<PAGE>
PAGE 1
IDS Life of New York Flexible Portfolio Annuity
Prospectus
Sept. 5, 1996
The Flexible Portfolio Annuity is an individual deferred
fixed/variable annuity contract offered by IDS Life Insurance
Company of New York (IDS Life of New York), a subsidiary of IDS
Life Insurance Company (IDS Life), a subsidiary of American Express
Financial Corporation. Purchase payments may be allocated among
different accounts, providing variable and/or fixed returns and
payouts. The annuity is available for qualified and nonqualified
retirement plans.
IDS Life of New York Flexible Portfolio Annuity Account
Sold by: IDS Life Insurance Company of New York, 20 Madison Ave.
Extension, Albany, NY 12203, Telephone: 518-869-8613.
THIS PROSPECTUS CONTAINS THE INFORMATION ABOUT THE VARIABLE ACCOUNT
THAT YOU SHOULD KNOW BEFORE INVESTING. Refer to "The variable
account" in this prospectus.
THE PROSPECTUS IS ACCOMPANIED OR PRECEDED BY THE FOLLOWING
PROSPECTUSES: THE RETIREMENT ANNUITY MUTUAL FUNDS PROSPECTUS
(DESCRIBING IDS LIFE AGGRESSIVE GROWTH FUND, IDS LIFE INTERNATIONAL
EQUITY FUND, IDS LIFE CAPITAL RESOURCE FUND, IDS LIFE MANAGED FUND,
IDS LIFE SPECIAL INCOME FUND, IDS LIFE MONEYSHARE FUND, IDS LIFE
GROWTH DIMENSIONS FUND, IDS LIFE GLOBAL YIELD FUND AND IDS LIFE
INCOME ADVANTAGE FUND); AIM VARIABLE INSURANCE FUNDS, INC.
PROSPECTUS (DESCRIBING AIM V.I. GROWTH AND INCOME FUND); PUTNAM
CAPITAL MANAGER TRUST (DESCRIBING PCM NEW OPPORTUNITIES FUND); TCI
PORTFOLIOS, INC., (DESCRIBING TCI VALUE); TEMPLETON VARIABLE
PRODUCTS SERIES FUND (DESCRIBING TEMPLETON DEVELOPING MARKETS FUND)
AND WARBURG PINCUS TRUST (DESCRIBING WARBURG PINCUS TRUST/SMALL
COMPANY GROWTH PORTFOLIO). PLEASE KEEP THESE PROSPECTUSES FOR
FUTURE REFERENCE.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION, OR ANY STATE SECURITIES
COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
IDS LIFE OF NEW YORK IS NOT A FINANCIAL INSTITUTION, AND THE
SECURITIES IT OFFERS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR
GUARANTEED OR ENDORSED BY ANY FINANCIAL INSTITUTION NOR ARE THEY
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD OR ANY OTHER AGENCY. INVESTMENTS IN THIS ANNUITY
INVOLVE INVESTMENT RISK INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
A Statement of Additional Information (SAI) dated Sept. 5, 1996
(incorporated by reference into this prospectus) has been filed
with the Securities and Exchange Commission (SEC), and is available
without charge by contacting IDS Life of New York at the telephone
<PAGE>
PAGE 2
number above or by completing and sending the order form on the
last page of this prospectus. The table of contents of the SAI is
on the last page of this prospectus.
<PAGE>
PAGE 3
Table of contents
Key terms.......................................................
The Flexible Portfolio Annuity in brief.........................
Expense summary.................................................
Financial statements............................................
Performance information.........................................
The variable account............................................
The funds.......................................................
IDS Life Aggressive Growth Fund............................
IDS Life International Equity Fund.........................
IDS Life Capital Resource Fund.............................
IDS Life Managed Fund......................................
IDS Life Special Income Fund...............................
IDS Life Moneyshare Fund...................................
IDS Life Growth Dimensions Fund............................
IDS Life Global Yield Fund.................................
IDS Life Income Advantage Fund.............................
AIM V.I. Growth and Income Fund............................
PCM New Opportunities Fund.................................
TCI Value..................................................
Templeton Developing Markets Fund..........................
Warburg Pincus Trust/Small Company Growth Portfolio........
The fixed account...............................................
Buying your annuity.............................................
The retirement date........................................
Beneficiary................................................
How to make purchase payments..............................
Charges.........................................................
Contract administrative charge.............................
Mortality and expense risk fee.............................
Surrender charge...........................................
Waiver of surrender charges................................
Valuing your investment.........................................
Number of units............................................
Accumulation unit value....................................
Net investment factor......................................
Factors that affect variable subaccount
accumulation units.........................................
Making the most of your annuity.................................
Automated dollar-cost averaging............................
Transferring money between subaccounts.....................
Transfer policies..........................................
How to request a transfer or a surrender...................
Surrendering your contract......................................
Surrender policies.........................................
Receiving payment when you request a surrender.............
TSA-special surrender provisions................................
Changing ownership..............................................
Benefits in case of death.......................................
The annuity payout period.......................................
Annuity payout plans.......................................
Death after annuity payouts begin..........................
<PAGE>
PAGE 4
Taxes...........................................................
Voting rights...................................................
Substitution of investments.....................................
Distribution of the contracts...................................
About IDS Life of New York......................................
Regular and special reports.....................................
Services..................................................
Table of contents of the Statement of
Additional Information...................................
<PAGE>
PAGE 5
Key terms
These terms can help you understand details about your annuity.
Annuity - A contract purchased from an insurance company that
offers tax-deferred growth of the investment until earnings are
withdrawn, and that can be tailored to meet the specific needs of
the individual during retirement.
Accumulation unit - A measure of the value of each variable
subaccount before annuity payouts begin.
Annuitant - The person on whose life or life expectancy the annuity
payouts are based.
Annuity payouts - An amount paid at regular intervals under one of
several plans available to the owner and/or any other payee. This
amount may be paid on a variable or fixed basis or a combination of
both.
Annuity unit - A measure of the value of each variable subaccount
used to calculate the annuity payouts you receive.
Beneficiary - The person designated to receive annuity benefits in
case of the owner's or annuitant's death.
Close of business - When the New York Stock Exchange (NYSE) closes,
normally 4 p.m. Eastern time.
Code - Internal Revenue Code of 1986, as amended.
Contract value - The total value of your annuity before any
applicable surrender charge and any contract administrative charge
have been deducted.
Contract year - A period of 12 months, starting on the effective
date of your contract and on each anniversary of the effective
date.
Fixed account - An account to which you may allocate purchase
payments. Amounts allocated to this account earn interest at rates
that are declared periodically by IDS Life of New York.
IDS Life of New York - In this prospectus, "we," "us," "our" and
"IDS Life of New York" refer to IDS Life Insurance Company of New
York.
Mutual funds (funds) - Mutual funds or portfolios, each with a
different investment objective. (See "The funds.") You may
allocate your purchase payments into variable subaccounts investing
in shares of any or all of these funds.
Owner (you, your) - The person who controls the annuity (decides on
investment allocations, transfers, payout options, etc.). Usually,
but not always, the owner is also the annuitant. The owner is
responsible for taxes, regardless of whether he or she receives the
annuity's benefits.<PAGE>
PAGE 6
Purchase payments - Payments made to IDS Life of New York for an
annuity.
Qualified annuity - An annuity purchased for a retirement plan
that is subject to applicable federal law and any rules of the plan
itself. These plans include:
o Individual Retirement Annuities (IRAs)
o Simplified Employee Pension Plans (SEPs)
o Section 401(k) plans
o Custodial and trusteed pension and profit-sharing plans
o Tax-Sheltered Annuities (TSAs)
All other annuities are considered nonqualified annuities.
Retirement date - The date when annuity payouts are scheduled to
begin. This date is first established when you start your
contract. You can change it in the future.
Surrender charge - A deferred sales charge that may be applied if
you surrender your annuity before the retirement date.
Surrender value - The amount you are entitled to receive if you
surrender your annuity. It is the contract value minus any
applicable surrender charge and contract administrative charge.
Valuation date - Any normal business day, Monday through Friday,
that the NYSE is open. The value of each variable subaccount is
calculated at the close of business on each valuation date.
Variable account - An account consisting of separate subaccounts to
which you may allocate purchase payments; each invests in shares of
one mutual fund. (See "The variable account.") The value of your
investment in each variable subaccount changes with the performance
of the particular fund.
The Flexible Portfolio Annuity in brief
Purpose: The Flexible Portfolio Annuity is designed to allow you
to build up funds for retirement. You do this by making one or more
investments (purchase payments) that may earn returns that increase
the value of the annuity. Beginning at a specified future date
(the retirement date), the annuity provides lifetime or other forms
of payouts to you or to anyone you designate.
Ten-day free look: You may return your annuity to your financial
advisor or our Albany office within 10 days after it is delivered
to you and receive a full refund of purchase payments. No charges
will be deducted.
Accounts: You may allocate your purchase payments among any or all
of:
<PAGE>
PAGE 7
o variable subaccounts, each of which invests in a mutual fund
with a particular investment objective. The value of each
variable subaccount varies with the performance of the
particular fund. We cannot guarantee that the value at the
retirement date will equal or exceed the total of purchase
payments allocated to the variable subaccounts. (p.)
o one fixed account, which earns interest at rates that are
adjusted periodically by IDS Life of New York. (p.)
Buying your annuity: Your financial advisor will help you complete
and submit an application. Applications are subject to acceptance
at our Albany office. You may buy a nonqualified annuity or a
qualified annuity including an IRA. Payment may be made either in
a lump sum or installments:
o Minimum initial purchase payment - $2,000 ($1,000 for qualified
annuities) unless you pay in installments by means of a bank
authorization or under a group billing arrangement such as a
payroll deduction.
o Minimum additional purchase payment - $50.
o Minimum installment payment - $50 monthly; $23.08 biweekly
(scheduled payment plan billing).
o Maximum first-year payment(s) - $50,000 to $1,000,000 depending
on your age.
o Maximum payment for each subsequent year - $50,000 to $100,000
depending upon your age. (p.)
Transfers: Subject to certain restrictions you may redistribute
your money among accounts without charge at any time until annuity
payouts begin, and once per contract year among the variable
subaccounts thereafter. You may establish automated transfers
among the fixed account and variable subaccount(s). (p.)
Surrenders: You may surrender all or part of your contract value at
any time before the retirement date. You also may establish
automated partial surrenders. Surrenders may be subject to charges
and tax penalties and may have other tax consequences; also,
certain restrictions apply. (p.)
Changing ownership: You may change ownership of a nonqualified
annuity by written instruction, however, such changes of
nonqualified annuities may have federal income tax consequences.
Certain restrictions apply concerning change of ownership of a
qualified annuity. (p.)
Benefits in case of death: If you or the annuitant dies before
annuity payouts begin, we will pay the beneficiary an amount at
least equal to the contract value. (p.)
Annuity payouts: The contract value of your investment can be
applied to an annuity payout plan that begins on the retirement
date. You may choose from a variety of plans to make sure that
payouts continue as long as they are needed. If you purchased a
qualified annuity, the payout schedule must meet the requirements
of the qualified plan. Payouts may be made on a fixed or variable
<PAGE>
PAGE 8
basis, or both. Total monthly payouts may include amounts from
each variable subaccount and the fixed account. During the annuity
payout period, you cannot be invested in more than five variable
subaccounts at any one time unless we agree otherwise. (p.)
Taxes: Generally, your annuity grows tax-deferred until you
surrender it or begin to receive payouts. (Under certain
circumstances, IRS penalty taxes may apply.) Even if you direct
payouts to someone else, you will still be taxed on the income if
you are the owner. (p.)
Charges: Your Flexible Portfolio Annuity is subject to a $30
annual contract administrative charge, a 1.25% mortality and
expense risk charge and a surrender charge.
Expense summary
The purpose of this summary is to help you understand the various
costs and expenses associated with your annuity.
You pay no sales charge when you purchase the annuity. All costs
that you bear directly or indirectly for the variable subaccounts
and underlying mutual funds are shown below. Some expenses may
vary as explained under "Contract charges."
Direct charges. These are deducted directly from the contract
value. They include:
Surrender charge: You may pay surrender charges on any surrender
within the first eight contract years. The surrender charge starts
at 7% of any purchase payments surrendered during the first three
contract years, then declines by 1% per year from 6% in the fourth
year to 2% in the eighth year. No charge applies after 8 contract
years. Contract earnings may be surrendered without charge at any
time.
Annual contract administrative charge: $30, waived when contract
value, or total purchase payments (less any payments surrendered)
equals or exceeds $25,000 on your contract anniversary.
Indirect charges. The variable account pays these expenses out of
its assets. They are reflected in the variable subaccount's daily
accumulation unit value and are not charged directly to your
account. They include:
Mortality and expense risk fee: 1.25% per year, deducted from the
variable account as a percentage of the average daily net assets of
the underlying fund.
Operating expenses of underlying mutual funds: management fees and
other expenses deducted as a percentage of average net assets as
follows: *
<PAGE>
PAGE 9
<TABLE>
<CAPTION>
IDS Life IDS Life
Aggres- Inter- IDS Life IDS Life IDS Life IDS Life IDS Life AIM V.I. PCM New
sive national Capital IDS Life Special IDS Life Growth Global Income Growth and Oppor-
Growth Equity Resource Managed Income Moneyshare Dimensions Yield Advantage Income tunities
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Management
fees .64% .86% .63% .62% .63% .54% .63% .84% .62% .65% .70%
Other
expenses .04 .09 .04 .03 .04 .05 .05 .06 .05 .52 .14
Total .68%** .95%** .67%** .65%** .67%** .59%** .68%# .90%# .67%# 1.17%** .84%**
Warburg Pincus
Templeton Trust/Small
TCI Developing Company
Value Markets Growth Portfolio
(After Fee (After Expense
Limitation) Reimbursements)
Management
fees 1.00% 1.11% .67%
Other
expenses .00 .59 .58
Total 1.00% 1.70%++ 1.25%+**
* Premium taxes imposed by some state and local governments are not reflected in this table.
** Annualized operating expenses of underlying mutual funds at Dec. 31, 1995.
+ Figures in "Management Fees," "Other expenses" and "Total" reflect waivers and reimbursements of expenses by the investment
advisor of the Portfolio. If there had been no reimbursement of expenses in 1995, actual expenses of the Portfolio, expressed as a
percent of average daily net assets, would have been as follows: "Management Fees," .90%, "Other expenses," .60% and "Total,"
1.50%.
++This is a new fund; operating expenses are based on annualized estimates of such expenses to be incurred in the current fiscal
year. Expenses shown are net of management fees waived. The Fund's Investment Manager has agreed in advance to reduce its fee so
as to limit the total expenses of the Fund to an annual rate of 1.70% of the Fund's average daily net assets until May 1, 1997. If
management fees are not limited, estimated expenses of the Portfolio, expressed as a percent of average daily net assets, would be
as follows: "Management Fees," 1.25%, "Other expenses," 0.59% and "Total," 1.84%.
# This is a new fund, operating expenses are based on annualized estimates of such expenses to be incurred in the current fiscal
year.
