SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Post-Effective Amendment No. 2 (File No. 333-03867) [x]
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and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 3 (File No. 811-07623) [x]
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(Check appropriate box or boxes)
IDS LIFE OF NEW YORK FLEXIBLE PORTFOLIO ANNUITY ACCOUNT
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(Exact Name of Registrant)
IDS Life Insurance Company of New York
- --------------------------------------------------------------------------------
(Name of Depositor)
20 Madison Avenue Extension, Albany NY 12203
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(Address of Depositor's Principal Executive Offices) (Zip Code)
Depositor's Telephone Number, including Area Code (612) 671-4085
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Sherilyn K. Beck, IDS Tower 10, Minneapolis, MN 55440-0010
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(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check appropriate box)
[ ] immediately upon filing pursuant to paragraph (b) of Rule 485
[x] on May 1, 1998 pursuant to paragraph (b) of Rule 485
[ ] 60 days after filing pursuant to paragraph (a)(i) of Rule 485
[ ] on (date) pursuant to paragraph (a)(i) of Rule 485
If appropriate, check the following box:
[ ] this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
<PAGE>
CROSS REFERENCE SHEET
Cross reference sheet showing location in the prospectus of the information
called for by the items enumerated in Part A and B of Form N-4.
Negative answers omitted from the prospectus and Statement of Additional
Information are so indicated.
PART A
Item No. Section in Prospectus
1 Cover page
2 Key terms
3 (a) Expense Summary
(b) The Flexible Portfolio Annuity in brief
4 (a) Condensed financial information
(b) Performance information
(c) Financial statements
5 (a) Cover page; About IDS Life of New York
(b) The variable account
(c) The funds
(d) Cover page; The funds
(e) Voting rights
(f) NA
(g) NA
6 (a) Charges
(b) Expense Summary; Charges
(c) Charges
(d) Distribution of the contracts
(e) The funds
(f) NA
7 (a) Buying your annuity; Benefits in case of death; The annuity
payout period
(b) The variable accounts; Making the most of your annuity,
Transferring money between charge accounts
(c) The funds; Charges
(d) Cover page
8 (a) The annuity payout period
(b) Buying your annuity
(c) The annuity payout period
(d) The annuity payout period
(e) The annuity payout period
(f) The annuity payout period
9 (a) Benefits in case of death
(b) Benefits in case of death
10 (a) Buying your annuity; Valuing your investment
(b) Valuing your investment
(c) Buying your annuity; Valuing your investment
(d) About IDS Life of New York
11 (a) Surrendering your contract
(b) NA
(c) Surrendering your contract
(d) Buying your annuity
(e) The Flexible Portfolio Annuity in brief
12 (a) Taxes
(b) Key terms
(c) NA
13 NA
14 Table of contents of the Statement of Additional Information
PART B
Section in
Item No. Statement of Additional Information
15 (a) Cover page
(b) NA
16 Table of Contents
17 (a) NA
(b) NA
(c) About IDS Life of New York*
18 (a) NA
(b) NA
(c) Independent Auditors
(d) NA
(e) NA
(f) NA
19 (a) Distribution of the contracts*; About IDS Life of New York*
(b) Charges*
20 (a) Principal underwriter
(b) Principal underwriter
(c) Principal underwriter
(d) NA
21 (a) Performance information
(b) Performance information
22 Calculating annuity payouts
23 (a) NA
(b) NA
*Designates section in the prospectus, which is hereby incorporated by reference
in this statement of Additional Information.
<PAGE>
IDS Life of New York Flexible Portfolio Annuity
Prospectus
May 1, 1998
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), which is a
subsidiary of American Express Financial Corporation (AEFC). 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: 800-541-2251.
This prospectus contains the information about the variable account that you
should know before investing. Refer to "The variable account" in this
prospectus. As in the case of other annuities, it may not be advantageous to
purchase this annuity as a replacement for, or in addition to an existing
annuity.
