving Joint Owner.(2) If the GPWB was in effect, it ends unless the Joint Owners were spouses and the surviving spouse who is also the Joint Owner continues the Contract.	·	If the deceased was a sole Owner, the Beneficiary becomes the Owner if the Contract continues.
		·	If the deceased was a Joint Owner, the surviving Joint Owner becomes the sole Owner if the Contract continues.
·	For a description of the payout options, see the “Death Benefit Payment Options” discussion later in this section.
(1)	If the Beneficiary is the spouse of the deceased Owner, he or she may be able to continue the Contract instead of receiving a death benefit payout. If the Contract continues, we increase the Contract Value to equal the death benefit if that amount is greater than the Contract Value as of the Business Day we receive in Good Order at our Service Center the death benefit payment election and due proof of death. If the deceased was the Annuitant and the Owner was a non-individual, the surviving spouse becomes the new Owner upon Contract continuation.
(2)	If the surviving Joint Owner is the spouse of the deceased Owner, he or she may be able to continue the Contract instead of receiving a death benefit payout. If the Contract continues, we increase the Contract Value to equal the death benefit if that amount is greater than the Contract Value as of the Business Day we receive in Good Order at our Service Center the death benefit payment election and due proof of death. If both spousal Joint Owners die before we pay the death benefit, we pay any contingent Beneficiaries or the estate of the Joint Owner who died last if there are no contingent Beneficiaries. If the Joint Owners were not spouses and they both die before we pay the death benefit, for tax reasons, we pay the estate of the Joint Owner who died last.

The Allianz Alterity® Variable Annuity Contract Prospectus – April 30, 2012

UPON THE DEATH OF THE ANNUITANT AND THERE IS A SURVIVING JOINT ANNUITANT (NOTE: We only allow joint Annuitants on Full Annuitization)
Action under the portion of the Contract that is in the Accumulation Phase		Action under any portion of the Contract applied to Annuity Payments
·	Only Annuity Options 3 and 4 allow joint Annuitants. Under Annuity Options 3 and 4, Annuity Payments to the Payee continue during the lifetime of the surviving joint Annuitant and, for Annuity Option 4, during any remaining specified period of time. For more information, see section 3, The Annuity Phase – Annuity Options.	·	No death benefit is payable.
		·	If the deceased was a sole Owner, the Beneficiary becomes the Owner.
		·	If the deceased was a Joint Owner, the surviving Joint Owner becomes the sole Owner.

DEATH BENEFIT PAYMENT OPTIONS DURING THE ACCUMULATION PHASE

If you have not previously designated a death benefit payment option, a Beneficiary must request the death benefit be paid under one of the death benefit payment options below. If the Beneficiary is the spouse of the deceased Owner, he/she can choose to continue the Contract in his/her own name. Spouses must qualify as such under federal law to continue the Contract. With respect to the Earnings Protection GMDB, the Contract Value is then treated as the total Purchase Payments in the calculation of the death benefit for the Contract continued by the spouse. An election by the spouse to continue the Contract must be made on the death claim form before we pay the death benefit. If the surviving spouse continues the Contract, we increase the Contract Value to equal the death benefit if that amount is greater than the Contract Value as of the Business Day we receive in Good Order at our Service Center the death benefit payment option and due proof of death. If the surviving spouse continues the Contract, he or she may exercise all of the Owner’s rights under this Contract, including naming a new Beneficiary or Beneficiaries. If the surviving spouse continues the Contract, any optional benefits also continue with the possible exception of the GMIB Payments under PRIME Plus Benefit, which can only continue if the surviving spouse is also an Annuitant. For more information, please see section 4, PRIME Plus Benefit – When GMIB Ends. If a lump sum payment is requested, we pay the amount within seven days of our receipt of the death benefit payment option and due proof of death, including any required governmental forms, unless the suspension of payments or transfers provision is in effect. Payment of the death benefit may be delayed, pending receipt of any applicable tax consents and/or state forms. If the spouse continues the Contract, the spouse will be subject to any remaining withdrawal charge.

Option A: Lump sum payment of the death benefit.

Option B: Payment of the entire death benefit within five years of the date of any Owner’s death.

Option C: For a Nonqualified Contract, if the Beneficiary is an individual, payment of the death benefit as an Annuity Payment under an Annuity Option is over the lifetime of the Beneficiary or over a period not extending beyond the life expectancy of the Beneficiary. For a Qualified Contract, if the Beneficiary is an individual, Annuity Payments can be made over a period not extending beyond the Beneficiary’s life expectancy. Distribution under this option must begin within one year of the date of any Owner’s death. GMIB Payments are not available under this option.

Any portion of the death benefit not applied to Traditional Annuity Payments within one year of the date of the Owner’s death must be distributed within five years of the date of death.

If the Contract is owned by a non-individual, then we treat the death of any Annuitant as the death of an Owner for purposes of the Internal Revenue Code’s distribution at death rules, which are set forth in Section 72(s) of the Code.

In all events, notwithstanding any provision to the contrary in the Contract or this prospectus, the Contract is interpreted and administered in accordance with Section 72(s) of the Code.

Other rules may apply to Qualified Contracts.

The Allianz Alterity® Variable Annuity Contract Prospectus – April 30, 2012

11.	OTHER INFORMATION

ALLIANZ LIFE

Allianz Life is a stock life insurance company organized under the laws of the state of Minnesota in 1896. Our address is 5701 Golden Hills Drive, Minneapolis, MN 55416. We offer fixed and variable annuities and individual life insurance. We are licensed to do direct business in 49 states and the District of Columbia. We are a subsidiary of Allianz SE, a provider of integrated financial services.

THE SEPARATE ACCOUNT

We established Allianz Life Variable Account B (the Separate Account) as a separate account under Minnesota insurance law on May 31, 1985. The Separate Account is registered with the Securities and Exchange Commission as a unit investment trust under the Investment Company Act of 1940. The SEC does not supervise our management of the Separate Account.

The Separate Account holds the assets that underlie the Contracts, except assets allocated to our general account. We keep the Separate Account assets separate from the assets of our general account and other separate accounts. The Separate Account is divided into subaccounts, each of which invests exclusively in a single Investment Option.

We own the assets of the Separate Account. We credit gains to or charge losses against the Separate Account, whether or not realized, without regard to the performance of other investment accounts. The Separate Account’s assets may not be used to pay any of our liabilities, other than those arising from the Contracts.

If the Separate Account’s assets exceed the required reserves and other liabilities, we may transfer the excess to our general account, to the extent of seed money invested by us or earned fees and charges. The obligations under the Contracts are obligations of Allianz Life.

DISTRIBUTION

Allianz Life Financial Services, LLC (Allianz Life Financial), a wholly owned subsidiary of Allianz Life Insurance Company of North America, serves as principal underwriter for the Contracts. Allianz Life Financial, a limited liability company organized in Minnesota, is located at 5701 Golden Hills Drive, Minneapolis, MN 55416. Allianz Life Financial is registered as a broker/dealer with the SEC under the Securities Exchange Act of 1934 (the 1934 Act), as well as with the securities commissions in the states in which it operates, and is a member of the Financial Industry Regulatory Authority (FINRA). Allianz Life Financial is not a member of Securities Investors Protection Corporation. More information about Allianz Life Financial is available at http://www.finra.org or by calling 1-800-289-9999. You also can obtain an investor brochure from FINRA describing its Public Disclosure Program.

We have entered into a distribution agreement with our affiliate Allianz Life Financial for the distribution and sale of the Contracts. Allianz Life Financial also may perform various administrative services on our behalf. Allianz Life Financial does not itself sell the Contracts on a retail basis. Rather, Allianz Life Financial enters into selling agreements with other broker/dealers registered under the 1934 Act (selling firms) for the sale of the Contracts. These selling firms include third party broker/dealers and Questar Capital Corporation, an affiliated broker/dealer. We pay sales commissions to the selling firms and their registered representatives. Investment Options that assess Rule 12b-1 fees make payments of the fees to Allianz Life Financial as consideration for providing certain services and incurring certain expenses permitted under the Investment Option’s plan. These payments typically equal 0.25% of an Investment Option’s average daily net assets for the most recent calendar year. The investment adviser and/or subadviser (and/or their affiliates) of an Investment Option may from time to time make payments for administrative services to Allianz Life Financial or its affiliates.

The maximum commission payable to the selling firms for Contract sales is expected to not exceed 7% of Purchase Payments. Sometimes, we enter into an agreement with a selling firm to pay commissions as a combination of a certain amount of the commission at the time of sale and a trail commission which, when totaled, could exceed 7% of Purchase Payments.

We may fund Allianz Life Financial’s operating and other expenses, including: overhead; legal and accounting fees; Financial Professional training; compensation for the Allianz Life Financial management team; and other expenses associated with the Contracts. Financial Professionals and their managers are also eligible for various benefits, such as production incentive bonuses, insurance benefits, and non-cash compensation items that we may provide jointly with Allianz Life Financial. Non-cash items include conferences, seminars and trips (including travel, lodging and meals in connection therewith), entertainment, awards, merchandise and other similar items.

The Allianz Alterity® Variable Annuity Contract Prospectus – April 30, 2012

Selling firms and their Financial Professionals and managers may receive other payments from us for administrative issues and for services that do not directly involve the sale of the Contracts, including payments made for the recruitment and training of personnel, production of promotional literature and similar services. In addition, certain firms and their representatives may receive compensation for distribution and administrative services when acting in a wholesaling capacity and working with retail firms.

We and/or Allianz Life Financial may pay certain selling firms additional marketing support allowances for:

·	marketing services and increased access to Financial Professionals;

·	sales promotions relating to the Contracts;

·	costs associated with sales conferences and educational seminars for their Financial Professionals;

·	the cost of client meetings and presentations; and

·	other sales expenses incurred by them.

We retain substantial discretion in determining whether to grant a marketing support payment to a particular broker/dealer firm and the amount of any such payment. However, we do consider a number of specific factors in determining marketing support payments, which may include a review of the following:

·	the level of existing sales and assets held in contracts issued by us that are sold through the broker/dealer firm and the potential for new or additional sales;

·	the organizational “fit” between the broker/dealer firm and the type of wholesaling and marketing force we operate;

·	whether the broker/dealer firm’s operational, IT, and support services structure and requirements are compatible with our method of operation;

·	whether the broker/dealer firm’s product mix is oriented toward our core markets;

·	whether the broker/dealer firm has a structure facilitating a marketing support arrangement, such as frequent Financial Professional meetings and training sessions;

·	the potential return on investment of investing in a particular firm’s system;

·	our potential ability to obtain a significant level of the market share in the broker/dealer firm’s distribution channel;

·	the broker/dealer firm’s Financial Professional and customer profiles; and

·	the prominence and reputation of the broker/dealer firm in its marketing channel.

We may also make payments for marketing and wholesaling support to broker/dealer affiliates of Investment Options that are available through the variable annuities we offer. Additional information regarding marketing support payments can be found in the Distributor section of the Statement of Additional Information.

We and/or Allianz Life Financial may make bonus payments to certain selling firms based on aggregate sales of our variable insurance contracts (including this Contract) or persistency standards, or as part of a special promotion. These additional payments are not offered to all selling firms, and the terms of any particular agreement governing the payments may vary among selling firms. In some instances, the amount paid may be significant.

A portion of the payments made to selling firms may be passed on to their Financial Professionals in accordance with their internal compensation programs. Those programs may also include other types of cash and non-cash compensation and other benefits. Ask your Financial Professional for further information about what your Financial Professional and the selling firm for which he or she works may receive in connection with your purchase of a Contract.

We intend to recover commissions and other sales expenses through fees and charges imposed under the Contract. Commissions paid on the Contract, including other incentives or payments, are not charged directly to the Owners or the Separate Account.

We offer the Contracts to the public on a continuous basis. We anticipate continuing to offer the Contracts but reserve the right to discontinue the offering.

ADDITIONAL CREDITS FOR CERTAIN GROUPS

We may credit additional amounts to a Contract instead of modifying charges because of special circumstances that result in lower sales or administrative expenses or better than expected mortality or persistency experience.

The Allianz Alterity® Variable Annuity Contract Prospectus – April 30, 2012

ADMINISTRATION/ALLIANZ SERVICE CENTER

The Allianz Service Center performs certain administrative services regarding the Contracts and is located at 5701 Golden Hills Drive, Minneapolis, Minnesota. The Service Center mailing address and telephone number are listed at the back of this prospectus. The administrative services performed by our Service Center include:

·	issuance and maintenance of the Contracts,

·	maintenance of Owner records,

·	processing and mailing of account statements and other mailings to Owners, and

·	routine customer service including:

–

responding to Owner correspondence and inquiries,

–

processing of Contract changes,

–

processing withdrawal requests (both partial and total) and

–

processing annuitization requests.

To reduce expenses, only one copy of most financial reports and prospectuses, including reports and prospectuses for the Investment Options, are mailed to your household, even if you or other persons in your household have more than one contract issued by us or our affiliate. Call us at the toll-free telephone number listed at the back of this prospectus if you need additional copies of financial reports, prospectuses, or annual and semiannual reports, or if you would like to receive one copy for each contract in future mailings.

LEGAL PROCEEDINGS

We and our subsidiaries, like other life insurance companies, from time to time are involved in legal proceedings of various kinds, including regulatory proceedings and individual and class action lawsuits. In some legal proceedings involving insurers, substantial damages have been sought and/or material settlement payments have been made. Although the outcome of any such proceedings cannot be predicted with certainty, we believe that, at the present time, there are no pending or threatened legal proceedings to which we, the Separate Account, or Allianz Life Financial is a party that are reasonably likely to materially affect the Separate Account, our ability to meet our obligations under the Contracts, or Allianz Life Financial’s ability to perform its obligations.

FINANCIAL STATEMENTS

The consolidated financial statements of Allianz Life and the financial statements of the Separate Account have been included in Part C of the Registration Statement.

STATUS PURSUANT TO SECURITIES EXCHANGE ACT OF 1934

Allianz Life hereby relies on the exemption provided by Rule 12h-7 under the Securities Exchange Act of 1934 from the requirement to file reports pursuant to Section 15(d) of that Act.

The Allianz Alterity® Variable Annuity Contract Prospectus – April 30, 2012

12.	TABLE OF CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION (SAI)

Allianz Life……………………………………………………...........	2
Experts………………………………………………………….…....…	2
Legal Opinions……………………………………………………….	2
Distributor……………………………………………………….……….	2
Reduction or Elimination of the Withdrawal Charge………………..	3
Federal Tax Status…………………………………………..….…..	3
General…………………………………………………………...…	3
Diversification…………………………………………….…......….	4
Owner Control………………………………………………..….	4
Contracts Owned by Non-Individuals……………………..…..	5
Income Tax Withholding………………………………..….......	5
Required Distributions…………………………………..………	5
Qualified Contracts……………………………………………...	6
Annuity Provisions…………………………………………….........	6
Annuity Units/Calculating Annuity Payments…………….….	7
Mortality and Expense Risk Guarantee………………………..….	7
Information on May 2003 Contracts………………………..……..	7
Information on Contracts That Were Offered
Before April 29, 2005………………………..………..………...	15
Information on Original Contracts………………………….…..….	16
Financial Statements…………………………………..…..……….	18
Appendix – Condensed Financial Information…...……..………..	18

The Allianz Alterity® Variable Annuity Contract Prospectus – April 30, 2012

13.	PRIVACY AND SECURITY STATEMENT

2012

Your privacy is a high priority for Allianz. Our pledge to protect your privacy is reflected in our Privacy and Security Statement. This statement outlines our principles for collecting, using and protecting information that we maintain about you.

This statement applies to all of the companies within the Allianz family of companies that issue insurance policies. The law allows us to share your information among our insurance companies. The law does not allow you to prevent these disclosures. A list of our companies can be found at the end of this notice.

Information about you that Allianz collects

Allianz collects information about you so that we can process the insurance transactions you request. We limit the amount of your information collected to what we feel is needed to maintain your account. We may collect your information from the following sources:

·	From you, either directly or through your agent. This may include information on your insurance application or other forms you may complete, such as your name, address and telephone number.

·	From others, through the process of handling a claim. This may include information from medical or accident reports.

·	From your doctor or during a home visit by a health assessment professional. This may include medical information about you gathered with your written authorization.

·	From your relationship with us, such as the number of years you have been a customer or the types of insurance products you purchased.

·	From a consumer reporting agency such as a medical, credit, or motor vehicle report. The information in these reports may be kept by the agency and shared with others.

Information about you that Allianz shares

Allianz does not share information about current or former customers with anyone, except as “allowed by law.” “Allowed by law” means that we may share your information, such as your name, address, and policy information, as follows:

·	With affiliates and service providers in order to administer or service your policy.

·	With consumer reporting agencies to obtain a medical report, credit report, or motor vehicle report. These reports are used to determine eligibility for coverage or to process your requested transactions.

·	With your insurance agent so that they can perform services for you.

·	With medical professionals in order to process your claim.

·	With a state Department of Insurance in order to examine our records or business practices.

·	With a state or federal law enforcement agency, as required by law or to report suspected fraud activities.

·	With research groups to conduct studies on claims results. No individual is identified in any study or report.

Service providers with whom we legally share your information are required to sign a Privacy and Security Agreement with Allianz.

Allianz does not sell your information to anyone

We do not share your information with anyone for their own marketing purposes. For this reason, we are not required to obtain an “opt-in election,” an “opt-out election” or an authorization from you. We also do not share your information with any of our affiliated companies except to administer or service your policy.

Allianz policies and practices regarding security of your information

Allianz uses computer hardware and software tools to maintain physical and electronic safeguards. These safeguards comply with applicable federal and state regulations. We use state-of-the-art technology to secure our websites and protect the information that may be shared over these sites.

If you visit one of our websites, we may use “cookies” (small text files sent from our site to your hard drive). These cookies help us to recognize repeat visitors and allow easy access to and use of the site. We do not use cookies to gather your information. The cookies only enable you to use our website more easily. Refer to the Privacy link at the bottom of our website for more information on browsing privacy practices.

Your ability to access and correct your information

You have the right to access and obtain a copy of your information. This does not include the right to access and copy your information related to a claim or civil or criminal proceeding. If you wish to review your information, please write us at the address below. Provide your full name, address and policy number(s). For your protection, please have your request notarized.

The Allianz Alterity® Variable Annuity Contract Prospectus – April 30, 2012

This will ensure the identity of the person requesting your information. Alternately, you may also make your request through our secure website.

Within 30 working days of our receipt of your request, your information will be available. You may see the information in person or we will send you a copy. If medical information is contained in your file, we may request that you name a medical professional to whom we will send your information.

If you believe any of your information is incorrect, notify us in writing at the address below. Within 30 working days, we will let you know if our review has resulted in a correction of your information. If we do not agree there is an error, you may file a statement disputing our finding. We will attach the statement to your file. We will send any corrections we make, or your statement, to anyone we shared your information with over the past two years, and to anyone who may receive your information from us in the future. We do not control the information about you that is obtained from a consumer reporting agency or a Department of Motor Vehicles. At your request, we will provide you with the names and addresses of these agencies so that you can contact them directly.

Montana residents: You may write to us and also ask for a record of any disclosure of your medical information made within the last three years.

Notification of change

Your trust is one of our most important assets. If we revise our privacy practices in the future, we will notify you prior to introducing any changes. This Privacy and Security Statement is also displayed on our website (http://www.allianzlife.com).

For more information or if you have questions

If you have any questions or concerns about our privacy policies or procedures, please call the Corporate Compliance Privacy Office at 800.328.5600, write us at the following address or contact us via the website.

Allianz Life Insurance Company of North America

PO Box 1344

Minneapolis, MN 55440-1344

Allianz family of companies:

·	Allianz Life Insurance Company of North America

·	Allianz Life Insurance Company of New York

·	Allianz Investment Management LLC

·	Allianz Life Financial Services, LLC

·	Questar Asset Management, Inc.

·	Questar Capital Corporation

M40018 (R-12/2011)

The Allianz Alterity® Variable Annuity Contract Prospectus – April 30, 2012

APPENDIX A – CONDENSED FINANCIAL INFORMATION

The consolidated financial statements of Allianz Life Insurance Company of North America and the financial statements of Allianz Life Variable Account B are included in Part C of the Registration Statement.

Accumulation Unit value (AUV) information corresponding to the lowest and highest combination of charges for the Contract described by this prospectus is listed in the tables below. You can find AUV information corresponding to the additional combinations of charges in the appendix to the Statement of Additional Information (SAI), which is available without charge by contacting us at the telephone number or address listed at the back of this prospectus.

This information should be read in conjunction with the financial statements and related notes of the Separate Account included in Part C of the Registration Statement.

Lowest and Highest Combination of Benefit Options	Separate Account Annual Expenses(1)
Allianz Alterity – Base Contract with Traditional GMDB	1.50%
Allianz Alterity – Contract with Earnings Protection GMDB and PRIME Plus Benefit	2.45%

(1)

The Separate Account annual expenses for a May 2003 Contract with the Traditional GMDB and no PRIME Benefit (1.50%) and a May 2003 Contract with the Earnings Protection GMDB and Enhanced PRIME Benefit (2.45%) are the same as the expenses for the currently offered Contract, therefore the AUV information is the same. Please see the Statement of Additional Information for more information on the May 2003 Contract.

(Number of Accumulation Units in thousands)

Separate Account Annual Expenses 1.50%						Separate Account Annual Expenses 2.45%
Period or Year Ended	AUV at Beginning of Period		AUV at End of Period		Number of Accumulation Units Outstanding at End of Period	Period or Year Ended	AUV at Beginning of Period	AUV at End of Period	Number of Accumulation Units Outstanding at End of Period
AZL Balanced Index Strategy Fund
12/31/2009		N/A		10.033	15	12/31/2009	N/A	10.014	31
12/31/2010		10.033		10.921	23	12/31/2010	10.014	10.798	41
12/31/2011		10.921		11.018	22	12/31/2011	10.798	10.791	56
AZL Franklin Templeton Founding Strategy Plus Fund
12/31/2009		N/A		10.216	4	12/31/2009	N/A	10.197	7
12/31/2010		10.216		11.072	9	12/31/2010	10.197	10.948	14
12/31/2011		11.072		10.708	27	12/31/2011	10.948	10.487	82
AZL Fusion Balanced Fund
12/31/2005		N/A		10.623	216	12/31/2005	N/A	10.555	204
12/31/2006		10.623		11.458	415	12/31/2006	10.555	11.277	570
12/31/2007		11.458		12.089	633	12/31/2007	11.277	11.786	593
12/31/2008		12.089		8.640	626	12/31/2008	11.786	8.344	696
12/31/2009		8.640		10.785	484	12/31/2009	8.344	10.317	720
12/31/2010		10.785		11.801	422	12/31/2010	10.317	11.181	643
12/31/2011		11.801		11.521	344	12/31/2011	11.181	10.813	615
AZL Fusion Conservative Fund
12/31/2009		N/A		10.152	18	12/31/2009	N/A	10.133	33
12/31/2010		10.152		11.097	49	12/31/2010	10.133	10.972	54
12/31/2011		11.097		11.003	44	12/31/2011	10.972	10.776	73
AZL Fusion Moderate Fund
12/31/2005		N/A		10.801	271	12/31/2005	N/A	10.732	502
12/31/2006		10.801		11.780	498	12/31/2006	10.732	11.595	1147
12/31/2007		11.780		12.363	517	12/31/2007	11.595	12.053	1298
12/31/2008		12.363		8.189	512	12/31/2008	12.053	7.908	1285
12/31/2009		8.189		10.441	482	12/31/2009	7.908	9.987	1316
12/31/2010		10.441		11.493	450	12/31/2010	9.987	10.890	1274
12/31/2011		11.493		11.001	415	12/31/2011	10.890	10.325	1241
AZL Gateway Fund
12/31/2010		N/A		10.095	0	12/31/2010	N/A	10.031	0
12/31/2011		10.095		10.250	0	12/31/2011	10.031	10.088	10

The Allianz Alterity® Variable Annuity Contract Prospectus – April 30, 2012

Appendix A

Separate Account Annual Expenses 1.50%						Separate Account Annual Expenses 2.45%
Period or Year Ended	AUV at Beginning of Period		AUV at End of Period		Number of Accumulation Units Outstanding at End of Period	Period or Year Ended	AUV at Beginning of Period		AUV at End of Period	Number of Accumulation Units Outstanding at End of Period
AZL Growth Index Strategy Fund
12/31/2009		N/A		10.065	43	12/31/2009		N/A	10.046	13
12/31/2010		10.065		11.245	42	12/31/2010		10.046	11.119	12
12/31/2011		11.245		11.080	67	12/31/2011		11.119	10.851	126
AZL Invesco Equity and Income Fund
12/31/2004		N/A		10.803	54	12/31/2004		N/A	10.734	110
12/31/2005		10.803		11.361	78	12/31/2005		10.734	11.182	216
12/31/2006		11.361		12.593	129	12/31/2006		11.182	12.278	331
12/31/2007		12.593		12.785	153	12/31/2007		12.278	12.347	418
12/31/2008		12.785		9.582	132	12/31/2008		12.347	9.165	395
12/31/2009		9.582		11.596	117	12/31/2009		9.165	10.987	394
12/31/2010		11.596		12.764	109	12/31/2010		10.987	11.980	371
12/31/2011		12.764		12.301	117	12/31/2011		11.980	11.436	424
AZL Money Market Fund
12/31/2003		N/A		10.369	46	12/31/2003		N/A	9.990	81
12/31/2004		10.369		10.283	397	12/31/2004		9.990	9.814	242
12/31/2005		10.283		10.391	413	12/31/2005		9.814	9.823	424
12/31/2006		10.391		10.691	543	12/31/2006		9.823	10.012	463
12/31/2007		10.691		11.037	728	12/31/2007		10.012	10.237	658
12/31/2008		11.037		11.138	1090	12/31/2008		10.237	10.233	1401
12/31/2009		11.138		10.996	771	12/31/2009		10.233	10.007	1032
12/31/2010		10.996		10.833	614	12/31/2010		10.007	9.765	1001
12/31/2011		10.833		10.673	519	12/31/2011		9.765	9.530	940
BlackRock Global Allocation V.I. Fund
12/31/2008		N/A		7.914	18	12/31/2008		N/A	7.864	62
12/31/2009		7.914		9.427	142	12/31/2009		7.864	9.278	175
12/31/2010		9.427		10.193	154	12/31/2010		9.278	9.938	176
12/31/2011		10.193		9.676	178	12/31/2011		9.938	9.345	399
Fidelity VIP FundsManager 50% Portfolio
12/31/2011		N/A		10.719	0	12/31/2011		N/A	10.152	0
Fidelity VIP FundsManager 60% Portfolio
12/31/2011		N/A		9.649	2	12/31/2011		N/A	9.257	0
Franklin High Income Securities Fund
12/31/2003		N/A		20.747	48	12/31/2003		N/A	18.030	27
12/31/2004		20.747		22.455	74	12/31/2004		18.030	19.329	75
12/31/2005		22.455		22.855	84	12/31/2005		19.329	19.488	109
12/31/2006		22.855		24.624	68	12/31/2006		19.488	20.798	130
12/31/2007		24.624		24.914	88	12/31/2007		20.798	20.843	134
12/31/2008		24.914		18.805	77	12/31/2008		20.843	15.583	119
12/31/2009		18.805		26.434	67	12/31/2009		15.583	21.698	150
12/31/2010		26.434		29.493	80	12/31/2010		21.698	23.980	125
12/31/2011		29.493		30.380	62	12/31/2011		23.980	24.468	100
Franklin Income Securities Fund
12/31/2003		N/A		35.607	24	12/31/2003		N/A	30.943	13
12/31/2004		35.607		39.935	75	12/31/2004		30.943	34.375	87
12/31/2005		39.935		39.973	150	12/31/2005		34.375	34.084	183
12/31/2006		39.973		46.562	218	12/31/2006		34.084	39.328	271
12/31/2007		46.562		47.588	266	12/31/2007		39.328	39.812	285
12/31/2008		47.588		32.976	244	12/31/2008		39.812	27.326	250
12/31/2009		32.976		44.048	229	12/31/2009		27.326	36.156	230
12/31/2010		44.048		48.890	210	12/31/2010		36.156	39.751	215
12/31/2011		48.890		49.313	178	12/31/2011		39.751	39.716	193