IDS Life IDS Life
Aggres- Inter- IDS Life IDS Life IDS Life IDS Life IDS Life AIM V.I. PCM New
sive national Capital IDS Life Special IDS Life Growth Global Income Growth and Oppor-
Growth Equity Resource Managed Income Moneyshare Dimensions Yield Advantage Income tunities
Example:* You would pay the following expenses on a $1,000 investment, assuming 5% annual
return and surrender at the end of each time period:
1 year $ 93.42 $ 96.00 $ 93.33 $ 93.14 $ 93.33 $ 92.57 $ 93.42 $ 95.52 $ 93.33 $ 98.09 $ 93.90
3 years 142.30 150.02 142.01 141.44 142.01 139.71 142.30 148.59 142.01 156.28 143.73
5 years 170.98 184.15 170.49 169.50 170.49 166.55 170.98 181.72 170.49 194.78 173.43
10 years 243.98 272.02 242.93 240.82 242.93 234.47 243.98 266.88 242.93 294.32 249.23
Warburg Pincus
Templeton Trust/Small
TCI Developing Company
Value Markets Growth Portfolio
1 year $ 96.47 $103.15 $ 98.86
3 years 151.45 171.25 158.55
5 years 186.57 219.97 198.61
10 years 277.13 346.07 302.30
You would pay the following expenses on the same investment assuming no surrender or the
selection of an annuity payout plan at the end of each time period:
<PAGE>
PAGE 10
IDS Life IDS Life
Aggres- Inter- IDS Life IDS Life IDS Life IDS Life IDS Life AIM V.I. PCM New
sive national Capital IDS Life Special IDS Life Growth Global Income Growth and Oppor-
Growth Equity Resource Managed Income Moneyshare Dimensions Yield Advantage Income tunities
1 year $ 21.42 $ 24.19 $ 21.32 $ 21.12 $ 21.32 $ 20.50 $ 21.42 $ 23.68 $ 21.32 $ 26.45 $ 21.94
3 years 66.12 74.46 65.81 65.19 65.81 63.33 66.12 72.92 65.81 81.22 67.67
5 years 113.41 127.36 112.89 111.85 112.89 108.73 113.41 124.79 112.89 138.60 116.01
10 years 243.98 272.02 242.93 240.82 242.93 234.47 243.98 266.88 242.93 294.32 249.23
Warburg Pincus
Templeton Trust/Small
TCI Developing Company
Value Markets Growth Portfolio
1 year $ 24.70 $ 31.88 $ 27.27
3 years 76.00 97.38 83.67
5 years 129.92 165.27 142.67
10 years 277.13 346.07 302.30
</TABLE>
This example should not be considered a representation of past or
future expenses. Actual expenses may be more or less than those
shown.
* In this example, the $30 annual contract administrative charge is
approximated as a .160% charge based on the expected average
contract size. IDS Life of New York has entered into certain
arrangements under which it is compensated by the funds' advisors
and/or distributors for the administrative services it provides to
the funds.
Financial statements
The SAI, dated Sept. 5, 1996, contains:
The audited financial statements of IDS Life Insurance Company of
New York including:
- balance sheets as of Dec. 31, 1995 and Dec. 31, 1994
- related statements of income, and cash flows for each of the
three years in the period ended Dec. 31, 1995
and the unaudited financial statements of IDS Life Insurance
Company of New York including:
- balance sheet as of June 30, 1996 and
- related statements of income, and cash flows for the six
months ended June 30, 1996.
The SAI does not include financial statements of the Variable
Account because this is a new account that does not have any
assets.
Performance information
Performance information for the variable subaccounts may appear
from time to time in advertisements or sales literature. In all
cases, such information reflects the performance of a hypothetical
investment in a particular account during a particular time period.
Calculations are performed as follows:
<PAGE>
PAGE 11
Simple yield - Account GM (investing in Moneyshare Fund): Income
over a given seven-day period (not counting any change in the
capital value of the investment) is annualized (multiplied by 52)
by assuming that the same income is received for 52 weeks. This
annual income is then stated as an annual percentage return on the
investment.
Compound yield - Account GM (investing in Moneyshare Fund):
Calculated like simple yield, except that, when annualized, the
income is assumed to be reinvested. Compounding of reinvested
returns increases the yield as compared to a simple yield.
Yield - For accounts investing in income funds: Net investment
income (income less expenses) per accumulation unit during a given
30-day period is divided by the value of the unit on the last day
of the period. The result is converted to an annual percentage.
Average annual total return: Expressed as an average annual
compounded rate of return of a hypothetical investment over a
period of one, five and 10 years (or up to the life of the account
if it is less than 10 years old). This figure reflects deduction
of all applicable charges, including the contract administrative
charge, mortality and expense risk fee and surrender charge,
assuming a surrender at the end of the illustrated period.
Optional total return quotations may be made that do not reflect a
surrender charge deduction (assuming no surrender).
Aggregate total return: Represents the cumulative change in the
value of an investment over a specified period of time (reflecting
change in a subaccount's accumulation unit value). The calculation
assumes reinvestment of investment earnings and reflects the
deduction of all applicable charges, including the contract
administrative charge, mortality and expense risk fee and surrender
charge, assuming a surrender at the end of the illustrated period.
Optional total return quotations may be made that do not reflect a
surrender charge deduction (assuming no surrender). Aggregate
total return may be shown by means of schedules, charts or graphs.
Performance information should be considered in light of the
investment objectives and policies, characteristics and quality of
the fund in which the subaccount invests, and the market conditions
during the given time period. Such information is not intended to
indicate future performance. Because advertised yields and total
return figures include all charges attributable to the annuity,
which has the effect of decreasing advertised performance,
subaccount performance should not be compared to that of mutual
funds that sell their shares directly to the public. (See the SAI
for a further description of methods used to determine yield and
total return for the subaccounts.)
If you would like additional information about actual performance,
contact your financial advisor.
<PAGE>
PAGE 12
The variable account
Purchase payments can be allocated to any or all of the subaccounts
of the variable account that invest in shares of the following
funds:
Subaccount
IDS Life Aggressive Growth Fund GA
IDS Life International Equity Fund GI
IDS Life Capital Resource Fund GC
IDS Life Managed Fund GD
IDS Life Special Income Fund GS
IDS Life Moneyshare Fund GM
IDS Life Growth Dimensions Fund GG
IDS Life Global Yield Fund GY
IDS Life Income Advantage Fund GV
AIM V.I. Growth and Income Fund GW
PCM New Opportunities Fund GN
TCI Value GP
Templeton Developing Markets Fund GK
Warburg Pincus Trust/Small Company Growth Portfolio GT
Each variable subaccount meets the definition of a separate account
under federal securities laws. Income, capital gains and capital
losses of each subaccount are credited or charged to that
subaccount alone. No variable subaccount will be charged with
liabilities of any other account or of our general business. All
obligations arising under the contracts are general obligations of
IDS Life of New York.
The variable account was established under New York law on April
17, 1996 and is registered as a unit investment trust under the
Investment Company Act of 1940 (the 1940 Act). This registration
does not involve any supervision of our management or investment
practices and policies by the SEC.
The funds
IDS Life Aggressive Growth Fund
Objective: capital appreciation. Invests primarily in common stock
of small-and medium-size companies. The fund also may invest in
warrants or debt securities or in large, well-established companies
when the portfolio manager believes such investments offer the best
opportunity for capital appreciation.
IDS Life International Equity Fund
Objective: capital appreciation. Invests primarily in common stock
of foreign issuers and foreign securities convertible into common
stock. The fund also may invest in certain international bonds if
the portfolio manager believes they have a greater potential for
capital appreciation than equities.
IDS Life Capital Resource Fund
Objective: capital appreciation. Invests primarily in U.S. common
stocks and other securities convertible into common stock,
diversified over many different companies in a variety of
industries.<PAGE>
PAGE 13
IDS Life Managed Fund
Objective: maximum total investment return. Invests primarily in
U.S. common stocks, securities convertible into common stock,
warrants, fixed income securities (primarily high-quality corporate
bonds) and money-market instruments. The fund invests in many
different companies in a variety of industries.
IDS Life Special Income Fund
Objective: to provide a high level of current income while
conserving the value of the investment for the longest time period.
Invests primarily in high-quality, lower-risk corporate bonds
issued by many different companies in a variety of industries, and
in government bonds.
IDS Life Moneyshare Fund
Objective: maximum current income consistent with liquidity and
conservation of capital. Invests in high-quality money market
securities with remaining maturities of 13 months or less. The
fund also will maintain a dollar-weighted average portfolio
maturity not exceeding 90 days. The fund attempts to maintain a
constant net asset value of $1 per share.
IDS Life Growth Dimensions Fund
Objective: long-term growth of capital. Invests primarily in
common stocks of U.S. and foreign companies showing potential for
significant growth.
IDS Life Global Yield Fund
Objective: high total return through income and growth of capital.
Invests primarily in a non-diversified portfolio of debt securities
of U.S. and foreign issuers.
IDS Life Income Advantage Fund
Objective: high current income, with capital growth as a secondary
objective. Invests primarily in long-term, high-yielding, high-
risk debt securities below investment grade issued by U.S. and
foreign corporations.
AIM V.I. Growth and Income Fund
Objective: to seek growth of capital, with current income as a
secondary objective. The fund seeks to achieve its objective by
investing primarily in dividend-paying common stocks which have
prospects for both growth of capital and dividend income.
PCM New Opportunities Fund
Objective: long-term capital appreciation. Invests principally in
common stocks of companies in sectors of the economy that
management believes possess above-average, long-term growth
potential.
TCI Value
Objective: long-term capital growth, with income as a secondary
objective. Invests primarily in securities that management
believes to be undervalued at the time of purchase.
<PAGE>
PAGE 14
Templeton Developing Markets Fund
Objective: long-term capital appreciation. Invests primarily in
equity securities of issuers in countries having developing
markets.
Warburg Pincus Trust/Small Company Growth Portfolio
Objective: capital growth. Invests primarily in equity securities
of small-sized domestic companies.
All funds are available to serve as the underlying investment for
variable annuities, and some funds are available to serve as the
underlying investment for variable annuities, variable life
insurance contracts and qualified plans. It is conceivable that in
the future it may be disadvantageous for variable annuity separate
accounts, variable life insurance separate accounts and/or
qualified plans to invest in the available funds simultaneously.
Although IDS Life of New York and the funds do not currently
foresee any such disadvantages, the boards of directors or trustees
of the appropriate funds will monitor events in order to identify
any material conflicts between such contract owners, policy owners
and qualified plans to determine what action, if any, should be
taken in response to a conflict. If a board were to conclude that
separate funds should be established for variable annuity, variable
life insurance and qualified plan separate accounts, the variable
annuity contract holders would not bear any expenses associated
with establishing separate funds.
The Internal Revenue Service (IRS) has issued final regulations
relating to the diversification requirements under Section 817(h)
of the Code. Each mutual fund intends to comply with these
requirements.
The U.S. Treasury and the IRS have indicated they may provide
additional guidance concerning how many variable subaccounts may be
offered and how many exchanges among variable subaccounts may be
allowed before the owner is considered to have investment control
and thus is currently taxed on income earned within variable
subaccount assets. We do not know at this time what the additional
guidance will be or when action will be taken. We reserve the
right to modify the contract, as necessary, to ensure that the
owner will not be subject to current taxation as the owner of the
variable subaccount assets.
We intend to comply with all federal tax laws to ensure that the
contract continues to qualify as an annuity for federal income tax
purposes. We reserve the right to modify the contract as necessary
to comply with any new tax laws.
The investment managers for the funds are as follows:
o IDS Life Funds - IDS Life, IDS Tower 10, Minneapolis, MN 55440;
American Express Financial Corporation is the investment
advisor.
o AIM V.I. Growth and Income Fund - A I M Advisors, Inc., 11
Greenway Plaza, Suite 1919, Houston, TX 77046-1173;
<PAGE>
PAGE 15
o PCM New Opportunities Fund - Putnam Investment Management, Inc.,
One Post Office Square, Boston, MA 02109;
o TCI Value - Investors Research Corporation, Twentieth Century
Tower, 4500 Main Street, Kansas City, MO 64111;
o Templeton Developing Markets Fund - Templeton Asset Management
Ltd., Hong Kong Branch, Two Exchange Square, Hong Kong;
o Warburg Pincus Trust/Small Company Growth Portfolio - Warburg,
Pincus Counsellors, Inc., 466 Lexington Avenue, New York, NY
10017-3147.
The investment managers cannot guarantee that the funds will meet
their investment objectives. Please read the prospectuses for the
funds for complete information on investment risks, deductions,
expenses and other facts you should know before investing. These
prospectuses are available by contacting IDS Life of New York at
the address or telephone number on the front of this prospectus, or
from your financial advisor.
The fixed account
Purchase payments can also be allocated to the fixed account. The
cash value of the fixed account increases as interest is credited
to the account. Purchase payments and transfers to the fixed
account become part of the general account of IDS Life of New York,
the company's main portfolio of investments. Interest is credited
daily and compounded annually. We may change the interest rates
from time to time.
Because of exemptive and exclusionary provisions, interests in the
fixed account have not been registered under the Securities Act of
1933 (1933 Act), nor is the fixed account registered as an
investment company under the 1940 Act. Accordingly, neither the
fixed account nor any interests in it are generally subject to the
provisions of the 1933 or 1940 Acts, and we have been advised that
the staff of the SEC has not reviewed the disclosures in this
prospectus that relate to the fixed account. Disclosures regarding
the fixed account, however, may be subject to certain generally
applicable provisions of the federal securities laws relating to
the accuracy and completeness of statements made in prospectuses.
Buying your annuity
Your financial advisor will help you prepare and submit your
application, and send it along with your initial purchase payment
to our Albany office. As the owner, you have all rights and
may receive all benefits under the contract. The annuity cannot be
owned in joint tenancy, except in spousal situations. You cannot
buy an annuity or be an annuitant if you are 91 or older.
When you apply, you can select:
o the account(s) in which you want to invest;
o how you want to make purchase payments; and
o a beneficiary.<PAGE>
PAGE 16
The contract provides for allocation of purchase payments to the
subaccounts of the variable account and/or to the fixed account in
even 1% increments.
If your application is complete, we will process it and apply your
purchase payment to your account(s) within two days after we
receive it. If your application is accepted, we will send you a
contract. If we cannot accept your application within five days,
we will decline it and return your payment. We will credit
additional purchase payments to your account(s) at the next close
of business.
The retirement date
Upon processing your application we will establish the retirement
date to the maximum age or date as specified below. You can also
select a date within the maximum limits. This date can be aligned
with your actual retirement from a job, or it can be a different
future date, depending on your needs and goals and on certain
restrictions. You can also change the date, provided you send us
written instructions at least 30 days before annuity payouts begin.
For nonqualified annuities, the retirement date must be:
o no earlier than the 60th day after the contract's effective
date; and
o no later than the annuitant's 90th birthday or before the 10th
contract anniversary, if purchased after age 75.
For qualified annuities, to avoid IRS penalty taxes, the retirement
date generally must be:
o on or after the annuitant reaches age 59 1/2; and
o by April 1 of the year following the calendar year when the
annuitant reaches age 70 1/2.
If you are taking the minimum IRA or TSA distributions as required
by the Code from another tax-qualified investment, or in the form
of partial surrenders from this annuity, annuity payouts can start
as late as the annuitant's 90th birthday.
Beneficiary
If death benefits become payable before the retirement date, your
named beneficiary will receive all or part of the contract value.
If there is no named beneficiary, then you or your estate will be
the beneficiary. (See "Benefits in case of death" for more about
beneficiaries.)
Minimum purchase payment
If single payment:
Nonqualified: $2,000
Qualified: $1,000
o Minimum additional purchase payment: $50<PAGE>
PAGE 17
If installment payments:
o Minimum installment payment(s): $50 monthly; $23.08 biweekly
(scheduled payment plan billing)
Installments must total at least $600 in the first year.*
*If you make no purchase payments for 36 months, and your previous
payments total $600 or less, we have the right to give you 30 days'
written notice and pay you the total value of your contract in a
lump sum.
Maximum first-year payment(s):
This maximum is based on your age or age of the annuitant (whomever
is older) on the effective date of the contract.
Up to age 75 $1 million
76 to 85 $500,000
86 to 90 $50,000
o Maximum payment for each subsequent year**: $100,000 Up to age 85
$ 50,000 Ages 86-90
**These limits apply in total to all IDS Life of New York annuities
you own. We reserve the right to increase maximum limits. For
qualified annuities the qualified plan's limits on annual
contributions also apply.
