As filed pursuant to Rule 424(b)(3) under
                                       the Securities Act of 1933
                                       Registration No. 033-87864


                      AIG SUNAMERICA LIFE ASSURANCE COMPANY

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                            VARIABLE SEPARATE ACCOUNT
                                SUPPLEMENT TO THE

     WM DIVERSIFIED STRATEGIES VARIABLE ANNUITY PROSPECTUS DATED MAY 3, 2004
   WM DIVERSIFIED STRATEGIES III VARIABLE ANNUITY PROSPECTUS DATED MAY 3, 2004

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The following replaces the paragraph under the heading titled LEGAL PROCEEDINGS
located in the OTHER INFORMATION section of the prospectus:

AIG SunAmerica Life engages in various kinds of routine litigation. In
management's opinion, these matters are not material in relation to the
financial position of the Company with the exception of the matters disclosed
below.

A purported class action captioned NIKITA Mehta, as Trustee of the N.D. Mehta
Living Trust vs. AIG SunAmerica Life Assurance Company, Case 04L0199, filed on
April 5, 2004 in the Circuit Court, Twentieth Judicial District in St. Clair
County, Illinois. The lawsuit alleges certain improprieties in conjunction with
alleged market timing activities. The probability of any particular outcome
cannot be reasonably estimated at this time.

On November 23, 2004, American International Group, Inc. (AIG), the parent
company and affiliated person of AIG SunAmerica Life Assurance Company
("Depositor"), consented to the settlement of an injunctive action instituted by
the SEC. In its complaint, the Securities and Exchange Commission (SEC) alleged
that AIG violated Section 10(b) of the Securities Exchange Act of 1934, as
amended (Exchange Act) and Rule 10b-5 promulgated thereunder and Section 17(a)
of the Securities Act of 1933 (Securities Act) and aided and abetted violations
of Sections 13(a) and 13(b)(2)(A) of the Exchange Act and Rules 12b-20, 13a-1,
and 13a-13 promulgated thereunder, in connection with certain structured
transactions between subsidiaries of The PNC Financial Services Group, Inc. and
certain subsidiaries of AIG, and similar transactions marketed by certain
subsidiaries of AIG to other publicly traded companies. The conduct described in
the complaint did not involve any conduct of AIG or its affiliates related to
their investment advisory, depository or distribution activities. Pursuant to a
final judgment entered on December 7, 2004, AIG, without admitting or denying
the allegations in the complaint (except as to jurisdiction), was ordered to pay
approximately $46 million in disgorgement, penalties and prejudgment interest.

In addition, the final judgment enjoins AIG from future violation of the
above-referenced provisions of the federal securities laws. Absent exemptive
relief granted by the SEC, the entry of the injunction would prohibit AIG and,
its affiliated persons, from, among other things, serving as an investment
advisor or depositor of any registered investment management company or
principal underwriter for any registered open-end investment company pursuant to
Section 9(a) of the Investment Company Act of 1940, as amended (the "1940 Act").
Certain affiliated persons of AIG, including the Depositor, received a temporary
exemptive order from the SEC pursuant to Section 9(c) of the 1940 Act on
December 8, 2004 with respect to the entry of the injunction, granting exemptive
relief from the provisions of Section 9(a) of the 1940 Act. The temporary order
permits AIG and its affiliated persons to serve as investment adviser,
subadviser, depositor, principal underwriter or sponsor of the separate accounts
through which your variable annuity is funded ("Separate Accounts"). The
Depositor expect that a permanent exemptive order will be granted, although
there is no assurance the SEC will issue the permanent order.

Additionally, AIG and AIG Financial Products Corp. (AIG-FP), a subsidiary of
AIG, reached a similar settlement with the Fraud Section of the United States
Department of Justice (DOJ). The settlement with the DOJ consists of an
agreement with respect to AIG and AIG-FP and a complaint and deferred
prosecution agreement with AIG-FP PAGIC Equity Holding Corp. (a special purpose
entity) that will foreclose future prosecutions, provided that the companies
comply with the agreements. As part of the settlement, AIG-FP will pay a penalty
of $80 million to the DOJ.

The Depositor believes that the disgorgement and penalties are not likely to
have a material adverse effect on the Separate Accounts.

Date: December 16, 2004


                Please keep this Supplement with your Prospectus

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