The Allianz Alterity® Variable Annuity Contract Prospectus – April 30, 2012

Appendix A

Separate Account Annual Expenses 1.50%						Separate Account Annual Expenses 2.45%
Period or Year Ended	AUV at Beginning of Period		AUV at End of Period		Number of Accumulation Units Outstanding at End of Period	Period or Year Ended	AUV at Beginning of Period	AUV at End of Period	Number of Accumulation Units Outstanding at End of Period
Franklin U.S. Government Fund
12/31/2003		N/A		23.183	65	12/31/2003	N/A	20.147	34
12/31/2004		23.183		23.631	104	12/31/2004	20.147	20.341	120
12/31/2005		23.631		23.839	143	12/31/2005	20.341	20.327	170
12/31/2006		23.839		24.429	157	12/31/2006	20.327	20.633	175
12/31/2007		24.429		25.653	175	12/31/2007	20.633	21.461	191
12/31/2008		25.653		27.188	170	12/31/2008	21.461	22.529	265
12/31/2009		27.188		27.612	150	12/31/2009	22.529	22.665	221
12/31/2010		27.612		28.638	112	12/31/2010	22.665	23.284	196
12/31/2011		28.638		29.815	103	12/31/2011	23.284	24.013	192
PIMCO VIT All Asset Portfolio
12/31/2004		N/A		11.870	114	12/31/2004	N/A	11.794	83
12/31/2005		11.870		12.422	366	12/31/2005	11.794	12.227	217
12/31/2006		12.422		12.808	305	12/31/2006	12.227	12.487	187
12/31/2007		12.808		13.667	177	12/31/2007	12.487	13.198	182
12/31/2008		13.667		11.330	149	12/31/2008	13.198	10.838	192
12/31/2009		11.330		13.569	160	12/31/2009	10.838	12.857	169
12/31/2010		13.569		15.117	202	12/31/2010	12.857	14.188	288
12/31/2011		15.117		15.183	169	12/31/2011	14.188	14.116	299
PIMCO VIT Emerging Markets Bond Portfolio
12/31/2005		N/A		10.920	3	12/31/2005	N/A	10.851	23
12/31/2006		10.920		11.756	23	12/31/2006	10.851	11.571	37
12/31/2007		11.756		12.254	37	12/31/2007	11.571	11.947	45
12/31/2008		12.254		10.309	38	12/31/2008	11.947	9.955	44
12/31/2009		10.309		13.262	37	12/31/2009	9.955	12.686	50
12/31/2010		13.262		14.655	49	12/31/2010	12.686	13.885	131
12/31/2011		14.655		15.351	43	12/31/2011	13.885	14.408	94
PIMCO VIT Global Advantage Strategy Bond Portfolio
12/31/2011		N/A		9.807	9	12/31/2011	N/A	9.745	0
PIMCO VIT Global Bond Portfolio (Unhedged)
12/31/2005		N/A		9.343	29	12/31/2005	N/A	9.283	23
12/31/2006		9.343		9.632	47	12/31/2006	9.283	9.480	45
12/31/2007		9.632		10.412	63	12/31/2007	9.480	10.151	66
12/31/2008		10.412		10.170	88	12/31/2008	10.151	9.821	122
12/31/2009		10.170		11.709	97	12/31/2009	9.821	11.200	122
12/31/2010		11.709		12.879	101	12/31/2010	11.200	12.203	139
12/31/2011		12.879		13.649	128	12/31/2011	12.203	12.810	133
PIMCO VIT Global Multi-Asset Portfolio
12/31/2009		N/A		10.009	10	12/31/2009	N/A	9.990	0
12/31/2010		10.009		10.979	29	12/31/2010	9.990	10.856	37
12/31/2011		10.979		10.629	26	12/31/2011	10.856	10.410	77
PIMCO VIT High Yield Portfolio
12/31/2003		N/A		11.267	80	12/31/2003	N/A	10.855	38
12/31/2004		11.267		12.160	191	12/31/2004	10.855	11.605	173
12/31/2005		12.160		12.474	237	12/31/2005	11.605	11.792	208
12/31/2006		12.474		13.407	192	12/31/2006	11.792	12.555	217
12/31/2007		13.407		13.670	230	12/31/2007	12.555	12.679	214
12/31/2008		13.670		10.296	188	12/31/2008	12.679	9.459	231
12/31/2009		10.296		14.244	206	12/31/2009	9.459	12.963	280
12/31/2010		14.244		16.067	189	12/31/2010	12.963	14.483	306
12/31/2011		16.067		16.361	159	12/31/2011	14.483	14.609	254

The Allianz Alterity® Variable Annuity Contract Prospectus – April 30, 2012

Appendix A

Separate Account Annual Expenses 1.50%						Separate Account Annual Expenses 2.45%
Period or Year Ended	AUV at Beginning of Period		AUV at End of Period		Number of Accumulation Units Outstanding at End of Period	Period or Year Ended	AUV at Beginning of Period	AUV at End of Period	Number of Accumulation Units Outstanding at End of Period
PIMCO VIT Real Return Portfolio
12/31/2003		N/A		10.509	56	12/31/2003	N/A	10.442	47
12/31/2004		10.509		11.275	190	12/31/2004	10.442	11.098	237
12/31/2005		11.275		11.341	300	12/31/2005	11.098	11.057	349
12/31/2006		11.341		11.253	323	12/31/2006	11.057	10.867	330
12/31/2007		11.253		12.267	276	12/31/2007	10.867	11.734	305
12/31/2008		12.267		11.231	274	12/31/2008	11.734	10.641	347
12/31/2009		11.231		13.099	253	12/31/2009	10.641	12.294	376
12/31/2010		13.099		13.951	226	12/31/2010	12.294	12.969	370
12/31/2011		13.951		15.349	204	12/31/2011	12.969	14.134	383
PIMCO VIT Total Return Portfolio
12/31/2003		N/A		12.665	138	12/31/2003	N/A	12.202	126
12/31/2004		12.665		13.086	290	12/31/2004	12.202	12.489	316
12/31/2005		13.086		13.208	385	12/31/2005	12.489	12.486	415
12/31/2006		13.208		13.513	386	12/31/2006	12.486	12.654	513
12/31/2007		13.513		14.477	419	12/31/2007	12.654	13.428	518
12/31/2008		14.477		14.946	399	12/31/2008	13.428	13.731	532
12/31/2009		14.946		16.795	437	12/31/2009	13.731	15.284	688
12/31/2010		16.795		17.888	443	12/31/2010	15.284	16.125	662
12/31/2011		17.888		18.259	371	12/31/2011	16.125	16.304	629
PIMCO VIT Unconstrained Bond Portfolio
12/31/2011		N/A		9.795	20	12/31/2011	N/A	9.733	7
Templeton Global Bond Securities Fund
12/31/2007		N/A		31.790	13	12/31/2007	N/A	26.726	19
12/31/2008		31.790		33.259	36	12/31/2008	26.726	27.696	31
12/31/2009		33.259		38.885	40	12/31/2009	27.696	32.075	57
12/31/2010		38.885		43.841	42	12/31/2010	32.075	35.820	63
12/31/2011		43.841		42.813	42	12/31/2011	35.820	34.651	73

The Allianz Alterity® Variable Annuity Contract Prospectus – April 30, 2012

Appendix A

APPENDIX B – PB VALUE CALCULATION EXAMPLES

·	You purchased a Contract with PRIME Plus Benefit. You are the only Owner.

·	You made an initial Purchase Payment of $100,000.

·	You make an additional Purchase Payment of $10,000 in the sixth Contract Year and allocate the entire amount to the Investment Options. You make no other Purchase Payments.

·	The MAV on the ninth Contract Anniversary is $180,000.

·	You take a partial withdrawal of $20,000 in the tenth Contract Year when the Contract Value (on the day of but before the partial withdrawal) is $160,000. You take no other partial withdrawals.

·	The Contract Value on the tenth Contract Anniversary is $140,000.

·	As of the tenth Contract Anniversary you have not yet reached your 81st birthday and the Contracts have not exceeded the limits on volatility or risk that trigger allocation and transfer restrictions under PRIME Plus Benefit.

On the tenth Contract Anniversary, the PB Value is equal to 1 or 2:
1)	The 7% AIA
	Initial Purchase Payment…………………………………………………………………………………………………..			$100,000.00
	Increased by 7% on the first Contract Anniversary……………………………………………………………………..			x 1.07
				$107,000.00
	Increased by 7% on the second Contract Anniversary…………………………………………………………………			x 1.07
				$114,490.00

	Beginning on the sixth Contract Anniversary we only apply the 7% increase to the 7% AIA amount as of the fifth Contract Anniversary.

	On the sixth Contract Anniversary the 7% AIA is:
		The fifth Contract Anniversary 7% AIA……………………………………………………………………………….		$140,255.17
		Increased by 7% on the sixth Contract Anniversary………………………………………………………………..		x 1.07
				$150,073.03
	Plus the additional Purchase Payment received in the sixth Contract Year…………………………………………			+ 10,000.00
				$160,073.03
	On the seventh Contract Anniversary the 7% AIA is:
		The fifth Contract Anniversary 7% AIA……………………………………………………………………………….		$140,255.17
		Increased by 7% on the sixth Contract Anniversary………………………………………………………………..		x 1.07
				$150,073.03
	Increased by 7% on the seventh Contract Anniversary………………………………………………………………..			x 1.07
				$160,578.14
	Plus the additional Purchase Payment received in the sixth Contract Year…………………………………………			+ 10,000.00
				$170,758.14

	On the ninth Contract Anniversary the 7% AIA is:………………………………………………………………………			$193,845.92
	On the tenth Contract Anniversary the 7% AIA is:
		The fifth Contract Anniversary 7% AIA increased by 7% for
			each anniversary since, up to and including the tenth:………………………………………………………..	$196,715.14
		Plus the additional Purchase Payment received in the sixth Contract Year……………………………………..		+ 10,000.00
		Reduced proportionately by the percentage of Contract Value withdrawn
			during the tenth Contract Year: ($20,000 / $160,000) = 0.125 x $193,845.92 =…………………………..	– 24,230.74
				$182,484.40

The Allianz Alterity® Variable Annuity Contract Prospectus – April 30, 2012

Appendix B

	Verifying that the 7% AIA is within the maximum limit:
		2 times Purchase Payments made in the first five Contract Years: 2 x $100,000 =…………………………….		$200,000
		Reduced proportionately by the percentage of Contract Value withdrawn:
			($20,000 / $160,000) = 0.125 x $200,000 =…………………………………………………………………….	– 25,000
				$175,000
	Therefore the 7% AIA on the tenth Contract Anniversary is limited to the maximum………………………….			$175,000

2)	The MAV
	The MAV on the ninth Contract Anniversary…………………………………………………………………………….			$180,000
	Reduced proportionately by the percentage of Contract Value withdrawn:
		($20,000 / $160,000) = 0.125 x $180,000 =………………………………………………………………………...		– 22,500
				$157,500

The 7% AIA is greater than the MAV on the tenth Contract Anniversary. However, if you chose to exercise the GMIB on the tenth Contract Anniversary you may be able choose to set the PB Value equal to either the 7% or the MAV. This is because the GMIB Payments available under the 7% AIA may be less than the GMIB Payments available under the MAV depending on the Annuity Option you select, your age, and sex (where applicable) at the time of annuitization. In addition, it is possible that fixed Traditional Annuity Payments based on the $140,000 Contract Value would be more than GMIB Payments based on the MAV or the 7% AIA depending on the current interest rates available at the time of annuitization.

If instead you exercise the GPWB you can select either the 5% payment option or the 10% payment option. Under the 5% payment option the PB Value is the 7% AIA, the PB Value could increase (step up) on every third Contract Anniversary* the maximum allowable payment is less than what is available under the 10% payment option, but we make payments for at least 20 years (assuming no Excess Withdrawals or step ups). Under the 10% payment option, the PB Value is the MAV, step ups are not available, we make payments for ten years (assuming no Excess Withdrawals), but the maximum allowable payment is more. Under the GPWB, you would choose the payment option that is most appropriate for your situation.

*	Step ups continue to happen automatically until the earliest of: a) the older Owner’s 91st birthday; or b) you exhaust the PB Value.

APPENDIX C – GPWB UNDER PRIME PLUS BENEFIT

·	On the tenth Contract Anniversary you exercise the GPWB and select the 5% payment option with annual payments.

·	On the tenth Contract Anniversary the PB Value is the 7% AIA, which is $175,000, and your Contract Value is $140,000 (see the example that appears in Appendix B).

·	You elect the maximum allowable payment and your annual GPWB Payments are 5% x $175,000 = $8,750. You take no Excess Withdrawals and do not elect to stop your GPWB Payments.

	Contract Value	PB Value	GPWB Payment
On the 10th Contract Anniversary	$140,000	$175,000	$8,750
11th Contract Anniversary	$144,800	$166,250	$8,750
12th Contract Anniversary	$151,900	$157,500	$8,750
13th Contract Anniversary before the step up	$160,000	$148,750	$8,750
13th Contract Anniversary after the step up	$160,000	$160,000	$8,750
14th Contract Anniversary	$151,700	$151,250	$8,750
15th Contract Anniversary	$144,300	$142,500	$8,750
16th Contract Anniversary before the step up	$132,900	$133,750	$8,750
16th Contract Anniversary after the step up	$132,900	$133,750	$8,750

The Allianz Alterity® Variable Annuity Contract Prospectus – April 30, 2012

Appendix B & C

·	In this example, the PB Value was stepped up on the 13th Contract Anniversary because the Contract Value was greater than the PB Value. However, the GPWB Maximum was not stepped up because the current GPWB Maximum ($8,750) was greater than 5% of the increased PB Value (5% x $160,000 = $8,000).

·	There was no step up to either the PB Value or the GPWB Payment on the 16th Contract Anniversary in this example because the Contract Value was less than the PB Value.

If on the 16th Contract Anniversary the Contract Value had grown to $180,000, the remaining PB Value would be stepped up to $180,000. The GPWB Maximum would also be stepped up because 5% of the increased PB Value (5% x $180,000 = $9,000) is greater than the current GPWB Maximum ($8,750), however, you would not be able to increase your GPWB Payments until the 17th Contract Anniversary because we do not automatically increase your GPWB Payments upon a step up.

Example of the effect of an Excess Withdrawal on GPWB Payments

·	Continue the assumptions from the previous example except that you elect to receive $600 per month as your GPWB Payment. If you do not take any Excess Withdrawals you would receive $7,200 of GPWB Payments over the course of each Contract Year without incurring a withdrawal charge.

·	Assume the Contract Value on the day of (but before) the Excess Withdrawal is $150,000. The PB Value on the day of (but before) the Excess Withdrawal is $170,200.

If you take a $500 Excess Withdrawal in the 11th Contract Year after receiving the eighth monthly GPWB Payment:

The total partial withdrawals (GPWB Payments and the Excess Withdrawal) for the Contract Year = $7,200 + $500 = $7,700. Because the total partial withdrawals are less than the $8,750 GPWB Maximum, none of the withdrawals are subject to the withdrawal charge, and the Excess Withdrawal reduces both the PB Value and Contract Value by the amount withdrawn ($500). The PB Value after the Excess Withdrawal would be $170,200 - $500 = $169,700.

If you take a $5,000 Excess Withdrawal in the 11th Contract Year after receiving the eighth monthly GPWB Payment:

The total partial withdrawals for the Contract Year = $7,200 + $5,000 = $12,200. Because the total partial withdrawals are greater than the $8,750 GPWB Maximum, some of the withdrawals are subject to the withdrawal charge. We determine which withdrawals are subject to the withdrawal charge as follows:

The GPWB Maximum………………………………………………………………………………………………...	$8,750
First eight GPWB Payments…………………………………………………………………………………………	– 4,800
Remaining GPWB Maximum………………………………………………………………………………………..	$3,950
Portion of the Excess Withdrawal that is subject to the withdrawal charge = $5,000 – $3,950 =……………	$1,050

When we compute the withdrawal charge we withdraw Purchase Payments on a “first-in-first-out” (FIFO) basis. Your initial Purchase Payment was $100,000 and the withdrawal charge period for this payment has expired. Therefore, there is no withdrawal charge on the Excess Withdrawal.

We adjust the PB Value for the Excess Withdrawal as follows:

The PB Value on the day of (but before) the partial withdrawal…………………………………………………		$170,200.00
The amount of the Excess Withdrawal that does not exceed the GPWB Maximum………………………….		– 3,950.00
Reduced proportionately by the remaining amount of the Excess Withdrawal’s percentage of Contract
	Value on the day of (but before) the partial withdrawal = $1,050 / $150,000 = 0.007 x $170,200 =……	– 1,191.40
Remaining PB Value after the Excess Withdrawal………………………………………………………………..		$165,058.60

In addition, because the Excess Withdrawal exhausts the GPWB Maximum for the year, the four remaining GPWB Payments are also subject to a withdrawal charge. To avoid a withdrawal charge you could instruct us to stop GPWB Payments for the remainder of the year.

The Allianz Alterity® Variable Annuity Contract Prospectus – April 30, 2012

Appendix C

APPENDIX D – DEATH BENEFIT CALCULATION EXAMPLES

·	You purchased a Contract with an initial Purchase Payment of $100,000. You are the only Owner and are age 69 or younger on the Issue Date. You make no additional Purchase Payments.

·	The MAV on the ninth Contract Anniversary is $180,000.

You take a partial withdrawal of $20,000 in the tenth Contract Year when the Contract Value on the date of (but before the partial withdrawal) is $160,000. The withdrawal charge period on the initial Purchase Payment has expired so there is no withdrawal charge on this partial withdrawal. You take no other partial withdrawals.

·	The Contract Value on the tenth Contract Anniversary is $140,000.

NOTE: We calculate the 3% AIA and MAV only for Contracts with Enhanced GMDB. The M&E charges are higher for Contracts with Enhanced GMDB or Earnings Protection GMDB than for Contracts with Traditional GMDB. If the differences in these charges were reflected above, the Contract Values would be lower for Contracts with Enhanced GMDB or Earnings Protection GMDB than for Contracts with Traditional GMDB.

If you selected Traditional GMDB:
We calculate the death benefit on the tenth Contract Anniversary as the greater of:
1)	Contract Value………………………………………………………………………………………………………...			$140,000
2)	The Traditional GMDB value:
	Total Purchase Payments received…………………………………………………………………………………			$100,000
		Reduced proportionately by the percentage of Contract Value
			withdrawn: ($20,000 / $160,000) = 0.125 x $100,000 =…………………………………………………..	– 12,500
				$87,500
Therefore, the death benefit payable as of the tenth Contract Anniversary is the $140,000 Contract Value.

If you selected Enhanced GMDB:
We calculate the death benefit on the tenth Contract Anniversary as the greater of:
1)	Contract Value………………………………………………………………………………………………………...					$140,000.00
2)	The 3% AIA:
	Initial Purchase Payment………….…………………………………………………………………………………					$100,000.00
		Increased by 3% on the first Contract Aniversary……………………………………………………………..				x 1.03
						$103,000.00
		Increased by 3% on the second Contract Aniversary……….………………………………………………..				x 1.03
						106,090.00
		Increased by 3% on the third Contract Aniversary……………..……………………………………………..				x 1.03
						$109,272.70
		On the ninth Contract Anniversary the 3% AIA is……………………………………………………………..				$130,477.32
			Reduced proportionately by the percentage of Contract Value withdrawn:
				($20,000 / $160,000) = 0.125 x $130,477.32 =………………………………………………………...		– 16,309.66
						$114,167.66
		Increased by 3% on the tenth Contract Anniversary…………………………………………………………..				x 1.03
						$117,592.69
		Verifying that the 3% AIA is within the maximum limit:
			1.5 times Purchase Payments: 1.5 x $100,000 =………………………………………..		$150,000
			Reduced proportionately by the percentage of Contract Value withdrawn:
				($20,000 / $160,000) = 0.125 x $150,000 =…………………………………………..	– 18,750
					$131,250

The Allianz Alterity® Variable Annuity Contract Prospectus – April 30, 2012

Appendix D

3)	The MAV:
	The MAV on the ninth Contract Anniversary……………………………………………………………………….			$180,000
		Reduced proportionately by the percentage of Contract Value withdrawn:
			($20,000 / $160,000) = 0.125 x $180,000 =………………………………………………………………..	– 22,500
				$157,500
Therefore, the death benefit payable as of the tenth Contract Anniversary is the $157,500 MAV.

If you selected Earnings Protection GMDB:
We calculate the death benefit on the tenth Contract Anniversary as the greater of:
1)	Contract Value………………………………………………………………………………………………………...					$140,000
2)	Total Purchase Payments:
	Total Purchase Payments received…………………………………………………………………………………					$100,000
		Less adjusted partial withdrawals calculated as (PW x DB) / CV:
			($20,000 x $160,000) / $160,000 = $20,000 x 1 =…………………………………………………………			– 20,000
						$80,000
3)	CV Plus:
	Contract Value………………………………………………………………………………………………………...					$140,000
		Plus 50% of the lesser of (a) or (b).
			(a) Contract Vaue minus total Purchase Payments: $140,000 – $100,000 =.………..		$40,000
			(b) Three times your total Purchase Payments received in the first two
				Contract Years: 3 x $100,000…………………………………………………………..	$300,000
			(a) is less than (b), so 50% of (a) = 0.50 x $40,000 =……………………………………………………..			+ 20,000
						$160,000
Therefore, the death benefit payable as of the tenth Contract Anniversary is the $160,000 CV Plus.

The Allianz Alterity® Variable Annuity Contract Prospectus – April 30, 2012

Appendix D

APPENDIX E – WITHDRAWAL CHARGE EXAMPLES

All of the following examples assume you purchased a Contract with an initial Purchase Payment of $100,000 and you make no additional Purchase Payments. The partial withdrawal privilege for each Contract Year is 12% of your total Purchase Payments, less any previous withdrawals taken during that Contract Year under the partial withdrawal privilege or as RMD payments. Any unused partial withdrawal privilege in one Contract Year carries over to the next Contract Year. This means at the beginning of each Contract Year, there would be at least $12,000 available under the partial withdrawal privilege.

Full withdrawal when the Contract Value has declined due to a loss in your selected Investment Options:

·	You take a full withdrawal in the third Contract Year when the Contract Value is $90,000 and the withdrawal charge is 5%. You have taken no other withdrawals from the Contract.

·	There are no Purchase Payments that are beyond the withdrawal charge period and the partial withdrawal privilege does not apply upon a full withdrawal. Because this is a full withdrawal, we assess the withdrawal charge against the entire Withdrawal Charge Basis.

We calculate the withdrawal charge as follows:
	The Withdrawal Charge Basis is equal to total Purchase Payments less any Purchase Payments
	withdrawn (excluding any penalty-free withdrawals) = $100,000 – $0 = ……………….……….....................	$100,000
	Multiplied by the withdrawal charge………………………………………………………………………………...	x 5%
		$5,000

Therefore, we withdraw $90,000 from the Contract and pay you $85,000 ($90,000 less the $5,000 withdrawal charge).

Partial withdrawal under the partial withdrawal privilege followed by a full withdrawal:

You take a partial withdrawal of $9,000 in the second Contract Year. The total amount available under the partial withdrawal privilege at this time is $24,000 ($12,000 per year for two years). The $9,000 withdrawn is not subject to a withdrawal charge and does not reduce the Withdrawal Charge Basis.

You take a full withdrawal in the third Contract Year when the Contract Value is $90,000 and the withdrawal charge is 5%. At this time, there are no Purchase Payments that are beyond the withdrawal charge period. Because this is a full withdrawal, the partial withdrawal privilege does not apply and we assess the withdrawal charge against the entire Withdrawal Charge Basis.

We calculate the withdrawal charge for the full withdrawal as follows:
	The Withdrawal Charge Basis is equal to total Purchase Payments less any Purchase Payments
	withdrawn (excluding any penalty-free withdrawals) = $100,000 – $0 = ……………….……….....................	$100,000
	Multiplied by the withdrawal charge………………………………………………………………………………...	x 5%
		$5,000

Therefore, upon the full withdrawal, we withdraw $90,000 from the Contract and pay you $85,000 ($90,000 less the $5,000 withdrawal charge). In this example, your total distributions from the Contract after deducting the withdrawal charge are $94,000.

Partial withdrawal in excess of the partial withdrawal privilege followed by a full withdrawal:

You take a partial withdrawal of $27,000 in the second Contract Year when the withdrawal charge is 6%. The total amount available under the partial withdrawal privilege at this time is $24,000 ($12,000 per year for two years), so $3,000 of the withdrawal is subject to a withdrawal charge and reduces the Withdrawal Charge Basis.

We calculate the withdrawal charge for the partial withdrawal as follows:
	The amount you receive that is subject to a withdrawal ....………………………….……….....................	$3,000
	Multiplied by the withdrawal charge………………………………………………………………………………...	x 6%
		$180

Therefore, we withdraw $27,180 from the Contract and pay you $27,000.

The Allianz Alterity® Variable Annuity Contract Prospectus – April 30, 2012

Appendix E

Continuing the example, assume you take a full withdrawal in the third Contract Year when the Contract Value is $90,000 and the withdrawal charge is 5%. At this time, there are no Purchase Payments that are beyond the withdrawal charge period. Because this is a full withdrawal, the partial withdrawal privilege does not apply and we assess the withdrawal charge against the entire Withdrawal Charge Basis.

We calculate the withdrawal charge for the full withdrawal as follows:
	The Withdrawal Charge Basis is equal to total Purchase Payments less any Purchase Payments
	withdrawn (excluding any penalty-free withdrawals) = $100,000 – $3,000 =………….……….....................	$97,000
	Multiplied by the withdrawal charge………………………………………………………………………………...	x 5%
		$4,850

Therefore, upon the full withdrawal, we withdraw $90,000 from the Contract and pay you $85,150 ($90,000 less the $4,850 withdrawal charge). In this example, your total distributions from the Contract after deducting the withdrawal charge are $112,150.

A series of partial withdrawals under the partial withdrawal privilege followed by a full withdrawal:

·	You take the maximum amount available under the partial withdrawal privilege each year for five years (total distributions = $60,000). The $60,000 withdrawn is not subject to a withdrawal charge and does not reduce the Withdrawal Charge Basis.

In the sixth Contract Year, the Contract Value is $11,000. Although the maximum available under the partial withdrawal privilege is $12,000, there is only $11,000 of Contract Value available. Assuming you withdraw the $11,000, the partial withdrawal privilege does not apply because this is a full withdrawal. At this time, there are no Purchase Payments that are beyond the withdrawal charge period. Because this is a full withdrawal, we assess the withdrawal charge against the entire Withdrawal Charge Basis. The withdrawal charge in the sixth Contract Year is 2%.

We calculate the withdrawal charge for the full withdrawal as follows:
	The Withdrawal Charge Basis is equal to total Purchase Payments less any Purchase Payments
	withdrawn (excluding any penalty-free withdrawals) = $100,000 – $0 = ……………….……….....................	$100,000
	Multiplied by the withdrawal charge………………………………………………………………………………...	x 2%
		$2,000

Therefore, upon the full withdrawal, we withdraw $11,000 from the Contract and pay you $9,000 ($11,000 less the $2,000 withdrawal charge). In this example, your total distributions from the Contract after deducting the withdrawal charge are $69,000.

Alternatively, the largest available partial withdrawal at this time is $9,000, as this amount reduces the Contract Value to the minimum required Contract Value of $2,000. If instead of a full withdrawal, you take a partial withdrawal of $9,000, it is not subject to a withdrawal charge. After one additional year, the initial Purchase Payment is beyond its withdrawal charge period and you could then withdraw all remaining Contract Value without incurring a withdrawal charge.

The Allianz Alterity® Variable Annuity Contract Prospectus – April 30, 2012

Appendix E

FOR SERVICE OR MORE INFORMATION

You can review and copy information about us, the Separate Account, the prospectus and the SAI at the SEC’s Public Reference Room in Washington, D.C. You may obtain information about the operation of the Public Reference Room by calling (202) 551-8090.

The SEC also maintains a website (http://www.sec.gov). The prospectus, the SAI and other information about the Contract are available on the EDGAR database on the SEC’s website. If you do not have access to the website, you can get copies of information from the website upon payment of a duplication fee by writing to:

Public Reference Section of the Commission

100 F Street, NE

Washington, DC 20549

If you need customer service (such as changes in Contract information, information on Contract Values, requesting a withdrawal or transfer, changing your allocation instructions, etc.), please contact our Service Center at:

Allianz Life Insurance Company of North America

P.O. Box 561

Minneapolis, MN 55440-0561

(800) 624-0197

ADDRESSES FOR MAILING CHECKS

For a check for an additional Purchase Payment by regular mail please use this address:

Allianz Life Insurance Company of North America

NW5989

P.O. Box 1450

Minneapolis, MN 55485-5989

For a check for an additional Purchase Payment by overnight, certified or registered mail please use this address:

Allianz Life Insurance Company of North America

NW5989

1350 Energy Lane, Suite 200

St. Paul, MN 55108-5254

NOTE: Checks for additional Purchase Payments you send to the wrong address are forwarded to the 1350 Energy Lane address listed above, which may delay processing.

The Allianz Alterity® Variable Annuity Contract Prospectus – April 30, 2012

PART B – SAI

STATEMENT OF ADDITIONAL INFORMATION

ALLIANZ ALTERITY®

INDIVIDUAL FLEXIBLE PURCHASE PAYMENT

VARIABLE DEFERRED ANNUITY CONTRACT

ISSUED BY

ALLIANZ LIFE® VARIABLE ACCOUNT B (THE SEPARATE ACCOUNT)

AND

ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA

(ALLIANZ LIFE, WE, US, OUR)

APRIL 30, 2012

This is not a prospectus. This Statement of Additional Information (SAI) should be read in conjunction with the prospectus for the Contract, which is dated the same date as this SAI. Definitions of capitalized terms can be found in the glossary in the prospectus. The prospectus is incorporated in this SAI by reference.

The prospectus for the Contract concisely sets forth information that a prospective investor ought to know before investing. For a copy of the Contract’s prospectus, call or write us at:

Allianz Life Insurance Company of North America

5701 Golden Hills Drive

Minneapolis, MN 55416

(800) 624-0197

TABLE OF CONTENTS

Allianz Life……………………………………………………...........	2
Experts………………………………………………………….…....…	2
Legal Opinions……………………………………………………….	2
Distributor……………………………………………………….……….	2
Reduction or Elimination of the Withdrawal Charge………………..	3
Federal Tax Status…………………………………………..….…..	3
General…………………………………………………………...…	3
Diversification…………………………………………….…......….	4
Owner Control………………………………………………..….	4
Contracts Owned by Non-Individuals……………………..…..	5
Income Tax Withholding………………………………..….......	5
Required Distributions…………………………………..………	5
Qualified Contracts……………………………………………...	6
Annuity Provisions…………………………………………….........	6
Annuity Units/Calculating Annuity Payments…………….….	7
Mortality and Expense Risk Guarantee………………………..….	7
Information on May 2003 Contracts………………………..……..	7
Information on Contracts That Were Offered
Before April 29, 2005………………………..………..………...	15
Information on Original Contracts………………………….…..….	16
Financial Statements…………………………………..…..……….	18
Appendix – Condensed Financial Information…...……..………..	18

ALTSAI-0412

The Allianz Alterity® Variable Annuity Contract SAI – April 30, 2012

ALLIANZ LIFE

Allianz Life is a stock life insurance company organized under the laws of the state of Minnesota in 1896. We are a subsidiary of Allianz of America, Inc. (AZOA), a financial holding company. AZOA is a subsidiary of Allianz SE, a provider of integrated financial services. Allianz SE is headquartered in Munich, Germany, and has sales outlets throughout the world. We offer fixed and variable annuities and individual life insurance.