How to make purchase payments
1 By letter
Send your check along with your name and account number to:
Regular mail:
IDS Life Insurance Company of New York
Box 5144
Albany, NY 12205
Express mail:
IDS Life Insurance Company of New York
20 Madison Ave. Extension
Albany, NY 12203
2 By scheduled payment plan
Your financial advisor can help you set up:
o an automatic payroll deduction, salary reduction or other group
billing arrangement; or
o a bank authorization.
<PAGE>
PAGE 18
Charges
Contract administrative charge
This fee is for establishing and maintaining your records. We
deduct $30 from the contract value on your contract anniversary.
This $30 charge is waived if your contract value, or total purchase
payments less any payments surrendered, equals or exceeds $25,000
on your contract anniversary.
If you surrender your contract, the charge will be deducted at the
time of surrender regardless of the contract value or purchase
payments made. The charge cannot be increased and does not apply
after annuity payouts begin.
Mortality and expense risk fee
This fee is to cover the mortality risk and expense risk and is
applied daily to the variable subaccounts and reflected in the unit
values of the subaccounts. The subaccounts pay this fee at the
time that dividends are distributed from the funds in which they
invest. Annually the fee totals 1.25% of the subaccounts' average
daily net assets. Approximately two-thirds of this amount is for
our assumption of mortality risk, and one-third is for our
assumption of expense risk. This fee does not apply to the fixed
account.
Mortality risk arises because of our guarantee to pay a death
benefit and our guarantee to make annuity payouts according to the
terms of the contract, no matter how long a specific annuitant
lives and no matter how long the entire group of IDS Life of New
York annuitants live. If, as a group, IDS Life of New York
annuitants outlive the life expectancy we have assumed in our
actuarial tables, then we must take money from our general assets
to meet our obligations. If, as a group, IDS Life of New York
annuitants do not live as long as expected, we could profit from
the mortality risk fee. Expense risk arises because the contract
administrative charge cannot be increased and may not cover our
expenses. Any deficit would have to be made up from our general
assets.
We do not plan to profit from the contract administrative charge.
However, we do hope to profit from the mortality and expense risk
fee. We may use any profits realized from this fee for any proper
corporate purpose, including, among others, payment of distribution
(selling) expenses. We do not expect that the surrender charge,
discussed in the following paragraphs, will cover sales and
distribution expenses.
Surrender charge
A surrender charge applies to all purchase payments surrendered in
the first eight contract years. The surrender amount you request
is determined by drawing from your total contract value in the
following order:
<PAGE>
PAGE 19
o First we surrender any contract earnings (contract value minus
all purchase payments received and not previously surrendered).
There is no surrender charge on contract earnings. Note:
Contract earnings are determined by looking at the entire
contract value, not the earnings of any particular variable
subaccount or the fixed account.
o If necessary, we surrender amounts representing purchase
payments not previously surrendered. The surrender charge rate
on these purchase payments is as follows:
Surrender charge as
percent of purchase
payments surrendered Contract year
7 1-3
6 4
5 5
4 6
3 7
2 8
0 After 8 years
The surrender charge is calculated so that the total amount
surrendered, minus any surrender charge, equals the amount you
request.
Waiver of surrender charges
There are no surrender charges for:
o contract earnings;
o minimum required distributions after you reach age 70 1/2; (for
qualified plans)
o contracts settled using an annuity payout plan; and
o death benefits.
Other information on charges: American Express Financial
Corporation makes certain custodial services available to some
custodial and trusteed pension and profit sharing plans and 401(k)
plans funded by IDS Life of New York annuities. Fees for these
services start at $30 per calendar year per participant. A
termination fee for owners under age 59 1/2 will be charged (fee
waived in case of death or disability).
Possible group reductions: In some cases (for example, an employer
making the annuity available to employees), lower sales and
administrative expenses may be incurred due to the size of the
group, the average contribution and the use of group enrollment
procedures. In such cases, we may be able to reduce or eliminate
the contract administrative and surrender charges. However, we
expect this to occur infrequently.
<PAGE>
PAGE 20
Valuing your investment
Here is how your accounts are valued:
Fixed account: The amounts allocated to the fixed account are
valued directly in dollars and equal the sum of your purchase
payments, plus interest earned, less any amounts surrendered or
transferred and any contract administrative charge assessed.
Variable subaccounts: Amounts allocated to the variable
subaccounts are converted into accumulation units. Each time you
make a purchase payment or transfer amounts into one of the
variable subaccounts, a certain number of accumulation units are
credited to your contract for that subaccount. Conversely, each
time you take a partial surrender, transfer amounts out of a
variable subaccount, or are assessed a contract administrative
charge, a certain number of accumulation units are subtracted from
your contract.
The accumulation units are the true measure of investment value in
each subaccount during the accumulation period. They are related
to, but not the same as, the net asset value of the underlying
fund. The dollar value of each accumulation unit can rise or fall
daily depending on the performance of the underlying mutual fund
and on certain fund expenses. Here is how unit values are
calculated:
Number of units
To calculate the number of accumulation units for a particular
subaccount, we divide your investment, by the current accumulation
unit value.
Accumulation unit value
The current accumulation unit value for each variable subaccount
equals the last value times the subaccount's current net investment
factor.
Net investment factor
o Determined each business day by adding the underlying mutual
fund's current net asset value per share, plus per share amount
of any current dividend or capital gain distribution; then
o dividing that sum by the previous net asset value per share; and
o subtracting the percentage factor representing the mortality and
expense risk fee from the result.
Because the net asset value of the underlying mutual fund may
fluctuate, the accumulation unit value may increase or decrease.
You bear this investment risk in a variable subaccount.
Factors that affect variable subaccount accumulation units
Accumulation units may change in two ways; in number and in value.
Here are the factors that influence those changes:
The number of accumulation units you own may fluctuate due to:
o additional purchase payments allocated to the variable
subaccount(s);<PAGE>
PAGE 21
o transfers into or out of the variable subaccount(s);
o partial surrenders;
o surrender charges; and/or
o contract administrative charges.
Accumulation unit values may fluctuate due to:
o changes in underlying mutual fund(s) net asset value;
o dividends distributed to the variable subaccount(s);
o capital gains or losses of underlying mutual funds;
o mutual fund operating expenses; and/or
o mortality and expense risk fees.
Making the most of your annuity
Automated dollar-cost averaging
You can use automated transfers to take advantage of dollar-cost
averaging (investing a fixed amount at regular intervals). For
example, you might have a set amount transferred monthly from a
relatively conservative variable subaccount to a more aggressive
one, or to several others.
This systematic approach can help you benefit from fluctuations in
accumulation unit values caused by fluctuations in the market
value(s) of the underlying mutual fund(s). Since you invest the
same amount each period, you automatically acquire more units when
the market value falls, fewer units when it rises. The potential
effect is to lower the average cost per unit. For specific
features contact your financial advisor.
How dollar-cost averaging works
Amount Accumulation Number of units
Month invested unit value purchased
Jan $100 $20 5.00
Feb 100 18 5.56
March 100 17 5.88
April 100 15 6.67
May 100 16 6.25
June 100 18 5.56
July 100 17 5.88
Aug 100 19 5.26
Sept 100 21 4.76
Oct 100 20 5.00
(footnotes to table) By investing an equal number of dollars each
month...
(arrow in table pointing to April) you automatically buy more units
when the per unit market price is low...
(arrow in table pointing to September) and fewer units when the per
unit market price is high.
You have paid an average price of only $17.91 per unit over the 10
months, while the average market price actually was $18.10.
<PAGE>
PAGE 22
Dollar-cost averaging does not guarantee that any variable
subaccount will gain in value, nor will it protect against a
decline in value if market prices fall. However, if you can
continue to invest regularly throughout changing market conditions,
it can be an effective strategy to help meet your long-term goals.
Transferring money between subaccounts
You may transfer money from any one subaccount, or the fixed
account, to another subaccount before the annuity payouts begin.
If we receive your request before the close of business, we will
process it that day. Requests received after the close of business
will be processed the next business day. There is no charge for
transfers. Before making a transfer, you should consider the risks
involved in switching investments.
Certain restrictions apply to transfers involving the fixed
account. We may suspend or modify transfer privileges at any time.
Excessive trading activity can disrupt mutual fund management
strategy and increase expenses, which are borne by all contract
owners participating in the fund regardless of their transfer
activity. We may apply modifications or restrictions in any manner
reasonably designed to prevent any use of the transfer right we
consider to be to the disadvantage of other contract owners.
Transfer policies
o Before annuity payouts begin, you may transfer contract values
between the variable subaccounts, or from the variable
subaccount(s) to the fixed account at any time. However, if you
have made a transfer from the fixed account to the variable
subaccount(s), you may not make a transfer (including automated
transfers) from any variable subaccount back to the fixed
account until the next contract anniversary.
o You may transfer contract values from the fixed account to the
variable subaccount(s) once a year during a 31-day transfer
period starting on each contract anniversary (except for
automated transfers, which can be set up at any time for
transfer periods of your choosing subject to certain minimums).
o If we receive your transfer request within 30 days before the
contract anniversary date, the transfer from the fixed account
to the variable subaccount(s) will be effective on the
anniversary.
o If we receive your request on or within 30 days after the
contract anniversary date, the transfer from the fixed account
to the variable subaccount(s) will be effective on the day we
receive it.
o We will not accept requests for transfers from the fixed account
at any other time.
o Once annuity payouts begin, no transfers may be made to or from
the fixed account, but transfers may be made once per contract
year among the variable subaccounts. During the annuity payout
period, you cannot be invested in more than five variable
subaccounts at any one time unless we agree otherwise.<PAGE>
PAGE 23
How to request a transfer or a surrender
1 By letter
Send your name, account number, Social Security Number or Taxpayer
Identification Number and signed request for a transfer or
surrender to:
Regular mail:
IDS Life Insurance Company of New York
P.O. Box 5144
Albany, NY 12205
Express mail:
IDS Life Insurance Company of New York
20 Madison Avenue Ext.
Albany, NY 12203
Minimum amount
Mail transfers: $250 or entire account balance
Mail surrenders: $250 or entire account balance
Maximum amount
Mail transfers: None (up to contract value)
Mail surrenders: None (up to contract value)
2 By automated transfers and automated partial surrenders
Your financial advisor can help you set up automated transfers
among your accounts or partial surrenders from the accounts. You
can start or stop this service by written request or other method
acceptable to IDS Life of New York. You must allow 30 days for IDS
Life of New York to change any instructions that are currently in
place.
o Automated transfers from the fixed account to any one of the
variable subaccount(s) may not exceed an amount that, if
continued, would deplete the fixed account within 12 months.
o Automated surrenders may be restricted by applicable law under
some contracts.
o You may not make additional purchase payments if automated
partial surrenders are in effect.
o Automated partial surrenders may result in IRS taxes and
penalties on all or part of the amount surrendered.
Minimum amount
Automated transfers or surrenders: $50
Maximum amount
Automated transfers or surrenders: None (except for automated
transfers from the fixed
account)
<PAGE>
PAGE 24
Surrendering your contract
As owner, you may surrender all or part of your contract at any
time before annuity payouts begin by sending a written request or
calling IDS Life of New York. For total surrenders we will compute
the value of your contract at the close of business after we
receive your request. We may ask you to return the contract. You
may have to pay surrender charges (see "Surrender charge") and IRS
taxes and penalties (see "Taxes"). No surrenders may be made after
annuity payouts begin.
Surrender policies
If you have a balance in more than one account and request a
partial surrender, we will withdraw money from all your accounts in
the same proportion as your value in each account correlates to
your total contract value, unless you request otherwise. The
minimum contract value after partial surrender is $600.
Receiving payment when you request a surrender
By regular or express mail:
o Payable to owner;
o Mailed to address of record;
o Special payee and/or addressee.
By wire:
o Request that payment be wired to your bank;
o Bank account must be in the same ownership as your contract;
o Pre-authorization required. For instructions, contact your
financial advisor.
Payment normally will be sent within seven days after receiving
your request. However, we may postpone the payment if:
-the surrender amount includes a purchase payment check that
has not cleared;
-the NYSE is closed, except for normal holiday and weekend
closings;
-trading on the NYSE is restricted, according to SEC rules;
-an emergency, as defined by SEC rules, makes it impractical
to sell securities or value the net assets of the accounts;
or
-the SEC permits us to delay payment for the protection of
security holders.
TSA-special surrender provisions
Participants in Tax-Sheltered Annuities: The Code imposes certain
restrictions on your right as owner to receive early distributions
from a TSA:<PAGE>
PAGE 25
o Distributions attributable to salary reduction contributions
made after Dec. 31, 1988, plus the earnings on them, or to
transfers or rollovers of such amounts from other contracts, may
be made from the TSA only if:
-you have attained age 59 1/2;
-you have become disabled as defined in the Code;
-you have separated from the service of the employer who
purchased the annuity; or
-the distribution is made to your beneficiary because of your
death.
o If you encounter a financial hardship (within the meaning of the
Code), you may receive a distribution of all contract values
attributable to salary reduction contributions made after Dec.
31, 1988, but not the earnings on them.
o Even though a distribution may be permitted under the above
rules, it still may be subject to IRS taxes and penalties. (See
"Taxes.")
o The above restrictions on the right to receive a distribution do
not affect the availability of the amount credited to the
contract as of Dec. 31, 1988. The restrictions do not apply to
transfers or exchanges of contract value within the annuity, or
to another registered variable annuity contract or investment
vehicle available through the employer.
o If the contract has a loan provision, the right to receive a
loan from your fixed account is described in detail in your
contract. You may borrow from the contract value allocated to
the fixed account.
o For certain types of contributions under a TSA contract to be
excluded from taxable income, the employer must comply with
certain nondiscrimination requirements. You should consult your
employer to determine whether the nondiscrimination rules apply
to you.
Changing ownership
You may change ownership of your nonqualified annuity at any time
by filing a change of ownership with us at our Albany office. The
change will become binding upon us when we receive and record it.
We will honor any change of ownership request believed to be
authentic and will use reasonable procedures to confirm that it is.
If these procedures are followed, we take no responsibility for the
validity of the change.
If you have a nonqualified annuity, you may lose your tax
advantages by transferring, assigning or pledging any part of it.
(See "Taxes.")
If you have a qualified annuity, you may not sell, assign,
transfer, discount or pledge your contract as collateral for a
loan, or as security for the performance of an obligation or for
any other purpose to any person except IDS Life of New York.
<PAGE>
PAGE 26
However, if the owner is a trust or custodian, or an employer
acting in a similar capacity, ownership of a contract may be
transferred to the annuitant.
Benefits in case of death
If you or the annuitant dies (or, for qualified annuities, if the
annuitant dies) before annuity payouts begin, we will pay the
beneficiary as follows:
If death occurs before the annuitant's 75th birthday, the
beneficiary receives the greatest of:
o the contract value;
o the contract value as of the most recent sixth contract
anniversary, minus any surrenders since that anniversary; or
o purchase payments, minus any surrenders.
If death occurs on or after the annuitant's 75th birthday, the
beneficiary receives the greater of:
o the contract value; or
o the contract value as of the most recent sixth contract
anniversary, minus any surrenders since that anniversary.
If death occurs on or after the annuitant's 75th birthday, the
beneficiary receives the contract value.
If your spouse is sole beneficiary under a nonqualified annuity and
you die before the retirement date, your spouse may keep the
annuity as owner. To do this your spouse must, within 60 days
after we receive proof of death, give us written instructions to
keep the contract in force.
Under a qualified annuity, if the annuitant dies before reaching
age 70 1/2 and before the retirement date, and the spouse is the
only beneficiary, the spouse may keep the annuity in force until
the date on which the annuitant would have reached age 70 1/2 or
any other date permitted by the Code. To do this, the spouse must
give us written instructions within 60 days after we receive proof
of death.
