As filed pursuant to Rule
424(b)(3) under the Securities
Act of 1933 Registration No.
333-103504
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AIG SUNAMERICA LIFE ASSURANCE COMPANY
VARIABLE SEPARATE ACCOUNT
SUPPLEMENT TO THE
POLARIS CHOICE II PROSPECTUS
(FORM NUMBER: R-3460-PRO)
DATED DECEMBER 28, 2004
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The date of the prospectus is hereby changed to December 28, 2004.
All references in the prospectus to the date of the Statement of Additional
Information are hereby changed to December 28, 2004.
The following replaces the TRANSFERS DURING THE ACCUMULATION PHASE section
located on page 11 of the prospectus:
TRANSFERS DURING THE ACCUMULATION PHASE
Subject to our rules, restrictions and policies, during the Accumulation Phase
you may transfer funds between the Variable Portfolios and/or any available
fixed account options by telephone or through the Company's website
(http://www.aigsunamerica.com) or in writing by mail or facsimile. All transfer
instructions submitted via facsimile must be sent to (818) 615-1543, otherwise
they will not be considered received by us. We may accept transfers by telephone
or the Internet unless you tell us not to on your contract application. When
receiving instructions over the telephone or the Internet, we follow procedures
we have adopted to provide reasonable assurance that the transactions executed
are genuine. Thus, we are not responsible for any claim, loss or expense from
any error resulting from instructions received over the telephone or the
Internet. If we fail to follow our procedures, we may be liable for any losses
due to unauthorized or fraudulent instructions.
Any transfer request will be priced as of the day it is received in good order
by us if the request is processed before the close of the New York Stock
Exchange ("NYSE"), usually at 1:00 p.m. Pacific Time. If the transfer request is
processed after the NYSE closes, the request will be priced as of the next
business day.
Funds already in your contract cannot be transferred into the DCA fixed
accounts. You must transfer at least $100 per transfer. If less than $100
remains in any Variable Portfolio after a transfer, that amount must be
transferred as well.
TRANSFER POLICIES
This product is not designed for contract owners engaged in trading strategies
that seek to benefit from short-term price fluctuations or price inefficiencies
in the Variable Portfolios of this product ("Short-Term Trading"). Such
Short-Term Trading may create risks that may result in adverse effects on
investment return of an underlying fund. Such risks may include, but are not
limited to: (1) interference with the management and planned investment
strategies of an underlying fund and/or (2) increased brokerage and
administrative costs due to forced and
Please keep this Supplement with your Prospectus.
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unplanned fund turnover; both of which may dilute the value of the shares in the
underlying fund and reduce value for all investors in the Variable Portfolio. In
addition to negatively impacting the contract owner, a reduction in contract
value may also be harmful to annuitants and/or beneficiaries. We have adopted
administrative procedures to discourage Short-Term Trading.
We charge for transfers in excess of 15 in any contract year. Currently, the fee
is $25 ($10 in Pennsylvania and Texas) for each transfer exceeding this limit.
Transfers resulting from your participation in the DCA or Asset Rebalancing
programs are not counted towards the number of free transfers per contract year.
In addition to charging a fee when you exceed 15 transfers as described in the
preceding paragraph, all transfer requests in excess of 5 transfers within a
rolling six-month look-back period must be submitted by United States Postal
Service first-class mail ("U.S. Mail") for twelve months from the date of your
5th transfer request. For example, if you made a transfer on February 15, 2004
and within the previous six months (from August 15, 2003 forward) you made 5
transfers including the February 15th transfer, then all transfers made for
twelve months after February 15, 2004 must be submitted by U.S. Mail (from
February 16, 2004 through February 15, 2005). We will not accept transfer
requests sent by any other medium except U.S. Mail during this 12-month period.
Transfer requests required to be submitted by U.S. Mail can only be cancelled by
a written request sent by U.S. Mail with the appropriate paperwork prior to the
execution of the transfer. Transfers resulting from your participation in the
DCA or Asset Rebalancing programs are not included for the purposes of
determining the number of transfers for the U.S. Mail requirement. We try to
ensure that the U.S. Mail Policy is uniformly and consistently applied to all
contract owners. However, as discussed below, our ability to detect and deter
Short-Term Trading may be limited. Therefore, Short-Term Trading may occur and
the Variable Portfolios may be negatively impacted.