Allianz Life does not have a separate custodian for the assets owned through the Separate Account. Most mutual fund shares are not in certificated form, and as such, Allianz Life in effect acts as self custodian for the non-certificated shares we own through the Separate Account.

EXPERTS

The financial statements of Allianz Life Variable Account B as of and for the year or period ended December 31, 2011 (including the statements of changes in net assets for each of the years or periods in the two year period then ended and the financial highlights for each of the periods presented) and the consolidated financial statements and supplemental schedules of Allianz Life Insurance Company of North America as of December 31, 2011 and 2010 and for each of the years in the three-year period ended December 31, 2011, are included in Part C of the Registration Statement in reliance upon the report of KPMG LLP, independent registered public accounting firm, also included in Part C, and upon the authority of said firm as experts in accounting and auditing. The audit report covering the December 31, 2011 financial statements and supplemental schedules of Allianz Life Insurance Company of North America refers to a change in the method of evaluating other-than-temporary impairments of fixed maturity securities due to the adoption of accounting requirements issued by the Financial Accounting Standards Board (FASB), as of January 1, 2009. The principal business address of KPMG LLP is 4200 Wells Fargo Center, 90 South Seventh Street, Minneapolis, MN.

LEGAL OPINIONS

Stewart D. Gregg, Senior Securities Counsel of Allianz Life, has provided legal advice on certain matters in connection with the issuance of the Contracts.

DISTRIBUTOR

Allianz Life Financial Services, LLC (Allianz Life Financial (previously USAllianz Investor Services, LLC)), a wholly owned subsidiary of Allianz Life Insurance Company of North America, acts as the distributor. Allianz Life Financial does not sell the Contracts on a retail basis. Rather, Allianz Life Financial enters into selling agreements with other third-party broker/dealers registered under the Securities Exchange Act of 1934 (selling firms) for the sale of the Contracts.

We pay commissions for sales of the Contracts. Allianz Life Financial passes through most of the commissions it receives to selling firms for their sales. Allianz Life Financial received sales compensation with respect to the Contracts issued under Allianz Life Variable Account B in the following amounts during the last three calendar years:

Calendar Year	Aggregate Amount of Commissions Paid to Allianz Life Financial	Aggregate Amount of Commissions Retained by Allianz Life Financial After Payments to Selling Firms
2009	$169,464,504.26	$0
2010	$220,761,073.60	$0
2011	$264,909,554.57	$0

We may fund Allianz Life Financial’s operating and other expenses including: overhead; legal and accounting fees; registered representative training; deferred compensation and insurance benefits for registered representatives; compensation for the Allianz Life Financial management team; and other expenses associated with the Contracts. We also pay for Allianz Life Financial’s operating and other expenses, including overhead, legal and accounting fees.

As described above, Allianz Life Financial sells its Contracts primarily through “wholesaling,” in which Allianz Life Financial sells contracts through a large group of mostly non-affiliated broker/dealer firms. Currently, Allianz Life Financial has agreements with approximately 894 retail broker/dealers to sell its contracts. As described in the prospectus, Allianz Life Financial may pay marketing support payments to certain third-party firms for marketing our contracts. Currently, Allianz Life Financial makes marketing support payments to approximately 48 broker-dealer firms. These payments vary in amount. In 2011, the five firms receiving the largest payments, ranging from $769,664 to $4,297,627, are listed below. Marketing support payments may also be made to managers of Investment Options or their affiliates for providing Investment Option information and marketing support.

The Allianz Alterity® Variable Annuity Contract SAI – April 30, 2012

Firm Name

LPL Financial Network

The Advisor Group Network

Wells Fargo Network

National Planning Holdings

HD Vest Investment Services

REDUCTION OR ELIMINATION OF THE WITHDRAWAL CHARGE

We may reduce or eliminate the amount of the withdrawal charge on the Contracts when Contract sales are made to individuals or to a group of individuals in a manner that results in savings of sales expenses. We determine the entitlement to a reduction of the withdrawal charge after examination of the following factors:

·	the size of the group;

·	the total amount of Purchase Payments expected to be received from the group;

·	the nature of the group for which the Contracts are purchased, and the persistency expected in that group (for example, the expectation that the Owners continue to hold the Contracts for a certain period of time);

·	the purpose for which the Contracts are purchased and whether that purpose makes it likely that expenses are reduced; and

·	any other circumstances which we believe to be relevant to determining whether reduced sales or administrative expenses may be expected.

None of these reductions are contractually guaranteed. We may eliminate the withdrawal charge when the Contracts are issued to an officer, director or employee of Allianz Life or any of its affiliates. We may reduce or eliminate the withdrawal charge when the Contract is sold by a registered representative appointed with Allianz Life to any members of his or her immediate family and the commission is waived. In no event is any reduction or elimination of the withdrawal charge permitted where the reduction or elimination is unfairly discriminatory to any person.

FEDERAL TAX STATUS

NOTE: The following description is based upon our understanding of current federal income tax law applicable to annuities in general. We cannot predict the probability that any changes in such laws will be made. Purchasers are cautioned to seek competent tax advice regarding the possibility of such changes. We do not guarantee the tax status of the Contracts. Purchasers bear the complete risk that the Contracts may not be treated as “annuity contracts” under federal income tax laws. It should be further understood that the following discussion is not exhaustive and that special rules not described herein may be applicable in certain situations. Moreover, no attempt has been made to consider any applicable state or other tax laws.

General

Section 72 of the Internal Revenue Code of 1986, as amended (the Code) governs taxation of annuities in general. An Owner is generally not taxed on increases in the value of a Contract until distribution occurs, either in the form of a lump sum payment or as Annuity Payments. For a lump sum payment received as a full withdrawal (total redemption) or death benefit, the recipient is taxed on the portion of the payment that exceeds the cost basis of the Contract (your investment). For Non-Qualified Contracts, this cost basis is generally the Purchase Payments, while for Qualified Contracts there may be no cost basis. The taxable portion of the lump sum payment is taxed at ordinary income tax rates. A partial withdrawal results in tax on any gain in the Contract (for example, the difference, if any, between the Contract Value immediately before the withdrawal, unreduced by any charges, and the Contract’s cash basis). Lump sum withdrawals, whether partial or full, may also be subject to a federal penalty tax equal to 10% of the taxable amount.

For Annuity Payments, the portion of each payment included in income equals the excess of the payment over the exclusion amount. The exclusion amount for Annuity Payments based on a variable Annuity Option is determined by dividing the investment in the Contract (adjusted for any period certain or refund guarantee) by the number of years over which the annuity is expected to be paid (which is determined by Treasury Regulations). The exclusion amount for Annuity Payments based on a fixed Annuity Option is determined by multiplying the Annuity Payment by the ratio that the investment in the Contract (adjusted for any period certain or refund guarantee) bears to the expected return under the Contract. Annuity Payments received after the investment in the Contract has been recovered (for example, when the total of the excludable amounts equal the investment in the Contract) are fully taxable. The taxable portion of an Annuity Payment is taxed at ordinary income tax rates.

The Allianz Alterity® Variable Annuity Contract SAI – April 30, 2012

For certain types of Qualified Contracts there may be no cost basis in the Contract within the meaning of Section 72 of the Code. Owners, Annuitants and Beneficiaries under the Contracts should seek competent financial advice about the tax consequences of any distributions.

We are taxed as a life insurance company under the Code. For federal income tax purposes, the Separate Account is not a separate entity from us, and its operations form a part of Allianz Life.

Although the likelihood of legislative changes is uncertain, there is always the possibility that the tax treatment of the Contract could change by legislation or otherwise. Consult a tax adviser with respect to legislative developments and their effect on the Contract.

We have the right to modify the Contract in response to legislative changes that could otherwise diminish the favorable tax treatment that annuity Owners currently receive. We make no guarantee regarding the tax status of any contract and do not intend the above discussion as tax advice.

Diversification

Section 817(h) of the Code imposes certain diversification standards on the underlying assets of variable annuity contracts. The Code provides that a variable annuity contract will not be treated as an annuity contract for any period (and any subsequent period) for which the investments are not adequately diversified in accordance with regulations prescribed by the United States Treasury Department (Treasury Department). Disqualification of the Contract as an annuity contract would result in the imposition of federal income tax to the Owner with respect to earnings allocable to the Contract before the receipt of Annuity Payments under the Contract. The Code contains a safe harbor provision which provides that annuity contracts, such as the Contract, meet the diversification requirements if, as of the end of each quarter, the underlying assets meet the diversification standards for a regulated investment company and no more than 55% of the total assets consist of cash, cash items, U.S. government securities and securities of other regulated investment companies.

On March 2, 1989, the Treasury Department issued regulations (Treas. Reg. 1.817-5) which established diversification requirements for the Investment Options underlying variable contracts such as the Contract. The regulations amplify the diversification requirements for variable contracts set forth in the Code and provide an alternative to the safe harbor provision described above. Under these regulations, an Investment Option will be deemed adequately diversified if:

·	no more than 55% of the value of the total assets of the Investment Option is represented by any one investment;

·	no more than 70% of the value of the total assets of the Investment Option is represented by any two investments;

·	no more than 80% of the value of the total assets of the Investment Option is represented by any three investments; and

·	no more than 90% of the value of the total assets of the Investment Option is represented by any four investments.

The Code provides that for purposes of determining whether or not the diversification standards imposed on the underlying assets of variable contracts by Section 817(h) of the Code have been met, “each United States government agency or instrumentality shall be treated as a separate issuer.”

We intend that all Investment Options underlying the Contracts be managed by the investment advisers in such a manner as to comply with these diversification requirements.

Owner Control

The Treasury Department has indicated that the diversification regulations do not provide guidance regarding the circumstances in which Owner control of the investments of the Separate Account cause the Owner to be treated as the owner of the assets of the Separate Account, thereby resulting in the loss of favorable tax treatment for the Contract. In certain circumstances, owners of variable annuity contracts have been considered for federal income tax purposes to be the owners of the assets of the separate account, supporting their contracts due to their ability to exercise investment control over those assets. When this is the case, the contract owners have been currently taxed on income and gains attributable to the variable account assets. There is little guidance in this area, and some features of our Contracts, such as the flexibility of an Owner to allocate Purchase Payments and transfer amounts among the investment divisions of the Separate Account, have not been explicitly addressed in published rulings. While we believe that the Contracts do not give Owners investment control over Separate Account assets, we reserve the right to modify the Contracts as necessary to prevent an Owner from being treated as the owner of the Separate Account assets supporting the Contract.

The Allianz Alterity® Variable Annuity Contract SAI – April 30, 2012

Contracts Owned by Non-Individuals

Under Section 72(u) of the Code, the investment earnings on Purchase Payments for the Contracts are taxed currently to the Owner if the Owner is a non-individual, for example, a corporation or certain other entities. Such Contracts generally are not treated as annuities for federal income tax purposes. However, this treatment is not applied to Contracts held by a trust or other entity as an agent for an individual or to Contracts held by qualified retirement plans. Annuity contracts owned by corporations or similar taxable entities do not qualify for income tax deferral. Allianz will issue a 1099R annually and report any gains and/or distributions from the Contract. Additional information may be requested for these types of entities and are subject to Allianz approval, on a case-by-case basis, before issuance. Purchasers should consult a tax adviser before purchasing a Contract to be owned by a non-individual.

Income Tax Withholding

All distributions or the portion thereof which is included in the gross income of the Owner are subject to federal income tax withholding. Generally, amounts are withheld from periodic payments at the same rate as wages and at the rate of 10% from non-periodic payments. However, the Owner, in most cases, may elect not to have taxes withheld or to have withholding done at a different rate.

Certain distributions from retirement plans qualified under Section 401 of the Code, which are not directly rolled over to another eligible retirement plan or individual retirement account or Individual Retirement Annuity, are subject to a mandatory 20% withholding for federal income tax. The 20% withholding requirement generally does not apply to:

·	a series of substantially equal payments made at least annually for the life or life expectancy of the participant or joint and last survivor expectancy of the participant and a designated Beneficiary, or for a specified period of ten years or more; or

·	distributions which are required minimum distributions; or

·	the portion of the distributions not included in gross income (for example, returns of after-tax contributions); or

·	hardship withdrawals.

Participants should consult a tax adviser regarding withholding requirements.

Required Distributions

In order to be treated as an annuity contract for federal income tax purposes, Section 72(s) of the Code requires any non-qualified contract to contain certain provisions specifying how your interest in the contract is distributed in the event of the death of an owner. Specifically, with regard to this Contract, Section 72(s) requires that:

·	if any Owner dies on or after the Income Date, but before the time the entire interest in the Contract has been distributed, the entire interest in the Contract is distributed at least as rapidly as under the method of distribution being used as of the date of such Owner’s death; and

·	if any Owner dies before the Income Date, the entire interest in the Contract is distributed within five years after the date of such Owner’s death.

These requirements are considered satisfied as to any portion of an Owner’s interest which is payable to or for the benefit of a designated Beneficiary and which is distributed over the life of such designated Beneficiary or over a period not extending beyond the life expectancy of that Beneficiary, provided that such distributions begin within one year of the Owner’s death. The designated Beneficiary refers to an individual designated by the Owner as a Beneficiary and to whom ownership of the Contract passes by reason of death. However, if the designated Beneficiary is the surviving spouse of the deceased Owner, the Contract may be continued with the surviving spouse as the new Owner. If the Owner is a non-individual, then the death or change of an Annuitant is treated as the death of the Owner.

Non-Qualified Contracts contain provisions that are intended to comply with these Code requirements.

Other rules may apply to Qualified Contracts.

The Allianz Alterity® Variable Annuity Contract SAI – April 30, 2012

Qualified Contracts

The Contract is designed to be used under various types of qualified plans. Because of the minimum Purchase Payment requirements, these Contracts may not be appropriate for some periodic payment retirement plans. Taxation of participants in each Qualified Contract varies with the type of plan and terms and conditions of each specific plan. Owners, Annuitants and Beneficiaries are cautioned that benefits under a Qualified Contract may be subject to the terms and conditions of the plan regardless of the terms and conditions of the Contracts issued pursuant to the plan. Some retirement plans are subject to distribution and other requirements that are not incorporated into our administrative procedures. We are not bound by the terms and conditions of such plans to the extent such terms conflict with the terms of a Contract, unless we specifically consent to be bound. Owners, participants and Beneficiaries are responsible for determining that contributions, distributions and other transactions with respect to the Contracts comply with applicable law.

General descriptions of the types of qualified plans with which the Contracts may be used can be found in the prospectus. Such descriptions are not exhaustive and are for general informational purposes only. The tax rules regarding qualified plans are very complex and have differing applications, depending on individual facts and circumstances. Each purchaser should obtain competent tax advice before purchasing a Contract issued under a qualified plan.

On July 6, 1983, the Supreme Court decided in Arizona Governing Committee v. Norris that optional annuity benefits provided under an employer’s deferred compensation plan could not, under Title VII of the Civil Rights Act of 1964, vary between men and women. The Contracts sold by us in connection with qualified plans may utilize annuity tables that do not differentiate on the basis of sex.

Qualified plans include special provisions restricting Contract provisions that may otherwise be available and described in this SAI. Generally, Contracts issued pursuant to qualified plans are not transferable except upon withdrawal or annuitization. Various penalty and excise taxes may apply to contributions or distributions made in violation of applicable limitations. Furthermore, certain withdrawal penalties and restrictions may apply to withdrawals from Qualified Contracts.

Many withdrawals from Qualified Contracts can be rolled over to an IRA or another qualified retirement plan. If you receive a withdrawal from a Qualified Contract that could be rolled over and you do not elect to make a direct rollover of that amount to an IRA or qualified plan, by law 20% of the taxable amount must be withheld by us for taxes. In situations where this mandatory tax withholding does not apply, other tax amounts may be withheld unless you elect out of the withholding. You may request more detailed information about income tax withholding at the time of a withdrawal. For more information see prospectus section 8, Taxes – Distributions – Qualified Contracts.

Pension and Profit-Sharing Plans. Sections 401(a) and 401(k) of the Code permit employers, including self-employed individuals, to establish various types of retirement plans for employees. These retirement plans may permit the purchase of the Contracts to provide benefits under the plan. Contributions to the plan for the benefit of employees are not included in the gross income of the employee until distributed from the plan. The tax consequences to participants may vary, depending upon the particular plan design. However, the Code places limitations and restrictions on all plans, including on such items as: amount of allowable contributions; form, manner and timing of distributions; transferability of benefits; vesting and nonforfeitability of interests; nondiscrimination in eligibility and participation; and the tax treatment of distributions and withdrawals. Participant loans are not allowed under the Contracts purchased in connection with these plans. For more information see prospectus section 8, Taxes – Qualified Contracts.

Purchasers of Contracts for use with pension or profit-sharing plans should obtain competent tax advice as to the tax treatment and suitability of such an investment. We may choose not to allow pension or profit-sharing plans to purchase this Contract.

ANNUITY PROVISIONS

We base Traditional Annuity Payments upon the following:

·	Whether you request fixed payments, variable payments, or a combination of both fixed and variable Traditional Annuity Payments.

·	The adjusted Contract Value on the Income Date.

·	The Annuity Option you select.

·	The age of the Annuitant and any joint Annuitant.

·	The sex of the Annuitant and any joint Annuitant where allowed.

The Allianz Alterity® Variable Annuity Contract SAI – April 30, 2012

We guarantee fixed Traditional Annuity Payments as to dollar amount and the amount does not vary with the investment experience of an Investment Option. If you request fixed Traditional Annuity Payments, the amount of adjusted Contract Value that you apply to fixed Traditional Annuity Payments is placed in our general account and does not participate in the investment experience of the Investment Options.

Variable payments are not predetermined as to dollar amount and vary in amount with the investment experience of the Investment Option(s) you select. We use Annuity Units to determine the amount of any variable Traditional Annuity Payments you elect to receive.

Annuity Units/Calculating Variable Annuity Payments

The first variable Traditional Annuity Payment is equal to the amount of adjusted Contract Value you are applying to variable Traditional Annuity Payments on the Income Date, divided first by $1,000 and then multiplied by the appropriate variable annuity payout factor for each $1,000 of value for the Annuity Option you selected.

We then purchase a fixed number of Annuity Units on the Income Date for each subaccount of the Investment Options you select. We do this by dividing the amount of the first Traditional Annuity Payment among the subaccounts for your selected Investment Options according to your most recent allocation instructions. We then divide the amount in each subaccount by the Annuity Unit value for each subaccount on the Income Date.

We determine the Annuity Unit value on each Business Day as follows:

·	multiply the Annuity Unit value for the immediately preceding Business Day by the net investment factor for the current Business Day; and

·	divide by the assumed net investment factor for the current Business Day.

The assumed net investment factor for the current Business Day is one plus the annual AIR adjusted to reflect the number of calendar days that have elapsed since the immediately preceding Business Day. We allow an AIR of 3%, 5% or 7% based on your selection and applicable law.

Thereafter, the number of Annuity Units in each subaccount generally remains unchanged unless you make a transfer. However, the number of Annuity Units changes if Annuity Option 3 is in effect, one Annuitant dies, and the Owner requests Traditional Annuity Payments at 75% or 50% of the previous payment amount. All calculations appropriately reflect the payment frequency you selected.

The Traditional Annuity Payment on each subsequent payment date is equal to the sum of the Traditional Annuity Payments for each subaccount. We determine the Traditional Annuity Payment for each subaccount by multiplying the number of Annuity Units allocated to the subaccount by the Annuity Unit value for that subaccount on the payment date.

MORTALITY AND EXPENSE RISK GUARANTEE

Allianz Life guarantees that the dollar amount of each Variable Annuity Payment after the first Annuity Payment not affected by variations in mortality and expense experience.

INFORMATION ON MAY 2003 CONTRACTS

The following is a list of common abbreviations used in this section:

AIA	=	Annual Increase Amount	GPWB	=	Guaranteed Partial Withdrawal Benefit
GMDB	=	Guaranteed Minimum Death Benefit	MAV	=	Maximum Anniversary Value
GMIB	=	Guaranteed Minimum Income Benefit	PRIME	=	Protected Retirement Income Made Easy

May 2003 Contracts are no longer offered for sale, but Owners of these Contracts can still make additional Purchase Payments. Therefore, we are including information on these Contracts in this SAI. May 2003 Contracts were replaced by May 2006 Contracts (which are described in the prospectus and have been discontinued as of July 1, 2010). The primary difference between May 2003 and May 2006 Contracts is that May 2003 Contracts offered the optional Traditional PRIME Benefit and optional Enhanced PRIME Benefit. Also, the partial withdrawal privilege allowed withdrawals of 10% of total Purchase Payments per year on a cumulative basis.

The Allianz Alterity® Variable Annuity Contract SAI – April 30, 2012

PRIME Benefits

PRIME Benefits include a GMIB and GPWB and carry an additional M&E charge. PRIME Benefits were available for selection at Contract issue. After the Issue Date, Traditional PRIME Benefit or Enhanced PRIME Benefit cannot be added to, changed, or removed from a Contract. If your Contract includes a PRIME Benefit and you do not exercise either GMIB or GPWB, you will have incurred higher Contract expenses without receiving any advantage from PRIME Benefits.

We designed PRIME Benefits to give you options on how to turn your accumulated retirement assets into a stream of retirement income. GMIB provides a guaranteed minimum fixed income in the form of Annuity Payments (GMIB Payments). Depending on the Annuity Option you select, GMIB can provide guaranteed lifetime income, but if the Annuitant(s) die shortly after the Income Date, the Payee may receive less than your investment in the Contract. GPWB provides a guaranteed minimum amount of income in the form of annual partial withdrawals (GPWB Payments). However, GPWB Payments are not guaranteed for life and you could outlive your payment stream. You must wait seven complete Contract Years before you can exercise GMIB or GPWB, and they can only be exercised within 30 days after a Contract Anniversary. PRIME Benefits do not create Contract Value or guarantee the performance of any Investment Option.

Payments made under PRIME Benefits are based on the PB Value. Under Traditional PRIME Benefit, the PB Value is total Purchase Payments adjusted for partial withdrawals and Partial Annuitizations. Under Enhanced PRIME Benefit, the PB Value is the: MAV; 3% AIA; or 7% AIA. The PB Value under Enhanced PRIME Benefit is never less than the PB Value under Traditional PRIME Benefit, but they may be equal. You can only access the PB Value by exercising GMIB or GPWB.

Canceling PRIME Benefits

Once you exercise a PRIME Benefit, you cannot cancel it. However, you can end GPWB by stopping GPWB Payments and instead do one of the following.

·	Take an Excess Withdrawal of the entire Contract Value, less any withdrawal charge and any deduction we make to reimburse ourselves for premium tax (available at anytime).

·	Request Traditional Annuity Payments under a Full Annuitization based on the entire Contract Value, less any deduction we make to reimburse ourselves for premium tax (available at anytime).

·	Request GMIB Payments under a Full Annuitization based on the entire remaining PB Value (only available within 30 days following a Contract Anniversary and before we make the next GPWB Payment).

Although you can end GPWB, you cannot end GMIB. If you do stop GPWB Payments:

·	GPWB ends,

·	the Accumulation Phase of the Contract ends,

·	GMDB ends, and

·	if you request Annuity Payments, that portion of the Contract ends, as indicated in prospectus section 3, The Annuity Phase.

PB Value Under Traditional PRIME Benefit

The PB Value before the date of any Owner’s death or exercise of GPWB is equal to:

·	total Purchase Payments received,

·	reduced proportionately by the percentage of Contract Value applied to a traditional Partial Annuitization or withdrawn (including any withdrawal charge) for each traditional annuitization or withdrawal taken, and

·	if you take a GMIB Partial Annuitization, reduced by the dollar amount applied to the GMIB Payments.

The Allianz Alterity® Variable Annuity Contract SAI – April 30, 2012

Any traditional Partial Annuitizations or withdrawals you take may reduce the PB Value by more than the amount annuitized or withdrawn. If the Contract Value at the time of annuitization or withdrawal is less than the PB Value, we deduct more than the amount annuitized or withdrawn from the PB Value.

If you exercise GPWB, the PB Value stops increasing on the date you begin receiving GPWB Payments and decreases:

·	on a dollar for dollar basis with each GPWB Payment we make; and

·	proportionately by the percentage of any Contract Value taken as an Excess Withdrawal (including any withdrawal charge) for each Excess Withdrawal taken.

PB Value Under Enhanced PRIME Benefit

The PB Value before the date of any Owner’s death or exercise of GPWB is equal to:

·	the AIA; or

the MAV.

We calculate the AIA two ways. We increase your total Purchase Payments adjusted for partial withdrawals on each Contract Anniversary by: a) 3%; and b) 7% (Not available in the state of Washington).

If the MAV is greater than both the 3% AIA and 7% AIA, the PB Value is equal to the MAV. If the 3% AIA is greater than the MAV, you can decide whether to set the PB Value equal to the 3% AIA or 7% AIA. If only the 7% AIA is greater than the MAV, you can decide whether to set the PB Value equal to the 7% AIA or MAV.

The 7% AIA may be more limited than the 3% AIA or MAV because:

·	the 7% AIA is subject to a maximum of two times Purchase Payments received in the first five Contract Years;

·	under GMIB, the guaranteed fixed payout rates for the 7% AIA are lower and there are fewer available Annuity Options; and

· under GPWB, you can only receive GPWB Payments of up to 5% of the PB Value each year.

If you take a GMIB Partial Annuitization, the AIA and MAV decrease, but continue to be calculated. If you take a GMIB Full Annuitization or exercise GPWB, we establish a PB Value and the AIA and MAV end. After you exercise GPWB, only the PB Value remains and continues to be calculated.

Calculating the AIAs

For each AIA that was effective on the Issue Date, it is equal to the initial Purchase Payment received. For any AIA that was effective after the Issue Date, it is equal to the Contract Value on the endorsement effective date.

On each Business Day other than a Contract Anniversary, each AIA is equal to:

·	its value on the immediately preceding Business Day,

·	plus any additional Purchase Payments received that day,

·	reduced proportionately by the percentage of Contract Value applied to a traditional Partial Annuitization or withdrawn that day (including any withdrawal charge), and

·	if you take a GMIB Partial Annuitization that day based on the:

–

3% AIA, we reduce the 3% AIA by the dollar amount applied to GMIB Payments and we reduce the 7% AIA proportionately by the percentage of the 3% AIA applied to GMIB Payments.

–

7% AIA, we reduce the 7% AIA by the dollar amount applied to GMIB Payments and we reduce the 3% AIA proportionately by the percentage of the 7% AIA applied to GMIB Payments.

–

MAV, we reduce both the 3% AIA and 7% AIA proportionately by the percentage of the MAV applied to GMIB Payments.

On each Contract Anniversary before the older Owner’s 81st birthday,* each AIA is equal to its value on the immediately preceding Business Day increased by 3% for Contracts with the 3% AIA, and increased by 7% for Contracts with the 7% AIA. We then process any transactions received on that Contract Anniversary (such as additional Purchase Payments, withdrawals, and Partial Annuitizations) in the same way that we do on each Business Day other than a Contract Anniversary.

The Allianz Alterity® Variable Annuity Contract SAI – April 30, 2012

Beginning with the Contract Anniversary that occurs on or after the older Owner’s 81st birthday,* we calculate each AIA in the same way that we do on each Business Day other than a Contract Anniversary.

*	If the Contract is owned by a non-individual (for example, a qualified plan or trust), we use the Annuitant’s age.

We limit the 3% AIA to a maximum of:

·	1.5 times total Purchase Payments received,

·	reduced proportionately by the percentage of Contract Value applied to each traditional Partial Annuitization or withdrawal (including any withdrawal charge) for each traditional annuitization or withdrawal taken, and

·	reduced proportionately by the percentage of GMIB value applied to each GMIB Partial Annuitization.

We limit the 7% AIA to a maximum of:

·	2 times the total Purchase Payments received in the first five Contract Years,

·	reduced proportionately by the percentage of Contract Value applied to each traditional Partial Annuitization or withdrawal (including any withdrawal charge) for each traditional annuitization or withdrawal taken, and

·	reduced proportionately by the percentage of GMIB value applied to each GMIB Partial Annuitization.

Calculating the MAV

The MAV on the Issue Date is equal to your initial Purchase Payment.

On each Business Day other than a Contract Anniversary, the MAV is equal to:

·	its value on the immediately preceding Business Day,

·	plus any additional Purchase Payments received that day,

·	reduced proportionately by the percentage of Contract Value applied to a traditional Partial Annuitization or withdrawn that day (including any withdrawal charge), and

·	if you take a GMIB Partial Annuitization that day based on the:

–

MAV, we reduce the MAV by the dollar amount applied to GMIB Payments, and

–

3% AIA or 7% AIA, we reduce the MAV proportionately by the percentage of the 3% AIA or 7% AIA applied to GMIB Payments.

On each Contract Anniversary before the older Owner’s 81st birthday,* the MAV is equal to the greater of its value on the immediately preceding Business Day, or the Contract Value that occurs on that Contract Anniversary before we process any transactions. We then process any transactions we received on that Contract Anniversary (such as additional Purchase Payments, withdrawals, and Partial Annuitizations) in the same way that we do on each Business Day other than a Contract Anniversary.

Beginning with the Contract Anniversary that occurs on or after the older Owner’s 81st birthday,* we calculate the MAV in the same way that we do on each Business Day other than a Contract Anniversary.

*	If the Contract is owned by a non-individual (for example, a qualified plan or trust), we use the Annuitant’s age.

Any traditional Partial Annuitizations or withdrawals you take may reduce the AIAs or MAV by more than the amount annuitized or withdrawn. If the Contract Value at the time of annuitization or withdrawal is less than an AIA (or MAV as appropriate), we deduct more than the amount annuitized or withdrawn from the AIA (or MAV).

If you exercise GPWB, the PB Value stops increasing on the date you begin receiving GPWB Payments and decreases:

·	on a dollar for dollar basis with each GPWB Payment we make; and

·	proportionately by the percentage of any Contract Value taken as an Excess Withdrawal (including any withdrawal charge) for each withdrawal taken.