Payments: We will pay the beneficiary in a single sum unless you
have given us other written instructions, or the beneficiary may
receive payouts under any annuity payout plan available under this
contract if:
o the beneficiary asks us in writing within 60 days after we
receive proof of death;
o payouts begin no later than one year after death; and
o the payout period does not extend beyond the beneficiary's life
or life expectancy.
When paying the beneficiary, we will determine the contract's value
at the next close of business after our death claim requirements
are fulfilled. Interest, if any, will be paid from the date of
<PAGE>
PAGE 27
death at a rate no less than required by law. We will mail payment
to the beneficiary within seven days after our death claim
requirements are fulfilled. (See "Taxes.")
The annuity payout period
As owner of the contract, you have the right to decide how and to
whom annuity payouts will be made starting at the retirement date.
You may select one of the annuity payout plans outlined below, or
we will mutually agree on other payout arrangements. The amount
available for payouts under the plan you select is the contract
value on your retirement date. No surrender charges are deducted
under the payout plans listed below.
You also decide whether annuity payouts are to be made on a fixed
or variable basis, or a combination of fixed and variable. Amounts
of fixed and variable payouts depend on:
o the annuity payout plan you select;
o the annuitant's age and, in most cases, sex;
o the annuity table in the contract;
o the amounts you allocated to the account(s) at settlement.
In addition, for variable payouts only, amounts depend on the
investment performance of the subaccount(s) you select. These
payouts will vary from month to month because the performance of
the underlying mutual funds will fluctuate. (In the case of fixed
annuities, payouts remain the same from month to month.)
For information with respect to transfers between accounts after
annuity payouts begin, see "Transfer policies."
Annuity payout plans
You may choose any one of these annuity payout plans by giving us
written instructions at least 30 days before contract values are to
be used to purchase the payout plan.
o Plan A - Life annuity - no refund: Monthly payouts are made
until the annuitant's death. Payouts end with the last payout
before the annuitant's death; no further payouts will be made.
This means that if the annuitant dies after only one monthly payout
has been made, no more payouts will be made.
o Plan B - Life annuity with five, 10 or 15 years certain: Monthly
payouts are made for a guaranteed payout period of five, 10 or 15
years that the annuitant elects. This election will determine the
length of the payout period to the beneficiary if the annuitant
should die before the elected period has expired. The guaranteed
payout period is calculated from the retirement date. If the
annuitant outlives the elected guaranteed payout period, payouts
will continue until the annuitant's death.
o Plan C - Life annuity - installment refund: Monthly payouts are
made until the annuitant's death, with our guarantee that payouts
will continue for some period of time. Payouts will be made for at
<PAGE>
PAGE 28
least the number of months determined by dividing the amount
applied under this option by the first monthly payout, whether or
not the annuitant is living.
o Plan D - Joint and last survivor life annuity - no refund:
Monthly payouts are made to the annuitant and a joint annuitant
while both are living. If either annuitant dies, monthly payouts
continue at the full amount until the death of the surviving
annuitant. Payouts end with the death of the second annuitant.
o Plan E - Payouts for a specified period: Monthly payouts are
made for a specific payout period of 10 to 30 years chosen by the
annuitant. Payouts will be made only for the number of years
specified whether the annuitant is living or not. Depending on the
time period selected, it is foreseeable that an annuitant can
outlive the payout period selected. In addition, a 10% IRS penalty
tax could apply under this payout plan. (See "Taxes.")
Restrictions for some qualified plans: If you purchased a
qualified annuity, you must select a payout plan that provides for
payouts:
o over the life of the annuitant;
o over the joint lives of the annuitant and a designated
beneficiary;
o for a period not exceeding the life expectancy of the
annuitant; or
o for a period not exceeding the joint life expectancies
of the annuitant and a designated beneficiary.
If we do not receive instructions: You must give us written
instructions for the annuity payouts at least 30 days before the
annuitant's retirement date. If you do not, we will make payouts
under Plan B, with 120 monthly payouts guaranteed.
If monthly payouts would be less than $20: We will calculate the
amount of monthly payouts at the time the contract value is used to
purchase a payout plan. If the calculations show that monthly
payouts would be less than $20, we have the right to pay the
contract value to the owner in a lump sum.
Death after annuity payouts begin
If you or the annuitant dies after annuity payouts begin, any
amount payable to the beneficiary will be provided in the annuity
payout plan in effect.
Taxes
Generally, under current law, any increase in your contract value
is taxable to you only when you receive a payout or surrender.
(See detailed discussion below.) Any portion of the annuity
payouts and any surrenders you request that represent ordinary
income are normally taxable. You will receive a 1099 tax
information form for any year in which a taxable distribution was
made.
<PAGE>
PAGE 29
Annuity payouts under nonqualified annuities: A portion of each
payout will be ordinary income and subject to tax, and a portion of
each payout will be considered a return of part of your investment
and will not be taxed. All amounts received after your investment
in the annuity is fully recovered will be subject to tax.
Tax law requires that all nonqualified deferred annuity contracts
issued by the same company to the same owner during a calendar year
are to be taxed as a single, unified contract when distributions
are taken from any one of such contracts.
Annuity payouts under qualified annuities: Under a qualified
annuity, the entire payout generally will be includable as ordinary
income and subject to tax except to the extent that contributions
were made with after-tax dollars. If you or your employer invested
in your contract with pre-tax dollars as part of a qualified
retirement plan, such amounts are not considered to be part of your
investment in the contract and will be taxed when paid to you.
Surrenders: If you surrender part or all of your contract before
your annuity payouts begin, your surrender payment will be taxed to
the extent that the value of your contract immediately before the
surrender exceeds your investment. You also may have to pay a 10%
IRS penalty for surrenders before reaching age 59 1/2. For
qualified annuities, other penalties may apply if you surrender
your annuity before your plan specifies that you can receive
payouts.
Death benefits to beneficiaries: The death benefit under an
annuity is not tax-exempt. Any amount received by the beneficiary
that represents previously deferred earnings within the contract,
is taxable as ordinary income to the beneficiary in the year(s) he
or she receives the payment(s).
Annuities owned by corporations, partnerships or trusts: Any
annual increase in the value of annuities held by such entities
generally will be treated as ordinary income received during that
year. This provision is effective for purchase payments made after
Feb. 28, 1986. However, if the trust was set up for the benefit of
a natural person only, the income will continue to be tax-deferred.
Penalties: If you receive amounts from your contract before
reaching age 59 1/2, you may have to pay a 10% IRS penalty on the
amount includable in your ordinary income. However, this penalty
will not apply to any amount received by you or your beneficiary:
o because of your death;
o because you become disabled (as defined in the Code);
o if the distribution is part of a series of substantially equal
periodic payments, made at least annually, over your life or
life expectancy (or joint lives or life expectancies of you and
your beneficiary); or
o if it is allocable to an investment before Aug. 14, 1982 (except
for qualified annuities).
For a qualified annuity, other penalties or exceptions may apply if
you surrender your annuity before your plan specifies that payouts
can be made.<PAGE>
PAGE 30
Withholding, generally: If you receive all or part of the contract
value from an annuity, withholding may be imposed against the
taxable income portion of the payout. Any withholding that is done
represents a prepayment of your tax due for the year. You take
credit for such amounts on the annual tax return that you file.
If the payout is part of an annuity payout plan, the amount of
withholding generally is computed using payroll tables. You can
provide us with a statement of how many exemptions to use in
calculating the withholding. As long as you've provided us with a
valid Social Security Number or Taxpayer Identification Number, you
can elect not to have any withholding occur.
If the distribution is any other type of payment (such as a partial
or full surrender), withholding is computed using 10% of the
taxable portion. Similar to above, as long as you've provided us
with a valid Social Security Number or Taxpayer Identification
Number, you can elect not to have this withholding occur.
Some states also impose withholding requirements similar to the
federal withholding described above. If this should be the case,
any payment from which federal withholding is deducted may also
have state withholding deducted. The withholding requirements may
differ if payment is being made to a non-U.S. citizen or if the
payment is being delivered outside the United States.
Withholding from qualified annuities: If you receive directly all
or part of the contract value from a qualified annuity (except an
IRA), mandatory 20% income tax withholding generally will be
imposed at the time the payout is made. This mandatory withholding
is in place of the elective withholding discussed above. This
mandatory withholding will not be imposed if:
o instead of receiving the distribution check, you elect to have
the distribution rolled over directly to an IRA or another
eligible plan;
o the payout is one in a series of substantially equal periodic
payouts, made at least annually, over your life or life
expectancy (or the joint lives or life expectancies of you and
your designated beneficiary) or over a specified period of 10
years or more; or
o the payment is a minimum distribution required under the Code.
Payments made to a surviving spouse instead of being directly
rolled over to an IRA may also be subject to mandatory 20% income
tax withholding.
State withholding also may be imposed on taxable distributions.
Transfer of ownership of a nonqualified annuity: If you make such
a transfer without receiving adequate consideration, the transfer
is considered a gift, and also may be considered a surrender for
federal income tax purposes. If the gift is a currently taxable
event, the amount of deferred earnings at the time of the transfer
will be taxed to the original owner, who also may be subject to a
<PAGE>
PAGE 31
10% IRS penalty as discussed earlier. In this case, the new
owner's investment in the annuity will be the value of the annuity
at the time of the transfer.
Collateral assignment of a nonqualified annuity: If you
collaterally assign or pledge your contract, earnings on purchase
payments you made after Aug. 13, 1982 will be taxed to you like a
surrender.
Important: Our discussion of federal tax laws is based upon our
understanding of these laws as they are currently interpreted.
Federal tax laws or current interpretations of them may change.
For this reason and because tax consequences are complex and highly
individual and cannot always be anticipated, you should consult a
tax advisor if you have any questions about taxation of your
contract.
Tax qualification: The contract is intended to qualify as an
annuity for federal income tax purposes. To that end, the
provisions of the contract are to be interpreted to ensure or
maintain such tax qualification, notwithstanding any other
provisions of the contract. We reserve the right to amend the
contract to reflect any clarifications that may be needed or are
appropriate to maintain such qualification or to conform the
contract to any applicable changes in the tax qualification
requirements. We will send you a copy of any such amendments.
Voting rights
As a contract owner with investments in the variable subaccount(s)
you may vote on important mutual fund policies until annuity
payouts begin. Once they begin, the person receiving them has
voting rights. We will vote fund shares according to the
instructions of the person with voting rights.
Before annuity payouts begin, the number of votes is determined by
applying the percentage interest in each variable subaccount to the
total number of votes allowed to the subaccount.
After annuity payouts begin, the number of votes is equal to:
o the reserve held in each subaccount for the contract,
divided by
o the net asset value of one share of the applicable underlying
mutual fund.
As we make annuity payouts, the reserve for the annuity decreases;
therefore, the number of votes also will decrease.
We calculate votes separately for each subaccount not more than 60
days before a shareholders' meeting. Notice of these meetings,
proxy materials and a statement of the number of votes to which the
voter is entitled, will be sent.
<PAGE>
PAGE 32
We will vote shares for which we have not received instructions in
the same proportion as the votes for which we have received
instructions. We also will vote the shares for which we have
voting rights in the same proportion as the votes for which we have
received instructions.
Substitution of investments
If shares of any fund should not be available for purchase by the
appropriate variable subaccount or if, in the judgment of IDS Life
of New York's Management, further investment in such shares is no
longer appropriate in view of the purposes of the subaccount,
investment in the subaccount may be discontinued or another
registered open-end management investment company may be
substituted for fund shares held in the subaccounts if IDS Life of
New York believes it would be in the best interest of persons
having voting rights under the contract. The variable account may
be operated as a management company under the 1940 Act or it may be
deregistered under this Act if the registration is no longer
required. In the event of any such substitution or change, IDS
Life of New York, without the consent or approval of the owners,
may amend the contract and take whatever action is necessary and
appropriate. However, no such substitution or change will be made
without the necessary approval of the SEC and state insurance
departments. IDS Life of New York will notify owners of any
substitution or change.
Distribution of the contracts
American Express Financial Advisors Inc., a registered
broker/dealer and an affiliate of IDS Life of New York, is the sole
distributor of the contract. IDS Life of New York pays total
commissions of up to 7.0% of the total purchase payments received
on the contracts. A portion of this total commission is paid to
district managers and field vice presidents of the selling
representative.
About IDS Life of New York
The Flexible Portfolio Annuity is issued by IDS Life of New York.
IDS Life is a wholly owned subsidiary of IDS Life, which is a
wholly owned subsidiary of American Express Financial Corporation.
American Express Financial Corporation is a wholly owned subsidiary
of the American Express Company, a financial services company
headquartered in New York City.
IDS Life of New York is a stock life insurance company organized in
1972 under the laws of the State of New York and located at 20
Madison Ave. Ext., Albany, NY. IDS Life of New York is licensed in
New York and North Dakota and conducts a conventional life
insurance business in the State of New York.
American Express Financial Advisors Inc. is the principal
underwriter for the Accounts. Its corporate office is IDS Tower
10, Minneapolis, MN 55440-0010. American Express Financial
Advisors Inc. is a wholly owned subsidiary of American Express
Financial Corporation.
<PAGE>
PAGE 33
American Express Financial Advisors Inc. offers mutual funds,
investment certificates and a broad range of financial management
services. IDS Life of New York offers insurance and annuities.
American Express Financial Advisors Inc. serves individuals and
businesses through its nationwide network of more than 175 offices
and more than 7,800 financial advisors.
Other subsidiaries provide investment management and related
services for pension, profit-sharing, employee savings and
endowment funds of businesses and institutions.
Regular and special reports
Services
To help you track and evaluate the performance of your annuity, we
provide:
Quarterly statements showing the value of your investment.
Annual reports containing required information on the annuity and
its underlying investments.
A personalized annuity progress report detailing the cumulative
return since the contract was purchased and the average annual rate
of return on your investments. This report, which is unique in the
industry, is available upon request from your financial advisor.
<PAGE>
PAGE 34
Table of contents of the Statement of Additional Information
IDS Life of New York Preferred Retirement
Account.......................................
Performance information.......................
Calculating annuity payouts...................
Rating agencies...............................
Principal underwriter.........................
Independent auditors..........................
Mortality and expense risk fee................
Prospectus....................................
Financial statements -
IDS Life Insurance Company of New York
___________________________________________________________________
Please check the appropriate box to receive a copy of the Statement
of Additional Information for:
_____ IDS Life of New York Flexible Portfolio Annuity
_____ IDS Life Retirement Annuity Mutual Funds
_____ AIM Variable Insurance Funds, Inc.
_____ Putnam Capital Manager Trust
_____ TCI Portfolios, Inc.
_____ Templeton Variable Products Series Fund
_____ Warburg Pincus Trust/Small Company Growth Portfolio
Please return this request to:
IDS Life of New York Annuity Service
IDS Life Insurance Company of New York
Box 5144
Albany, NY 12205
Your name _______________________________________________________
Address _________________________________________________________
City ______________________ State ______________ Zip ___________
<PAGE>
PAGE 35
STATEMENT OF ADDITIONAL INFORMATION
for
IDS LIFE OF NEW YORK FLEXIBLE PORTFOLIO ANNUITY
IDS Life of New York Flexible Portfolio Annuity Account
Sept. 5, 1996
IDS Life of New York Flexible Portfolio Annuity Account is a
separate account established and maintained by IDS Life Insurance
Company of New York (IDS Life of New York).
This Statement of Additional Information, dated Sept. 5, 1996, is
not a prospectus. It should be read together with the Account's
prospectus, dated Sept. 5, 1996, which may be obtained from your
financial advisor, or by writing or calling IDS Life of New York at
the address or telephone number below.
