VIA EDGAR AND ELECTRONIC MAIL
April 21, 2009
Mr. Jeffrey Foor
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Variable Separate Account ("Registrant")
AIG SunAmerica Life Assurance Company ("Depositor")
Polaris Platinum III Variable Annuity
Form N-4
File Nos. 333-157199 and 811-03859
Dear Mr. Foor:
Thank you for your comments today regarding the Initial Registration
Statement on Form N-4 filed on February 2, 2009 as referenced above. We have
considered your comments and provided our responses below.
1. Highlights, page 4
a. Comment -- Please revise the discussion, under the headings
Expenses and Access to Your Money, to reflect the ability of
an owner to make withdrawals pursuant to the Free Withdrawal
Provision under the contract.
Response -- The following disclosure has been added to the
Expenses paragraph in the Highlights:
"Your contract provides for a free withdrawal amount each
year. See FREE WITHDRAWAL PROVISIONS below."
b. Comment -- Please reference Appendix C specifically in the
cross-reference to the appendix listing state contract
availability and state contract variations.
Response -- The reference has been revised accordingly.
2. Fee Tables, page 5
a. Comment -- Footnote 2, which describes the Withdrawal Charge
Schedule, should reference the ability to take free
withdrawals under the contract .
Response -- The following disclosure has been added to
Footnote 2:
"Your contract provides for a free withdrawal amount each
year. See FREE WITHDRAWAL PROVISIONS below."
b. Comment -- Please remove "or" from between the two optional
death benefits under the Separate Account Annual Expenses
section of the table.
Response -- The reference to "or" has been removed.
c. Comment -- Please revise Footnote 5 to clarify that the
Optional Combination HV & Roll-Up Death Benefit has the
highest fee of the optional death benefits.
Response -- Footnote has been revised as follows:
"The Maximum Separate Account Annual Expenses reflect election
of the Combination HV & Roll-Up death benefit which has the
highest fee of the optional death benefits."
d. Comment -- Please update the underlying fund expenses table.
Response -- The table and expense examples have been updated.
e. Comment -- Please revise Footnote 6 disclosure to use the
defined term "Purchase Payments" instead of "Purchase".
Response -- This scrivener's error has been corrected.
f. Comment -- Please revise Foote 6 and 7 to consistently use the
capitalized term Excess Withdrawal.
Response -- We have changed all references to reflect the term
in lower case.
3. Optional Living Benefits, page 21+
a. Comment -- At the beginning of this disclosure, please include
the name of each of the three living benefits and state
clearly that these are guaranteed minimum withdrawal features.
b. Comment -- For each of the optional living benefits, please
include plain English disclosure as to the purpose of the
optional feature. In addition, please add disclosure to
clearly distinguish each feature from the other living
benefits offered under the contract.
Response -- We have added the following disclosure in response
to the comments above on page 21:
"One of the following optional living benefits, all of which
are guaranteed minimum withdrawal benefits, is available for
election in your contract:
MARKETLOCK INCOME PLUS offers guaranteed lifetime income plus
the opportunity to lock in the greater of investment gains or
an annual Income Credit for up to 5 or 10 years, even after
withdrawals begin. The annual 6% Income Credit is reduced but
not eliminated in any contract year in which withdrawals up to
the maximum are taken, therefore providing a guarantee that
income can
increase even after starting withdrawals. After the first 10
years, the Income Base Evaluation Period may be extended to
lock in investment gains on contract anniversaries through age
90. In addition, if no withdrawals are taken during the first
12 years, on the 12th contract anniversary, the Minimum Income
Base is equal to 200% of Eligible Purchase Payments.
MARKETLOCK FOR LIFE PLUS offers guaranteed lifetime income
plus the opportunity to lock in the greater of investment
gains or an annual Income Credit for up to 5 or 10 years, even
after withdrawals begin. The annual 6% Income Credit is only
available in years that no withdrawals are taken. After the
first 10 years, the Income Base Evaluation Period may be
extended to lock in investment gains on contract anniversaries
through age 90. In addition, if no withdrawals are taken
during the first 12 years, on the 12th contract anniversary,
the Minimum Income Base is equal to 200% of Eligible Purchase
Payments.
MARKETLOCK FOR LIFE offers guaranteed lifetime income based on
the contract's highest anniversary value during the contract's
first 5 years. After the first 5 years, the Income Base
Evaluation Period may be extended to lock in investment gains
on contract anniversaries through age 90."
c. Comment - Please consider additional prospectus disclosure
describing the relationship between guarantees in connection
with the living benefits, or other contract guarantees, and
the claims paying ability of the company and its general
account.
Response -- The following disclosure has been added to the
General Account discussion in the prospectus:
"Obligations that are paid of the Company's general account
("General Account") include the interest rate on available
Fixed Accounts and amounts owed under your contract for death
and/or living benefits which are in excess of contract value.
The General Account assets are invested in accordance with
applicable state regulation. These assets are exposed to the
typical risks normally associated with a portfolio of fixed
income securities, namely interest rate, option, liquidity and
credit risk. The Company manages its exposure to these risks
by, among other things, closely monitoring and matching the
duration and cash flows of its assets and liabilities,
monitoring or limiting prepayment and extension risk in its
portfolio, maintaining a large percentage of its portfolio in
highly liquid securities and engaging in a disciplined process
of underwriting, reviewing and monitoring credit risk. With
respect to the living benefits available in your contract, we
also manage interest and market risk through a hedging
strategy in the portfolio and we require that those who elect
a living benefit allocate their Purchase Payments in
accordance with specified investment parameters."
4. General
a. Comment -- If you intend to rely on the exemption provided by
Rule 12h-7 under the Securities Exchange Act of 1934, please
provide a statement to that effect in the prospectus as
required by the rule.
Response -- Based on established, long standing precedents and
interpretations of the Federal Securities laws, the Company,
as Depositor for registered separate accounts, does not
believe it needs to rely on Rule 12h-7 of the Securities
Exchange Act of 1934 ("34 Act") as the basis for its exemption
from the duty under Section 15(d) of the 34 Act to file
reports required by Section 13(a) of the 34 Act ("34 Act
Reports") with respect to the variable annuities registered on
this Registration Statement pursuant to the Securities Act of
1933 ("33 Act"). Should subsequent Staff interpretation or
guidance with respect to Rule 12h-7 and its applicability
change our analysis of this matter we will make appropriate
adjustments to disclosure by supplement to the prospectus
pursuant to Rule 497 of 33 Act.
We will file all revisions and all relevant exhibits and financial
statements in a pre-effective amendment to the registration statement on or
about April 27, 2009, along with an acceleration request asking for
effectiveness on April 30, 2009. As part of the acceleration request, we will
also make the appropriate representations pursuant to the Staff's press release
dated June 24, 2004. If you have any further questions, please contact me at
310-772-6545.
Very truly yours,
/s/ Manda Ghaferi
Manda Ghaferi
Assistant General Counsel