Using PRIME Benefits

GPWB guarantees a minimum amount of income in the form of partial withdrawals (GPWB Payments) during the Accumulation Phase. GMIB guarantees a minimum amount of fixed income in the form of Annuity Payments (GMIB Payments) during the Annuity Phase. Depending on the Annuity Option you select, GMIB can provide guaranteed lifetime income, but if the Annuitant(s) die shortly after the Income Date, the Payee may receive less than your investment in the Contract.

The Allianz Alterity® Variable Annuity Contract SAI – April 30, 2012

You must hold your Contract for seven complete Contract Years before you can exercise GPWB or GMIB and you can only exercise GPWB or GMIB within 30 days following a Contract Anniversary. You cannot exercise GPWB or GMIB before the expiration of the seven-year waiting period.

If you exercise GPWB:

·	You can no longer make additional Purchase Payments to the Contract.

·	Partial Annuitizations are no longer available.

·	The additional M&E charge for the PRIME Benefit continues until both GPWB and GMIB end.

·	If you have Enhanced GMDB or Earnings Protection GMDB, the additional M&E charge for GMDB continues as long as the Enhanced GMDB value or Earnings Protection GMDB value is greater than zero.

The partial withdrawal privilege is no longer available to you, however, you can still take GPWB Payments and Excess Withdrawals up to the annual GPWB Maximum without a withdrawal charge. Excess Withdrawals (including a full withdrawal of the Contract Value) are available while you are receiving GPWB Payments, however, amounts withdrawn in excess of the annual GPWB Maximum (including GPWB Payments) are subject to a withdrawal charge, as set out in prospectus section 7, Expenses – Withdrawal Charge.

·	The systematic withdrawal and minimum distribution programs are no longer available to you and if you are participating in these programs, your participation ends.

·	The Contract Value continues to fluctuate as a result of market performance, and decreases on a dollar for dollar basis with each GPWB Payment and any Excess Withdrawals.

·	The GMDB value no longer increases, each GPWB Payment reduces the GMDB value on a dollar for dollar basis and any Excess Withdrawals reduce the GMDB value proportionately by the percentage of Contract Value withdrawn.

·	The PB Value no longer increases, each GPWB Payment reduces the PB Value on a dollar for dollar basis and any Excess Withdrawals reduce the PB Value proportionately by the percentage of Contract Value withdrawn.

·	Excess Withdrawals do not affect the GPWB Payment amount or frequency, but may decrease the time over which you receive GPWB Payments.

If you exercise GMIB under a Full Annuitization:

·	The Accumulation Phase ends and the Annuity Phase begins.

·	The portion of the Contract that you apply to GMIB is no longer subject to the Separate Account annual expense, but any portion of the Contract applied to variable Traditional Annuity Payments continues to be subject to a 1.50% Separate Account annual expense.

·	If you have not exercised GPWB, it is no longer available to you, and you are no longer able to make additional Purchase Payments to the Contract.

·	If you exercised GPWB, GPWB Payments stop and GPWB ends.

·	GMDB ends.

If you exercise GMIB under a Partial Annuitization*:

·	The Annuity Phase begins and the Accumulation Phase continues.

The portion of the Contract that you apply to GMIB is no longer subject to the Separate Account annual expense, but any portion of the Contract in the Accumulation Phase or that has been applied to variable Traditional Annuity Payments continues to be subject to the appropriate Separate Account annual expense.

·	If any portion of the Contract is in the Accumulation Phase, you may be able to make additional Purchase Payments to the Contract, but you cannot make additional Purchase Payments to any portion of the Contract in the Annuity Phase.

·	GPWB continues to be available to you.

·	The Partial Annuitization reduces the Contract Value and GMDB value proportionately by the percentage of PB Value you apply to GMIB.

·	GMIB Payments do not affect the Contract Value available under the portion of the Contract in the Accumulation Phase.

*	Not available after you exercise GPWB, or if the PB Value is less than the Contract Value.

The Allianz Alterity® Variable Annuity Contract SAI – April 30, 2012

Under PRIME Benefits, the Owner controls:

·	when to exercise a benefit,

·	which benefit(s) to exercise, and

·	the amount of the GPWB Payment (subject to the GPWB Maximum) and Excess Withdrawals from the portion of the Contract that is in the Accumulation Phase.

GPWB Payments

If you exercise GPWB, we make GPWB Payments based on the percentage of the initial PB Value you select, subject to the maximum allowable payment (GPWB Maximum). If you exercise GPWB, you can receive up to:

·	10% of the PB Value under Traditional PRIME Benefit,

·	10% of the PB Value under Enhanced PRIME Benefit, if the 3% AIA or MAV applies, or

·	5% of the PB Value under Enhanced PRIME Benefit, if the 7% AIA applies.

Once you choose the percentage of GPWB value you want to receive, you cannot change it. Therefore, under a Qualified Contract that is subject to a minimum distribution requirement, once you select your GPWB Payment percentage you cannot adjust your GPWB Payment to meet your required minimum distribution needs.

Although GPWB Payments are partial withdrawals, they are not subject to the withdrawal charge. However, withdrawal charges apply to any Excess Withdrawals you take in the first seven years after you exercise GPWB. In addition, if you take an Excess Withdrawal, the amount withdrawn reduces:

·	the Contract Value,

·	the PB Value (which determines the amount available for future GPWB Payments and/or future GMIB Payments), and

·	the GMDB value.

Excess Withdrawals do not affect the GPWB Payment amount or frequency, but may decrease the time over which you receive GPWB Payments. If you take no Excess Withdrawals while the GPWB is in effect, we pay the PB value to you:

·	within ten years, under Traditional PRIME Benefit if you take the maximum allowable payment each year.

·	within ten years, if you elect the 10% payment option under Enhanced PRIME Benefit and take the maximum allowable payment each year.

·	within 20 years, if you elect the 5% payment option under Enhanced PRIME Benefit and take the maximum allowable payment each year (assuming no step ups).

We deduct each GPWB Payment proportionately from the Investment Choices. We continue to allocate the Contract Value among the Investment Choices according to your instructions while GPWB is in effect. You can also continue to make transfers between the Investment Options (subject to certain restrictions) while GPWB is in effect.

·	receive a lump sum payment of the entire remaining Contract Value (less any withdrawal charges and any deduction we make for premium taxes), the Accumulation Phase and the Contract ends; or

·	request Traditional Annuity Payments under a Full Annuitization based on the entire remaining Contract Value (less any deduction we make for premium taxes).

We send you notice at least 30 days before the last GPWB Payment date to ask for your instructions. If we do not receive any instructions from you by the date we make the last GPWB Payment, we pay you the entire remaining Contract Value (less any withdrawal charges and any deductions we make for premium tax) in a lump sum, the Accumulation Phase and the Contract ends.*

*	If you took a Partial Annuitization, those portions of the Contract continue and we continue to make Annuity Payments as provided for in the selected Annuity Option.

The Allianz Alterity® Variable Annuity Contract SAI – April 30, 2012

Taxation of GPWB Payments

GPWB Payments are considered withdrawals for tax purposes. This means that for Non-Qualified Contracts, Contract gains from the entire Contract are considered distributed first and are subject to ordinary income tax. Purchase Payments are distributed after gains have been paid out and are generally considered to be a return of your investment and are not subject to income tax. For Qualified Contracts, the entire GPWB Payment is most likely subject to ordinary income tax. In addition, GPWB Payments may be subject to premium taxes and, if any Owner is younger than age 59½, may also be subject to a 10% federal penalty tax. GPWB Payments are not subject to a withdrawal charge.

When GPWB Ends

GPWB ends upon the earliest of the following.

·	The Business Day you take an Excess Withdrawal of the entire Contract Value.

·	The Business Day that the PB Value and Contract Value are both zero.

·	The Business Day before the Income Date that you take a Full Annuitization.

·	When the Contract ends.

·	The death of any Owner (unless the deceased Owner’s spouse continues the Contract as the new Owner).

GMIB Payments

The annuity income protection provided by GMIB applies only under the following circumstances.

·	Your Income Date must be within 30 days following a Contract Anniversary, beginning with seventh Contract Anniversary.

·	GMIB Payments can only be made as fixed payments, regardless of the Annuity Option* you select.

·	Annuity Option 6* is only available if the PB Value is the MAV and the duration of the period certain must be at least ten years.

·	If the PB Value is the 7% AIA, your available Annuity Options* are restricted to Annuity Option 2 or 4 and the duration of the period certain must be at least ten years.

·	We base all GMIB Payments on an interest rate of 1% per year if the PB Value is the MAV and you select Annuity Option 6, or if the PB value is the 7% AIA.

*	For more information, see prospectus section 3, The Annuity Phase – Annuity Options.

In order to begin receiving monthly GMIB Payments, you must submit an income option election form to our Service Center after the expiration of the seven-year waiting period and within 30 days following a Contract Anniversary. GMIB Payments begin after your request has been received at our Service Center and is determined to be in good order. We make GMIB Payments to you beginning on the 30th day after your Contract Anniversary. If the scheduled GMIB Payment date does not fall on a Business Day, we make payment to you on the next Business Day.

Under GMIB, you can take either a Full Annuitization, before you exercise GPWB, or you can take Partial Annuitization(s) if the PB Value is greater than the Contract Value. Any GMIB Partial Annuitization reduces the Contract Value and GMDB value proportionately by the percentage of PB Value you apply to GMIB. If you take a Partial Annuitization, you cannot:

·	transfer any amounts you allocated to GMIB Payments back to any portion of the Contract in the Accumulation Phase;

·	transfer amounts from one Annuity Payment stream to another; or

·	allocate additional PB Value (or Contract Value) to an existing stream of Annuity Payments.

If you purchased this Contract under a qualified plan that is subject to minimum distribution requirement and you do not exercise GMIB on or before the date required minimum distribution payments must begin under the qualified plan, the Owner or Beneficiary may not be able to exercise the GMIB due to the restrictions imposed by the minimum distribution requirements.

The Allianz Alterity® Variable Annuity Contract SAI – April 30, 2012

Amount Used to Calculate GMIB Payments

GMIB guarantees that the GMIB Payments are equal to the guaranteed fixed payout rates applied to the PB Value. There may be situations where the PB Value is greater than the Contract Value, but the GMIB Payments are less than fixed Traditional Annuity Payments based on the Contract Value. This may occur because the guaranteed fixed payout rates available with GMIB may be less than the current fixed payout rates that are otherwise available under Traditional Annuity Payments. We base your Annuity Payments on whichever amount (PB Value or Contract Value) produces the greatest payment. However, if we use the Contract Value and the current fixed payout rates to calculate Traditional Annuity Payments, you will have incurred higher Contract expenses without receiving any explicit benefit from the GMIB.

While the 7% AIA may be larger than the 3% AIA and/or MAV, it may produce a lower GMIB Payment because under the 7% AIA you have fewer available Annuity Options and guaranteed fixed payout rates are lower.

If the GMIB Payment available under the 7% AIA is always less than the GMIB Payment available under the 3% AIA or MAV, we base GMIB Payments on the amount that produces the largest payment. However, it is possible that the GMIB Payments under the 7% AIA may be more or less than the GMIB Payments available under the 3% AIA and/or MAV depending on the Annuity Option you select. In these instances, we allow you to select the amount we use to calculate GMIB Payments and the Annuity Option that you feel is most appropriate.

Taxation of GMIB Payments

If you take a GMIB Partial Annuitization, GMIB Payments are considered withdrawals and not annuity payments for tax purposes. This means that for tax purposes, any Contract earnings in the entire Contract are considered to be distributed before Purchase Payments and may be subject to ordinary income tax and a 10% federal penalty tax. For Non-Qualified Contracts, gains are generally subject to ordinary income tax and Purchase Payments are not. For Qualified Contracts, the entire GMIB Payment under a Partial Annuitization is most likely subject to ordinary income taxes. For more information on Partial Annuitizations, please see prospectus section 3, The Annuity Phase – Partial Annuitization.

If you take a Full Annuitization under GMIB, GMIB Payments are considered annuity payments for tax purposes. If you take a GMIB Partial Annuitization, GMIB Payments are considered annuity payments (and not withdrawals) for tax purposes only after the Income Date on which you have applied the entire remaining Contract Value to Annuity Payments under the GMIB and/or Traditional Annuity Payments, that is, the Income Date after the Contract has been fully annuitized. For Non-Qualified Contracts that have been fully annuitized, a portion of each payment may be treated as gains that are subject to tax as ordinary income, and the remaining portion of the payment is considered to be a return of your investment and not subject to income tax. Once we have paid out all of your Purchase Payments, however, the full amount of each GMIB Payment is subject to tax as ordinary income. For Qualified Contracts, the entire GMIB Payment is most likely subject to tax as ordinary income. Once you apply the entire Contract Value to Annuity Payments, GMIB Payments generally are not subject to the 10% federal penalty tax.

When GMIB Ends

If you have not exercised GMIB, it ends upon the earliest of the following.

·	The Business Day that the PB Value and Contract Value are both zero.

·	The Business Day before the Income Date you take a Full Annuitization and request Traditional Annuity Payments.

·	When the Contract ends.

·	The death of any Owner (unless the deceased Owner’s spouse continues the Contract as the new Owner).

If you exercise GMIB, each portion of the Contract that you apply to GMIB Payments ends upon the earliest of the following.

·	Under Annuity Options 1 and 3, the death of the last surviving Annuitant.

·	Under Annuity Options 2 and 4, the death of the last surviving Annuitant and expiration of the guaranteed period.*

·	Under Annuity Option 5, the death of the Annuitant and payment of any lump sum refund.

·	Under Annuity Option 6, the expiration of the specified period certain.

·	When the Contract ends.

*	If we make a lump sum payment of the remaining guaranteed GMIB Payments at the death of the last surviving Annuitant, this portion of the Contract ends upon payment of the lump sum.

The Allianz Alterity® Variable Annuity Contract SAI – April 30, 2012

Separate Account Annual Expenses for May 2003 Contracts

The Separate Account annual expenses for May 2003 Contracts without PRIME Benefits during the Accumulation Phase are the same as the expenses for May 2006 Base Contracts. The Separate Account annual expenses for May 2003 Contracts with Enhanced PRIME Benefit during the Accumulation Phase are the same as the current charges for May 2006 Contracts with PRIME Plus Benefit.

The Separate Account annual expenses for May 2003 Contracts with Traditional PRIME Benefit during the Accumulation Phase are as follows:

Separate Account Annual Expenses(1)

(as a percentage of average daily assets invested in a subaccount on an annual basis)

	May 2003 Contracts with Traditional PRIME Benefit
	M&E Charges	Admin.Charge	Total
Traditional GMDB	1.55%	0.15%	1.70%
Enhanced GMDB	1.80%	0.15%	1.95%
Earnings Protection GMDB	1.85%	0.15%	2.00%

(1)	Some or all of the guaranteed benefits may not be available in all states; check with your Financial Professional.

The Separate Account annual expenses for May 2003 Contracts during the Annuity Phase are the same as the charges for May 2006 Contracts.

For more information on the expenses and charges of May 2006 Contracts, please see the Fee Tables in the prospectus.

INFORMATION ON CONTRACTS THAT WERE OFFERED BEFORE APRIL 29, 2005

Before April 29, 2005, we offered Contracts that allowed the Owner to take money out of the Contract (take a liquidation) during the Annuity Phase if the Owner elected to have us make variable Annuity Payments under Annuity Options 2, 4, or 6. These liquidations were subject to an additional charge. These Contracts are no longer offered for sale.

Liquidations under Annuity Option 2 (life annuity with monthly payments over 5, 10, 15 or 20 years guaranteed). During the lifetime of the Annuitant, and while the number of variable Traditional Annuity Payments made is less than the guaranteed number of payments elected, you may request a partial withdrawal (partial liquidation) of up to 75% of the total liquidation value, less any previously liquidated amounts. The total liquidation value is equal to the present value of the remaining guaranteed variable Traditional Annuity Payments, to the end of the guaranteed period, using the selected AIR as the interest rate for the present value calculation, less a commutation fee, or as set forth in your Contract. The minimum amount that you can liquidate is $500, or the remaining portion of the total liquidation value available (whichever is less). We subtract a commutation fee from the amount liquidated before we pay you the proceeds. We process partial liquidations within seven days after your written request is received in good order at our Service Center. After a partial liquidation, we reduce the subsequent monthly variable Traditional Annuity Payments during the remaining guaranteed period by the percentage of liquidation value withdrawn, including the commutation fee. After we have made the guaranteed number of variable Traditional Annuity Payments, we restore the number of Annuity Units used in calculating the monthly variable Traditional Annuity Payments to their original values as if no liquidations had taken place.

Liquidations under Annuity Option 4 (joint and last survivor with monthly payments over 5, 10, 15 or 20 years guaranteed). While either the Annuitant or joint Annuitant is alive and the number of variable Traditional Annuity Payments we have made is less than the guaranteed number of payments elected, you may request a partial withdrawal (partial liquidation) of up to 75% of the total liquidation value, less any previously liquidated amounts. The total liquidation value is equal to the present value of the remaining guaranteed variable Traditional Annuity Payments, to the end of the guaranteed period, using the selected AIR as the interest rate for the present value calculation, less a commutation fee, or as set forth in your Contract. The minimum amount that you can liquidate is $500, or the remaining portion of the total liquidation value available (whichever is less). We subtract a commutation fee from the amount liquidated before we pay you the proceeds. We process partial liquidations within seven days after your written request is received in good order at our Service Center.

The Allianz Alterity® Variable Annuity Contract SAI – April 30, 2012

After a partial liquidation, we reduce the subsequent monthly variable Traditional Annuity Payments during the remaining guaranteed period by the percentage of liquidation value withdrawn, including the commutation fee. After we have made the guaranteed number of variable Traditional Annuity Payments, we restore the number of Annuity Units used in calculating the monthly variable Traditional Annuity Payments to their original values as if no liquidations had taken place.

Liquidations under Annuity Option 6 (specified period certain annuity). If you requested variable Traditional Annuity Payments, you may take a withdrawal (liquidation) at least once each Contract Year of up to 100% of the total liquidation value in the Contract. We subtract a withdrawal charge from the amount liquidated before we pay you the proceeds. We process partial liquidations within seven days after your written request is received in good order at our Service Center. After a partial liquidation, we reduce the subsequent monthly variable Traditional Annuity Payments during the remaining period certain by the percentage of liquidation value withdrawn, including the withdrawal charge.

Commutation fee/withdrawal charge for liquidations under Annuity Options 2, 4, or 6. If you request variable Traditional Annuity Payments under Annuity Options 2, 4 or 6 and take a liquidation, we may assess a commutation fee or withdrawal charge.

For Annuity Options 2 and 4, the commutation fee as a percentage of the amount liquidated is equal to:

Number of Complete Years Since Income Date	Charge
0	5%
1	4%
2	3%
3	2%
4 years or more	1%

In states where variable Traditional Annuity Payments are available under Annuity Option 6, the withdrawal charge as a percentage of the amount liquidated is equal to:

Number of Complete Contract Years Since Receipt of Purchase Payment	Charge
0	7%
1	6%
2	5%
3	4%
4	3%
5	2%
6 Contract years or more	0%

We assess the commutation fee and/or the withdrawal charge to cover distribution expense and lost revenue, as well as internal costs incurred in conjunction with the liquidation.

INFORMATION ON ORIGINAL CONTRACTS

Original Contracts were first offered in January 2000 and were replaced by May 2003 Contracts. Original Contracts are no longer offered for sale, but Owners of these Contracts can still make additional Purchase Payments. Therefore, we are including information on these Contracts in this SAI.

Original Contracts automatically provided a Traditional GMIB for no additional charge and the Traditional GMIB value under these Contracts is calculated in the same manner as the PB Value under the Traditional PRIME Benefit for May 2003 Contracts. The Enhanced GMIB was available for an additional mortality and expense risk (M&E) charge if all Owners were 79 or younger on the Issue Date and the Enhanced GMIB value was equal to the greater of:

·	the Maximum Anniversary Value (MAV) before the older Owner’s 81st birthday, adjusted for subsequent partial withdrawals and subsequent Purchase Payments; or

·	the Annual Increase Amount (AIA) before the older Owner’s 81st birthday, adjusted for subsequent partial withdrawals and subsequent Purchase Payments.

The Allianz Alterity® Variable Annuity Contract SAI – April 30, 2012

The MAV for Original Contracts is calculated in the same manner as the MAV under PRIME Plus Benefit for May 2006 Contracts. The 5% AIA for Original Contracts is also calculated in the same manner as it is under May 2006 Contracts with PRIME Plus Benefit, on each Business Day other than a Contract Anniversary and on each Contract Anniversary that occurs on or after the older Owner’s 81st birthday. However, the 5% AIA on each Contract Anniversary before the older Owner’s 81st birthday for Original Contracts is calculated by taking its value on the immediately preceding Business Day increased by 5%. We then process any transactions we received on that Contract Anniversary (such as additional Purchase Payments, withdrawals and Partial Annuitizations) in the same way that we do on each Business Day other than a Contract Anniversary. There is no limit on the 5% AIA for Original Contracts. For details on how the Traditional GMIB and Enhanced GMIB values are calculated, please see the discussion earlier in this SAI.

GPWBs were not available under Original Contracts.

The death benefits available under Original Contracts were the same as what is available under May 2006 Contracts. However, on Original Contracts, the AIA under Enhanced GMDB is calculated in the same manner as it is for Original Contracts with Enhanced GMIB, and there is no limit on the AIA. The Earnings Protection GMDB value for Original Contracts is calculated in the same manner as it is for May 2006 Contracts, except that the “CV Plus” is calculated as follows:

The CV Plus

·	If all Owners were age 69 or younger on the Issue Date, 40% of the lesser of (a) or (b), or

·	If the older Owner was age 70 or older on the Issue Date, 25% of the lesser of (a) or (b), where:

(a)	is the Contract Value determined as of the end of the Business Day during which both due proof of death and an election of the death benefit payment option have been received at our Service Center; and

(b)	is the total Purchase Payments.

For more details on the death benefits, please see prospectus section 11, Death Benefit.

The charges for Original Contracts differ from the charges of the May 2006 Contracts as follows:

Separate Account Annual Expenses During the Accumulation Phase (as a percentage of average daily assets invested in a subaccount on an annual basis)
	Charges for Original Contracts with Traditional GMIB			Charges for Original Contracts with Enhanced GMIB
	M&E Charges	Admin. Charge	Total	M&E Charges	Admin. Charge	Total
Traditional GMDB	1.25%	0.15%	1.40%	1.55%	0.15%	1.70%
Enhanced GMDB	1.55%	0.15%	1.70%	1.75%	0.15%	1.90%
Earnings Protection GMDB	1.45%	0.15%	1.60%	1.75%	0.15%	1.90%

During the Annuity Phase, if you request variable Annuity Payments, the Separate Account annual expenses are equal on an annual basis to 1.40%. This expense is equal to the lowest charge because we do not pay a death benefit separate from the benefits provided by the Annuity Option if the Annuitant dies during the Annuity Phase.

Withdrawal Charge – during the Accumulation Phase* (as a percentage of each Purchase Payment withdrawn)		Withdrawal Charge – during the Annuity Phase** (as a percentage of amount liquidated under Annuity Option 6)

Number of Complete Contract Years Since Receipt of Purchase Payment	Charge	Number of Complete Contract Years Since Receipt of Purchase Payment	Charge
0	7%	0	7%
1	6%	1	6%
2	5%	2	5%
3	4%	3	4%
4	3%	4	3%
5 years or more	0%	5 years or more	0%

Each year, on a cumulative basis (less any withdrawals taken in the current Contract Year that were not subject to a withdrawal charge), you may take partial withdrawals that when added together do not exceed 10% of total Purchase Payments and we do not assess a withdrawal charge. For more details and additional information on other penalty-free withdrawal options please see the discussion of the partial withdrawal privilege and other information that appears in the prospectus section 9, Access to Your Money.

**	May not be applicable in all states.

The Allianz Alterity® Variable Annuity Contract SAI – April 30, 2012

For more details on the other charges of Original Contracts, please see the Fee Tables and section 7, Expenses in the prospectus.

FINANCIAL STATEMENTS

The audited consolidated financial statements of Allianz Life as of and for the year ended December 31, 2011 are included in Part C of the Registration Statement and are incorporated herein by reference. The financial statements should be considered only as bearing upon the ability of Allianz Life to meet its obligations under the Contracts. The audited financial statements of the Separate Account as of and for the year ended December 31, 2011 are also included in Part C of the Registration Statement and are incorporated herein by reference.

APPENDIX – CONDENSED FINANCIAL INFORMATION

Accumulation Unit value (AUV) information corresponding to the highest and lowest combination of charges for May 2006 Contracts is found in Appendix A to the prospectus. AUV information listing the additional combinations of charges for all other older Contracts no longer offered is found below.

This information should be read in conjunction with the financial statements and related notes of the Separate Account included in Part C of the Registration Statement.

Key to Benefit Option*		Separate Account Annual Expenses(1)
ALE 1	Allianz Alterity – Original Contract with Enhanced GMDB and Enhanced GMIB	1.90%
ALE 3	Allianz Alterity – May 2006 Base and May 2003 Contract with Enhanced GMDB	1.80%
ALE 4	Allianz Alterity – May 2003 Contract with Enhanced GMDB and Traditional PRIME Benefit	1.95%
ALE 5	Allianz Alterity – May 2003 Contract with Enhanced GMDB and Enhanced PRIME Benefit	2.40%
ALO 1	Allianz Alterity – Original Contract with Traditional GMDB and Enhanced GMIB and Original Contract with Enhanced GMDB and Traditional GMIB	1.70%
ALO 2	Allianz Alterity – Original Contract with Earnings Protection GMDB and Enhanced GMIB	1.90%
ALO 3	Allianz Alterity – May 2006 Base and May 2003 Contract with Earnings Protection GMDB	1.80%
ALO 4	Allianz Alterity – May 2003 Contract with Earnings Protection GMDB and Traditional PRIME Benefit	2.00%
ALT 1	Allianz Alterity – Original Contract with Traditional GMDB and Traditional GMIB	1.40%
ALT 2	Allianz Alterity – Original Contract with Earnings Protection GMDB and Traditional GMIB	1.60%
ALT 4	Allianz Alterity – May 2003 Contract with Traditional GMDB and Traditional PRIME Benefit	1.70%
ALT 5	Allianz Alterity – May 2003 Contract with Traditional GMDB and Enhanced PRIME Benefit and May 2006 Contract with Traditional GMDB and PRIME Plus Benefit	2.20%

(1)

The Separate Account annual expenses for a May 2003 Contract with Traditional GMDB and No PRIME Benefit (1.50%) and a May 2003 Contract with Earnings Protection GMDB and Enhanced PRIME Benefit (2.45%) are the same as the expenses for May 2006 Contracts, therefore the AUV information is included in the prospectus.