IDS Life Insurance Company of New York
20 Madison Avenue Extension
Albany, NY 12203
518-869-8613
<PAGE>
PAGE 36
TABLE OF CONTENTS
IDS Life of New York Preferred Retirement Account.............p.
Performance Information.......................................p.
Calculating Annuity Payouts...................................p.
Rating Agencies...............................................p.
Principal Underwriter.........................................p.
Independent Auditors..........................................p.
Mortality and Expense Risk Fee................................p.
Prospectus....................................................p.
Financial Statements
IDS Life Insurance Company of New York..............p.
<PAGE>
PAGE 37
IDS LIFE OF NEW YORK PREFERRED RETIREMENT ACCOUNT
The Flexible Portfolio Annuity may be used to fund the IDS Life of
New York Preferred Retirement Account (PRA) as a way to build tax-
deferred retirement income. The PRA can be used to supplement, or
as an alternative to, a non-deductible IRA or other retirement
plan.
The advantages of the IDS Life of New York Preferred Retirement
Account over a non-deductible IRA are shown below:
IDS Life of New York Non-deductible IRA
Preferred Retirement
Account
_____________________________________________________________
Maximum $50,000 to $1 million $2,000 per year
amount you initially, then $50,000 (only $250 for
can to $100,000 per year non-working spouse)
contribute depending on your
age. (spouse can have
own plan)
______________________________________________________________
Highest age The later of age 90 70 1/2 years old
you can or the 10th contract
contribute anniversary
______________________________________________________________
Types of Any type: wages, Generally limited
income you investment income, to income from
can gifts, inheritance, employment
contribute etc.
______________________________________________________________
Records None required, but You must keep all
you must IDS Life of New York records yourself
keep furnishes you regular
reports for your files
______________________________________________________________
Reports you None You must report all
must file contributions and
with the withdrawals each
IRS year
______________________________________________________________
Age at which The later of age 90 70 1/2 years old
you must or the 10th contract
begin anniversary
withdrawals
______________________________________________________________
PERFORMANCE INFORMATION
The following performance figures are calculated on the basis of
historical performance of the funds. The performance figures
relating to these funds assume that the contract was in existence
prior to Sept. 5, which it was not. Performance figures are
calculated on the basis of historical performance of the funds.
Before the subaccounts began investing in these funds, the figures
<PAGE>
PAGE 38
show what the subaccount performance would have been if these
subaccounts had existed during the illustrated periods. Once these
subaccounts began investing in these funds, actual values are used
for the calculations.
Calculation of yield for Subaccount GM (Investing in IDS Life
Moneyshare Fund)
Subaccount GM, which invests in IDS Life Moneyshare Fund, Inc.,
calculates an annualized simple yield and a compound yield based on
a seven-day period.
The simple yield is calculated by determining the net change in the
value of a hypothetical subaccount having the balance of one
accumulation unit at the beginning of the seven-day period. (The
net change does not include capital change, but does include a pro
rata share of the annual contract charges, including the annual
contract administrative charge and the mortality and expense risk
fee.) The net change in the subaccount value is divided by the
value of the subaccount at the beginning of the period to obtain
the return for the period. That return is then multiplied by 365/7
to obtain an annualized figure. The value of the hypothetical
subaccount includes the amount of any declared dividends, the value
of any shares purchased with any dividend paid during the period
and any dividends declared for such shares. The variable
subaccount's yield does not include any realized or unrealized
gains or losses, nor does it include the effect of any applicable
surrender charge.
The subaccount calculates its compound yield according to the
following formula:
365/7
Compound Yield = [(return for seven-day period +1) ] - 1
Based on the historical performance of the Fund on Dec. 31, 1995,
the subaccount's annualized simple yield would have been 4.04% and
its compound yield would have been 4.13% had the subaccount been in
existence.
The rate of return, or yield, on the subaccount's accumulation unit
may fluctuate daily and does not provide a basis for determining
future yields. Investors must consider, when comparing an
investment in subaccount GM with fixed annuities, that fixed
annuities often provide an agreed-to or guaranteed fixed yield for
a stated period of time, whereas the variable subaccount's yield
fluctuates. In comparing the yield of subaccount GM to a money
market fund, you should consider the different services that the
annuity provides.
Calculation of yield for Subaccounts (Investing in income funds)
Quotations of yield will be based on all investment income earned
during a particular 30-day period, less expenses accrued during the
period (net investment income) and will be computed by dividing net
<PAGE>
PAGE 39
investment income per accumulation unit by the value of an
accumulation unit on the last day of the period, according to the
following formula:
YIELD = 2[(a-b + 1)6 - 1]
cd
where: a = dividends and investment income earned during the
period.
b = expenses accrued for the period (net of
reimbursements).
c = the average daily number of accumulation units
outstanding during the period that were entitled to
receive dividends.
d = the maximum offering price per accumulation unit on
the last day of the period.
Yield on the subaccount is earned from the increase in the net
asset value of shares of the fund in which the subaccount invests
and from dividends declared and paid by the fund, which are
automatically invested in shares of the fund.
Based on the historical performance of the Fund, on Dec. 31, 1995,
the subaccount's annualized yield would have been 8.45% had this
subaccount been in existence.
Calculation of average annual total return
Quotations of average annual total return for a subaccount will be
expressed in terms of the average annual compounded rate of return
of a hypothetical investment in the annuity contract over a period
of one, five and 10 years (or, if less, up to the life of the
account), calculated according to the following formula:
P(1+T)n = ERV
where: P = a hypothetical initial payment of $1,000.
T = average annual total return.
n = number of years.
ERV = Ending Redeemable Value of a hypothetical $1,000
payment made at the beginning of the one, five,
or ten year (or other) period at the end of the
one, five, or ten year (or other) period (or
fractional portion thereof).
The following performance figures are calculated on the basis of
historical performance of the funds. These figures show what the
performance of the subaccounts of the variable account would have
been if these subaccounts had existed during the illustrated
periods.
<PAGE>
PAGE 40
Average Annual Total Return For Period Ended: Dec. 31, 1995
Average Annual Total Return with Surrender
<TABLE>
<CAPTION>
Since
Subaccount investing in: 1 Year 5 Year 10 Year Inception
<S> <C> <C> <C> <C>
IDS Life
Aggressive Growth Fund (1/92) 22.91% --% --% 8.85%
Capital Resource Fund (10/81) 19.07 13.21 12.26 --
International Equity Fund (1/92) 3.01 -- -- 7.11
Managed Fund (4/86) 15.46 10.99 -- 9.99
Moneyshare Fund (10/81) -2.97 1.86 4.41 --
Special Income Fund (10/81) 13.62 9.69 8.78 --
AIM
AIM V.I. Growth and Income Fund (5/94) 25.45 -- -- 10.79
PCM
New Opportunities Fund (5/94) 36.45 -- -- 22.67
Warburg Pincus Trust
Small Company Growth Portfolio (6/95) -- -- -- 47.15
Average Annual Total Return without Surrender
Since
Subaccount investing in: 1 Year 5 Year 10 Year Inception
IDS Life
Aggressive Growth Fund (1/92) 29.91% --% --% 10.01%
Capital Resource Fund (10/81) 26.07 13.81 12.26 --
International Equity Fund (1/92) 10.01 -- -- 8.32
Managed Fund (4/86) 22.46 11.64 -- 9.99
Moneyshare Fund (10/81) 4.03 2.78 4.41 --
Special Income Fund (10/81) 20.62 10.37 8.78 --
AIM
AIM V.I. Growth and Income Fund (5/94) 32.45 -- -- 17.79
PCM
New Opportunities Fund (5/94) 43.56 -- -- 29.67
Warburg Pincus Trust
Small Company Growth Portfolio (6/95) -- -- -- 54.15
</TABLE>
Aggregate Total Return
Aggregate total return represents the cumulative change in the
value of an investment over a specified period of time (reflecting
change in a subaccount's accumulation unit value) and is computed
by the following formula:
ERV - P
P
where: P = a hypothetical initial payment of $1,000.
ERV = Ending Redeemable Value of a hypothetical $1,000
payment made at the beginning of the one, five,
or ten year (or other) period at the end of the
one, five, or ten year (or other) period (or
fractional portion thereof).
The Securities and Exchange Commission requires that an assumption
be made that the contract owner surrenders the entire contract at
the end of the one, five and ten year periods (or, if less, up to
the life of the account) for which performance is required to be
calculated. In addition, performance figures may be shown without
the deduction of a surrender charge. Total return figures reflect
the deduction of the contract administrative charge and mortality
and expense risk fee.
<PAGE>
PAGE 41
Performance of the subaccounts may be quoted or compared to
rankings, yields, or returns as published or prepared by
independent rating or statistical services or publishers or
publications such as The Bank Rate Monitor National Index,
Barron's, Business Week, Donoghue's Money Market Fund Report,
Financial Services Week, Financial Times, Financial World, Forbes,
Fortune, Global Investor, Institutional Investor, Investor's Daily,
Kiplinger's Personal Finance, Lipper Analytical Services, Money,
Mutual Fund Forecaster, Newsweek, The New York Times, Personal
Investor, Stanger Report, Sylvia Porter's Personal Finance, USA
Today, U.S. News and World Report, The Wall Street Journal and
Wiesenberger Investment Companies Service.
CALCULATING ANNUITY PAYOUTS
The Variable Account
The following calculations are done separately for each of the
subaccounts of the variable account. The separate monthly payouts,
added together, make up your total variable annuity payout.
Initial Payout: To compute your first monthly payment, we:
o determine the dollar value of your annuity as of the valuation
date seven days before the retirement date.
o apply the result to the annuity table contained in the contract
or another table at least as favorable. The annuity table shows
the amount of the first monthly payment for each $1,000 of value
which depends on factors built into the table, as described below.
Annuity Units: The value of your subaccount is then converted to
annuity units. To compute the number credited to you, we divide
the first monthly payment by the annuity unit value (see below) on
the valuation date on (or next day preceding) the seventh calendar
day before the retirement date. The number of units in your
subaccount is fixed. The value of the units fluctuates with the
performance of the underlying mutual fund.
Subsequent Payouts: To compute later payouts, we multiply:
o the annuity unit value on the valuation date on or immediately
preceding the seventh calendar day before the payout is due; by
o the fixed number of annuity units credited to you.
Annuity Table: The table shows the amount of the first monthly
payment for each $1,000 of contract value according to the age and,
when applicable, the sex of the annuitant. (Where required by law,
we will use a unisex table of settlement rates.) The table assumes
that the contract value is invested at the beginning of the annuity
payout period and earns a 5% rate of return, which is reinvested
and helps to support future payouts.
Substitution of 3.5% Table: If you ask us at least 30 days before
the retirement date, we will substitute an annuity table based on
an assumed 3.5% investment rate for the 5% table in the contract.
The assumed investment rate affects both the amount of the first
payout and the extent to which subsequent payouts increase or
decrease. Using the 5% table results in a higher initial payment,
<PAGE>
PAGE 42
but later payouts will increase more slowly when annuity unit
values are rising and decrease more rapidly when they are
declining.
Annuity Unit Values: This value was originally set at $1 for each
variable subaccount. To calculate later values we multiply the
last annuity value by the product of:
o the net investment factor; and
o the neutralizing factor. The purpose of the neutralizing factor
is to offset the effect of the assumed investment rate built into
the annuity table. With an assumed investment rate of 5%, the
neutralizing factor is 0.999866 for a one day valuation period.
Net Investment Factor:
o Determined each business day by adding the underlying mutual
fund's current net asset value per share plus per share amount of
any current dividend or capital gain distribution; then
o dividing that sum by the previous net asset value per share; and
o subtracting the percentage factor representing the mortality and
expense risk fee from the result.
Because the net asset value of the underlying mutual fund may
fluctuate, the net investment factor may be greater or less than
one, and the accumulation unit value may increase or decrease. You
bear this investment risk in a variable subaccount.
The Fixed Account
Your fixed annuity payout amounts are guaranteed. Once calculated,
your payout will remain the same and never change. To calculate
your annuity payouts we:
o take the value of your fixed account at the retirement date or
the date you have selected to begin receiving your annuity payouts;
then
o using an annuity table we apply the value according to the
annuity payout plan you select; and
o the annuity payout table we use will be the one in effect at the
time you choose to begin your annuity payouts. The table will be
equal to or greater than the table in your contract.
RATING AGENCIES
The following chart reflects the ratings given to IDS Life of New
York by independent rating agencies. These agencies evaluate the
financial soundness and claims-paying ability of insurance
companies based on a number of different factors. This information
does not relate to the management or performance of the variable
subaccounts of the annuity. This information relates only to the
fixed account and reflects IDS Life of New York's ability to make
annuity payouts and to pay death benefits and other distributions
from the annuity.
<PAGE>
PAGE 43
Rating agency Rating
A.M. Best A+
(Superior)
Duff & Phelps AAA
Moody's Aa2
PRINCIPAL UNDERWRITER
The principal underwriter for the variable account is American
Express Financial Advisors Inc., which offers the variable
annuities on a continuous basis.
INDEPENDENT AUDITORS
The financial statements of IDS Life Insurance Company of New York
as of Dec. 31, 1995 and 1994, and for each of the three years in
the period ended Dec. 31, 1995, appearing in this prospectus and
Statement of Additional Information have been audited by Ernst &
Young LLP, independent auditors, as stated in their report
appearing herein.
MORTALITY AND EXPENSE RISK FEE
IDS Life of New York has represented to the SEC that:
IDS Life of New York has reviewed publicly available information
regarding products of other companies. Based upon this review, IDS
Life of New York has concluded that the mortality and expense risk
fee is within the range of charges determined by industry practice.
IDS Life of New York will maintain at its administrative office,
and make available on request of the SEC or its staff, a memorandum
setting forth in detail the variable products analyzed and the
methodology, and results of, its comparative review.
IDS Life of New York has concluded that there is a reasonable
likelihood that the proposed distribution financing arrangements
made with respect to the contracts will benefit the variable
account and investors in the contracts. The basis for such
conclusion is set forth in a memorandum which will be made
available to the SEC or its staff on request.
PROSPECTUS
The prospectus dated Sept. 5, 1996, is hereby incorporated in this
Statement of Additional Information by reference.
<PAGE>
PAGE 44
Report of Independent Auditors
The Board of Directors
IDS Life Insurance Company of New York
We have audited the accompanying balance sheets of IDS Life
Insurance Company of New York (a wholly owned subsidiary of IDS
Life Insurance Company) as of December 31, 1995 and 1994, and the
related statements of income and cash flows for each of the three
years in the period ended December 31, 1995. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of IDS
Life Insurance Company of New York at December 31, 1995 and 1994,
and the results of its operations and its cash flows for each of
the three years in the period ended December 31, 1995, in
conformity with generally accepted accounting principles.
As discussed in Note 1 to the financial statements, the Company
changed its method of accounting for certain investments in debt
and equity securities in 1994.
Ernst & Young LLP
February 2, 1996
Minneapolis, Minnesota
<PAGE>
PAGE 45
IDS Life of New York Financial Information
The financial statements shown below are those of the insurance
company and not those of any other entity. They are included in
the prospectus for the purpose of informing investors as to the
financial condition of the insurance company and its ability to
carry out its obligations under its variable contracts.