In connection with our efforts to deter Short-Term Trading, we may become aware
of trading activity that appears detrimental to the Variable Portfolios. If we
determine that your transfer patterns among the Variable Portfolios and/or
available fixed accounts reflect what we consider to be Short-Term Trading, we
may require you to adhere to our U.S. Mail policy described above prior to
reaching the specified number of transfers within the defined period for a
period that we determine. To the extent we become aware of Short-Term Trading
activities which cannot be reasonably controlled by the U.S. Mail Policy, we
also reserve the right to impose further limits on the number and frequency of
transfers you can make, impose minimum holding periods, pass through to you
redemption fees imposed by the underlying funds and/or reject any transfer
request or terminate your transfer privileges. We will notify you in writing if
your transfer privileges are terminated. In addition, we reserve the right to
not accept transfers from a financial representative acting for you and not to
accept preauthorized transfer forms. We try to ensure that the restrictions and
policies applicable to Short-Term Trading are uniformly and consistently applied
to all contract owners. However, as discussed below, our ability to detect and
deter Short-Term Trading may be limited. Therefore, Short-Term Trading may occur
and the Variable Portfolios may be negatively impacted.
Some of the factors we may consider when determining whether to accelerate the
U.S. Mail policy, reject or impose other conditions on transfer privileges
include:
(1) the number of transfers made in a defined period;
(2) the dollar amount of the transfer;
Please keep this Supplement with your Prospectus.
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(3) the total assets of the Variable Portfolio involved in the transfer
and/or transfer requests that represent a significant portion of the
total assets of the Variable Portfolio;
(4) the investment objectives and/or asset classes of the particular
Variable Portfolio involved in your transfers;
(5) whether the transfer appears to be part of a pattern of transfers to
take advantage of short-term market fluctuations or market
inefficiencies; and/or
(6) other activity, as determined by us, that creates an appearance, real
or perceived, of Short-Term Trading.
Notwithstanding the administrative procedures above, there may be limitations on
the effectiveness of these procedures. Our ability to detect and deter
Short-Term Trading may be limited by operational systems and technological
limitations. Despite our efforts, we cannot guarantee that we will detect all
Short-Term Trading. To the extent that we are unable to detect and deter
Short-Term Trading, the Variable Portfolios may be negatively impacted as
described above. Additionally, the Variable Portfolios may be harmed by transfer
activity related to other insurance companies and/or retirement plans or other
investors that invest in shares of the underlying fund. You should be aware that
the design of our administrative procedures involves inherently subjective
decisions, which we attempt to make in a fair and reasonable manner consistent
with the interests of all owners of this contract. We try to ensure that the
restrictions and policies applicable to Short-Term Trading are uniformly and
consistently applied to all contract owners. However, as discussed above, our
ability to detect and deter Short-Term Trading may be limited. Therefore,
Short-Term Trading may occur and the Variable Portfolios may be negatively
impacted. We do not enter into agreements with contract owners whereby we permit
Short-Term Trading in exchange for other investments in our products.
As stated above, we try to ensure that the Short-Term Trading restrictions and
policies apply uniformly and consistently to all contract owners with the
exception of transfers that occur through omnibus group contracts. The
Short-Term Trading policies and procedures, which include the U.S. Mail policy
are not applied to such contracts. Omnibus group contracts may invest in the
same underlying funds available in your contract but on an aggregate, not
individual basis. Thus, we have limited ability to detect Short-Term Trading in
omnibus group contracts and our inability to detect Short-Term Trading may
negatively impact the Variable Portfolios as described above.
WE RESERVE THE RIGHT TO MODIFY THE POLICIES AND PROCEDURES DESCRIBED IN THIS
SECTION AT ANY TIME. To the extent that we exercise this reservation of rights,
we will do so uniformly and consistently unless we disclose otherwise.
For information regarding transfers during the Income Phase, see INCOME OPTIONS
below.
Date: December 28, 2004
Please keep this Supplement with your Prospectus.
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