The Allianz Alterity® Variable Annuity Contract SAI – April 30, 2012

(Number of Accumulation Units in thousands)

Benefit Option *	Period or Year Ended	AUV at Beginning of Period	AUV at End of Period	Number of Accumulation Units Outstanding at End of Period
Investment Option

AZL Balanced Index Strategy Fund

ALE 1 1.90%

12/31/2009 N/A 10.025 54

12/31/2010 10.025 10.869 76

12/31/2011 10.869 10.922 70

ALE 3 1.80%

12/31/2009 N/A 10.027 0

12/31/2010 10.027 10.882 19

12/31/2011 10.882 10.946 21

ALE 4 1.95%

12/31/2009 N/A 10.024 0

12/31/2010 10.024 10.863 0

12/31/2011 10.863 10.910 9

ALE 5 2.40%

12/31/2009 N/A 10.015 55

12/31/2010 10.015 10.804 197

12/31/2011 10.804 10.803 109

ALO 1 1.70%

12/31/2009 N/A 10.029 14

12/31/2010 10.029 10.895 19

12/31/2011 10.895 10.970 26

ALO 2 1.90%

12/31/2009 N/A 10.025 0

12/31/2010 10.025 10.869 12

12/31/2011 10.869 10.922 5

ALO 3 1.80%

12/31/2009 N/A 10.027 0

12/31/2010 10.027 10.882 0

12/31/2011 10.882 10.946 0

ALO 4 2.00%

12/31/2009 N/A 10.023 0

12/31/2010 10.023 10.856 0

12/31/2011 10.856 10.898 0

ALT 1 1.40%

12/31/2009 N/A 10.035 0

12/31/2010 10.035 10.934 0

12/31/2011 10.934 11.042 0

ALT 2 1.60%

12/31/2009 N/A 10.031 0

12/31/2010 10.031 10.908 0

12/31/2011 10.908 10.994 0

ALT 4 1.70%

12/31/2009 N/A 10.029 0

12/31/2010 10.029 10.895 5

12/31/2011 10.895 10.970 1

ALT 5 2.20%

12/31/2009 N/A 10.019 182

12/31/2010 10.019 10.830 246

12/31/2011 10.830 10.850 300

AZL Franklin Templeton Founding Strategy Plus Fund

ALE 1 1.90%

12/31/2009 N/A 10.208 5

12/31/2010 10.208 11.020 17

12/31/2011 11.020 10.614 237

ALE 3 1.80%

12/31/2009 N/A 10.210 1

12/31/2010 10.210 11.033 5

12/31/2011 11.033 10.638 11

ALE 4 1.95%

12/31/2009 N/A 10.207 0

12/31/2010 10.207 11.013 0

12/31/2011 11.013 10.603 0

ALE 5 2.40%

12/31/2009 N/A 10.198 8

12/31/2010 10.198 10.954 70

12/31/2011 10.954 10.499 249

ALO 1 1.70%

12/31/2009 N/A 10.212 4

12/31/2010 10.212 11.046 18

12/31/2011 11.046 10.661 92

ALO 2 1.90%

12/31/2009 N/A 10.208 0

12/31/2010 10.208 11.020 0

12/31/2011 11.020 10.614 18

ALO 3 1.80%

12/31/2009 N/A 10.210 0

12/31/2010 10.210 11.033 0

12/31/2011 11.033 10.638 0

ALO 4 2.00%

12/31/2009 N/A 10.206 0

12/31/2010 10.206 11.006 0

12/31/2011 11.006 10.591 0

ALT 1 1.40%

12/31/2009 N/A 10.218 0

12/31/2010 10.218 11.085 0

12/31/2011 11.085 10.731 7

ALT 2 1.60%

12/31/2009 N/A 10.214 0

12/31/2010 10.214 11.059 0

12/31/2011 11.059 10.684 0

ALT 4 1.70%

12/31/2009 N/A 10.212 0

12/31/2010 10.212 11.046 0

12/31/2011 11.046 10.661 6

ALT 5 2.20%

12/31/2009 N/A 10.202 15

12/31/2010 10.202 10.980 67

12/31/2011 10.980 10.545 290

The Allianz Alterity® Variable Annuity Contract SAI – April 30, 2012

Benefit Option *	Period or Year Ended	AUV at Beginning of Period	AUV at End of Period	Number of Accumulation Units Outstanding at End of Period
Investment Option

AZL Fusion Balanced Fund

ALE 1 1.90%

12/31/2005 N/A 10.594 203

12/31/2006 10.594 11.381 1207

12/31/2007 11.381 11.960 957

12/31/2008 11.960 8.514 967

12/31/2009 8.514 10.586 1220

12/31/2010 10.586 11.536 1107

12/31/2011 11.536 11.217 937

ALE 3 1.80%

12/31/2005 N/A 10.601 38

12/31/2006 10.601 11.400 83

12/31/2007 11.400 11.992 147

12/31/2008 11.992 8.546 120

12/31/2009 8.546 10.635 116

12/31/2010 10.635 11.602 148

12/31/2011 11.602 11.293 123

ALE 4 1.95%

12/31/2005 N/A 10.590 3

12/31/2006 10.590 11.372 19

12/31/2007 11.372 11.944 27

12/31/2008 11.944 8.499 21

12/31/2009 8.499 10.561 22

12/31/2010 10.561 11.503 39

12/31/2011 11.503 11.180 30

ALE 5 2.40%

12/31/2005 N/A 10.559 695

12/31/2006 10.559 11.287 1460

12/31/2007 11.287 11.802 1878

12/31/2008 11.802 8.359 2256

12/31/2009 8.359 10.341 2615

12/31/2010 10.341 11.213 2693

12/31/2011 11.213 10.849 2354

ALO 1 1.70%

12/31/2005 N/A 10.608 66

12/31/2006 10.608 11.419 264

12/31/2007 11.419 12.025 276

12/31/2008 12.025 8.577 491

12/31/2009 8.577 10.685 577

12/31/2010 10.685 11.668 427

12/31/2011 11.668 11.368 366

ALO 2 1.90%

12/31/2005 N/A 10.594 33

12/31/2006 10.594 11.381 65

12/31/2007 11.381 11.960 89

12/31/2008 11.960 8.514 78

12/31/2009 8.514 10.586 86

12/31/2010 10.586 11.536 170

12/31/2011 11.536 11.217 175

ALO 3 1.80%

12/31/2005 N/A 10.601 3

12/31/2006 10.601 11.400 4

12/31/2007 11.400 11.992 25

12/31/2008 11.992 8.546 10

12/31/2009 8.546 10.635 9

12/31/2010 10.635 11.602 9

12/31/2011 11.602 11.293 9

ALO 4 2.00%

12/31/2005 N/A 10.587 0

12/31/2006 10.587 11.362 0

12/31/2007 11.362 11.929 0

12/31/2008 11.929 8.483 0

12/31/2009 8.483 10.536 0

12/31/2010 10.536 11.471 0

12/31/2011 11.471 11.143 0

ALT 1 1.40%

12/31/2005 N/A 10.630 37

12/31/2006 10.630 11.477 56

12/31/2007 11.477 12.121 94

12/31/2008 12.121 8.672 76

12/31/2009 8.672 10.836 71

12/31/2010 10.836 11.868 35

12/31/2011 11.868 11.598 26

ALT 2 1.60%

12/31/2005 N/A 10.615 0

12/31/2006 10.615 11.439 0

12/31/2007 11.439 12.057 0

12/31/2008 12.057 8.609 0

12/31/2009 8.609 10.735 0

12/31/2010 10.735 11.734 0

12/31/2011 11.734 11.444 0

ALT 4 1.70%

12/31/2005 N/A 10.608 210

12/31/2006 10.608 11.419 255

12/31/2007 11.419 12.025 266

12/31/2008 12.025 8.577 113

12/31/2009 8.577 10.685 110

12/31/2010 10.685 11.668 91

12/31/2011 11.668 11.368 76

ALT 5 2.20%

12/31/2005 N/A 10.573 681

12/31/2006 10.573 11.325 1766

12/31/2007 11.325 11.865 2214

12/31/2008 11.865 8.421 3338

12/31/2009 8.421 10.438 3678

12/31/2010 10.438 11.341 3866

12/31/2011 11.341 10.995 3620

AZL Fusion Conservative Fund

ALE 1 1.90%

12/31/2009 N/A 10.144 2

12/31/2010 10.144 11.044 121

12/31/2011 11.044 10.907 265

ALE 3 1.80%

12/31/2009 N/A 10.146 0

12/31/2010 10.146 11.058 3

12/31/2011 11.058 10.931 3

ALE 4 1.95%

12/31/2009 N/A 10.143 0

12/31/2010 10.143 11.038 0

12/31/2011 11.038 10.895 13

The Allianz Alterity® Variable Annuity Contract SAI – April 30, 2012

Benefit Option *	Period or Year Ended	AUV at Beginning of Period	AUV at End of Period	Number of Accumulation Units Outstanding at End of Period
Investment Option

ALE 5 2.40%

12/31/2009 N/A 10.134 5

12/31/2010 10.134 10.979 396

12/31/2011 10.979 10.788 530

ALO 1 1.70%

12/31/2009 N/A 10.148 0

12/31/2010 10.148 11.071 95

12/31/2011 11.071 10.955 119

ALO 2 1.90%

12/31/2009 N/A 10.144 2

12/31/2010 10.144 11.044 2

12/31/2011 11.044 10.907 5

ALO 3 1.80%

12/31/2009 N/A 10.146 0

12/31/2010 10.146 11.058 4

12/31/2011 11.058 10.931 6

ALO 4 2.00%

12/31/2009 N/A 10.142 0

12/31/2010 10.142 11.031 0

12/31/2011 11.031 10.883 0

ALT 1 1.40%

12/31/2009 N/A 10.154 0

12/31/2010 10.154 11.111 2

12/31/2011 11.111 11.027 14

ALT 2 1.60%

12/31/2009 N/A 10.150 0

12/31/2010 10.150 11.084 0

12/31/2011 11.084 10.979 0

ALT 4 1.70%

12/31/2009 N/A 10.148 1

12/31/2010 10.148 11.071 11

12/31/2011 11.071 10.955 11

ALT 5 2.20%

12/31/2009 N/A 10.138 71

12/31/2010 10.138 11.005 257

12/31/2011 11.005 10.835 546

AZL Fusion Moderate Fund

ALE 1 1.90%

12/31/2005 N/A 10.772 1370

12/31/2006 10.772 11.702 2008

12/31/2007 11.702 12.231 1890

12/31/2008 12.231 8.070 2067

12/31/2009 8.070 10.247 1946

12/31/2010 10.247 11.235 1671

12/31/2011 11.235 10.711 1615

ALE 3 1.80%

12/31/2005 N/A 10.779 37

12/31/2006 10.779 11.721 90

12/31/2007 11.721 12.264 119

12/31/2008 12.264 8.099 112

12/31/2009 8.099 10.295 106

12/31/2010 10.295 11.299 98

12/31/2011 11.299 10.783 92

ALE 4 1.95%

12/31/2005 N/A 10.768 17

12/31/2006 10.768 11.692 61

12/31/2007 11.692 12.215 47

12/31/2008 12.215 8.055 47

12/31/2009 8.055 10.223 41

12/31/2010 10.223 11.203 39

12/31/2011 11.203 10.676 39

ALE 5 2.40%

12/31/2005 N/A 10.736 2465

12/31/2006 10.736 11.604 4727

12/31/2007 11.604 12.069 5581

12/31/2008 12.069 7.923 5359

12/31/2009 7.923 10.011 5641

12/31/2010 10.011 10.921 5786

12/31/2011 10.921 10.360 5656

ALO 1 1.70%

12/31/2005 N/A 10.786 316

12/31/2006 10.786 11.741 529

12/31/2007 11.741 12.297 533

12/31/2008 12.297 8.129 330

12/31/2009 8.129 10.344 338

12/31/2010 10.344 11.364 350

12/31/2011 11.364 10.855 268

ALO 2 1.90%

12/31/2005 N/A 10.772 52

12/31/2006 10.772 11.702 149

12/31/2007 11.702 12.231 132

12/31/2008 12.231 8.070 92

12/31/2009 8.070 10.247 89

12/31/2010 10.247 11.235 93

12/31/2011 11.235 10.711 161

ALO 3 1.80%

12/31/2005 N/A 10.779 5

12/31/2006 10.779 11.721 26

12/31/2007 11.721 12.264 44

12/31/2008 12.264 8.099 128

12/31/2009 8.099 10.295 123

12/31/2010 10.295 11.299 128

12/31/2011 11.299 10.783 131

ALO 4 2.00%

12/31/2005 N/A 10.765 6

12/31/2006 10.765 11.682 12

12/31/2007 11.682 12.199 12

12/31/2008 12.199 8.040 12

12/31/2009 8.040 10.200 5

12/31/2010 10.200 11.172 4

12/31/2011 11.172 10.640 3

ALT 1 1.40%

12/31/2005 N/A 10.808 33

12/31/2006 10.808 11.800 74

12/31/2007 11.800 12.396 93

12/31/2008 12.396 8.219 54

12/31/2009 8.219 10.490 51

12/31/2010 10.490 11.559 51

12/31/2011 11.559 11.075 56

The Allianz Alterity® Variable Annuity Contract SAI – April 30, 2012

Benefit Option *	Period or Year Ended	AUV at Beginning of Period	AUV at End of Period	Number of Accumulation Units Outstanding at End of Period
Investment Option

ALT 2 1.60%

12/31/2005 N/A 10.793 0

12/31/2006 10.793 11.760 0

12/31/2007 11.760 12.330 0

12/31/2008 12.330 8.159 0

12/31/2009 8.159 10.392 0

12/31/2010 10.392 11.428 0

12/31/2011 11.428 10.928 0

ALT 4 1.70%

12/31/2005 N/A 10.786 171

12/31/2006 10.786 11.741 217

12/31/2007 11.741 12.297 188

12/31/2008 12.297 8.129 131

12/31/2009 8.129 10.344 141

12/31/2010 10.344 11.364 123

12/31/2011 11.364 10.855 106

ALT 5 2.20%

12/31/2005 N/A 10.750 2618

12/31/2006 10.750 11.643 5316

12/31/2007 11.643 12.133 6671

12/31/2008 12.133 7.981 6983

12/31/2009 7.981 10.105 7164

12/31/2010 10.105 11.046 7066

12/31/2011 11.046 10.499 7102

AZL Gateway Fund

ALE 1 1.90%

12/31/2010 N/A 10.068 4

12/31/2011 10.068 10.182 31

ALE 3 1.80%

12/31/2010 N/A 10.075 1

12/31/2011 10.075 10.199 5

ALE 4 1.95%

12/31/2010 N/A 10.065 0

12/31/2011 10.065 10.173 1

ALE 5 2.40%

12/31/2010 N/A 10.034 28

12/31/2011 10.034 10.097 163

ALO 1 1.70%

12/31/2010 N/A 10.082 1

12/31/2011 10.082 10.216 28

ALO 2 1.90%

12/31/2010 N/A 10.068 1

12/31/2011 10.068 10.182 1

ALO 3 1.80%

12/31/2010 N/A 10.075 0

12/31/2011 10.075 10.199 0

ALO 4 2.00%

12/31/2010 N/A 10.061 0

12/31/2011 10.061 10.165 0

ALT 1 1.40%

12/31/2010 N/A 10.102 0

12/31/2011 10.102 10.267 10

ALT 2 1.60%

12/31/2010 N/A 10.089 0

12/31/2011 10.089 10.233 0

ALT 4 1.70%

12/31/2010 N/A 10.082 3

12/31/2011 10.082 10.216 6

ALT 5 2.20%

12/31/2010 N/A 10.048 21

12/31/2011 10.048 10.131 75

AZL Growth Index Strategy Fund

ALE 1 1.90%

12/31/2009 N/A 10.057 127

12/31/2010 10.057 11.192 150

12/31/2011 11.192 10.983 283

ALE 3 1.80%

12/31/2009 N/A 10.059 8

12/31/2010 10.059 11.205 6

12/31/2011 11.205 11.007 13

ALE 4 1.95%

12/31/2009 N/A 10.056 0

12/31/2010 10.056 11.185 0

12/31/2011 11.185 10.971 5

ALE 5 2.40%

12/31/2009 N/A 10.047 317

12/31/2010 10.047 11.125 315

12/31/2011 11.125 10.863 1025

ALO 1 1.70%

12/31/2009 N/A 10.061 43

12/31/2010 10.061 11.219 29

12/31/2011 11.219 11.031 241

ALO 2 1.90%

12/31/2009 N/A 10.057 4

12/31/2010 10.057 11.192 12

12/31/2011 11.192 10.983 22

ALO 3 1.80%

12/31/2009 N/A 10.059 7

12/31/2010 10.059 11.205 7

12/31/2011 11.205 11.007 9

ALO 4 2.00%

12/31/2009 N/A 10.055 0

12/31/2010 10.055 11.179 0

12/31/2011 11.179 10.959 10

ALT 1 1.40%

12/31/2009 N/A 10.067 0

12/31/2010 10.067 11.259 0

12/31/2011 11.259 11.104 3

ALT 2 1.60%

12/31/2009 N/A 10.063 0

12/31/2010 10.063 11.232 0

12/31/2011 11.232 11.055 0

ALT 4 1.70%

12/31/2009 N/A 10.061 0

12/31/2010 10.061 11.219 2

12/31/2011 11.219 11.031 6

ALT 5 2.20%

12/31/2009 N/A 10.051 520

12/31/2010 10.051 11.152 487

12/31/2011 11.152 10.911 1185

The Allianz Alterity® Variable Annuity Contract SAI – April 30, 2012

Benefit Option *	Period or Year Ended	AUV at Beginning of Period	AUV at End of Period	Number of Accumulation Units Outstanding at End of Period
Investment Option

AZL Invesco Equity and Income Fund

ALE 1 1.90%

12/31/2004 N/A 10.774 611

12/31/2005 10.774 11.285 903

12/31/2006 11.285 12.460 1029

12/31/2007 12.460 12.599 857

12/31/2008 12.599 9.404 551

12/31/2009 9.404 11.335 572

12/31/2010 11.335 12.428 628

12/31/2011 12.428 11.929 648

ALE 3 1.80%

12/31/2004 N/A 10.781 23

12/31/2005 10.781 11.304 42

12/31/2006 11.304 12.493 51

12/31/2007 12.493 12.645 70

12/31/2008 12.645 9.448 53

12/31/2009 9.448 11.400 99

12/31/2010 11.400 12.511 161

12/31/2011 12.511 12.021 139

ALE 4 1.95%

12/31/2004 N/A 10.770 7

12/31/2005 10.770 11.276 24

12/31/2006 11.276 12.443 28

12/31/2007 12.443 12.575 30

12/31/2008 12.575 9.382 21

12/31/2009 9.382 11.303 23

12/31/2010 11.303 12.387 19

12/31/2011 12.387 11.883 32

ALE 5 2.40%

12/31/2004 N/A 10.738 704

12/31/2005 10.738 11.191 1500

12/31/2006 11.191 12.295 2089

12/31/2007 12.295 12.369 2402

12/31/2008 12.369 9.187 2189

12/31/2009 9.187 11.018 1865

12/31/2010 11.018 12.020 1809

12/31/2011 12.020 11.480 2151

ALO 1 1.70%

12/31/2004 N/A 10.788 495

12/31/2005 10.788 11.323 638

12/31/2006 11.323 12.526 613

12/31/2007 12.526 12.691 531

12/31/2008 12.691 9.492 375

12/31/2009 9.492 11.465 321

12/31/2010 11.465 12.595 277

12/31/2011 12.595 12.113 308

ALO 2 1.90%

12/31/2004 N/A 10.774 3

12/31/2005 10.774 11.285 22

12/31/2006 11.285 12.460 32

12/31/2007 12.460 12.599 28

12/31/2008 12.599 9.404 43

12/31/2009 9.404 11.335 30

12/31/2010 11.335 12.428 33

12/31/2011 12.428 11.929 40

ALO 3 1.80%

12/31/2004 N/A 10.781 1

12/31/2005 10.781 11.304 1

12/31/2006 11.304 12.493 8

12/31/2007 12.493 12.645 10

12/31/2008 12.645 9.448 14

12/31/2009 9.448 11.400 20

12/31/2010 11.400 12.511 19

12/31/2011 12.511 12.021 20

ALO 4 2.00%

12/31/2004 N/A 10.767 1

12/31/2005 10.767 11.266 1

12/31/2006 11.266 12.427 0

12/31/2007 12.427 12.552 0

12/31/2008 12.552 9.360 0

12/31/2009 9.360 11.271 0

12/31/2010 11.271 12.345 0

12/31/2011 12.345 11.838 9

ALT 1 1.40%

12/31/2004 N/A 10.810 24

12/31/2005 10.810 11.380 36

12/31/2006 11.380 12.627 67

12/31/2007 12.627 12.832 47

12/31/2008 12.832 9.627 16

12/31/2009 9.627 11.662 13

12/31/2010 11.662 12.850 6

12/31/2011 12.850 12.395 9

ALT 2 1.60%

12/31/2004 N/A 10.795 1

12/31/2005 10.795 11.342 2

12/31/2006 11.342 12.560 1

12/31/2007 12.560 12.738 0

12/31/2008 12.738 9.537 0

12/31/2009 9.537 11.530 0

12/31/2010 11.530 12.679 0

12/31/2011 12.679 12.207 0

ALT 4 1.70%

12/31/2004 N/A 10.788 10

12/31/2005 10.788 11.323 41

12/31/2006 11.323 12.526 43

12/31/2007 12.526 12.691 40

12/31/2008 12.691 9.492 37

12/31/2009 9.492 11.465 24

12/31/2010 11.465 12.595 22

12/31/2011 12.595 12.113 27

ALT 5 2.20%

12/31/2004 N/A 10.752 365

12/31/2005 10.752 11.229 890

12/31/2006 11.229 12.360 1169

12/31/2007 12.360 12.461 1387

12/31/2008 12.461 9.273 1562

12/31/2009 9.273 11.144 1259

12/31/2010 11.144 12.182 1231

12/31/2011 12.182 11.658 1551

The Allianz Alterity® Variable Annuity Contract SAI – April 30, 2012

Benefit Option *	Period or Year Ended	AUV at Beginning of Period	AUV at End of Period	Number of Accumulation Units Outstanding at End of Period
Investment Option

AZL Money Market Fund

ALE 1 1.90%

12/31/2002 10.479 10.368 3068

12/31/2003 10.368 10.208 2432

12/31/2004 10.208 10.083 1767

12/31/2005 10.083 10.148 1965

12/31/2006 10.148 10.400 2388

12/31/2007 10.400 10.693 3449

12/31/2008 10.693 10.748 3764

12/31/2009 10.748 10.568 2460

12/31/2010 10.568 10.370 1817

12/31/2011 10.370 10.176 1767

ALE 3 1.80%

12/31/2003 N/A 10.248 18

12/31/2004 10.248 10.133 31

12/31/2005 10.133 10.208 46

12/31/2006 10.208 10.472 117

12/31/2007 10.472 10.778 154

12/31/2008 10.778 10.844 209

12/31/2009 10.844 10.674 184

12/31/2010 10.674 10.484 129

12/31/2011 10.484 10.298 99

ALE 4 1.95%

12/31/2003 N/A 10.188 3

12/31/2004 10.188 10.058 30

12/31/2005 10.058 10.118 31

12/31/2006 10.118 10.364 49

12/31/2007 10.364 10.651 101

12/31/2008 10.651 10.700 162

12/31/2009 10.700 10.516 111

12/31/2010 10.516 10.314 95

12/31/2011 10.314 10.115 42

ALE 5 2.40%

12/31/2003 N/A 10.010 658

12/31/2004 10.010 9.838 1205

12/31/2005 9.838 9.852 1915

12/31/2006 9.852 10.046 2245

12/31/2007 10.046 10.278 3231

12/31/2008 10.278 10.279 5580

12/31/2009 10.279 10.057 4400

12/31/2010 10.057 9.819 3815

12/31/2011 9.819 9.587 3583

ALO 1 1.70%

12/31/2002 10.519 10.429 1929

12/31/2003 10.429 10.288 1943

12/31/2004 10.288 10.183 1045

12/31/2005 10.183 10.269 1087

12/31/2006 10.269 10.545 1359

12/31/2007 10.545 10.864 1816

12/31/2008 10.864 10.941 2202

12/31/2009 10.941 10.780 1495

12/31/2010 10.780 10.599 913

12/31/2011 10.599 10.421 842

ALO 2 1.90%

12/31/2002 10.479 10.368 320

12/31/2003 10.368 10.208 296

12/31/2004 10.208 10.083 178

12/31/2005 10.083 10.148 195

12/31/2006 10.148 10.400 279

12/31/2007 10.400 10.693 285

12/31/2008 10.693 10.748 443

12/31/2009 10.748 10.568 360

12/31/2010 10.568 10.370 225

12/31/2011 10.370 10.176 234

ALO 3 1.80%

12/31/2003 N/A 10.248 6

12/31/2004 10.248 10.133 6

12/31/2005 10.133 10.208 2

12/31/2006 10.208 10.472 87

12/31/2007 10.472 10.778 5

12/31/2008 10.778 10.844 23

12/31/2009 10.844 10.674 25

12/31/2010 10.674 10.484 12

12/31/2011 10.484 10.298 52

ALO 4 2.00%

12/31/2003 N/A 10.168 0

12/31/2004 10.168 10.033 10

12/31/2005 10.033 10.088 1

12/31/2006 10.088 10.328 0

12/31/2007 10.328 10.609 0

12/31/2008 10.609 10.652 8

12/31/2009 10.652 10.464 1

12/31/2010 10.464 10.258 7

12/31/2011 10.258 10.055 7

ALT 1 1.40%

12/31/2002 10.580 10.521 714

12/31/2003 10.521 10.410 541

12/31/2004 10.410 10.334 396

12/31/2005 10.334 10.453 378

12/31/2006 10.453 10.766 471

12/31/2007 10.766 11.125 396

12/31/2008 11.125 11.238 436

12/31/2009 11.238 11.106 166

12/31/2010 11.106 10.952 129

12/31/2011 10.952 10.801 92

ALT 2 1.60%

12/31/2002 10.539 10.459 9

12/31/2003 10.459 10.329 11

12/31/2004 10.329 10.233 3

12/31/2005 10.233 10.330 23

12/31/2006 10.330 10.618 2

12/31/2007 10.618 10.950 0

12/31/2008 10.950 11.039 0

12/31/2009 11.039 10.888 0

12/31/2010 10.888 10.716 1

12/31/2011 10.716 10.546 0

The Allianz Alterity® Variable Annuity Contract SAI – April 30, 2012

Benefit Option *	Period or Year Ended	AUV at Beginning of Period	AUV at End of Period	Number of Accumulation Units Outstanding at End of Period
Investment Option

ALT 4 1.70%

12/31/2003 N/A 10.288 19

12/31/2004 10.288 10.183 90

12/31/2005 10.183 10.269 165

12/31/2006 10.269 10.545 166

12/31/2007 10.545 10.864 170

12/31/2008 10.864 10.941 382

12/31/2009 10.941 10.780 199

12/31/2010 10.780 10.599 113

12/31/2011 10.599 10.421 86

ALT 5 2.20%

12/31/2003 N/A 10.089 369

12/31/2004 10.089 9.935 861

12/31/2005 9.935 9.969 1505

12/31/2006 9.969 10.186 1870

12/31/2007 10.186 10.442 2802

12/31/2008 10.442 10.464 5845

12/31/2009 10.464 10.258 5012

12/31/2010 10.258 10.036 4320

12/31/2011 10.036 9.818 4104

BlackRock Global Allocation V.I. Fund

ALE 1 1.90%

12/31/2008 N/A 7.893 348

12/31/2009 7.893 9.364 970

12/31/2010 9.364 10.085 1255

12/31/2011 10.085 9.535 1398

ALE 3 1.80%

12/31/2008 N/A 7.898 13

12/31/2009 7.898 9.380 196

12/31/2010 9.380 10.112 229

12/31/2011 10.112 9.570 214

ALE 4 1.95%

12/31/2008 N/A 7.890 1

12/31/2009 7.890 9.356 5

12/31/2010 9.356 10.071 8

12/31/2011 10.071 9.518 17

ALE 5 2.40%

12/31/2008 N/A 7.866 784

12/31/2009 7.866 9.286 1529

12/31/2010 9.286 9.951 1972

12/31/2011 9.951 9.362 2915

ALO 1 1.70%

12/31/2008 N/A 7.903 193

12/31/2009 7.903 9.396 415

12/31/2010 9.396 10.139 463

12/31/2011 10.139 9.605 661

ALO 2 1.90%

12/31/2008 N/A 7.893 14

12/31/2009 7.893 9.364 35

12/31/2010 9.364 10.085 45

12/31/2011 10.085 9.535 35

ALO 3 1.80%

12/31/2008 N/A 7.898 10

12/31/2009 7.898 9.380 15

12/31/2010 9.380 10.112 14

12/31/2011 10.112 9.570 14

ALO 4 2.00%

12/31/2008 N/A 7.888 0

12/31/2009 7.888 9.349 0

12/31/2010 9.349 10.058 0

12/31/2011 10.058 9.500 9

ALT 1 1.40%

12/31/2008 N/A 7.919 24

12/31/2009 7.919 9.443 34

12/31/2010 9.443 10.220 83

12/31/2011 10.220 9.712 74

ALT 2 1.60%

12/31/2008 N/A 7.909 1

12/31/2009 7.909 9.411 0

12/31/2010 9.411 10.166 0

12/31/2011 10.166 9.641 6

ALT 4 1.70%

12/31/2008 N/A 7.903 2

12/31/2009 7.903 9.396 23

12/31/2010 9.396 10.139 33

12/31/2011 10.139 9.605 54

ALT 5 2.20%

12/31/2008 N/A 7.877 584

12/31/2009 7.877 9.317 1401

12/31/2010 9.317 10.004 2113

12/31/2011 10.004 9.431 2843

Fidelity VIP FundsManager 50% Portfolio

ALE 1 1.90%

12/31/2011 N/A 10.476 5

ALE 3 1.80%

12/31/2011 N/A 10.536 0

ALE 4 1.95%

12/31/2011 N/A 10.446 0

ALE 5 2.40%

12/31/2011 N/A 10.181 6

ALO 1 1.70%

12/31/2011 N/A 10.596 0

ALO 2 1.90%

12/31/2011 N/A 10.476 1

ALO 3 1.80%

12/31/2011 N/A 10.536 0

ALO 4 2.00%

12/31/2011 N/A 10.416 0

ALT 1 1.40%

12/31/2011 N/A 10.780 4

ALT 2 1.60%

12/31/2011 N/A 10.657 0

ALT 4 1.70%

12/31/2011 N/A 10.596 0

ALT 5 2.20%

12/31/2011 N/A 10.298 3

The Allianz Alterity® Variable Annuity Contract SAI – April 30, 2012

Benefit Option *	Period or Year Ended	AUV at Beginning of Period	AUV at End of Period	Number of Accumulation Units Outstanding at End of Period
Investment Option