<TABLE>
<CAPTION>
IDS Life Insurance Company of New York
Balance Sheets Dec. 31, 1995 Dec. 31, 1994
Assets (thousands)
<S> <C> <C>
Investments:
Fixed maturities:
Held to maturity, at amortized cost
(Fair value: 1995, $683,147; 1994, $653,080) $ 642,580 $ 686,483
Available for sale, at fair value
(Amortized cost: 1995, $577,068;
1994, $474,599) 601,298 455,103
1,243,878 1,141,586
Mortgage loans on real estate
(Fair value: 1995, $168,194; 1994, $157,085) 158,730 164,916
Policy loans 18,035 14,899
Other investments 1,915 1,524
Total investments 1,422,558 1,322,925
Cash and cash equivalents -- 5,262
Accrued investment income 22,572 21,517
Deferred policy acquisition costs 109,800 100,078
Other assets 2,108 1,584
Separate account assets 724,212 506,208
Total assets $2,281,250 $1,957,574
Liabilities and Stockholder's Equity
Liabilities:
Fixed annuities - future policy benefits $1,109,167 $1,087,367
Universal life-type insurance - future
policy benefits 136,475 127,871
Traditional life, disability income and
long-term care insurance - future policy
benefits 42,477 40,546
Policy claims and other policyholders' funds 3,644 3,217
Deferred income taxes 15,663 2,044
Amounts due to brokers 10,000 --
Other liabilities 21,029 18,600
Separate account liabilities 724,212 506,208
Total liabilities 2,062,667 1,785,853
Stockholder's equity:
Capital stock, $10 par value per share; 200,000
shares authorized, issued and outstanding 2,000 2,000
Additional paid-in capital 49,000 49,000
Net unrealized gain (loss) on investments 15,341 (12,369)
Retained earnings 152,242 133,090
Total stockholder's equity 218,583 171,721
Total liabilities and stockholder's equity $2,281,250 $1,957,574
Commitments and contingencies (Note 7)
See accompanying notes.
</TABLE>
<PAGE>
PAGE 46
<TABLE>
<CAPTION>
____________________________________________________________________________
Statements of Income Years ended Dec. 31,
1995 1994 1993
(thousands)
____________________________________________________________________________
<S> <C> <C> <C>
Revenues:
Traditional life, disability income and
long-term care insurance premiums $ 9,280 $ 7,846 $ 7,110
Policyholder and contractholder charges 13,216 11,607 9,634
Mortality and expense risk fees 6,213 4,562 2,904
Net investment income 110,924 108,143 110,147
Net realized gain on investments 1,548 957 1,334
Total revenues 141,181 133,115 131,129
Benefits and expenses:
Death and other benefits - traditional
life, disability income and long-term
care insurance 3,354 6,016 5,715
Death and other benefits - universal
life-type insurance and investment contracts 4,548 3,773 2,465
Increase (decrease) in liabilities for future
policy benefits for traditional life,
disability income and long-term care insurance 1,958 506 (1,343)
Interest credited on universal life-type
insurance and investment contracts 68,630 65,018 68,987
Amortization of deferred policy
acquisition costs 13,085 12,994 10,434
Other insurance and operating expenses 7,474 8,359 7,652
Total benefits and expenses 99,049 96,666 93,910
Income before income taxes 42,132 36,449 37,219
Income taxes 14,745 12,794 13,335
Net income $ 27,387 $ 23,655 $ 23,884
See accompanying notes.
<PAGE>
PAGE 47
__________________________________________________________________________
Statements of Cash Flows Years ended Dec. 31,
1995 1994 1993
(thousands)
Cash flows from operating activities:
Net income $ 27,387 $ 23,655 $ 23,884
Adjustments to reconcile net income to net
cash provided by operating activities:
Issuance - policy loans, excluding
universal life-type insurance (2,093) (1,365) (1,044)
Repayment - policy loans, excluding
universal life-type insurance 881 849 455
Change in accrued investment income (1,055) (175) (1,476)
Change in deferred policy acquisition
costs, net (11,017) (11,522) (10,622)
Change in liabilities for future policy
benefits for traditional life, disability
income and long-term care insurance 1,931 501 (939)
Change in policy claims and other
policyholders' funds 427 870 282
Change in deferred income taxes (1,301) (4,321) (449)
Change in other liabilities 2,429 (1,711) 4,348
Amortization of premium (accretion
of discount), net (480) 2,464 (1,598)
Net realized gain on investments (1,548) (957) (1,334)
Premiums related to universal life-type
insurance 21,694 19,522 15,141
Surrenders and death benefits related to
universal life-type insurance (13,164) (13,208) (9,785)
Interest credited to account balances related
to universal life-type insurance 7,036 6,640 6,892
Policyholder and contractholder
charges, non-cash (6,962) (6,000) (5,663)
Other, net (508) 689 (780)
Net cash provided by operating activities $ 23,657 $ 15,931 $ 17,312
Cash flows from investing activities:
Fixed maturities held to maturity:
Purchases $(37,540) $(36,560) $ --
Maturities, sinking fund payments and calls 34,216 78,757 --
Sales 28,905 2,649 --
Fixed maturities available for sale:
Purchases (133,503) (117,965) --
Maturities, sinking fund payments and calls 44,234 70,316 --
Sales 8,839 14,533 --
Investment securities:
Purchases -- -- (331,900)
Maturities, sinking fund payments and calls -- -- 265,059
Sales -- -- 28,519
Other investments, excluding policy loans:
Purchases (1,939) (47,353) (65,202)
Sales 5,993 2,975 2,568
Change in amounts due to brokers 10,000 (4,952) (10,448)
Net cash used in investing activities (40,795) (37,600) (111,404)
Cash flows from financing activities:
Activity related to investment contracts:
Considerations received 137,737 168,947 149,269
Surrenders and death benefits (177,531) (198,963) (119,158)
Interest credited to account balances 61,594 58,378 62,250
Issuance - policy loans, universal life-type
insurance (4,870) (3,907) (3,403)
Repayment - policy loans, universal life-type
insurance 2,946 2,476 1,886
Cash dividend to parent (8,000) -- --
Net cash provided by financing activities 11,876 26,931 90,844
Net (decrease) increase in cash and cash
equivalents (5,262) 5,262 (3,248)
Cash and cash equivalents at beginning
of year 5,262 - 3,248
Cash and cash equivalents at end of year $ -- $ 5,262 $ --
See accompanying notes.
</TABLE>
<PAGE>
PAGE 48
IDS Life Insurance Company of New York
Notes to Financial Statements ($ thousands)
1. Summary of significant accounting policies
Nature of business
IDS Life Insurance Company of New York (the Company) is engaged in
the insurance and annuity business in the state of New York. The
Company's principal products are deferred annuities and universal
life insurance which are issued primarily to individuals. It
offers single premium and annual premium deferred annuities on both
a fixed and variable dollar basis. Immediate annuities are offered
as well. The Company's insurance products include universal life
(fixed and variable), whole life, single premium life and term
products (including waiver of premium and accidental death
benefits). The Company also markets disability income and long-
term care insurance.
The Company's principal annuity product in terms of amount in force
is the fixed deferred annuity. The annuity contract guarantees a
minimum interest rate during the accumulation period (the time
before annuity payments begin), although the Company normally pays
a higher rate reflective of current market rates. The fixed
annuity provides for a surrender charge during the first seven to
ten years after a purchase payment is made. The Company has also
adopted a practice whereby the higher current rate is guaranteed
for a specified period. The Company also offers a variable annuity
product under the name Flexible Annuity. This is a fixed/variable
annuity offering the purchasers a choice among mutual funds with
portfolios of equities, bonds, managed assets and/or short-term
securities, and the Company's general account, as the underlying
investment vehicles. With respect to funds applied to the variable
portion of the annuity, the purchaser, rather than the Company,
assumes the investment risks and receives the rewards inherent in
the ownership of the underlying investment. The Flexible Annuity
provides for a surrender charge during the first six years after a
purchase payment is made.
The Company's principal insurance product is the flexible-premium,
adjustable-benefit universal life insurance policy. In this type
of insurance policy, each premium payment accumulates interest in a
cash value account. The policyholder has access to the cash
surrender value in whole or in part after the first year. The size
of the cash value of the fund can also be controlled by the
policyholder by increasing or decreasing premiums, subject only to
maintaining a required minimum to keep the policy in force.
Monthly deductions from the cash value of the policy are made for
the cost of insurance, expense charges and any policy riders.
Basis of presentation
The Company is a wholly owned subsidiary of IDS Life Insurance
Company (IDS Life), which is a wholly owned subsidiary of American
Express Financial Corporation, which is a wholly owned subsidiary
of American Express Company. The accompanying financial
statements have been prepared in conformity with generally accepted<PAGE>
PAGE 49
1. Summary of significant accounting policies (continued)
accounting principles which vary in certain respects from reporting
practices prescribed or permitted by the New York Department of
Insurance as reconciled in Note 11.
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
Investments
Fixed maturities that the Company has both the positive intent and
the ability to hold to maturity are classified as held to maturity
and carried at amortized cost. All other fixed maturities and all
marketable equity securities are classified as available for sale
and carried at fair value. Unrealized gains and losses on
securities classified as available for sale are carried as a
separate component of stockholder's equity.
Management determines the appropriate classification of fixed
maturities at the time of purchase and reevaluates the
classification at each balance sheet date.
Mortgage loans on real estate are carried principally at the unpaid
principal balances of the related loans. Policy loans are carried
at the aggregate of the unpaid loan balances which do not exceed
the cash surrender values of the related policies. Other
investments include interest rate caps and equity securities. When
evidence indicates a decline in the underlying value or earning
power of individual investments which is other than temporary such
investments are written down to fair value by a charge to income.
Equity securities are carried at market value and the related net
unrealized appreciation or depreciation is reported as a credit or
charge to stockholder's equity.
Realized investment gain or loss is determined on an identified
cost basis.
Prepayments are anticipated on certain investments in mortgage-
backed securities in determining the constant effective yield used
to recognize interest income. Prepayment estimates are based on
information received from brokers who deal in mortgage-backed
securities.
Statements of cash flows
The Company considers investments with a maturity at the date of
their acquisition of three months or less to be cash equivalents.
These securities are carried principally at amortized cost which
approximates fair value.
<PAGE>
PAGE 50
1. Summary of significant accounting policies (continued)
Supplementary information to the statements of cash flows for the
years ended Dec. 31 is summarized as follows:
1995 1994 1993
Cash paid during the year for:
Income taxes $15,026 $17,386 $14,138
Interest on borrowings 742 147 235
Recognition of profits on fixed annuity contracts and insurance
policies
The Company issues single premium deferred annuity contracts that
provide for a service fee (surrender charge) at annually decreasing
rates upon withdrawal of the annuity accumulation value by the
contract owner. No sales fee is deducted from the contract
considerations received on these contracts ("no load" annuities).
All of the Company's single premium deferred annuity contracts
provide for crediting the contract owners' accumulations at
specified rates of interest. Such rates are revised by the Company
from time to time based on changes in the market investment yield
rates for fixed-income securities.
Profits on single premium deferred annuities and installment
annuities are recognized by the Company over the lives of the
contracts and represent the excess of investment income earned from
investment of contract considerations over interest credited to
contract owners and other expenses.
The retrospective deposit method is used in accounting for
universal life-type insurance. This method recognizes profits over
the lives of the policies in proportion to the estimated gross
profits expected to be realized.
Premiums on traditional life, disability income and long-term care
insurance policies are recognized as revenue when collected or due,
and related benefits and expenses are associated with premium
revenue in a manner that results in recognition of profits over the
lives of the insurance policies. This association is accomplished
by means of the provision for future policy benefits and the
deferral and subsequent amortization of policy acquisition costs.
Deferred policy acquisition costs
The costs of acquiring new business, principally sales
compensation, policy issue costs, underwriting and certain sales
expenses, have been deferred on insurance and annuity contracts.
The deferred acquisition costs for single premium deferred
annuities and installment annuities are amortized based upon
surrender charge revenue and a portion of the excess of investment
income earned from investment of the contract considerations over
the interest credited to contract owners. The costs for universal
life-type insurance are amortized over the lives of the policies as
a percentage of the estimated gross profits expected to be realized<PAGE>
PAGE 51
1. Summary of significant accounting policies (continued)
on the policies. For traditional life, disability income and long-
term care insurance policies, the costs are amortized over an
appropriate period in proportion to premium revenue.
Liabilities for future policy benefits
Liabilities for universal life-type insurance, single premium
deferred annuities and installment annuities are accumulation
values.
Liabilities for fixed annuities in a benefit status are based on
the Progressive Annuity Table with interest at 5 percent, the 1971
Individual Annuity Table with interest at 7 percent or 8.25
percent, or the 1983a Table with various interest rates ranging
from 5.5 percent to 9.5 percent, depending on year of issue.
Liabilities for future benefits on traditional life insurance have
been computed principally by the net level premium method, based on
anticipated rates of mortality (approximating the 1965-1970 Select
and Ultimate Basic Table for policies issued after 1980 and the
1955-1960 Select and Ultimate Basic Table for policies issued prior
to 1981 and the 1975-1980 Select and Ultimate Basic Table for term
insurance policies issued after 1986), policy persistency derived
from IDS Life's experience data (first-year rates ranging from
approximately 70 percent to 90 percent and increasing rates
thereafter), and estimated future investment yields of 4 percent
for policies issued before 1974 and 5.25 percent for policies
issued from 1974 to 1980. Cash value plans issued in 1980 and
later assume future investment rates that grade from 9.5 percent to
5 percent over 20 years. Term insurance issued from 1981 to 1984
assumes an 8 percent level investment rate, and term insurance
issued from 1985 to 1994 assumes investment rates that grade from
10 percent to 6 percent over 20 years, and term insurance issued
after 1994 assumes investment rates that grade from 8 percent to
6.5 percent over 7 years.
Liabilities for future disability income policy benefits have been
computed principally by the net level premium method, based on the
1964 Commissioners Disability Table with the 1958 Commissioners
Standard Ordinary Mortality Table at 3 percent interest for persons
disabled in 1980 and prior, 8 percent interest for persons disabled
from 1981 to 1991, 7 percent interest for persons disabled in 1992
and 6 percent interest for persons disabled after 1992.
Liabilities for future benefits on long-term care insurance have
been computed principally by the net level premium method, using
morbidity rates based on the 1985 National Nursing Home Survey and
mortality rates based on the 1983a Table. The interest rate basis
is 9.5 percent grading to 7 percent over ten years for policies
issued from 1989 to 1992, 7.75 percent grading to 7 percent over
four years for policies issued after 1992, 8 percent for claims
incurred in 1989 to 1991, 7 percent for claims incurred in 1992 and
6 percent for claims incurred after 1992.
<PAGE>
PAGE 52
1. Summary of significant accounting policies (continued)
Reinsurance
The maximum amount of life insurance risk retained by the Company
on any one life is $750 of life and waiver of premium benefits plus
$50 of accidental death benefits. The maximum amount of disability
income risk retained by the Company on any one life is $6 of
monthly benefit for benefit periods longer than three years. The
excesses are reinsured with other life insurance companies on a
yearly renewable term basis.
Federal income taxes
The Company's taxable income is included in the consolidated
federal income tax return of American Express Company. The Company
provides for income taxes on a separate return basis, except that,
under an agreement between American Express Financial Corporation
and American Express Company, tax benefit is recognized for losses
to the extent they can be used on the consolidated tax return. It
is the policy of American Express Financial Corporation to
reimburse a subsidiary for any tax benefit.
Included in other liabilities at Dec. 31, 1995 and 1994 are $3,971
and $3,161, respectively, payable to IDS Life for federal income
taxes.
Separate account business
The separate account assets and liabilities represent funds held
for the exclusive benefit of the variable annuity and variable life
insurance contract owners. The Company receives a monthly cost of
insurance charge and receives a minimum death benefit guarantee fee
from variable life insurance separate accounts and a mortality and
expense assurance fee from the variable annuity and variable life
insurance separate accounts.
The Company makes contractual mortality assurances to the variable
annuity contract owners that the net assets of the separate
accounts will not be affected by future variations in the actual
life expectancy experience of the annuitants and the beneficiaries
from the mortality assumptions implicit in the annuity contracts.
The Company makes periodic fund transfers to, or withdrawals from,
the separate accounts for such actuarial adjustments for variable
annuities that are in the benefit payment period. The Company
guarantees, for the variable life insurance policyholders, the
contractual insurance rate and that the death benefit will never be
less than the death benefit at the date of issuance.