The prospectus is accompanied or preceded by the following prospectuses: the IDS
Life Retirement Annuity Mutual Funds; AIM Variable Insurance Funds, Inc.; Putnam
Variable Trust; American Century Variable Portfolios, Inc.; Templeton Variable
Products Series Fund and Warburg Pincus Trust. Please read these
documents carefully and keep them 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 bank or a financial institution, and the
securities it offers are not deposits or obligations of, backed or guaranteed or
endorsed by any bank or 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) (incorporated by reference into this
prospectus) filed with the Securities and Exchange Commission (SEC), is
available without charge by contacting IDS Life of New York at the telephone
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>
Table of contents
Key terms................................................................
The Flexible Portfolio Annuity in brief..................................
Expense summary..........................................................
Condensed financial information (unaudited)..............................
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.....................................
Putnam VT New Opportunities Fund....................................
American Century VP Value...........................................
Templeton Developing Markets Fund: Class 1..........................
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>
Taxes....................................................................
Voting rights............................................................
Substitution of investments..............................................
Distribution of the contracts............................................
About IDS Life of New York...............................................
Year 2000................................................................
Regular and special reports..............................................
Services
Table of contents of the Statement of Additional Information........
<PAGE>
Key terms
These terms can help you understand details about your annuity.
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 - 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.
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.
Purchase payments - Payments made to IDS Life of New York for an annuity.
<PAGE>
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), including Roth IRAs o SIMPLE IRAs o
Simplified Employee Pension (SEP) Plans 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 - Consists 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:
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. )
<PAGE>
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
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. Roth IRAs, however, may grow tax-free, if you
meet certain distribution requirements. (p. )
<PAGE>
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. (p. )
Expense summary
The purpose of this table 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."
Contract Owner Expense
Surrender charge
(contingent deferred sales
charge as a percent of purchase
payments surrendered) Contract year
7 1-3
6 4
5 5
4 6
3 7
2 8
0 After 8 years
Annual Contract Administrative Charge $30
Variable Account Annual Expense
Mortality and Expense Risk Fee
(as a percentage of daily net asset value) 1.25%
<PAGE>
<TABLE>
<CAPTION>
Annual Operating Expenses of Underlying Mutual Funds
(as a percentage of average net assets)
IDS Life IDS Life IDS Life IDS Life IDS Life
Aggressive International Capital IDS Life Special IDS Life Growth
Growth Equity Resource Managed Income Moneyshare Dimensions
<S> <C> <C> <C> <C> <C> <C> <C>
Management fees 0.60% 0.83% 0.60% 0.59% 0.60% 0.51% 0.63%
Other expenses 0.07% 0.11% 0.07% 0.05% 0.07% 0.06% 0.08%
Total 0.67%* 0.94%* 0.67%* 0.64%* 0.67%* 0.57%* 0.71%*
Warburg Pincus
Putnam Trust/Small
IDS Life IDS Life AIM V.I. VT New American Templeton Company Growth
Global Income Growth and Opportunities Century Developing (After fee
Yield Advantage Income++ Fund VP Value Markets: Class Ilimitations)
Management fees 0.84% 0.62% 0.63% 0.58% 1.00% 1.25% 0.90%
Other expenses 0.07% 0.03% 0.06% 0.05% -- 0.33% 0.24%
Total 0.91%* 0.65%* 0.69% 0.63% 1.00% 1.58% 1.14%+
</TABLE>
* Annualized operating expenses of underlying mutual funds at Dec. 31, 1997.
+ Figures in "Management fees," "Other expenses" and "Total" are based on actual
expenses for the fiscal year ended Dec. 31, 1997 net of any fee waivers or
expense reimbursements. Without such waivers or reimbursements, "Other expenses"
would equal 0.25% and "Total" would equal 1.15%. ++AIM Advisers, Inc. ("AIM")
may from time to time voluntarily waive or reduce its respective fees. Effective
May 1, 1998, the Fund reimburses AIM in an amount up to 0.25% of the average net
asset value of the Fund, for expenses incurred in providing, or assuring that
participating insurance companies provide, certain administrative services.
Currently, the fee only applies to the average net asset value of the Fund in
excess of the net asset value of the Fund as calculated on April 30, 1998.