Fidelity VIP FundsManager 60% Portfolio

ALE 1 1.90%

12/31/2011 N/A 9.482 11

ALE 3 1.80%

12/31/2011 N/A 9.523 0

ALE 4 1.95%

12/31/2011 N/A 9.461 0

ALE 5 2.40%

12/31/2011 N/A 9.277 56

ALO 1 1.70%

12/31/2011 N/A 9.565 14

ALO 2 1.90%

12/31/2011 N/A 9.482 0

ALO 3 1.80%

12/31/2011 N/A 9.523 0

ALO 4 2.00%

12/31/2011 N/A 9.440 0

ALT 1 1.40%

12/31/2011 N/A 9.691 0

ALT 2 1.60%

12/31/2011 N/A 9.606 0

ALT 4 1.70%

12/31/2011 N/A 9.565 0

ALT 5 2.20%

12/31/2011 N/A 9.358 95

Franklin High Income Securities Fund

ALE 1 1.90%

12/31/2002 17.198 15.194 137

12/31/2003 15.194 19.556 382

12/31/2004 19.556 21.082 366

12/31/2005 21.082 21.372 329

12/31/2006 21.372 22.934 375

12/31/2007 22.934 23.111 296

12/31/2008 23.111 17.374 212

12/31/2009 17.374 24.325 258

12/31/2010 24.325 27.032 214

12/31/2011 27.032 27.734 171

ALE 3 1.80%

12/31/2003 N/A 19.848 5

12/31/2004 19.848 21.417 9

12/31/2005 21.417 21.733 17

12/31/2006 21.733 23.346 18

12/31/2007 23.346 23.549 20

12/31/2008 23.549 17.721 22

12/31/2009 17.721 24.836 20

12/31/2010 24.836 27.627 18

12/31/2011 27.627 28.373 15

ALE 4 1.95%

12/31/2003 N/A 19.412 25

12/31/2004 19.412 20.916 9

12/31/2005 20.916 21.193 12

12/31/2006 21.193 22.731 33

12/31/2007 22.731 22.895 14

12/31/2008 22.895 17.203 12

12/31/2009 17.203 24.074 11

12/31/2010 24.074 26.739 11

12/31/2011 26.739 27.420 8

ALE 5 2.40%

12/31/2003 N/A 18.164 77

12/31/2004 18.164 19.482 310

12/31/2005 19.482 19.652 434

12/31/2006 19.652 20.984 510

12/31/2007 20.984 21.040 534

12/31/2008 21.040 15.738 423

12/31/2009 15.738 21.925 551

12/31/2010 21.925 24.242 542

12/31/2011 24.242 24.748 412

ALO 1 1.70%

12/31/2002 17.643 15.618 83

12/31/2003 15.618 20.143 255

12/31/2004 20.143 21.758 231

12/31/2005 21.758 22.101 172

12/31/2006 22.101 23.764 183

12/31/2007 23.764 23.996 148

12/31/2008 23.996 18.075 114

12/31/2009 18.075 25.358 214

12/31/2010 25.358 28.236 222

12/31/2011 28.236 29.027 142

ALO 2 1.90%

12/31/2002 17.198 15.194 26

12/31/2003 15.194 19.556 61

12/31/2004 19.556 21.082 61

12/31/2005 21.082 21.372 47

12/31/2006 21.372 22.934 48

12/31/2007 22.934 23.111 37

12/31/2008 23.111 17.374 28

12/31/2009 17.374 24.325 27

12/31/2010 24.325 27.032 30

12/31/2011 27.032 27.734 22

ALO 3 1.80%

12/31/2003 N/A 19.848 0

12/31/2004 19.848 21.417 1

12/31/2005 21.417 21.733 1

12/31/2006 21.733 23.346 2

12/31/2007 23.346 23.549 5

12/31/2008 23.549 17.721 4

12/31/2009 17.721 24.836 4

12/31/2010 24.836 27.627 4

12/31/2011 27.627 28.373 3

ALO 4 2.00%

12/31/2003 N/A 19.270 0

12/31/2004 19.270 20.752 1

12/31/2005 20.752 21.016 1

12/31/2006 21.016 22.530 1

12/31/2007 22.530 22.681 1

12/31/2008 22.681 17.034 0

12/31/2009 17.034 23.825 1

12/31/2010 23.825 26.449 1

12/31/2011 26.449 27.109 2

The Allianz Alterity® Variable Annuity Contract SAI – April 30, 2012

Benefit Option *	Period or Year Ended	AUV at Beginning of Period	AUV at End of Period	Number of Accumulation Units Outstanding at End of Period
Investment Option

ALT 1 1.40%

12/31/2002 18.333 16.277 69

12/31/2003 16.277 21.056 129

12/31/2004 21.056 22.813 113

12/31/2005 22.813 23.242 81

12/31/2006 23.242 25.066 67

12/31/2007 25.066 25.387 69

12/31/2008 25.387 19.180 23

12/31/2009 19.180 26.989 24

12/31/2010 26.989 30.142 21

12/31/2011 30.142 31.080 18

ALT 2 1.60%

12/31/2002 17.870 15.835 2

12/31/2003 15.835 20.443 5

12/31/2004 20.443 22.104 5

12/31/2005 22.104 22.475 5

12/31/2006 22.475 24.190 5

12/31/2007 24.190 24.451 4

12/31/2008 24.451 18.436 4

12/31/2009 18.436 25.890 4

12/31/2010 25.890 28.857 3

12/31/2011 28.857 29.696 3

ALT 4 1.70%

12/31/2003 N/A 20.143 7

12/31/2004 20.143 21.758 27

12/31/2005 21.758 22.101 61

12/31/2006 22.101 23.764 56

12/31/2007 23.764 23.996 21

12/31/2008 23.996 18.075 18

12/31/2009 18.075 25.358 18

12/31/2010 25.358 28.236 15

12/31/2011 28.236 29.027 11

ALT 5 2.20%

12/31/2003 N/A 18.708 82

12/31/2004 18.708 20.107 270

12/31/2005 20.107 20.323 345

12/31/2006 20.323 21.743 407

12/31/2007 21.743 21.845 457

12/31/2008 21.845 16.373 503

12/31/2009 16.373 22.855 565

12/31/2010 22.855 25.322 539

12/31/2011 25.322 25.902 465

Franklin Income Securities Fund

ALE 1 1.90%

12/31/2002 26.630 25.970 310

12/31/2003 25.970 33.563 632

12/31/2004 33.563 37.492 702

12/31/2005 37.492 37.378 830

12/31/2006 37.378 43.367 999

12/31/2007 43.367 44.144 894

12/31/2008 44.144 30.467 696

12/31/2009 30.467 40.534 611

12/31/2010 40.534 44.811 549

12/31/2011 44.811 45.018 470

ALE 3 1.80%

12/31/2003 N/A 34.063 6

12/31/2004 34.063 38.088 13

12/31/2005 38.088 38.011 23

12/31/2006 38.011 44.144 46

12/31/2007 44.144 44.981 69

12/31/2008 44.981 31.076 62

12/31/2009 31.076 41.385 52

12/31/2010 41.385 45.798 48

12/31/2011 45.798 46.055 43

ALE 4 1.95%

12/31/2003 N/A 33.316 0

12/31/2004 33.316 37.197 5

12/31/2005 37.197 37.066 12

12/31/2006 37.066 42.983 20

12/31/2007 42.983 43.732 20

12/31/2008 43.732 30.167 12

12/31/2009 30.167 40.115 13

12/31/2010 40.115 44.325 12

12/31/2011 44.325 44.508 9

ALE 5 2.40%

12/31/2003 N/A 31.173 37

12/31/2004 31.173 34.648 335

12/31/2005 34.648 34.371 806

12/31/2006 34.371 39.679 1133

12/31/2007 39.679 40.188 1483

12/31/2008 40.188 27.597 1311

12/31/2009 27.597 36.533 1204

12/31/2010 36.533 40.187 1101

12/31/2011 40.187 40.171 1075

ALO 1 1.70%

12/31/2002 27.320 26.695 136

12/31/2003 26.695 34.570 312

12/31/2004 34.570 38.694 350

12/31/2005 38.694 38.654 375

12/31/2006 38.654 44.936 404

12/31/2007 44.936 45.834 422

12/31/2008 45.834 31.696 467

12/31/2009 31.696 42.254 412

12/31/2010 42.254 46.806 372

12/31/2011 46.806 47.116 342

ALO 2 1.90%

12/31/2002 26.630 25.970 43

12/31/2003 25.970 33.563 81

12/31/2004 33.563 37.492 93

12/31/2005 37.492 37.378 93

12/31/2006 37.378 43.367 107

12/31/2007 43.367 44.144 104

12/31/2008 44.144 30.467 102

12/31/2009 30.467 40.534 89

12/31/2010 40.534 44.811 83

12/31/2011 44.811 45.018 72

The Allianz Alterity® Variable Annuity Contract SAI – April 30, 2012

Benefit Option *	Period or Year Ended	AUV at Beginning of Period	AUV at End of Period	Number of Accumulation Units Outstanding at End of Period
Investment Option

ALO 3 1.80%

12/31/2003 N/A 34.063 0

12/31/2004 34.063 38.088 5

12/31/2005 38.088 38.011 5

12/31/2006 38.011 44.144 9

12/31/2007 44.144 44.981 10

12/31/2008 44.981 31.076 10

12/31/2009 31.076 41.385 11

12/31/2010 41.385 45.798 10

12/31/2011 45.798 46.055 9

ALO 4 2.00%

12/31/2003 N/A 33.071 0

12/31/2004 33.071 36.905 1

12/31/2005 36.905 36.757 2

12/31/2006 36.757 42.603 2

12/31/2007 42.603 43.323 2

12/31/2008 43.323 29.870 2

12/31/2009 29.870 39.700 2

12/31/2010 39.700 43.845 1

12/31/2011 43.845 44.004 0

ALT 1 1.40%

12/31/2002 28.387 27.822 54

12/31/2003 27.822 36.137 71

12/31/2004 36.137 40.570 91

12/31/2005 40.570 40.649 88

12/31/2006 40.649 47.397 88

12/31/2007 47.397 48.490 63

12/31/2008 48.490 33.635 43

12/31/2009 33.635 44.972 33

12/31/2010 44.972 49.967 30

12/31/2011 49.967 50.449 28

ALT 2 1.60%

12/31/2002 27.671 27.066 1

12/31/2003 27.066 35.085 4

12/31/2004 35.085 39.310 2

12/31/2005 39.310 39.308 1

12/31/2006 39.308 45.742 3

12/31/2007 45.742 46.703 2

12/31/2008 46.703 32.330 2

12/31/2009 32.330 43.142 2

12/31/2010 43.142 47.837 2

12/31/2011 47.837 48.202 1

ALT 4 1.70%

12/31/2003 N/A 34.570 2

12/31/2004 34.570 38.694 15

12/31/2005 38.694 38.654 45

12/31/2006 38.654 44.936 52

12/31/2007 44.936 45.834 48

12/31/2008 45.834 31.696 40

12/31/2009 31.696 42.254 33

12/31/2010 42.254 46.806 31

12/31/2011 46.806 47.116 24

ALT 5 2.20%

12/31/2003 N/A 32.108 7

12/31/2004 32.108 35.759 235

12/31/2005 35.759 35.544 755

12/31/2006 35.544 41.115 1228

12/31/2007 41.115 41.726 1633

12/31/2008 41.726 28.711 1580

12/31/2009 28.711 38.084 1396

12/31/2010 38.084 41.976 1312

12/31/2011 41.976 42.044 1248

Franklin U.S. Government Fund

ALE 1 1.90%

12/31/2002 20.290 21.854 1523

12/31/2003 21.854 21.917 2450

12/31/2004 21.917 22.251 2174

12/31/2005 22.251 22.358 1972

12/31/2006 22.358 22.819 1736

12/31/2007 22.819 23.866 1425

12/31/2008 23.866 25.193 1252

12/31/2009 25.193 25.484 1076

12/31/2010 25.484 26.325 947

12/31/2011 26.325 27.298 768

ALE 3 1.80%

12/31/2003 N/A 22.178 8

12/31/2004 22.178 22.538 23

12/31/2005 22.538 22.669 31

12/31/2006 22.669 23.160 29

12/31/2007 23.160 24.248 38

12/31/2008 24.248 25.621 54

12/31/2009 25.621 25.943 40

12/31/2010 25.943 26.826 33

12/31/2011 26.826 27.845 31

ALE 4 1.95%

12/31/2003 N/A 21.692 2

12/31/2004 21.692 22.011 10

12/31/2005 22.011 22.106 11

12/31/2006 22.106 22.551 12

12/31/2007 22.551 23.574 12

12/31/2008 23.574 24.872 17

12/31/2009 24.872 25.146 14

12/31/2010 25.146 25.964 10

12/31/2011 25.964 26.910 10

ALE 5 2.40%

12/31/2003 N/A 20.296 239

12/31/2004 20.296 20.502 669

12/31/2005 20.502 20.498 1012

12/31/2006 20.498 20.817 1043

12/31/2007 20.817 21.664 1063

12/31/2008 21.664 22.753 1253

12/31/2009 22.753 22.901 1112

12/31/2010 22.901 23.539 1074

12/31/2011 23.539 24.288 1003

The Allianz Alterity® Variable Annuity Contract SAI – April 30, 2012

Benefit Option *	Period or Year Ended	AUV at Beginning of Period	AUV at End of Period	Number of Accumulation Units Outstanding at End of Period
Investment Option

ALO 1 1.70%

12/31/2002 20.811 22.460 816

12/31/2003 22.460 22.570 1127

12/31/2004 22.570 22.960 997

12/31/2005 22.960 23.117 968

12/31/2006 23.117 23.641 861

12/31/2007 23.641 24.776 646

12/31/2008 24.776 26.205 528

12/31/2009 26.205 26.561 555

12/31/2010 26.561 27.493 438

12/31/2011 27.493 28.566 369

ALO 2 1.90%

12/31/2002 20.290 21.854 134

12/31/2003 21.854 21.917 230

12/31/2004 21.917 22.251 190

12/31/2005 22.251 22.358 189

12/31/2006 22.358 22.819 162

12/31/2007 22.819 23.866 145

12/31/2008 23.866 25.193 122

12/31/2009 25.193 25.484 101

12/31/2010 25.484 26.325 87

12/31/2011 26.325 27.298 80

ALO 3 1.80%

12/31/2003 N/A 22.178 0

12/31/2004 22.178 22.538 2

12/31/2005 22.538 22.669 2

12/31/2006 22.669 23.160 3

12/31/2007 23.160 24.248 3

12/31/2008 24.248 25.621 3

12/31/2009 25.621 25.943 2

12/31/2010 25.943 26.826 8

12/31/2011 26.826 27.845 6

ALO 4 2.00%

12/31/2003 N/A 21.532 0

12/31/2004 21.532 21.838 1

12/31/2005 21.838 21.921 2

12/31/2006 21.921 22.351 1

12/31/2007 22.351 23.354 1

12/31/2008 23.354 24.627 1

12/31/2009 24.627 24.886 1

12/31/2010 24.886 25.682 1

12/31/2011 25.682 26.605 1

ALT 1 1.40%

12/31/2002 21.619 23.402 400

12/31/2003 23.402 23.587 391

12/31/2004 23.587 24.067 320

12/31/2005 24.067 24.304 291

12/31/2006 24.304 24.929 234

12/31/2007 24.929 26.205 172

12/31/2008 26.205 27.800 161

12/31/2009 27.800 28.262 136

12/31/2010 28.262 29.342 97

12/31/2011 29.342 30.578 78

ALT 2 1.60%

12/31/2002 21.021 22.709 14

12/31/2003 22.709 22.843 12

12/31/2004 22.843 23.261 7

12/31/2005 23.261 23.443 4

12/31/2006 23.443 23.998 3

12/31/2007 23.998 25.176 3

12/31/2008 25.176 26.655 3

12/31/2009 26.655 27.044 3

12/31/2010 27.044 28.021 2

12/31/2011 28.021 29.143 2

ALT 4 1.70%

12/31/2003 N/A 22.508 13

12/31/2004 22.508 22.897 39

12/31/2005 22.897 23.053 59

12/31/2006 23.053 23.576 52

12/31/2007 23.576 24.707 56

12/31/2008 24.707 26.133 49

12/31/2009 26.133 26.488 45

12/31/2010 26.488 27.417 33

12/31/2011 27.417 28.487 32

ALT 5 2.20%

12/31/2003 N/A 20.905 133

12/31/2004 20.905 21.160 424

12/31/2005 21.160 21.198 617

12/31/2006 21.198 21.571 748

12/31/2007 21.571 22.493 740

12/31/2008 22.493 23.672 946

12/31/2009 23.672 23.873 881

12/31/2010 23.873 24.588 876

12/31/2011 24.588 25.420 823

PIMCO VIT All Asset Portfolio

ALE 1 1.90%

12/31/2004 N/A 11.838 388

12/31/2005 11.838 12.339 740

12/31/2006 12.339 12.672 607

12/31/2007 12.672 13.467 530

12/31/2008 13.467 11.120 492

12/31/2009 11.120 13.264 358

12/31/2010 13.264 14.719 402

12/31/2011 14.719 14.725 391

ALE 3 1.80%

12/31/2004 N/A 11.846 7

12/31/2005 11.846 12.360 20

12/31/2006 12.360 12.706 23

12/31/2007 12.706 13.517 19

12/31/2008 13.517 11.172 16

12/31/2009 11.172 13.340 13

12/31/2010 13.340 14.817 11

12/31/2011 14.817 14.838 15

The Allianz Alterity® Variable Annuity Contract SAI – April 30, 2012

Benefit Option *	Period or Year Ended	AUV at Beginning of Period	AUV at End of Period	Number of Accumulation Units Outstanding at End of Period
Investment Option

ALE 4 1.95%

12/31/2004 N/A 11.834 7

12/31/2005 11.834 12.329 19

12/31/2006 12.329 12.655 15

12/31/2007 12.655 13.443 11

12/31/2008 13.443 11.094 10

12/31/2009 11.094 13.227 8

12/31/2010 13.227 14.669 9

12/31/2011 14.669 14.668 9

ALE 5 2.40%

12/31/2004 N/A 11.798 548

12/31/2005 11.798 12.237 1037

12/31/2006 12.237 12.504 960

12/31/2007 12.504 13.222 889

12/31/2008 13.222 10.863 910

12/31/2009 10.863 12.893 849

12/31/2010 12.893 14.235 1129

12/31/2011 14.235 14.170 1074

ALO 1 1.70%

12/31/2004 N/A 11.854 177

12/31/2005 11.854 12.381 437

12/31/2006 12.381 12.740 305

12/31/2007 12.740 13.567 250

12/31/2008 13.567 11.224 199

12/31/2009 11.224 13.416 205

12/31/2010 13.416 14.916 281

12/31/2011 14.916 14.952 419

ALO 2 1.90%

12/31/2004 N/A 11.838 31

12/31/2005 11.838 12.339 30

12/31/2006 12.339 12.672 32

12/31/2007 12.672 13.467 22

12/31/2008 13.467 11.120 35

12/31/2009 11.120 13.264 28

12/31/2010 13.264 14.719 35

12/31/2011 14.719 14.725 42

ALO 3 1.80%

12/31/2004 N/A 11.846 1

12/31/2005 11.846 12.360 2

12/31/2006 12.360 12.706 1

12/31/2007 12.706 13.517 1

12/31/2008 13.517 11.172 2

12/31/2009 11.172 13.340 2

12/31/2010 13.340 14.817 2

12/31/2011 14.817 14.838 2

ALO 4 2.00%

12/31/2004 N/A 11.830 0

12/31/2005 11.830 12.319 0

12/31/2006 12.319 12.638 0

12/31/2007 12.638 13.418 0

12/31/2008 13.418 11.068 0

12/31/2009 11.068 13.189 0

12/31/2010 13.189 14.621 0

12/31/2011 14.621 14.612 0

ALT 1 1.40%

12/31/2004 N/A 11.878 18

12/31/2005 11.878 12.443 59

12/31/2006 12.443 12.842 62

12/31/2007 12.842 13.717 29

12/31/2008 13.717 11.383 30

12/31/2009 11.383 13.646 25

12/31/2010 13.646 15.218 38

12/31/2011 15.218 15.300 29

ALT 2 1.60%

12/31/2004 N/A 11.862 0

12/31/2005 11.862 12.401 5

12/31/2006 12.401 12.774 4

12/31/2007 12.774 13.617 3

12/31/2008 13.617 11.277 3

12/31/2009 11.277 13.492 3

12/31/2010 13.492 15.016 3

12/31/2011 15.016 15.067 5

ALT 4 1.70%

12/31/2004 N/A 11.854 27

12/31/2005 11.854 12.381 53

12/31/2006 12.381 12.740 37

12/31/2007 12.740 13.567 32

12/31/2008 13.567 11.224 24

12/31/2009 11.224 13.416 21

12/31/2010 13.416 14.916 19

12/31/2011 14.916 14.952 25

ALT 5 2.20%

12/31/2004 N/A 11.814 358

12/31/2005 11.814 12.278 1099

12/31/2006 12.278 12.571 1025

12/31/2007 12.571 13.320 926

12/31/2008 13.320 10.965 837

12/31/2009 10.965 13.041 964

12/31/2010 13.041 14.427 1205

12/31/2011 14.427 14.390 1384

PIMCO VIT Emerging Markets Bond Portfolio

ALE 1 1.90%

12/31/2005 N/A 10.891 88

12/31/2006 10.891 11.678 178

12/31/2007 11.678 12.124 124

12/31/2008 12.124 10.159 107

12/31/2009 10.159 13.016 148

12/31/2010 13.016 14.326 187

12/31/2011 14.326 14.947 159

ALE 3 1.80%

12/31/2005 N/A 10.898 6

12/31/2006 10.898 11.697 12

12/31/2007 11.697 12.156 10

12/31/2008 12.156 10.196 8

12/31/2009 10.196 13.077 12

12/31/2010 13.077 14.407 11

12/31/2011 14.407 15.047 11

The Allianz Alterity® Variable Annuity Contract SAI – April 30, 2012

Benefit Option *	Period or Year Ended	AUV at Beginning of Period	AUV at End of Period	Number of Accumulation Units Outstanding at End of Period
Investment Option

ALE 4 1.95%

12/31/2005 N/A 10.887 4

12/31/2006 10.887 11.668 3

12/31/2007 11.668 12.108 2

12/31/2008 12.108 10.140 1

12/31/2009 10.140 12.986 1

12/31/2010 12.986 14.285 1

12/31/2011 14.285 14.897 0

ALE 5 2.40%

12/31/2005 N/A 10.854 142

12/31/2006 10.854 11.581 227

12/31/2007 11.581 11.963 247

12/31/2008 11.963 9.974 218

12/31/2009 9.974 12.716 271

12/31/2010 12.716 13.925 450

12/31/2011 13.925 14.456 321

ALO 1 1.70%

12/31/2005 N/A 10.905 42

12/31/2006 10.905 11.717 84

12/31/2007 11.717 12.189 86

12/31/2008 12.189 10.234 67

12/31/2009 10.234 13.139 75

12/31/2010 13.139 14.489 96

12/31/2011 14.489 15.148 73

ALO 2 1.90%

12/31/2005 N/A 10.891 9

12/31/2006 10.891 11.678 13

12/31/2007 11.678 12.124 8

12/31/2008 12.124 10.159 21

12/31/2009 10.159 13.016 19

12/31/2010 13.016 14.326 18

12/31/2011 14.326 14.947 14

ALO 3 1.80%

12/31/2005 N/A 10.898 1

12/31/2006 10.898 11.697 0

12/31/2007 11.697 12.156 0

12/31/2008 12.156 10.196 0

12/31/2009 10.196 13.077 0

12/31/2010 13.077 14.407 0

12/31/2011 14.407 15.047 0

ALO 4 2.00%

12/31/2005 N/A 10.884 0

12/31/2006 10.884 11.658 0

12/31/2007 11.658 12.091 0

12/31/2008 12.091 10.122 0

12/31/2009 10.122 12.956 0

12/31/2010 12.956 14.245 0

12/31/2011 14.245 14.847 1

ALT 1 1.40%

12/31/2005 N/A 10.927 1

12/31/2006 10.927 11.776 7

12/31/2007 11.776 12.287 3

12/31/2008 12.287 10.347 3

12/31/2009 10.347 13.324 3

12/31/2010 13.324 14.738 4

12/31/2011 14.738 15.454 4

ALT 2 1.60%

12/31/2005 N/A 10.913 0

12/31/2006 10.913 11.736 0

12/31/2007 11.736 12.221 2

12/31/2008 12.221 10.272 2

12/31/2009 10.272 13.200 3

12/31/2010 13.200 14.572 0

12/31/2011 14.572 15.249 0

ALT 4 1.70%

12/31/2005 N/A 10.905 2

12/31/2006 10.905 11.717 8

12/31/2007 11.717 12.189 3

12/31/2008 12.189 10.234 3

12/31/2009 10.234 13.139 5

12/31/2010 13.139 14.489 5

12/31/2011 14.489 15.148 5

ALT 5 2.20%

12/31/2005 N/A 10.869 203

12/31/2006 10.869 11.619 351

12/31/2007 11.619 12.027 412

12/31/2008 12.027 10.047 381

12/31/2009 10.047 12.835 513

12/31/2010 12.835 14.084 553

12/31/2011 14.084 14.650 502

PIMCO VIT Global Advantage Strategy Bond Portfolio

ALE 1 1.90%

12/31/2011 N/A 9.781 11

ALE 3 1.80%

12/31/2011 N/A 9.788 0

ALE 4 1.95%

12/31/2011 N/A 9.778 0

ALE 5 2.40%

12/31/2011 N/A 9.748 18

ALO 1 1.70%

12/31/2011 N/A 9.794 20

ALO 2 1.90%

12/31/2011 N/A 9.781 0

ALO 3 1.80%

12/31/2011 N/A 9.788 0

ALO 4 2.00%

12/31/2011 N/A 9.774 0

ALT 1 1.40%

12/31/2011 N/A 9.814 0

ALT 2 1.60%

12/31/2011 N/A 9.801 1

ALT 4 1.70%

12/31/2011 N/A 9.794 0

ALT 5 2.20%

12/31/2011 N/A 9.761 1

The Allianz Alterity® Variable Annuity Contract SAI – April 30, 2012

Benefit Option *	Period or Year Ended	AUV at Beginning of Period	AUV at End of Period	Number of Accumulation Units Outstanding at End of Period
Investment Option

PIMCO VIT Global Bond Portfolio (Unhedged)

ALE 1 1.90%

12/31/2005 N/A 9.318 59

12/31/2006 9.318 9.568 109

12/31/2007 9.568 10.302 152

12/31/2008 10.302 10.022 300

12/31/2009 10.022 11.492 290

12/31/2010 11.492 12.590 213

12/31/2011 12.590 13.289 209

ALE 3 1.80%

12/31/2005 N/A 9.324 2

12/31/2006 9.324 9.584 12

12/31/2007 9.584 10.329 8

12/31/2008 10.329 10.059 21

12/31/2009 10.059 11.545 15

12/31/2010 11.545 12.662 17

12/31/2011 12.662 13.378 13

ALE 4 1.95%

12/31/2005 N/A 9.314 1

12/31/2006 9.314 9.560 1

12/31/2007 9.560 10.288 3

12/31/2008 10.288 10.003 9

12/31/2009 10.003 11.465 7

12/31/2010 11.465 12.554 4

12/31/2011 12.554 13.245 3

ALE 5 2.40%

12/31/2005 N/A 9.286 64

12/31/2006 9.286 9.488 167

12/31/2007 9.488 10.165 280

12/31/2008 10.165 9.839 769

12/31/2009 9.839 11.226 652

12/31/2010 11.226 12.237 634

12/31/2011 12.237 12.853 599

ALO 1 1.70%

12/31/2005 N/A 9.330 23

12/31/2006 9.330 9.600 71

12/31/2007 9.600 10.357 114

12/31/2008 10.357 10.096 157

12/31/2009 10.096 11.600 151

12/31/2010 11.600 12.734 90

12/31/2011 12.734 13.468 83

ALO 2 1.90%

12/31/2005 N/A 9.318 4

12/31/2006 9.318 9.568 2

12/31/2007 9.568 10.302 11

12/31/2008 10.302 10.022 24

12/31/2009 10.022 11.492 13

12/31/2010 11.492 12.590 7

12/31/2011 12.590 13.289 10

ALO 3 1.80%

12/31/2005 N/A 9.324 0

12/31/2006 9.324 9.584 1

12/31/2007 9.584 10.329 6

12/31/2008 10.329 10.059 12

12/31/2009 10.059 11.545 6

12/31/2010 11.545 12.662 6

12/31/2011 12.662 13.378 6

ALO 4 2.00%

12/31/2005 N/A 9.311 0

12/31/2006 9.311 9.552 0

12/31/2007 9.552 10.274 0

12/31/2008 10.274 9.985 0

12/31/2009 9.985 11.438 0

12/31/2010 11.438 12.519 0

12/31/2011 12.519 13.201 0

ALT 1 1.40%

12/31/2005 N/A 9.349 4

12/31/2006 9.349 9.648 9

12/31/2007 9.648 10.440 15

12/31/2008 10.440 10.208 10

12/31/2009 10.208 11.763 5

12/31/2010 11.763 12.952 6

12/31/2011 12.952 13.740 9

ALT 2 1.60%

12/31/2005 N/A 9.336 0

12/31/2006 9.336 9.616 0

12/31/2007 9.616 10.385 1

12/31/2008 10.385 10.133 1

12/31/2009 10.133 11.654 1

12/31/2010 11.654 12.806 0

12/31/2011 12.806 13.558 0

ALT 4 1.70%

12/31/2005 N/A 9.330 2

12/31/2006 9.330 9.600 8

12/31/2007 9.600 10.357 12

12/31/2008 10.357 10.096 12

12/31/2009 10.096 11.600 10

12/31/2010 11.600 12.734 7

12/31/2011 12.734 13.468 5

ALT 5 2.20%

12/31/2005 N/A 9.299 127

12/31/2006 9.299 9.520 298

12/31/2007 9.520 10.219 471

12/31/2008 10.219 9.912 690

12/31/2009 9.912 11.331 629

12/31/2010 11.331 12.377 611

12/31/2011 12.377 13.026 596

PIMCO VIT Global Multi-Asset Portfolio

ALE 1 1.90%

12/31/2009 N/A 10.001 1

12/31/2010 10.001 10.927 126

12/31/2011 10.927 10.536 232

ALE 3 1.80%

12/31/2009 N/A 10.003 0

12/31/2010 10.003 10.940 0

12/31/2011 10.940 10.559 3

ALE 4 1.95%

12/31/2009 N/A 10.000 0

12/31/2010 10.000 10.921 3

12/31/2011 10.921 10.524 4

ALE 5 2.40%

12/31/2009 N/A 9.991 157

12/31/2010 9.991 10.862 364

12/31/2011 10.862 10.421 608

The Allianz Alterity® Variable Annuity Contract SAI – April 30, 2012

Benefit Option *	Period or Year Ended	AUV at Beginning of Period	AUV at End of Period	Number of Accumulation Units Outstanding at End of Period
Investment Option