Accounting changes
The Financial Accounting Standards Board's (FASB) SFAS No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-
Lived Assets to Be Disposed Of," is effective Jan. 1, 1996. The
new rule is not expected to have a material impact on the Company's
results of operations or financial condition.<PAGE>
PAGE 53
1. Summary of significant accounting policies (continued)
The Company's adoption of SFAS No. 114 as of Jan. 1, 1995 is
discussed in Note 2.
The Company adopted SFAS No. 115, "Accounting for Certain
Investments in Debt and Equity Securities." The effect of adopting
the new rule was to increase stockholder's equity by approximately
$12 million, net of tax, as of Jan. 1, 1994, but the adoption had
no impact on the Company's net income.
Reclassification
Certain 1994 and 1993 amounts have been reclassified to conform to
the 1995 presentation.
2. Investments
Fair values of investments in fixed maturities represent quoted
market prices and estimated values when quoted prices are not
available. Estimated values are determined by established
procedures involving, among other things, review of market indices,
price levels of current offerings of comparable issues, price
estimates and market data from independent brokers and financial
files.
Changes in net unrealized appreciation (depreciation) of
investments for the years ended Dec. 31 are summarized as follows:
1995 1994 1993
Fixed maturities:
Held to maturity $73,970 $(84,244) $ --
Available for sale 43,726 (38,226) --
Investment securities -- -- 25,350
Net realized gain (loss) on investments for the years ended Dec. 31
is summarized as follows:
1995 1994 1993
Fixed maturities $1,997 $948 $1,316
Other investments (449) 9 18
$1,548 $957 $1,334
<PAGE>
PAGE 54
2. Investments (continued)
The amortized cost, gross unrealized gains and losses and fair
value of investments in fixed maturities and equity securities at
Dec. 31, 1995 are as follows:
<TABLE>
<CAPTION>
Gross Gross
Amortized Unrealized Unrealized Fair
Held to maturity Cost Gains Losses Value
<S> <C> <C> <C> <C>
U.S. Government agency
obligations $ 5,003 $ 199 $ -- $ 5,202
State and municipal
obligations 150 -- 2 148
Corporate bonds and
obligations 578,253 41,939 2,027 618,165
Mortgage-backed securities 59,174 846 388 59,632
$642,580 $42,984 $2,417 $683,147
Gross Gross
Amortized Unrealized Unrealized Fair
Available for sale Cost Gains Losses Value
State and municipal
obligations $ 105 $ 10 $ -- $ 115
Corporate bonds and
obligations 248,973 17,470 497 265,946
Mortgage-backed securities 327,990 9,157 1,910 335,237
Total fixed maturities 577,068 26,637 2,407 601,298
Equity securities 10 -- -- 10
$577,078 $26,637 $2,407 $601,308
</TABLE>
The change in net unrealized gain (loss) on available for sale
securities included as a separate component of stockholder's equity
was $27,710 in 1995.
The amortized cost, gross unrealized gains and losses and fair
value of investments in fixed maturities and equity securities at
Dec. 31, 1994 are as follows:
<TABLE>
<CAPTION>
Gross Gross
Amortized Unrealized Unrealized Fair
Held to maturity Cost Gains Losses Value
<S> <C> <C> <C> <C>
U.S. Government agency
obligations $ 398 $ 2 $ 18 $ 382
Corporate bonds and
obligations 622,422 6,564 33,976 595,010
Mortgage-backed securities 63,663 580 6,555 57,688
$686,483 $7,146 $40,549 $653,080
Gross Gross
Amortized Unrealized Unrealized Fair
Available for sale Cost Gains Losses Value
U.S. Government agency
obligations $ 10,000 $ -- $ 135 $ 9,865
State and municipal
obligations 104 1 -- 105
Corporate bonds and
obligations 142,447 2,632 2,447 142,632
Mortgage-backed securities 322,048 381 19,928 302,501
Total fixed maturities 474,599 3,014 22,510 455,103
Equity securities 332 -- 197 135
$474,931 $3,014 $22,707 $455,238
/TABLE
<PAGE>
PAGE 55
2. Investments (continued)
The change in net unrealized gain (loss) on available for sale
securities included as a separate component of stockholder's equity
was $(12,393) in 1994.
The amortized cost and fair value of investments in fixed
maturities at Dec. 31, 1995 by contractual maturity are shown
below. Expected maturities will differ from contractual
maturities because borrowers may have the right to call or prepay
obligations with or without call or prepayment penalties.
Amortized Fair
Held to maturity Cost Value
Due in one year or less $ 18,748 $ 19,136
Due from one to five years 99,486 105,747
Due from five to ten years 367,875 392,671
Due in more than ten years 97,297 105,961
Mortgage-backed securities 59,174 59,632
$642,580 $683,147
Amortized Fair
Available for sale Cost Value
Due in one year or less $ 15,296 $ 15,473
Due from one to five years 80,249 85,561
Due from five to ten years 108,127 114,937
Due in more than ten years 45,406 50,090
Mortgage-backed securities 327,990 335,237
$577,068 $601,298
During the year ended Dec. 31, 1995, fixed maturities classified as
held to maturity were sold with proceeds of $28,905 and gross
realized gains and losses on such sales were $1,055 and $121,
respectively. The sale of these fixed maturities was due to
significant deterioration in the issuers' creditworthiness. As a
result of adopting the FASB Special Report, "A Guide to
Implementation of Statement 115 on Accounting for Certain
Investments in Debt and Equity Securities," the Company
reclassified securities with a book value of $15,607 and net
unrealized gains of $144 from held to maturity to available for
sale in December 1995.
In addition, fixed maturities available for sale were sold during
1995 with proceeds of $8,839 and gross realized gains and losses on
such sales were $nil and $74, respectively.
During the year ended Dec. 31, 1994, fixed maturities classified as
held to maturity were sold with proceeds of $2,649 and gross
realized gains and losses on such sales were $nil and $86,
respectively. The sale of these fixed maturities was due to
significant deterioration in the issuers' creditworthiness.
In addition, fixed maturities available for sale were sold during
1994 with proceeds of $14,533 and gross realized gains and losses
on such sales were $181 and $308, respectively.
<PAGE>
PAGE 56
2. Investments (continued)
At Dec. 31, 1995, bonds carried at $262 were on deposit with the
state of New York as required by law.
Net investment income for the years ended Dec. 31 is summarized as
follows:
1995 1994 1993
Interest on fixed maturities $ 97,092 $ 93,800 $100,940
Interest on mortgage loans 13,888 13,226 8,424
Other investment income 1,291 1,219 1,220
Interest on cash equivalents 186 363 63
112,457 108,608 110,647
Less investment expenses 1,533 465 500
$110,924 $108,143 $110,147
At Dec. 31, 1995, investments in fixed maturities comprised 87
percent of the Company's total invested assets. Securities are
rated by Moody's and Standard & Poor's (S&P), except for securities
carried at approximately $144 million which are rated by American
Express Financial Corporation internal analysts using criteria
similar to Moody's and S&P. A summary of investments in fixed
maturities, at amortized cost, by rating on Dec. 31 is as follows:
Rating 1995 1994
Aaa/AAA $ 391,321 $ 393,736
Aa/AA 17,572 18,857
Aa/A 9,950 9,710
A/A 209,483 191,694
A/BBB 61,912 57,206
Baa/BBB 357,445 340,271
Baa/BB 46,029 48,552
Below investment grade 125,936 101,056
$1,219,648 $1,161,082
At Dec. 31, 1995, 90 percent of the securities rated Aaa/AAA are
GNMA, FNMA and FHLMC mortgage-backed securities. No holdings of
any other issuer are greater than 1 percent of the Company's total
investments in fixed maturities.
<PAGE>
PAGE 57
2. Investments (continued)
At Dec. 31, 1995, approximately 11.2 percent of the Company's
invested assets were mortgage loans on real estate. Summaries of
mortgage loans by region and by type of real estate are as follows:
<TABLE>
<CAPTION>
Dec. 31, 1995 Dec. 31, 1994
On Balance Commitments On Balance Commitments
Region Sheet to Purchase Sheet to Purchase
<S> <C> <C> <C> <C>
West North Central $ 23,705 $ -- $ 26,660 $--
East North Central 34,207 -- 35,018 --
South Atlantic 38,802 2,033 39,516 18
Middle Atlantic 23,502 -- 24,061 --
Pacific 13,150 -- 13,297 --
Mountain 14,937 5,084 15,218 --
New England 8,982 -- 9,674 --
East South Central 1,613 7,407 1,629 --
West South Central 277 -- 288 --
159,175 14,524 165,361 18
Less allowance for losses 445 -- 445 --
$158,730 $14,524 $164,916 $18
Dec. 31, 1995 Dec. 31, 1994
On Balance Commitments On Balance Commitments
Property type Sheet to Purchase Sheet to Purchase
Apartments $ 64,136 $ 7,988 $ 65,389 $18
Department/retail stores 55,308 -- 57,608 --
Office buildings 12,367 6,536 13,107 --
Industrial buildings 13,255 -- 13,583 --
Medical buildings 5,255 -- 6,704 --
Nursing/retirement 6,565 -- 6,644 --
Other 2,012 -- 2,038 --
Hotels/motels 277 -- 288 --
159,175 14,524 165,361 18
Less allowance for losses 445 -- 445 --
$158,730 $14,524 $164,916 $18
</TABLE>
Mortgage loan fundings are restricted by state insurance regulatory
authority to 80 percent or less of the market value of the real
estate at the time of origination of the loan. The Company holds
the mortgage document, which gives the right to take possession of
the property if the borrower fails to perform according to the
terms of the agreement. The fair value of the mortgage loans is
determined by a discounted cash flow analysis using mortgage
interest rates currently offered for mortgages of similar
maturities. Commitments to purchase mortgages are made in the
ordinary course of business. The fair value of the mortgage
commitments is $nil.
As of Jan. 1, 1995, the Company adopted Statement of Financial
Accounting Standards No. 114, "Accounting by Creditors for
Impairment of a Loan" (SFAS No. 114), as amended by Statement of
Financial Accounting Standards No. 118, "Accounting by Creditors
for Impairment of a Loan - Income Recognition and Disclosures".
The adoption of the new rules did not have a material impact on the
Company's results of operations or financial condition.
<PAGE>
PAGE 58
2. Investments (continued)
SFAS No. 114 applies to all loans except for smaller-balance
homogeneous loans, that are collectively evaluated for impairment.
Impairment is measured as the excess of the loan's recorded
investment over its present value of expected principal and
interest payments discounted at the loan's effective interest rate,
or the fair value of collateral. The amount of the impairment is
recorded as a reserve for investment losses.
Based on management's judgment as to the ultimate collectibility of
principal, interest payments received are either recognized as
income or applied to the recorded investment in the loan until it
has been recovered. Once the recorded investment has been
recovered, any additional payments are recognized as interest
income.
The reserve for investment losses is maintained at a level that
management believes is adequate to absorb estimated credit losses
in the portfolio. The level of the reserve account is determined
based on several factors, including historical experience, expected
future principal and interest payments, estimated collateral
values, and current and anticipated economic and political
conditions. Management regularly evaluates the adequacy of the
reserve for investment losses.
At Dec. 31, 1995, the Company's recorded investment in impaired
loans was $2,052 with a reserve of $445. During the year, the
average recorded investment in impaired loans was $3,003. There
was no change in the reserve for investment losses from the prior
year.
The Company recognized $204 of interest income related to impaired
loans for the year ended Dec. 31, 1995.
3. Income taxes
The Company qualifies as a life insurance company for federal
income tax purposes. As such, the Company is subject to the
Internal Revenue Code provisions applicable to life insurance
companies.
Income tax expense consists of the following:
1995 1994 1993
Federal income taxes:
Current $15,146 $16,419 $13,164
Deferred (1,301) (4,320) (449)
13,845 12,099 12,715
State income taxes-current 900 695 620
Income tax expense $14,745 $22,794 $13,335
<PAGE>
PAGE 59
3. Income taxes (continued)
Increases (decreases) to the federal tax provision applicable to
pretax income based on the statutory rate are attributable to:
<TABLE>
<CAPTION>
1995 1994 1993
Provision Rate Provision Rate Provision Rate
<S> <C> <C> <C> <C> <C> <C>
Federal income taxes based
on the statutory rate $14,746 35.0% $12,757 35.0% $13,026 35.0%
Increases (decreases) are
attributable to:
Tax-excluded interest
and dividend income (464) (1.1) (554) (1.5) (557) (1.5)
Other, net (437) (1.0) (104) (0.3) 246 0.7
Federal income taxes $13,845 32.9% $12,099 33.2% $12,715 34.2%
</TABLE>
A portion of life insurance company income earned prior to 1984 was
not subject to current taxation but was accumulated, for tax
purposes, in a "policyholders' surplus account." At Dec. 31, 1995,
the Company had a policyholders' surplus account balance of $798.
The policyholders' surplus account is only taxable if dividends to
the stockholder exceed the stockholder's surplus account or if the
Company is liquidated. Deferred income taxes of $279 have not been
established because no distributions of such amounts are
contemplated.
Significant components of the Company's deferred tax assets and
liabilities as of Dec. 31 are as follows:
1995 1994
Deferred tax assets:
Policy reserves $ 26,237 $21,567
Investments -- 3,331
Other 2,791 2,991
Total deferred tax assets 29,028 27,889
Deferred tax liabilities:
Deferred policy acquisition costs 33,001 29,933
Investments 11,690 --
Total deferred tax liabilities 44,691 29,933
Net deferred tax liabilities $(15,663) $(2,044)
The Company is required to establish a "valuation allowance" for
any portion of the deferred tax assets that management believes
will not be realized. In the opinion of management, it is more
likely than not that the Company will realize the benefit of the
deferred tax assets, and, therefore, no such valuation allowance
has been established.
<PAGE>
PAGE 60
4. Stockholder's equity
Retained earnings available for distribution as dividends to the
parent are limited to the Company's surplus as determined in
accordance with accounting practices prescribed by the New York
Department of Insurance. Statutory unassigned surplus aggregated
$85,964 as of Dec. 31, 1995 and $70,974 as of Dec. 31, 1994 (see
Note 3 with respect to the income tax effect of certain
distributions).
Dividends paid to parent were $8,000 in 1995, $nil in 1994 and $nil
in 1993.
During 1995, the Company incurred a loss of $235 on the sale of an
interest rate cap to IDS Life. This loss has been reflected as a
direct charge to stockholder's equity in the accompanying financial
statements.
5. Retirement plan and services
Until July 1, 1995, the Company participated in the IDS Retirement
Plan of American Express Financial Corporation which covered all
permanent employees age 21 and over who had met certain employment
requirements. Effective July 1, 1995, the IDS Retirement Plan was
merged with American Express Company's American Express Retirement
Plan, which simultaneously was amended to include a cash balance
formula and a lump sum distribution option. Employer contributions
to the plan are based on participants' age, years of service and
total compensation for the year. Funding of retirement costs for
this plan complies with the applicable minimum funding requirements
specified by ERISA. The Company's share of the total net periodic
pension cost was $nil in 1995, 1994 and 1993.
The Company has a "Sales Benefit Plan" which is an unfunded,
noncontributory retirement plan for all eligible financial
advisors. Total plan costs for 1995, 1994 and 1993, which are
calculated on the basis of commission earnings of the individual
financial advisors, were $1,392, $1,372 and $1,042, respectively.
Such costs are included in deferred policy acquisition costs.
The Company also participates in defined contribution pension plans
of American Express Company which cover all employees who have met
certain employment requirements. Company contributions to the
plans are a percent of either each employee's eligible compensation
or basic contributions. Costs of these plans charged to operations
in 1995, 1994 and 1993 were $231, $251 and $201, respectively.