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:
<TABLE>
<CAPTION>
IDS Life IDS Life IDS Life IDS Life IDS Life
Aggressive International Capital IDS Life Special IDS Life Growth
Growth Equity Resource Managed Income Moneyshare Dimensions
<S> <C> <C> <C> <C> <C> <C> <C>
1 year $ 90.39 $ 93.15 $ 90.39 $ 90.00 $ 90.39 $ 89.36 $ 90.80
3 years 132.99 141.35 132.99 132.06 132.99 129.88 134.23
5 years 158.15 172.16 172.16 158.15 158.15 152.93 160.24
10 years 233.30 261.62 233.30 230.11 233.30 222.62 237.54
Putnam
IDS Life IDS Life AIM V.I. VT New American Templeton Warburg Pincus
Global Income Growth and Opportunities Century Developing Trust/Small
Yield Advantage Income Fund VP Value Markets: Class ICompany Growth
1 year $ 92.85 $ 90.18 $ 90.59 $ 89.98 $ 93.77 $ 99.71 $ 95.20
3 years 140.42 132.37 133.61 131.75 143.20 160.96 147.50
5 years 170.61 157.11 159.20 156.07 175.25 204.72 182.43
10 years 258.51 231.17 235.42 229.04 267.81 325.79 282.11
<PAGE>
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:
IDS Life IDS Life IDS Life IDS Life IDS Life
Aggressive International Capital IDS Life Special IDS Life Growth
Growth Equity Resource Managed Income Moneyshare Dimensions
1 year $ 20.39 $ 23.15 $ 20.39 $ 20.08 $ 20.39 $ 18.75 $ 20.80
3 years 62.99 71.35 62.99 62.06 62.99 58.02 64.23
5 years 108.15 122.16 108.15 106.59 108.15 99.78 110.24
10 years 233.30 261.62 233.30 230.11 233.30 216.16 237.54
Putnam
IDS Life IDS Life AIM V.I. VT New American Templeton Warburg Pincus
Global Income Growth and Opportunities Century Developing Trust/Small
Yield Advantage Income Fund VP Value Markets: Class ICompany Growth
1 year $ 22.85 $ 20.18 $ 20.59 $ 19.98 $ 23.77 $ 29.71 $ 25.20
3 years 70.42 62.37 63.61 61.75 73.20 90.96 77.50
5 years 120.61 107.11 109.20 160.07 125.25 154.72 132.43
10 years 258.51 231.17 235.42 229.04 267.81 325.79 282.11
</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 .074% charge based on the 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.
<PAGE>
Condensed Financial Information (Unaudited)
The following tables give per-unit information about the financial history of
each variable subaccount.
Year Ended Dec. 31,
1997 1996 1
Subaccount GC (Investing in shares of IDS Life Capital Resource Fund)
Accumulation unit $1.02 $1.00
value at beginning
of period
Accumulation unit value $1.25 $1.02
at end of period
Number of accumulation 3,726 655
units outstanding at end
of period (000 omitted)
Ratio of operating 1.25% 1.25%
expense to average
net assets
Subaccount GI (Investing in shares of IDS Life International Equity Fund)
Accumulation unit $1.02 $1.00
value at beginning
of period
Accumulation unit value $1.04 $1.02
at end of period
Number of accumulation 4,751 712
units outstanding at end
of period (000 omitted)
Ratio of operating 1.25% 1.25%
expense to average
net assets
Subaccount GA (Investing in shares of IDS Life Aggressive Growth Fund)
Accumulation unit $1.01 $1.00
value at beginning
of period
Accumulation unit value $1.13 $1.01
at end of period
Number of accumulation 4,737 1,005
units outstanding at end
of period (000 omitted)
Ration of operating 1.25% 1.25%
expense to average
net assets
Subaccount GS (Investing in shares of IDS Life Special Income Fund)
Accumulation unit $1.02 $1.00
value at beginning
of period
Accumulation unit value $1.10 $1.02
at end of period
Number of accumulation 6,445 1,283
units outstanding at end
of period (000 omitted)
Ratio of operating 1.25% 1.25%
expense to average
net assets
Subaccount GM (Investing in shares of IDS Life Moneyshare Fund)
Accumulation unit $1.01 $1.00
value at beginning
of period
Accumulation unit value $1.05 $1.01
at end of period
Number of accumulation 10,767 2,865
units outstanding at end
of period (000 omitted)
Ratio of operating 1.25% 1.25%
expense to average
net assets