ALO 1 1.70%

12/31/2009 N/A 10.005 10

12/31/2010 10.005 10.953 148

12/31/2011 10.953 10.582 164

ALO 2 1.90%

12/31/2009 N/A 10.001 0

12/31/2010 10.001 10.927 3

12/31/2011 10.927 10.536 4

ALO 3 1.80%

12/31/2009 N/A 10.003 0

12/31/2010 10.003 10.940 2

12/31/2011 10.940 10.559 2

ALO 4 2.00%

12/31/2009 N/A 9.999 0

12/31/2010 9.999 10.914 0

12/31/2011 10.914 10.513 0

ALT 1 1.40%

12/31/2009 N/A 10.011 0

12/31/2010 10.011 10.992 7

12/31/2011 10.992 10.652 26

ALT 2 1.60%

12/31/2009 N/A 10.007 0

12/31/2010 10.007 10.966 0

12/31/2011 10.966 10.605 0

ALT 4 1.70%

12/31/2009 N/A 10.005 0

12/31/2010 10.005 10.953 4

12/31/2011 10.953 10.582 13

ALT 5 2.20%

12/31/2009 N/A 9.995 43

12/31/2010 9.995 10.888 436

12/31/2011 10.888 10.467 732

PIMCO VIT High Yield Portfolio

ALE 1 1.90%

12/31/2002 9.489 9.197 917

12/31/2003 9.197 11.092 2061

12/31/2004 11.092 11.923 1881

12/31/2005 11.923 12.182 1769

12/31/2006 12.182 13.042 1483

12/31/2007 13.042 13.244 1250

12/31/2008 13.244 9.935 852

12/31/2009 9.935 13.690 809

12/31/2010 13.690 15.380 770

12/31/2011 15.380 15.599 616

ALE 3 1.80%

12/31/2003 N/A 11.135 12

12/31/2004 11.135 11.982 32

12/31/2005 11.982 12.254 36

12/31/2006 12.254 13.132 42

12/31/2007 13.132 13.349 33

12/31/2008 13.349 10.024 27

12/31/2009 10.024 13.826 32

12/31/2010 13.826 15.549 36

12/31/2011 15.549 15.786 25

ALE 4 1.95%

12/31/2003 N/A 11.070 3

12/31/2004 11.070 11.894 9

12/31/2005 11.894 12.146 14

12/31/2006 12.146 12.997 15

12/31/2007 12.997 13.192 9

12/31/2008 13.192 9.891 23

12/31/2009 9.891 13.622 33

12/31/2010 13.622 15.296 19

12/31/2011 15.296 15.506 15

ALE 5 2.40%

12/31/2003 N/A 10.876 276

12/31/2004 10.876 11.633 708

12/31/2005 11.633 11.827 972

12/31/2006 11.827 12.598 987

12/31/2007 12.598 12.730 911

12/31/2008 12.730 9.502 834

12/31/2009 9.502 13.027 927

12/31/2010 13.027 14.563 1042

12/31/2011 14.563 14.696 851

ALO 1 1.70%

12/31/2002 9.525 9.251 608

12/31/2003 9.251 11.179 1309

12/31/2004 11.179 12.041 1151

12/31/2005 12.041 12.327 1017

12/31/2006 12.327 13.223 895

12/31/2007 13.223 13.456 734

12/31/2008 13.456 10.114 559

12/31/2009 10.114 13.964 471

12/31/2010 13.964 15.720 450

12/31/2011 15.720 15.975 348

ALO 2 1.90%

12/31/2002 9.489 9.197 131

12/31/2003 9.197 11.092 260

12/31/2004 11.092 11.923 204

12/31/2005 11.923 12.182 176

12/31/2006 12.182 13.042 167

12/31/2007 13.042 13.244 127

12/31/2008 13.244 9.935 105

12/31/2009 9.935 13.690 101

12/31/2010 13.690 15.380 88

12/31/2011 15.380 15.599 78

ALO 3 1.80%

12/31/2003 N/A 11.135 1

12/31/2004 11.135 11.982 5

12/31/2005 11.982 12.254 7

12/31/2006 12.254 13.132 7

12/31/2007 13.132 13.349 6

12/31/2008 13.349 10.024 5

12/31/2009 10.024 13.826 5

12/31/2010 13.826 15.549 5

12/31/2011 15.549 15.786 3

The Allianz Alterity® Variable Annuity Contract SAI – April 30, 2012

Benefit Option *	Period or Year Ended	AUV at Beginning of Period	AUV at End of Period	Number of Accumulation Units Outstanding at End of Period
Investment Option

ALO 4 2.00%

12/31/2003 N/A 11.048 0

12/31/2004 11.048 11.865 3

12/31/2005 11.865 12.110 3

12/31/2006 12.110 12.952 2

12/31/2007 12.952 13.140 2

12/31/2008 13.140 9.847 1

12/31/2009 9.847 13.555 0

12/31/2010 13.555 15.213 0

12/31/2011 15.213 15.414 0

ALT 1 1.40%

12/31/2002 9.580 9.333 229

12/31/2003 9.333 11.311 341

12/31/2004 11.311 12.220 330

12/31/2005 12.220 12.548 328

12/31/2006 12.548 13.500 254

12/31/2007 13.500 13.779 182

12/31/2008 13.779 10.389 106

12/31/2009 10.389 14.386 83

12/31/2010 14.386 16.244 70

12/31/2011 16.244 16.557 62

ALT 2 1.60%

12/31/2002 9.903 9.627 11

12/31/2003 9.627 11.645 19

12/31/2004 11.645 12.555 19

12/31/2005 12.555 12.866 13

12/31/2006 12.866 13.816 9

12/31/2007 13.816 14.073 4

12/31/2008 14.073 10.589 1

12/31/2009 10.589 14.634 1

12/31/2010 14.634 16.490 1

12/31/2011 16.490 16.775 1

ALT 4 1.70%

12/31/2003 N/A 11.179 28

12/31/2004 11.179 12.041 59

12/31/2005 12.041 12.327 68

12/31/2006 12.327 13.223 74

12/31/2007 13.223 13.456 61

12/31/2008 13.456 10.114 46

12/31/2009 10.114 13.964 43

12/31/2010 13.964 15.720 57

12/31/2011 15.720 15.975 21

ALT 5 2.20%

12/31/2003 N/A 10.962 171

12/31/2004 10.962 11.748 589

12/31/2005 11.748 11.968 871

12/31/2006 11.968 12.774 1024

12/31/2007 12.774 12.933 1003

12/31/2008 12.933 9.673 873

12/31/2009 9.673 13.288 1092

12/31/2010 13.288 14.884 1163

12/31/2011 14.884 15.051 1054

PIMCO VIT Real Return Portfolio

ALE 1 1.90%

12/31/2003 N/A 10.481 427

12/31/2004 10.481 11.200 1025

12/31/2005 11.200 11.221 1020

12/31/2006 11.221 11.089 778

12/31/2007 11.089 12.039 620

12/31/2008 12.039 10.979 802

12/31/2009 10.979 12.754 770

12/31/2010 12.754 13.529 637

12/31/2011 13.529 14.825 691

ALE 3 1.80%

12/31/2003 N/A 10.488 16

12/31/2004 10.488 11.219 20

12/31/2005 11.219 11.251 42

12/31/2006 11.251 11.129 46

12/31/2007 11.129 12.096 48

12/31/2008 12.096 11.042 52

12/31/2009 11.042 12.839 68

12/31/2010 12.839 13.633 33

12/31/2011 13.633 14.954 36

ALE 4 1.95%

12/31/2003 N/A 10.477 7

12/31/2004 10.477 11.191 15

12/31/2005 11.191 11.206 32

12/31/2006 11.206 11.068 23

12/31/2007 11.068 12.011 19

12/31/2008 12.011 10.948 23

12/31/2009 10.948 12.711 21

12/31/2010 12.711 13.477 12

12/31/2011 13.477 14.761 12

ALE 5 2.40%

12/31/2003 N/A 10.446 374

12/31/2004 10.446 11.107 1290

12/31/2005 11.107 11.072 1925

12/31/2006 11.072 10.887 1749

12/31/2007 10.887 11.761 1631

12/31/2008 11.761 10.672 2532

12/31/2009 10.672 12.335 2299

12/31/2010 12.335 13.019 1888

12/31/2011 13.019 14.196 1813

ALO 1 1.70%

12/31/2003 N/A 10.495 214

12/31/2004 10.495 11.238 509

12/31/2005 11.238 11.281 529

12/31/2006 11.281 11.170 369

12/31/2007 11.170 12.153 332

12/31/2008 12.153 11.104 433

12/31/2009 11.104 12.925 456

12/31/2010 12.925 13.738 394

12/31/2011 13.738 15.085 403

The Allianz Alterity® Variable Annuity Contract SAI – April 30, 2012

Benefit Option *	Period or Year Ended	AUV at Beginning of Period	AUV at End of Period	Number of Accumulation Units Outstanding at End of Period
Investment Option

ALO 2 1.90%

12/31/2003 N/A 10.481 29

12/31/2004 10.481 11.200 48

12/31/2005 11.200 11.221 52

12/31/2006 11.221 11.089 46

12/31/2007 11.089 12.039 50

12/31/2008 12.039 10.979 80

12/31/2009 10.979 12.754 78

12/31/2010 12.754 13.529 54

12/31/2011 13.529 14.825 132

ALO 3 1.80%

12/31/2003 N/A 10.488 1

12/31/2004 10.488 11.219 3

12/31/2005 11.219 11.251 5

12/31/2006 11.251 11.129 4

12/31/2007 11.129 12.096 6

12/31/2008 12.096 11.042 5

12/31/2009 11.042 12.839 5

12/31/2010 12.839 13.633 5

12/31/2011 13.633 14.954 5

ALO 4 2.00%

12/31/2003 N/A 10.474 0

12/31/2004 10.474 11.182 0

12/31/2005 11.182 11.191 5

12/31/2006 11.191 11.048 6

12/31/2007 11.048 11.983 5

12/31/2008 11.983 10.917 4

12/31/2009 10.917 12.669 5

12/31/2010 12.669 13.425 5

12/31/2011 13.425 14.697 0

ALT 1 1.40%

12/31/2003 N/A 10.516 43

12/31/2004 10.516 11.294 54

12/31/2005 11.294 11.371 61

12/31/2006 11.371 11.294 53

12/31/2007 11.294 12.324 61

12/31/2008 12.324 11.295 87

12/31/2009 11.295 13.187 77

12/31/2010 13.187 14.058 68

12/31/2011 14.058 15.482 135

ALT 2 1.60%

12/31/2003 N/A 10.502 0

12/31/2004 10.502 11.257 1

12/31/2005 11.257 11.311 1

12/31/2006 11.311 11.211 1

12/31/2007 11.211 12.209 2

12/31/2008 12.209 11.168 2

12/31/2009 11.168 13.012 3

12/31/2010 13.012 13.844 2

12/31/2011 13.844 15.216 1

ALT 4 1.70%

12/31/2003 N/A 10.495 16

12/31/2004 10.495 11.238 59

12/31/2005 11.238 11.281 113

12/31/2006 11.281 11.170 105

12/31/2007 11.170 12.153 108

12/31/2008 12.153 11.104 106

12/31/2009 11.104 12.925 94

12/31/2010 12.925 13.738 79

12/31/2011 13.738 15.085 57

ALT 5 2.20%

12/31/2003 N/A 10.460 196

12/31/2004 10.460 11.144 1055

12/31/2005 11.144 11.131 1768

12/31/2006 11.131 10.967 1797

12/31/2007 10.967 11.872 1758

12/31/2008 11.872 10.794 1989

12/31/2009 10.794 12.501 2134

12/31/2010 12.501 13.221 2112

12/31/2011 13.221 14.444 2034

PIMCO VIT Total Return Portfolio

ALE 1 1.90%

12/31/2002 11.303 12.097 5144

12/31/2003 12.097 12.468 7057

12/31/2004 12.468 12.831 6330

12/31/2005 12.831 12.899 5858

12/31/2006 12.899 13.145 5417

12/31/2007 13.145 14.026 4618

12/31/2008 14.026 14.422 3850

12/31/2009 14.422 16.142 3795

12/31/2010 16.142 17.123 3439

12/31/2011 17.123 17.409 2785

ALE 3 1.80%

12/31/2003 N/A 12.517 26

12/31/2004 12.517 12.895 71

12/31/2005 12.895 12.976 81

12/31/2006 12.976 13.236 90

12/31/2007 13.236 14.137 91

12/31/2008 14.137 14.551 78

12/31/2009 14.551 16.303 89

12/31/2010 16.303 17.311 106

12/31/2011 17.311 17.617 101

ALE 4 1.95%

12/31/2003 N/A 12.444 14

12/31/2004 12.444 12.800 28

12/31/2005 12.800 12.861 42

12/31/2006 12.861 13.099 52

12/31/2007 13.099 13.970 53

12/31/2008 13.970 14.358 57

12/31/2009 14.358 16.062 56

12/31/2010 16.062 17.030 44

12/31/2011 17.030 17.305 42

The Allianz Alterity® Variable Annuity Contract SAI – April 30, 2012

Benefit Option *	Period or Year Ended	AUV at Beginning of Period	AUV at End of Period	Number of Accumulation Units Outstanding at End of Period
Investment Option

ALE 5 2.40%

12/31/2003 N/A 12.226 634

12/31/2004 12.226 12.519 1510

12/31/2005 12.519 12.523 2043

12/31/2006 12.523 12.698 2260

12/31/2007 12.698 13.481 2364

12/31/2008 13.481 13.792 2804

12/31/2009 13.792 15.360 3216

12/31/2010 15.360 16.213 3255

12/31/2011 16.213 16.401 2776

ALO 1 1.70%

12/31/2002 11.347 12.168 2801

12/31/2003 12.168 12.566 3706

12/31/2004 12.566 12.958 3315

12/31/2005 12.958 13.053 3034

12/31/2006 13.053 13.328 2673

12/31/2007 13.328 14.250 2311

12/31/2008 14.250 14.681 1994

12/31/2009 14.681 16.465 1787

12/31/2010 16.465 17.501 1654

12/31/2011 17.501 17.829 1235

ALO 2 1.90%

12/31/2002 11.303 12.097 579

12/31/2003 12.097 12.468 810

12/31/2004 12.468 12.831 714

12/31/2005 12.831 12.899 678

12/31/2006 12.899 13.145 604

12/31/2007 13.145 14.026 554

12/31/2008 14.026 14.422 500

12/31/2009 14.422 16.142 450

12/31/2010 16.142 17.123 388

12/31/2011 17.123 17.409 282

ALO 3 1.80%

12/31/2003 N/A 12.517 4

12/31/2004 12.517 12.895 6

12/31/2005 12.895 12.976 10

12/31/2006 12.976 13.236 12

12/31/2007 13.236 14.137 24

12/31/2008 14.137 14.551 25

12/31/2009 14.551 16.303 26

12/31/2010 16.303 17.311 23

12/31/2011 17.311 17.617 16

ALO 4 2.00%

12/31/2003 N/A 12.419 0

12/31/2004 12.419 12.768 6

12/31/2005 12.768 12.823 8

12/31/2006 12.823 13.054 10

12/31/2007 13.054 13.915 9

12/31/2008 13.915 14.294 8

12/31/2009 14.294 15.982 5

12/31/2010 15.982 16.937 5

12/31/2011 16.937 17.202 7

ALT 1 1.40%

12/31/2002 11.412 12.275 1139

12/31/2003 12.275 12.715 1211

12/31/2004 12.715 13.151 932

12/31/2005 13.151 13.287 855

12/31/2006 13.287 13.607 717

12/31/2007 13.607 14.592 539

12/31/2008 14.592 15.080 453

12/31/2009 15.080 16.963 385

12/31/2010 16.963 18.084 338

12/31/2011 18.084 18.478 265

ALT 2 1.60%

12/31/2002 11.675 12.532 32

12/31/2003 12.532 12.956 33

12/31/2004 12.956 13.373 30

12/31/2005 13.373 13.484 22

12/31/2006 13.484 13.782 19

12/31/2007 13.782 14.750 16

12/31/2008 14.750 15.212 15

12/31/2009 15.212 17.077 15

12/31/2010 17.077 18.170 13

12/31/2011 18.170 18.529 10

ALT 4 1.70%

12/31/2003 N/A 12.566 53

12/31/2004 12.566 12.958 104

12/31/2005 12.958 13.053 171

12/31/2006 13.053 13.328 168

12/31/2007 13.328 14.250 155

12/31/2008 14.250 14.681 149

12/31/2009 14.681 16.465 161

12/31/2010 16.465 17.501 135

12/31/2011 17.501 17.829 106

ALT 5 2.20%

12/31/2003 N/A 12.322 288

12/31/2004 12.322 12.643 1105

12/31/2005 12.643 12.672 1779

12/31/2006 12.672 12.875 2065

12/31/2007 12.875 13.696 2177

12/31/2008 13.696 14.041 2424

12/31/2009 14.041 15.668 3232

12/31/2010 15.668 16.571 3348

12/31/2011 16.571 16.797 3017

PIMCO VIT Unconstrained Bond Portfolio

ALE 1 1.90%

12/31/2011 N/A 9.769 15

ALE 3 1.80%

12/31/2011 N/A 9.776 0

ALE 4 1.95%

12/31/2011 N/A 9.766 0

ALE 5 2.40%

12/31/2011 N/A 9.736 20

ALO 1 1.70%

12/31/2011 N/A 9.782 10

ALO 2 1.90%

12/31/2011 N/A 9.769 0

The Allianz Alterity® Variable Annuity Contract SAI – April 30, 2012

Benefit Option *	Period or Year Ended	AUV at Beginning of Period	AUV at End of Period	Number of Accumulation Units Outstanding at End of Period
Investment Option

ALO 3 1.80%

12/31/2011 N/A 9.776 0

ALO 4 2.00%

12/31/2011 N/A 9.763 0

ALT 1 1.40%

12/31/2011 N/A 9.802 0

ALT 2 1.60%

12/31/2011 N/A 9.789 0

ALT 4 1.70%

12/31/2011 N/A 9.782 4

ALT 5 2.20%

12/31/2011 N/A 9.750 60

Templeton Global Bond Securities Fund

ALE 1 1.90%

12/31/2007 N/A 29.551 56

12/31/2008 29.551 30.792 150

12/31/2009 30.792 35.857 162

12/31/2010 35.857 40.265 193

12/31/2011 40.265 39.165 172

ALE 3 1.80%

12/31/2007 N/A 30.095 2

12/31/2008 30.095 31.391 7

12/31/2009 31.391 36.591 6

12/31/2010 36.591 41.131 12

12/31/2011 41.131 40.047 8

ALE 4 1.95%

12/31/2007 N/A 29.282 2

12/31/2008 29.282 30.497 4

12/31/2009 30.497 35.496 3

12/31/2010 35.496 39.839 5

12/31/2011 39.839 38.732 4

ALE 5 2.40%

12/31/2007 N/A 26.971 75

12/31/2008 26.971 27.964 276

12/31/2009 27.964 32.401 332

12/31/2010 32.401 36.203 427

12/31/2011 36.203 35.039 406

ALO 1 1.70%

12/31/2007 N/A 30.650 53

12/31/2008 30.650 32.002 101

12/31/2009 32.002 37.340 124

12/31/2010 37.340 42.015 134

12/31/2011 42.015 40.949 127

ALO 2 1.90%

12/31/2007 N/A 29.551 4

12/31/2008 29.551 30.792 9

12/31/2009 30.792 35.857 10

12/31/2010 35.857 40.265 11

12/31/2011 40.265 39.165 12

ALO 3 1.80%

12/31/2007 N/A 30.095 0

12/31/2008 30.095 31.391 0

12/31/2009 31.391 36.591 1

12/31/2010 36.591 41.131 1

12/31/2011 41.131 40.047 1

ALO 4 2.00%

12/31/2007 N/A 29.016 0

12/31/2008 29.016 30.205 0

12/31/2009 30.205 35.138 0

12/31/2010 35.138 39.418 0

12/31/2011 39.418 38.303 1

ALT 1 1.40%

12/31/2007 N/A 32.376 3

12/31/2008 32.376 33.906 6

12/31/2009 33.906 39.681 11

12/31/2010 39.681 44.783 13

12/31/2011 44.783 43.777 10

ALT 2 1.60%

12/31/2007 N/A 31.215 0

12/31/2008 31.215 32.625 0

12/31/2009 32.625 38.105 0

12/31/2010 38.105 42.918 0

12/31/2011 42.918 41.871 0

ALT 4 1.70%

12/31/2007 N/A 30.650 1

12/31/2008 30.650 32.002 4

12/31/2009 32.002 37.340 5

12/31/2010 37.340 42.015 5

12/31/2011 42.015 40.949 4

ALT 5 2.20%

12/31/2007 N/A 27.975 116

12/31/2008 27.975 29.063 216

12/31/2009 29.063 33.742 351

12/31/2010 33.742 37.776 441

12/31/2011 37.776 36.635 403

The Allianz Alterity® Variable Annuity Contract SAI – April 30, 2012

PART C - OTHER INFORMATION

ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS

a.	Financial Statements
The following financial statements of the Company are incorporated by reference as exhibit EX-99.A. from Post-Effective Amendment No. 7 to Registrant’s Form N-4 (File Nos. 333-171427 and 811-05618) electronically filed on April 6, 2012.
1.	Report of Independent Registered Public Accounting Firm
2.	Consolidated Balance Sheets – December 31, 2011 and 2010
3.	Consolidated Statements of Operations – Years ended December 31, 2011, 2010, and 2009
4.	Consolidated Statements of Comprehensive Income – Years ended December 31, 2011, 2010, and 2009
5.	Consolidated Statements of Stockholder's Equity – Years ended December 31, 2011, 2010, and 2009
6.	Consolidated Statements of Cash Flows – Years ended December 31, 2011, 2010, and 2009
7.	Notes to Consolidated Financial Statements – December 31, 2011 and 2010
8.	Supplemental Schedules:
	–	Schedule I – Summary of Investments – Other than Investments in Related Parties
	–	Schedule II – Supplementary Insurance Information
	–	Schedule III – Reinsurance
The following financial statements of the Variable Account are incorporated by reference as exhibit EX-99.A. from Post-Effective Amendment No. 7 to Registrant’s Form N-4 (File Nos. 333-171427 and 811-05618) electronically filed on April 6, 2012.