The Company participates in defined benefit health care plans of
American Express Financial Corporation that provide health care and
life insurance benefits to retired employees and retired financial
advisors. The plans include participant contributions and service-
related eligibility requirements. Upon retirement, such employees
are considered to have been employees of American Express Financial
<PAGE>
PAGE 61
5. Retirement plan and services (continued)
Corporation. American Express Financial Corporation expenses these
benefits and allocates the expenses to its subsidiaries.
Accordingly, costs of such benefits to the Company are included in
employee compensation and benefits and cannot be identified on a
separate company basis. At Dec. 31, 1995, the total accumulated
post retirement benefit obligation, has been recorded as a
liability by American Express Financial Corporation.
6. Incentive plan and operating expenses
The Company maintains a "Persistency Payment Plan." Under the
terms of this plan, financial advisors earn additional compensation
based on the volume and persistency of insurance sales. The total
costs for the plan for 1995, 1994 and 1993 were $1,720, $1,287 and
$1,387, respectively. Such costs are included in deferred policy
acquisition costs.
Charges by IDS Life and American Express Financial Corporation for
the use of joint facilities, marketing services and other services
aggregated $12,122, $9,314 and $7,421 for 1995, 1994 and 1993,
respectively. Certain of the costs assessed to the Company are
included in deferred policy acquisition costs.
7. Commitments and contingencies
At Dec. 31, 1995 and 1994, traditional life insurance and universal
life-type insurance in force aggregated $3,502,851 and $3,155,571,
respectively, of which $163,462 and $162,956 were reinsured at the
respective year ends.
In addition, the Company has a stop loss reinsurance agreement with
IDS Life covering ordinary life benefits. IDS Life agrees to pay
all death benefits incurred each year which exceed 125 percent of
normal claims, where normal claims are defined in the agreement as
.095 percent of the mean retained life insurance in force.
Premiums ceded to IDS Life amounted to $85, $76 and $67 for the
years ended Dec. 31, 1995, 1994 and 1993, respectively. Claim
recoveries under the terms of this reinsurance agreement were $nil
in 1995, 1994 and 1993.
Premiums ceded to reinsurers other than IDS Life amounted to $269,
$721 and $741 for the years ended Dec. 31, 1995, 1994 and 1993,
respectively. Reinsurance recovered from reinsurers other than IDS
Life amounted to $576, $14 and $379 for the years ended Dec. 31,
1995, 1994 and 1993.
Reinsurance contracts do not relieve the Company from its primary
obligations to policyholders.
The Company has an agreement to assume a block of extended term
life insurance business. The amount of insurance in force related
to this agreement was $392,106 and $447,317 at Dec. 31, 1995 and
1994, respectively. The accompanying statement of income includes <PAGE>
PAGE 62
7. Commitments and contingencies (continued)
premiums of $nil for the years ended Dec. 31, 1995, 1994 and 1993,
and decrease in liabilities for future policy benefits of $2,039,
2,538 and $3,032 related to this agreement for the years ended Dec.
31, 1995, 1994 and 1993, respectively.
8. Lines of credit
The Company has available lines of credit with two banks
aggregating $30,000 at 40 to 80 basis points over each bank's cost
of funds. Outstanding borrowings under these agreements were $nil
at Dec. 31, 1995 and 1994.
9. Derivative financial instruments
The Company enters into transactions involving derivative
financial instruments to manage its exposure to interest rate risk,
including hedging specific transactions. The Company manages risks
associated with these instruments as described below. The Company
does not hold derivative instruments for trading purposes.
Market risk is the possibility that the value of the derivative
financial instruments will change due to fluctuations in a factor
from which the instrument derives its value, primarily an interest
rate. The Company is not impacted by market risk related to
derivatives held for non-trading purposes beyond that inherent in
cash market transactions. Derivatives held for purposes other than
trading are largely used to manage risk and, therefore, the cash
flow and income effects of the derivatives are inverse to the
effects of the underlying transactions.
Credit risk is the possibility that the counterparty will not
fulfill the terms of the contract. The Company monitors credit
exposure related to derivative financial instruments through
established approval procedures, including setting concentration
limits by counterparty and industry, and requiring collateral,
where appropriate. A vast majority of the Company's counterparties
are rated A or better by Moody's and Standard & Poor's.
The notional or contract amount of a derivative financial
instrument is generally used to calculate the cash flows that are
received or paid over the life of the agreement. Notional amounts
are not recorded on the balance sheet. Notional amounts far exceed
the related credit exposure.
Credit exposure related to interest rate caps is measured by
replacement cost of the contracts. The replacement cost represents
the fair value of the instruments.
<TABLE>
<CAPTION>
Notional Carrying Fair Total Credit
Dec. 31, 1995 Amount Value Value Exposure
<S> <C> <C> <C> <C>
Assets:
Interest rate caps $300,000 $1,905 $745 $745
Dec. 31, 1994
Assets:
Interest rate caps $200,000 $1,389 $828 $828
</TABLE>
<PAGE>
PAGE 63
9. Derivative financial instruments (continued)
The fair values of derivative financial instruments are based on
market values, dealer quotes or pricing models. The interest rate
caps expire on various dates from 1997 to 2000.
Interest rate caps are used to manage the Company's exposure to
rising interest rates. These instruments are used primarily to
protect the margin between interest rates earned on investments and
the interest rates credited to related annuity contract holders.
The cost of interest rate caps is amortized to interest expense
over the life of the contracts and payments received as a result
of these agreements are recorded as a reduction of interest expense
when realized. The amortized cost of interest rate cap contracts
is included in other investments.
10. Fair values of financial instruments
The Company discloses fair value information for most on- and off-
balance sheet financial instruments for which it is practical to
estimate that value. Fair values of life insurance obligations,
receivables and all non-financial instruments, such as deferred
acquisition costs are excluded. Off-balance sheet intangible
assets, such as the value the field force, are also excluded.
Management believes the value of excluded assets is significant.
The fair value of the Company, therefore, cannot be estimated by
aggregating the amounts presented.
<TABLE>
<CAPTION>
1995 1994
Carrying Fair Carrying Fair
Financial Assets Value Value Value Value
<S> <C> <C> <C> <C>
Investments:
Fixed maturities (Note 2):
Held to maturity $ 642,580 $ 683,147 $ 686,483 $ 653,080
Available for sale 601,298 601,298 455,103 455,103
Mortgage loans on real
estate (Note 2) 158,730 168,194 164,916 157,085
Other:
Equity securities (Note 2) 10 10 135 135
Derivative financial
instruments (Note 9) 1,905 745 1,389 828
Cash and cash equivalents
(Note 1) -- -- 5,262 5,262
Separate accounts assets
(Note 1) 724,212 724,212 506,208 506,208
Financial Liabilities
Future policy benefits for
fixed annuities 1,038,431 1,005,004 1,025,881 991,358
Separate account liabilitie 678,263 645,389 474,958 448,665
</TABLE>
At Dec. 31, 1995 and 1994, the carrying amount and fair value of
future policy benefits for fixed annuities exclude life insurance-
related contracts carried at $67,843 and $59,803, respectively,
and policy loans of $2,893 and $1,683, respectively. The fair
value of these benefits is based on the status of the annuities at
Dec. 31, 1995 and 1994. The fair value of deferred annuities is <PAGE>
PAGE 64
10. Fair values of financial instruments (continued)
estimated as the carrying amount less any surrender charges and
related loans. The fair value for annuities in non-life contingent
payout status is estimated as the present value of projected
benefit payments at rates appropriate for contracts issued in 1995
and 1994.
At Dec. 31, 1995 and 1994, the fair value of liabilities related to
separate accounts is estimated as the carrying amount less
applicable surrender charges and less variable insurance contracts
carried at $45,949 and $31,250, respectively.
11. Statutory insurance accounting practices
Reconciliations of net income for 1995, 1994 and 1993 and
stockholder's equity at Dec. 31, 1995 and 1994, as shown in the
accompanying financial statements, to that determined using
statutory accounting practices are as follows:
<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Net income, per accompanying
financial statements $ 27,387 $23,655 $23,884
Deferred policy acquisition costs (9,722) (12,187) (10,622)
Adjustments of future policy
benefit liabilities (10,655) 13,741 13,597
Deferred federal income taxes (1,301) (4,321) (462)
Provision for losses on investments -- (1,652) 438
Separate account gains 20,769 142 2,708
Other, net (1,678) 755 (1,182)
Net income, on basis of
statutory accounting practices
$24,800 $20,133 $28,361
1995 1994
Stockholder's equity, per
accompanying financial
statements $218,583 $171,721
Deferred policy acquisition costs (109,800) (100,078)
Adjustments of future policy
benefit liabilities 23,172 33,827
Deferred federal income taxes 15,663 2,044
Securities valuation reserve (18,029) (15,939)
Adjustments of separate account
liabilitiess 34,326 13,557
Net unrealized loss on
investments (24,231) 19,497
Premiums due 925 851
Deferred revenue liability 794 834
Allowance for losses 445 445
Non-admitted assets (578) (503)
Interest maintenance reserve (2,442) (2,110)
Other, net 347 249
Stockholder's equity, on basis
of statutory accounting
practices $139,175 $124,395
</TABLE>
<PAGE>
PAGE 65
IDS Life of New York Financial Information
The financial statements shown below are those of the insurance
company and not those of any other entity. They are included in
the prospectus for the purpose of informing investors as to the
financial condition of the insurance company and its ability to
carry out its obligations under its variable contracts.
IDS Life Insurance Company of New York
Balance Sheet (Unaudited) June 30, 1996
Assets (thousands)
Investments:
Fixed maturities:
Held to maturity, at amortized cost
(Fair value: 1996, $619,894) $ 611,118
Available for sale, at fair value
(Amortized cost: 1996, $570,211) 572,286
Mortgage loans on real estate
(Fair value: 1996, $169,197) 169,489
Policy loans 18,903
Other investments 1,576
Total investments 1,373,372
Cash and cash equivalents --
Accrued investment income 22,120
Deferred policy acquisition costs 114,975
Other assets 2,360
Separate account assets 829,743
Total assets $2,342,570
Liabilities and Stockholder's Equity
Liabilities:
Fixed annuities - future policy benefits $1,081,700
Universal life-type insurance - future
policy benefits 140,556
Traditional life, disability income and
long-term care insurance - future policy
benefits 43,771
Policy claims and other policyholders' funds (401)
Deferred income taxes 7,462
Amounts due to brokers 6,004
Other liabilities 24,464
Separate account liabilities 829,743
Total liabilities 2,133,299
Stockholder's equity:
Capital stock, $10 par value per share; 200,000
shares authorized, issued and outstanding 2,000
Additional paid-in capital 49,000
Net unrealized gain (loss) on investments 1,314
Retained earnings 156,957
Total stockholder's equity 209,271
Total liabilities and stockholder's equity $2,342,570
Commitments and contingencies
See accompanying notes.
<PAGE>
PAGE 66
___________________________________________________________________
Statement of Income (Unaudited) Six month period ended
June 30, 1996
(thousands)
___________________________________________________________________
Revenues:
Traditional life, disability income and
long-term care insurance premiums $ 5,316
Policyholder and contractholder charges 7,705
Mortality and expense risk fees 3,957
Net investment income 55,111
Net realized gain (loss) on investments (985)
Total revenues 71,104
Benefits and expenses:
Death and other benefits - traditional
life, disability income and long-term
care insurance 2,106
Death and other benefits - universal
life-type insurance and investment contracts 2,730
Increase (decrease) in liabilities for future
policy benefits for traditional life,
disability income and long-term care insurance 1,041
Interest credited on universal life-type
insurance and investment contracts 33,156
Amortization of deferred policy
acquisition costs 7,504
Other insurance and operating expenses 4,790
Total benefits and expenses 51,327
Income before income taxes 19,777
Income taxes 7,061
Net income $ 12,716
See accompanying notes.
<PAGE>
PAGE 67
___________________________________________________________________
Statement of Cash Flows (Unaudited) Six month period ended
June 30,1996
(thousands)
Cash flows from operating activities:
Net income $ 12,716
Adjustments to reconcile net income to net
cash provided by operating activities:
Issuance - policy loans, excluding
universal life-type insurance (946)
Repayment - policy loans, excluding
universal life-type insurance 704
Change in accrued investment income 452
Change in deferred policy acquisition
costs, net (4,598)
Change in liabilities for future policy
benefits for traditional life, disability
income and long-term care insurance 1,294
Change in policy claims and other
policyholders' funds (4,045)
Change in deferred income taxes 629
Change in other liabilities 3,435
Amortization of premium (accretion
of discount), net (202)
Net realized gain on investments 985
Premiums related to universal life-type
insurance 13,872
Surrenders and death benefits related to
universal life-type insurance (9,721)
Interest credited to account balances related
to universal life-type insurance 3,665
Policyholder and contractholder
charges, non-cash (3,735)
Other, net (1,579)
Net cash provided by operating activities 12,926
Cash flows from investing activities:
Fixed maturities held to maturity:
Purchases --
Maturities, sinking fund payments and calls 21,830
Sales 9,035
Fixed maturities available for sale:
Purchases (39,264)
Maturities, sinking fund payments and calls 33,786
Sales 12,866
Other investments, excluding policy loans:
Purchases (14,418)
Sales 3,328
Change in amounts due to brokers (3,996)
Net cash provided by investing activities $ 23,167
<PAGE>
PAGE 68
Cash flows from financing activities:
Activity related to investment contracts:
Considerations received $ 46,952
Surrenders and death benefits (103,909)
Interest credited to account balances 29,490
Issuance - policy loans, universal life-type
insurance (2,247)
Repayment - policy loans, universal life-type
insurance 1,621
Cash dividend to parent (8,000)
Net cash used in financing activities (36,093)
Net increase (decrease) in cash and cash
equivalents --
Cash and cash equivalents at beginning
of period --
Cash and cash equivalents at end of period $ --
See accompanying notes.
<PAGE>
PAGE 69
IDS Life Insurance Company of New York
Notes to Financial Statements
June 30, 1996 ($ Thousands) (Unaudited)
1. General
In the opinion of the management of IDS Life Insurance Company of
New York (the Company), the accompanying unaudited financial
statements contain all adjustments (consisting of normal recurring
adjustments) necessary to present fairly its balance sheet as of
June 30, 1996, and the related statement of income and statement of
cash flows for the six months ended June 30, 1996.
The Company is a wholly owned subsidiary of IDS Life Insurance
Company which is a wholly owned subsidiary of American Express
Financial Corporation which is a wholly owned subsidiary of
American Express Company.
2. Nature of business
The Company is engaged in the life insurance and annuity business
in the state of New York. The Company's principal products are
deferred annuities and universal life insurance which are issued
primarily to individuals. It sells various forms of fixed and
variable individual life insurance, disability income insurance,
long-term care insurance, and single and installment
premium fixed and variable annuities.
3. Statements of cash flows
The Company considers investments with a maturity at the date of
their acquisition of three months or less to be cash equivalents.
These securities are carried principally at amortized cost which
approximates market value.
Cash paid for interest on borrowings totaled $211 for the six
months ended June 30, 1996. Cash paid for income taxes totaled
$8,319 for the six months ended June 30, 1996.
4. Commitments and contingencies
The Company is a defendant in various lawsuits, none of which, in
the opinion of the Company counsel, will result in a material
liability.
<PAGE>
PAGE 70
STATEMENT OF DIFFERENCES
Difference Description
1) Headings. 1) The headings in the
prospectus are placed
in a strip at the top
of the page.
2) Footnotes for charts and 2) The footnotes for each
graphs are described at chart or graph are typed
the left margin. below the description of
the chart or graph.
3) Management fees and 3) Two of the figures on
other expenses. page 9 of the prospectus
have changed since the
last filing, under the
heading, "Templeton
Developing Markets."