1.	Report of Independent Registered Public Accounting Firm
2.	Statements of Assets and Liabilities – December 31, 2011
3.	Statements of Operations – For the year ended December 31, 2011
4.	Statements of Changes in Net Assets – For the year ended December 31, 2011 and 2010
5.	Notes to the Financial Statements – December 31, 2011
b.	Exhibits
1.	Resolution of Board of Directors of the Company authorizing the establishment of the Separate Account, dated May 31, 1985 incorporated by reference as exhibit EX-99.B1. from Registrant’s Form N-4 (File Nos. 333-06709 and 811-05618), electronically filed on June 25, 1996.
2.	Not Applicable
3.	a.	Principal Underwriter Agreement by and between North American Life and Casualty Company on behalf of NALAC Financial Plans, Inc. dated September 14, 1988 incorporated by reference as exhibit EX-99.B3.a. from Pre-Effective Amendment No.1 to Registrant’s Form N-4 (File Nos. 333-06709 and 811-05618), electronically filed on December 13, 1996. (North American Life and Casualty Company is the predecessor to Allianz Life Insurance Company of North America. NALAC Financial Plans, Inc., is the predecessor to USAllianz Investor Services, LLC, which is the predecessor to Allianz Life Financial Services, LLC.)
	b.	Broker-Dealer Agreement between North American Life and Casualty Company and NALAC Financial Plans, Inc. dated November 19, 1987; Amendment #1 dated April 12, 2000; Amendment #2 dated September 30, 2002; Amendment #3 dated October 1, 2003 incorporated by reference as exhibit EX-99.B3.b. from Post-Effective Amendment No. 18 to Registrant’s Form N-4 (File Nos. 333-82329 and 811-05618), electronically filed on April 23, 2007. (North American Life and Casualty Company is the predecessor to Allianz Life Insurance Company of North America. NALAC Financial Plans, Inc, is the predecessor to USAllianz Investor Services, LLC, which is the predecessor to Allianz Life Financial Services, LLC.)
	c.	The current specimen of the selling agreement between Allianz Life Financial Services, LLC, the principal underwriter for the Contracts, and retail brokers which offer and sell the Contracts to the public incorporated by reference as exhibit EX-99.B3.b. from the Initial Registration Statement to Registrant’s Form N-4 (File Nos. 333-134267 and 811-05618 electronically filed on May 19, 2006. The underwriter has executed versions of the agreement with approximately 2,100 retail brokers.
4.	a.	Individual Variable Annuity Original Contract and Schedule Page –L30800 is incorporated by reference as exhibit EX-99.B4.a. from Pre-Effective Amendment No.1 to Registrant’s Form N-4 (File Nos. 333-82329 and 811-05618), electronically filed on December 30, 1999.
	b.	Individual Variable Annuity-May 2003 Contract – L30800(5/03) is incorporated by reference as exhibit EX-99.B4.b. from Post-Effective Amendment No. 8 to Registrant’s Form N-4 (File Nos. 333-82329 and 811-05618), electronically filed on April 24, 2003.
	c.	Contract Schedule Page-May 2003 – S40010(5-03) is incorporated by reference as exhibit EX-99.B4.c. from Post-Effective Amendment No. 8 to Registrant’s Form N-4 (File Nos. 333-82329 and 811-05618), electronically filed on April 24, 2003.
	d.	Contract Schedule Page-PRIME Plus – S40010(1-06) is incorporated by reference as exhibit EX-99.B4.d. from Post-Effective Amendment No. 16 to Registrant’s Form N-4 (File Nos. 333-82329 and 811-05618), electronically filed on April 27, 2006.
	e.	Contract Schedule Addendum-add, reset-PRIME Plus – S40729-A-R is incorporated by reference as exhibit EX-99.B4.e. from Post-Effective Amendment No. 16 to Registrant’s Form N-4 (File Nos. 333-82329 and 811-05618), electronically filed on April 27, 2006.
	f.	Contract Schedule Addendum-drop-PRIME Plus – S40729-D is incorporated by reference as exhibit EX-99.B4.f. from Post-Effective Amendment No. 16 to Registrant’s Form N-4 (File Nos. 333-82329 and 811-05618), electronically filed on April 27, 2006.
	g.	Asset Allocation Rider-PRIME Plus – S40721-ALT is incorporated by reference as exhibit EX-99.B4.g. from Post-Effective Amendment No. 16 to Registrant’s Form N-4 (File Nos. 333-82329 and 811-05618), electronically filed on April 27, 2006.
	h.	PRIME Plus Benefit Rider-PRIME Plus – S40722 is incorporated by reference as exhibit EX-99.B4.h. from Post-Effective Amendment No. 16 to Registrant’s Form N-4 (File Nos. 333-82329 and 811-05618), electronically filed on April 27, 2006.
	i.	Annuity Option 6 Amendment Endorsement – S40397 is incorporated by reference as exhibit EX-99.B4.d. from Post-Effective Amendment No. 8 to Registrant’s Form N-4 (File Nos. 333-82329 and 811-05618), electronically filed on April 24, 2003.
	j.	Waiver of CDSC Endorsement – S30074 is incorporated by reference as exhibit EX-99.B4.a. from Registrant’s Form N-4 (File Nos. 333-82329 and 811-05618), electronically filed on July 6, 1999.
	k.	Traditional GMDB Endorsement – S40020 is incorporated by reference as exhibit EX-99.B4.b. from Pre-Effective Amendment No.1 to Registrant’s Form N-4 (File Nos. 333-82329 and 811-05618), electronically filed on December 30, 1999.
	l.	Traditional GMDB Rider II-PRIME Plus – S40727 is incorporated by reference as exhibit EX-99.B4.l. from Post-Effective Amendment No. 16 to Registrant’s Form N-4 (File Nos. 333-82329 and 811-05618), electronically filed on April 27, 2006.
	m.	Enhanced Death Benefit Endorsement – S40052 is incorporated by reference as exhibit EX-99.B4.c. from Pre-Effective Amendment No.1 to Registrant’s Form N-4 (File Nos. 333-82329 and 811-05618), electronically filed on December 30, 1999.
	n.	Enhanced GMDB Endorsement-May 2003 Contracts – S40390 is incorporated by reference as exhibit EX-99.B4.h. from Post-Effective Amendment No. 8 to Registrant’s Form N-4 (File Nos. 333-82329 and 811-05618), electronically filed on April 24, 2003.
	o.	Enhanced GMDB Rider II-PRIME Plus – S40726 is incorporated by reference as exhibit EX-99.B4.o. from Post-Effective Amendment No. 16 to Registrant’s Form N-4 (File Nos. 333-82329 and 811-05618), electronically filed on April 27, 2006.
	p.	Traditional GMIB Endorsement – S40021 is incorporated by reference as exhibit EX-99.B4.d. from Pre-Effective Amendment No.1 to Registrant’s Form N-4 (File Nos. 333-82329 and 811-05618), electronically filed on December 30, 1999.
	q.	Enhanced GMIB Endorsement – S40094 is incorporated by reference as exhibit EX-99.B4.e. from Pre-Effective Amendment No.1 to Registrant’s Form N-4 (File Nos. 333-82329 and 811-05618), electronically filed on December 30, 1999.
	r.	Enhanced GMIB Endorsement (3% & MAV)-May 2003 Contracts – S40391 is incorporated by reference as exhibit EX-99.B4.k. from Post-Effective Amendment No. 8 to Registrant’s Form N-4 (File Nos. 333-82329 and 811-05618), electronically filed on April 24, 2003.
	s.	Charitable Remainder Trust Endorsement is incorporated by reference as exhibit EX-99.B4.t. from Registrant’s Form N-4 (File Nos. 333-82329 and 811-05618), electronically filed on July 6, 1999.
	t.	IRA Endorsement – S40014 is incorporated by reference as exhibit EX-99.B4.g. from Pre-Effective Amendment No.1 to Registrant’s Form N-4 (File Nos. 333-82329 and 811-05618), electronically filed on December 30, 1999.
	u.	Unisex Endorsement – S20146 is incorporated by reference as exhibit EX-99.B4.h. from Pre-Effective Amendment No.1 to Registrant’s Form N-4 (File Nos. 333-82329 and 811-05618), electronically filed on December 30, 1999.
	v.	Pension Plan and Profit Sharing Plan Endorsement – S20205 is incorporated by reference as exhibit EX-99.B4.i. from Pre-Effective Amendment No.1 to Registrant’s Form N-4 (File Nos. 333-82329 and 811-05618), electronically filed on December 30, 1999.
	w.	Group Pension Plan Death Benefit Endorsement – S30072(4-99) is incorporated by reference as exhibit EX-99.B4.g. from Registrant’s Form N-4 (File Nos. 333-82329 and 811-05618), electronically filed on July 6, 1999.
	x.	403(b) Annuity Endorsement – S30072(4-99) is incorporated by reference as exhibit EX-99.B4.k. from Pre-Effective Amendment No.1 to Registrant’s Form N-4 (File Nos. 333-82329 and 811-05618), electronically filed on December 30, 1999.
	y.	Earnings Protection GMDB Endorsement-Original Contracts – S20219(03-01) is incorporated by reference as exhibit EX-99.B4.r. from Post-Effective Amendment No. 8 to Registrant’s Form N-4 (File Nos. 333-82329 and 811-05618), electronically filed on April 24, 2003.
	z.	Earnings Protection GMDB Endorsement-May 2003 Contracts – S40379 is incorporated by reference as exhibit EX-99.B4.s. from Post-Effective Amendment No. 8 to Registrant’s Form N-4 (File Nos. 333-82329 and 811-05618), electronically filed on April 24, 2003.
	aa.	Earnings Protection GMDB Rider II-PRIME Plus – S40725 is incorporated by reference as exhibit EX-99.B4.aa. from Post-Effective Amendment No. 16 to Registrant’s Form N-4 (File Nos. 333-82329 and 811-05618), electronically filed on April 27, 2006.
	ab.	Traditional GPWB Endorsement – S40392 is incorporated by reference as exhibit EX-99.B4.t. from Post-Effective Amendment No. 8 to Registrant’s Form N-4 (File Nos. 333-82329 and 811-05618), electronically filed on April 24, 2003.
	ac.	Enhanced GPWB Endorsement – S40393 is incorporated by reference as exhibit EX-99.B4.u. from Post-Effective Amendment No. 8 to Registrant’s Form N-4 (File Nos. 333-82329 and 811-05618), electronically filed on April 24, 2003.
	ad.	Inherited IRA/Roth IRA Endorsement is incorporated by reference as exhibit EX-99.B4.ad. from Post-Effective Amendment No. 16 to Registrant’s Form N-4 (File Nos. 333-82329 and 811-05618), electronically filed on April 27, 2006.
5.	a.	Application for Ind. Var. Annuity-Original Contracts is incorporated by reference as exhibit EX-99.B5. from Registrant’s Form N-4 (File Nos. 333-82329 and 811-05618), electronically filed on July 6, 1999.
	b.	Application for Ind. Var. Annuity-May 2003 Contracts – F40269(05-03) is incorporated by reference as exhibit EX-99.B5.b. from Post-Effective Amendment No. 8 to Registrant’s Form N-4 (File Nos. 333-82329 and 811-05618), electronically filed on April 24, 2003.
	c.	Application for Ind. Var. Annuity-PRIME Plus Contracts – F40269(1-06) is incorporated by reference as exhibit EX-99.B5.c. from Post-Effective Amendment No. 16 to Registrant’s Form N-4 (File Nos. 333-82329 and 811-05618), electronically filed on April 27, 2006.
6.	(i).	The Restated Articles of Incorporation of the Company (as amended August 1, 2006) incorporated by reference as exhibit EX-99.B6.i. from Pre-Effective Amendment No. 1 to Registrant's Form N-4 (File Nos. 333-166408 and 811-05618), electronically filed on September 24, 2010.
	(ii).	The Restated Bylaws of the Company (as amended August 1, 2006) incorporated by reference as exhibit EX-99.B6.ii. from Pre-Effective Amendment No. 1 to Registrant's Form N-4 (File Nos. 333-166408 and 811-05618), electronically filed on September 24, 2010.
7.	Not Applicable
8.	a.		22c-2 Agreements incorporated by reference as exhibit EX-99.B8.a. from Post-Effective Amendment No. 20 to Registrant’s Form N-4 (File Nos. 333-82329 and 811-05618), electronically filed on April 24, 2008.
	b.		22c-2 Agreement-BlackRock Distributors, Inc. is incorporated by reference as exhibit EX-99.B8.b. from Post-Effective Amendment No. 14 to Registrant’s Form N-4 (File Nos. 333-139701 and 811-05618), electronically filed on April 3, 2009.
	c.		Participation Agreement between BlackRock Series Fund, Inc., BlackRock Distributors, Inc., Allianz Life Insurance Co. of North America, and Allianz Life Financial Services, LLC, dated May 1, 2008 incorporated by reference as exhibit EX-99.B8.c. from Post-Effective Amendment No. 14 to Registrant’s Form N-4 (File Nos. 333-139701 and 811-05618), electronically filed on April 3, 2009.
	d.		Administrative Services Agreement between BlackRock Advisors, LLC and Allianz Life, dated May 1, 2008 incorporated by reference as exhibit EX-99.B8.d. from Post-Effective Amendment No. 14 to Registrant’s Form N-4 (File Nos. 333-139701 and 811-05618), electronically filed on April 3, 2009.
	e.		Participation Agreement between Davis Variable Account Fund, Inc., Davis Distributors, LLC and Allianz Life Insurance Company of North America, dated 11/1/1999 incorporated by reference as exhibit EX-99.B8.e. from Pre-Effective Amendment No.1 to Registrant’s Form N-4 (File Nos. 333-82329 and 811-05618), electronically filed on December 30, 1999.
	f.		Amendment to Participation Agreement between Davis Variable Account Fund, Inc., Davis Distributors, LLC and Allianz Life Insurance Company of North America dated 5/1/08. incorporated by reference as exhibit EX-99.B8.f. from Post-Effective Amendment No. 14 to Registrant’s Form N-4 (File Nos. 333-139701 and 811-05618), electronically filed on April 3, 2009.
	g.		Administrative Services Agreement between The Dreyfus Corporation and Allianz Life Insurance Company of North America, dated 5/1/2002 incorporated by reference as exhibit EX-99.B8.f. from Post-Effective Amendment No. 18 to Registrant’s Form N-4 (File Nos. 333-82329 and 811-05618), electronically filed on April 23, 2007.
	h.		Amendments to Administrative Services Agreement between The Dreyfus Corporation and Allianz Life Insurance Company of North America, dated 8/7/02, 10/16/06 incorporated by reference as exhibit EX-99.B8.g. from Post-Effective Amendment No. 18 to Registrant’s Form N-4 (File Nos. 333-82329 and 811-05618), electronically filed on April 23, 2007.
	i.		Disribution/12 b-1 Letter Agreement between Dreyfus Service Corporation and USAllianz Investor Services, LLC (predecessor to Allianz Life Financial Services, LLC.), dated 5/1/2002 incorporated by reference as exhibit EX-99.B8.h. from Post-Effective Amendment No. 18 to Registrant’s Form N-4 (File Nos. 333-82329 and 811-05618), electronically filed on April 23, 2007.
	j.		Fund Participation Agreement between Allianz Life Insurance Company of North America, Dreyfus Investment Portfolios and The Dreyfus Life and Annuity Index Fund, dated 5/1/2002 incorporated by reference as exhibit EX-99.B8.h. from Post-Effective Amendment No. 3 to Allianz Life Variable Account A’s Form N-6 (File Nos. 333-60206 and 811-04965), electronically filed on January 6, 2003.
	k.		Amendment to Fund Participation Agreement between Allianz Life Insurance Company of North America, Dreyfus Investment Portfolios and the Dreyfus Stock Index Fund, Inc., dated 5/1/2007 incorporated by reference as exhibit EX-99.B8.j. from Post-Effective Amendment No. 20 to Registrant’s Form N-4 (File Nos. 333-82329 and 811-05618), electronically filed on April 24, 2008.
	l.		Administrative Services Agreement between Franklin Templeton Services LLC and Allianz Life Insurance Company of North America, dated 10/1/2003 incorporated by reference as exhibit EX-99.B8.ac. from Pre-Effective Amendment No.2 to Registrant’s Form N-4 (File Nos. 333-120181 and 811-05618), electronically filed on March 30, 2005.
	m.		Amendment to Administrative Services Agreement between Franklin Templeton Services LLC and Allianz Life Insurance Company of North America, dated 8/08/2008 incorporated by reference as exhibit EX-99.B8.h. from Post-Effective Amendment No. 14 to Registrant’s Form N-4 (File Nos. 333-139701 and 811-05618), electronically filed on April 3, 2009.
	n.		Participation Agreement between Franklin Templeton Variable Insurance Products Trust, Franklin/Templeton Distributors, Inc., Allianz Life Insurance Company of North America and USAllianz Investor Services, LLC (the predecessor to Allianz Life Financial Services, LLC.), and dated 10/1/2003 incorporated by reference as exhibit EX-99.B8.h. from Pre-Effective Amendment No.2 to Registrant’s Form N-4 (File Nos. 333-120181 and 811-05618), electronically filed on March 30, 2005
	o.		Amendment to Participation Agreement between Franklin Templeton Variable Insurance Products Trust, Franklin/Templeton Distributors, Inc., Allianz Life Insurance Company of North America and USAllianz Investor Services, LLC (the predecessor to Allianz Life Financial Services, LLC.), dated 5/1/08 incorporated by reference as exhibit EX-99.B8.j. from Post-Effective Amendment No. 14 to Registrant’s Form N-4 (File Nos. 333-139701 and 811-05618), electronically filed on April 3, 2009.
	p.		Participation Agreement between Premier VIT, Allianz Life Insurance Company of North America and Allianz Global Investors Distributors LLC, dated 5/1/2006 incorporated by reference as exhibit EX-99.B8.ai. from Pre-Effective Amendment No.1 to Registrant’s Form N-4 (File Nos. 333-134267 and 811-05618), electronically filed on September 25, 2006.
	q.		Administrative Service Agreement between OpCap Advisors LLC and Allianz Life Insurance Company of North America, dated 5/1/2006 incorporated by reference as exhibit EX-99.B8.aj. from Pre-Effective Amendment No.1 to Registrant’s Form N-4 (File Nos. 333-134267 and 811-05618), electronically filed on September 25, 2006.
	r.		Administrative Support Service Agreement between OppenheimerFunds, Inc. and Allianz Life Insurance Company of North America, dated 12/1/1999 incorporated by reference as exhibit EX-99.B8.u. from Post-Effective Amendment No. 12 to Registrant’s Form N-4 (File Nos. 333-95729 and 811-05618), electronically filed on April 26, 2004.
	s.		Amendment to Administrative Support Service Agreement between OppenheimerFunds, Inc. and Allianz Life Insurance Company of North America, dated 2/1/00 is incorporated by reference as exhibit EX-99.B8.r. from Post-Effective Amendment No. 18 to Registrant’s Form N-4 (File Nos. 333-82329 and 811-05618), electronically filed on April 23, 2007.
	t.		Participation Agreement between Oppenheimer Variable Account Funds, OppenheimerFunds, Inc. and Allianz Life Insurance Company of North America, dated 12/1/1999 incorporated by reference as exhibit EX-99.B8.h. from Pre-Effective Amendment No.1 to Registrant’s Form N-4 (File Nos. 333-82329 and 811-05618), electronically filed on December 30, 1999.
	u.		Amendments to Participation Agreement between Oppenheimer Variable Account Funds, OppenheimerFunds, Inc. and Allianz Life Insurance Company of North America, dated 2/1/00, 5/1/02, 4/30/04, 4/29/05, 5/1/06 incorporated by reference as exhibit EX-99.B8.t. from Post-Effective Amendment No. 18 to Registrant’s Form N-4 (File Nos. 333-82329 and 811-05618), electronically filed on April 23, 2007.
	v.		Amended and Restated Services Agreement between Pacific Investment Management Company LLC and Allianz Life Insurance Company of North America, dated 01/01/2007 incorporated by reference as exhibit EX-99.B8.u. from Post-Effective Amendment No. 18 to Registrant’s Form N-4 (File Nos. 333-82329 and 811-05618), electronically filed on April 23, 2007.
	w.		Amendment dated May 1, 2011 to Investor Services Agreement between Allianz Life Insurance Company of North America and Pacific Investment Management Company dated June 1, 2009 incorporated by reference as exhibit EX-99.B8.n. from Post-Effective Amendment No. 25 to Registrant’s Form N-4 (File Nos. 333-139701 and 811-05618), electronically filed on April 26, 2011.
	x.		Participation Agreement between Allianz Life Insurance Company of North America, PIMCO Variable Insurance Trust, and PIMCO Funds Distributors LLC, dated 12/1/1999 incorporated by reference as exhibit EX-99.B8.i. from Pre-Effective Amendment No.1 to Registrant’s Form N-4 (File Nos. 333-82329 and 811-05618), electronically filed on December 30, 1999.
	y.		Amendments to Participation Agreement between Allianz Life Insurance Company of North America, PIMCO Variable Insurance Trust, and PIMCO Funds Distributors LLC, dated 4/1/00, 11/5/01, 5/1/02, 5/1/03, 4/30/04, 4/29/05 incorporated by reference as exhibit EX-99.B8.w. from Post-Effective Amendment No. 18 to Registrant’s Form N-4 (File Nos. 333-82329 and 811-05618), electronically filed on April 23, 2007.
	z.		Amendment dated May 1, 2011 to Participation Agreement between Allianz Life Insurance Company of North America, PIMCO Variable Insurance Trust and PIMCO Investments LLC (formerly Allianz Global Investors Distributiors LLC) dated December 1, 1999 incorporated by reference as exhibit EX-99.B8.q. from Post-Effective Amendment No. 25 to Registrant’s Form N-4 (File Nos. 333-139701 and 811-05618), electronically filed on April 26, 2011.
	aa.		Amendment dated April 30, 2012 to Participation Agreement between Allianz Life Insurance Company of North America, PIMCO Variable Insurance Trust and PIMCO Investments LLC (formerly Allianz Global Investors Distributiors LLC) dated December 1, 1999 incorporated by reference as exhibit EX-99.B8.q. from Post-Effective Amendment No. 7 to Registrant’s Form N-4 (File Nos. 333-171427 and 811-05618) electronically filed on April 6, 2012.
	ab.		Investor Services Agreement between Pacific Investment Management Company (PIMCO) and Allianz Life Insurance Company of North America, dated June 1, 2009 and Amendment dated 5-1-2011 incorporated by reference as exhibit EX-99.B8.t. from Post-Effective Amendment No. 7 to Registrant’s Form N-4 (File Nos. 333-171427 and 811-05618) electronically filed on April 6, 2012.
	ac.		Amendment dated 4-30-2012 to Investor Services Agreement between Pacific Investment Management Company (PIMCO) and Allianz Life Insurance Company of North America, dated June 1, 2009 incorporated by reference as exhibit EX-99.B8.u. from Post-Effective Amendment No. 7 to Registrant’s Form N-4 (File Nos. 333-171427 and 811-05618) electronically filed on April 6, 2012.
	ad.		Distribution Services Agreement between Allianz Life Insurance Company of North America and Allianz Global Investors Distributors, LLC, dated 01/01/2007 incorporated by reference as exhibit EX-99.B8.x. from Post-Effective Amendment No. 18 to Registrant’s Form N-4 (File Nos. 333-82329 and 811-05618), electronically filed on April 23, 2007.
	ae.		Services Agreement between Prudential Investment Management Services LLC and Allianz Life Insurance Company of North America, dated 12/15/2000 is incorporated by reference as exhibit EX-99.B8.w. from Post-Effective Amendment No. 12 to Registrant’s Form N-4 (File Nos. 333-95729 and 811-05618), electronically filed on April 26, 2004.
	af.		Amendment to Services Agreement between Prudential Investment Management Services LLC and Allianz Life Insurance Company of North America, dated 9/9/2002 incorporated by reference as exhibit EX-99.B8.z. from Post-Effective Amendment No. 18 to Registrant’s Form N-4 (File Nos. 333-82329 and 811-05618), electronically filed on April 23, 2007.
	ag.		Fund Participation Agreement between Allianz Life Insurance Company of North America, The Prudential Series Fund, Inc., Prudential Investments Fund Management LLC, and Prudential Investment Management Services, LLC, dated 12/15/2000 is incorporated by reference as exhibit EX-99.B8.k. from Post-Effective Amendment No. 2 to Registrant’s Form N-4 (File Nos. 333-82329 and 811-05618), electronically filed on December 15, 2000.
	ah.		Service Agreement between J.&W. Seligman & Co. Incorporated and Allianz Life Insurance Company of North America, dated 12/16/1999 incorporated by reference as exhibit EX-99.B8.x. from Post-Effective Amendment No. 12 to Registrant’s Form N-4 (File Nos. 333-95729 and 811-05618), electronically filed on April 26, 2004
	ai.		Fund Participation Agreement between Seligman Portfolios, Inc. and Allianz Life Insurance Company of North America, dated 12/1/1999 incorporated by reference as exhibit EX-99.B8.j. from Pre-Effective Amendment No.1 to Registrant’s Form N-4 (File Nos. 333-82329 and 811-05618), electronically filed on December 30, 1999.
	aj.		Amendments to Participation Agreement between Seligman Portfolios, Inc. and Allianz Life Insurance Company of North America, dated 2/1/00, 5/1/02, 5/1/03, 4/30/04, 5/1/06 incorporated by reference as exhibit EX-99.B8.ad. from Post-Effective Amendment No. 18 to Registrant’s Form N-4 (File Nos. 333-82329 and 811-05618), electronically filed on April 23, 2007.
9.*	Opinion and Consent of Counsel
10.*	Consent of Independent Registered Public Accounting Firm
11.	Not Applicable
12.	Not Applicable
13.	a.	Power of Attorneys incorporated by reference as exhibit EX-99.B13 from Post-Effective Amendment No. 25 to Registrant’s Form N-4 (File Nos. 333-139701 and 811-05618) electronically filed on April 26, 2011.
	b.	Power of Attorney-Walter White, incorporated by reference as exhibit EX-99.B13.b. from Post-Effective Amendment No. 6 to Registrant’s Form N-4 (File Nos. 333-171427 and 811-05618) electronically filed on February 16, 2012.
	c.	Power of Attorney-Marna C. Whittington, incorporated by reference as exhibit EX-99.B13.c. from Post-Effective Amendment No. 7 to Registrant’s Form N-4 (File Nos. 333-171427 and 811-05618) electronically filed on April 6, 2012.

*	Filed herewith

ITEM 25. DIRECTORS AND OFFICERS OF THE DEPOSITOR

Unless noted otherwise, all officers and directors have the following principal business address:
5701 Golden Hills Drive
Minneapolis, MN 55416-1297
The following are the Officers and Directors of the Company:

Name and Principal Business Address	Positions and Offices with Depositor
Walter R. White	Director, President and Chief Executive Officer
Giulio Terzariol	Director, Senior Vice President and Chief Financial Officer
Thomas P. Burns	Senior Vice President, Chief Distribution Officer
Neil H. McKay	Senior Vice President, Chief Actuary
Gretchen Cepek	Senior Vice President, Secretary and General Counsel
Carsten Quitter	Senior Vice President, Chief Investment Officer
Cathy Mahone	Senior Vice President, Chief Administrative Officer
Nancy E. Jones	Senior Vice President, Chief Marketing Officer
Patrick L. Nelson	Vice President, Chief Suitability Officer
Nicole A. Scanlon	Vice President, Controller
Gary C. Bhojwani	Director and Chairman of the Board
Michael P. Sullivan 500 IDS Center 80 South 8th Street Minneapolis, MN 55402	Director
Dale E. Lauer 14103 205th Ave. NE Woodinville, WA 98077	Director
Marna C. Whittington 2959 Barley Mill Yorklyn, DE 19736	Director

ITEM 26. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE DEPOSITOR OR REGISTRANT

The Insurance Company organizational chart is incorporated by reference from Registrant's Pre-Effective No. 1 to

Form N-4 File Nos. 333-171427 and 811-05618 filed electronically on April 7, 2011.

ITEM 27. NUMBER OF CONTRACT OWNERS

As of March 30, 2012 there were 29,609 qualified Contract Owners and 16,220 non-qualified Allianz Alterity Contract Owners with Contracts in the Separate Account.

ITEM 28. INDEMNIFICATION

The Bylaws of the Insurance Company provide:
ARTICLE XI. INDEMNIFICATION OF DIRECTORS, OFFICERS AND EMPLOYEES
SECTION 1. RIGHT TO INDEMNIFICATION:
(a)	Subject to the conditions of this Article and any conditions or limitations imposed by applicable law, the Corporation shall indemnify any employee, director or officer of the Corporation (an "Indemnified Person") who was, is, or in the sole opinion of the Corporation, may reasonably become a party to or otherwise involved in any Proceeding by reason of the fact that such Indemnified Person is or was:
	(i)	a director of the Corporation; or
	(ii)	acting in the course and scope of his or her duties as an officer or employee of the Corporation; or
	(iii)	rendering Professional Services at the request of and for the benefit of the Corporation; or
	(iv)	serving at the request of the Corporation as an officer, director, fiduciary or member of another corporation, association, committee, partnership, joint venture, trust, employee benefit plan or other enterprise (an "Outside Organization").
(b)	Notwithstanding the foregoing, no officer, director or employee shall be indemnified pursuant to these bylaws under the following circumstances:
	(i)	in connection with a Proceeding initiated by such person, in his or her own personal capacity, unless such initiation was authorized by the Board of Directors;
	(ii)	if a court of competent jurisdiction finally determines that any indemnification hereunder is unlawful;
	(iii)	for acts or omissions involving intentional misconduct or knowing and culpable violation of law;
	(iv)	for acts or omissions that the Indemnified Person believes to be contrary to the best interests of the Corporation or its shareholders or that involve the absence of good faith on the part of the Indemnified Person;
	(v)	for any transaction for which the Indemnified Person derived an improper personal benefit;
	(vi)	for acts or omissions that show a reckless disregard for the Indemnified Person's duty to the Corporation or its shareholders in circumstances in which the Indemnified Person was aware or should have been aware, in the ordinary course of performing the Indemnified Person's duties, of the risk of serious injury to the Corporation or its shareholders;
	(vii)	for acts or omissions that constitute an unexcused pattern of inattention that amounts to an abdication of the Indemnified Person's duties to the Corporation or its shareholders;
	(viii)	in circumstances where indemnification is prohibited by applicable law;
	(ix)	in the case of service as an officer, director, fiduciary or member of an Outside Organization, where the Indemnified Person was aware or should have been aware that the conduct in question was outside the scope of the assignment as contemplated by the Corporation.
SECTION 2. SCOPE OF INDEMNIFICATION:
(a)	Indemnification provided pursuant to Section 1(a)(iv) shall be secondary and subordinate to indemnification or insurance provided to an Indemnified Person by an Outside Organization or other source, if any.
(b)	Indemnification shall apply to all reasonable expenses, liability and losses, actually incurred or suffered by an Indemnified Person in connection with a Proceeding, including without limitation, attorneys' fees and any expenses of establishing a right to indemnification or advancement under this article, judgments, fines, ERISA excise taxes or penalties, amounts paid or to be paid in settlement and all interest, assessments and other charges paid or payable in connection with or in respect of such expense, liability and loss.
(c)	Such indemnification shall continue as to any Indemnified Person who has ceased to be an employee, director or officer of the Corporation and shall inure to the benefit of his or her heirs, estate, executors and administrators.
SECTION 3. DEFINITIONS:
(a)	"Corporation" for the purpose of Article XI shall mean Allianz Life Insurance Company of North America and all of its subsidiaries.
(b)	"Proceeding" shall mean any threatened, pending, or completed action, suit or proceeding whether civil, criminal, administrative, investigative or otherwise, including actions by or in the right of the Corporation to procure a judgment in its favor.
(c)	"Professional Services" shall mean services rendered pursuant to (i) a professional actuarial designation, (ii) a license to engage in the practice of law issued by a State Bar Institution or (iii) a Certified Public Accountant designation issued by the American Institute of Certified Public Accountants.
Insofar as indemnification for liability arising under the Securities Act of 1933 may be permitted for directors and officers or controlling persons of the Insurance Company pursuant to the foregoing, or otherwise, the Insurance Company has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Insurance Company of expenses incurred or paid by a director, officer or controlling person of the Insurance Company in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Company will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

ITEM 29. PRINCIPAL UNDERWRITERS

a.	Allianz Life Financial Services, LLC (previously USAllianz Investor Services, LLC) is the principal underwriter for the Contracts. It also is the principal underwriter for:
Allianz Life Variable Account A
Allianz Life of NY Variable Account C
b.	The following are the officers (managers) and directors (Board of Governors) of Allianz Life Financial Services, LLC. All officers and directors have the following principal business address:
5701 Golden Hills Drive
Minneapolis, MN 55416-1297

Name			Positions and Offices with Underwriter
Robert DeChellis			Governor, Chief Executive Officer and President
Thomas Burns			Governor
Kristine Starkman			Chief Compliance Officer
Jasmine Jirele			Chief Operating Officer and Senior Vice President
Angie Forsman			Vice President, Chief Financial Officer
Robert Densmore			Senior Vice President
Corey Walther			Senior Vice President
Michael Brandriet			Senior Vice President
Jennifer Sosniecki			Money Laundering Prevention Officer
Michael G. Brennan			Vice President, Compliance
Steve Miller			Assistant Vice President
Theodore C. Cadwell, Jr.			Secretary
Tracy M. Hardy			Assistant Secretary

c.	For the period 1-1-2011 to 12-31-2011
Name of Principal Underwriter		Net Underwriting Discounts and Commissions		Compensation on Redemption	Brokerage Commissions	Compensation
Allianz Life Financial Services, LLC		$264,909,554.57		$0	$0	$0
The $264,909,554.57 that Allianz Life Financial Services, LLC received from Allianz Life as commissions on the sale of Contracts issued under Allianz Life Variable Account B was subsequently paid entirely to the third party broker/dealers that perform the retail distribution of the Contracts and, therefore, no commission or compensation was retained by Allianz Life Financial Services, LLC.

ITEM 30. LOCATION OF ACCOUNTS AND RECORDS

Allianz Life Insurance Company of North America, at 5701 Golden Hills Drive, Minneapolis, Minnesota 55416, maintains physical possession of the accounts, books or documents of the Variable Account required to be maintained by Section 31(a) of the Investment Company Act of 1940, as amended, and the rules promulgated thereunder.

ITEM 31. MANAGEMENT SERVICES

Not Applicable

ITEM 32. UNDERTAKINGS

Registrant hereby undertakes to file a post-effective amendment to this registration statement as frequently as is necessary to ensure that the audited financial statements in the registration statement are never more than sixteen (16) months old for so long as payment under the variable annuity contracts may be accepted.

Registrant hereby undertakes to include either (1) as part of any application to purchase a contract offered by the prospectus, a space that an applicant can check to request a Statement of Additional Information, or (2) a postcard or similar written communication affixed to or included in the prospectus that the applicant can remove to send for a Statement of Additional Information.

c.	Registrant hereby undertakes to deliver any Statement of Additional Information and any financial statements required to be made available under this Form promptly upon written or oral request.

REPRESENTATIONS

Allianz Life Insurance Company of North America ("Company") hereby represents that the fees and charges deducted under the Contract in the aggregate, are reasonable in relation to the services rendered, the expenses to be incurred and the risks assumed by the Company.

The Company hereby represents that it is relying upon a No Action Letter issued to the American Council of Life Insurance, dated November 28, 1988 (Commission ref. IP-6-88), and that the following provisions have been complied with:

1.	Include appropriate disclosure regarding the redemption restrictions imposed by Section 403(b)(11) in each registration statement, including the prospectus, used in connection with the offer of the contract;

2.	Include appropriate disclosure regarding the redemption restrictions imposed by Section 403(b)(11) in any sales literature used in connection with the offer of the contract;

3.	Instruct sales representatives who solicit participants to purchase the contract specifically to bring the redemption restrictions imposed by Section 403(b)(11) to the attention of the potential participants;

Obtain from each plan participant who purchases a Section 403(b) annuity contract, prior to or at the time of such purchase, a signed statement acknowledging the participant's understanding of (1) the restrictions on redemption imposed by Section 403(b)(11), and (2) other investment alternatives available under the employer's Section 403(b) arrangement to which the participant may elect to transfer his contract value.

SIGNATURES

As required by the Securities Act of 1933 and the Investment Company Act of 1940, as amended, Allianz Life Insurance Company of North America on behalf of the Registrant certifies that it meets the requirements of the Securities Act Rule 485(b) for effectiveness of this Registration Statement and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereto duly authorized in the City of Minneapolis and State of Minnesota, on this 25th day of April, 2012.

ALLIANZ LIFE VARIABLE ACCOUNT B

(Registrant)

By: ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA

(Depositor)

By: /s/ STEWART D. GREGG

Stewart D. Gregg

Senior Securities Counsel

ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA

(Depositor)

By: WALTER R. WHITE**

Walter R. White

President and Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on the 25th day of April, 2012.

Signature	Title
Gary C. Bhojwani*	Director and Chairman of the Board
Walter R. White**	Director, President & Chief Executive Officer
Giulio Terzariol*	Director, Senior Vice President and Chief Financial Officer
Michael P. Sullivan*	Director
Dale E. Lauer*	Director
Marna C. Whittington***	Director

*	By Power of Attorney incorporated by reference as exhibit EX-99.B13 from Post-Effective Amendment No. 25 to Registrant’s Form N-4 (File Nos. 333-139701 and 811-05618) electronically filed on April 26, 2011.

**	By Power of Attorney incorporated by reference as exhibit EX-99.B13.b. from Post-Effective Amendment No. 6 to Registrant’s Form N-4 (File Nos. 333-171427 and 811-05618) electronically filed on February 16, 2012.

***	By Power of Attorney incorporated by reference as exhibit EX-99.B13.c. from Post-Effective Amendment No. 7 to Registrant’s Form N-4 (File Nos. 333-171427 and 811-05618) electronically filed on April 6, 2012.

By: /s/ STEWART D. GREGG

Stewart D. Gregg

Senior Securities Counsel

EXHIBITS TO POST-EFFECTIVE AMENDMENT NO. 24

TO FORM N-4

(FILE NOS. 333-82329 AND 811-05816)

ALLIANZ LIFE VARIABLE ACCOUNT B

ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA

INDEX TO EXHIBITS
EX-99.B9.	Opinion and Consent of Counsel
EX-99.B10.	Consent of Independent Registered Public Accounting Firm