Subaccount GD (Investing in shares of IDS Life Managed Fund)
Accumulation unit $1.04 $1.00
value at beginning
of period
Accumulation unit value $1.23 $1.04
at end of period
Number of accumulation 8,589 1,301
units outstanding at end
of period (000 omitted)
Ratio of operating 1.25% 1.25%
expense to average
net assets
Subaccount GG (Investing in shares of IDS Life Growth Dimensions Fund)
Accumulation unit $1.02 $1.00
value at beginning
of period
Accumulation unit value $1.25 $1.02
at end of period
Number of accumulation 19,979 3,667
units outstanding at end
of period (000 omitted)
Ratio of operating 1.25% 1.25%
expense to average
net assets
Subaccount GY (Investing in shares of IDS Life Global Yield Fund)
Accumulation unit $1.03 $1.00
value at beginning
of period
Accumulation unit value $1.05 $1.03
at end of period
Number of accumulation 3,672 592
units outstanding at end
of period (000 omitted)
Ratio of operating 1.25% 1.25%
expense to average
net assets
Subaccount GV (Investing in shares of IDS Life Income Advantage Fund)
Accumulation unit $1.02 $1.00
value at beginning
of period
Accumulation unit value $1.14 $1.02
at end of period
Number of accumulation 8,904 1,917
units outstanding at end
of period (000 omitted)
Ratio of operating 1.25% 1.25%
expense to average
net assets
Subaccount GW (Investing in shares of Aim V.I. Growth and Income Fund)
Accumulation unit $1.04 $1.00
value at beginning
of period
Accumulation unit value $1.29 $1.04
at end of period
Number of accumulation 10,124 1,386
units outstanding at end
of period (000 omitted)
Ratio of operating 1.25% 1.25%
expense to average
net assets
Subaccount GN (Investing in shares of Putnam VT New Opportunities Fund)
Accumulation unit $0.93 $1.00
value at beginning
of period
Accumulation unit value $1.14 $0.93
at end of period
Number of accumulation 12,772 2,682
units outstanding at end
of period (000 omitted)
Ratio of operating 1.25% 1.25%
expense to average
net assets
Subaccount GP (Investing in shares of American Century VP Value)
Accumulation unit $1.06 $1.00
value at beginning
of period
Accumulation unit value $1.32 $1.06
at end of period
Number of accumulation 5,589 806
units outstanding at end
of period (000 omitted)
Ratio of operating 1.25% 1.25%
expense to average
net assets
Subaccount GK (Investing in Class 1 shares of Templeton Developing Markets Fund)
Accumulation unit $1.00 $1.00
value at beginning
of period
Accumulation unit value $0.70 $1.00
at end of period
Number of accumulation 10,950 1,399
units outstanding at end
of period (000 omitted)
Ratio of operating 1.25% 1.25%
expense to average
net assets
Subaccount GT (Investing in shares of
Warburg Pincus Trust/Small Company Growth Portfolio)
Accumulation unit $0.98 $1.00
value at beginning
of period
Accumulation unit value $1.12 $0.98
at end of period
Number of accumulation 11,690 1,781
units outstanding at end
of period (000 omitted)
Ratio of operating 1.25% 1.25%
expense to average
net assets
1 Commencement of operations was Oct. 8, 1996.
<PAGE>
Financial statements
The SAI, dated May 1, 1998, contains:
The audited financial statements of the Variable Account including:
- - statements of net assets as of Dec. 31, 1997;
- - statements of operations for the year ended Dec. 31, 1997; and
- - statements of changes in net assets for the year ended Dec. 31, 1997
and from Oct. 8, 1996 (commencement of operations) to Dec. 31, 1996.
The audited financial statements of IDS Life Insurance Company of New York
including:
- - balance sheets as of Dec. 31, 1997 and Dec. 31, 1996; and
- - related statements of income, stockholder's equity and cash flows for
each of the three years in the period ended Dec. 31, 1997.
<PAGE>
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. We show actual performance from date the
subaccounts began investing in funds. We also show performance from the
commencement date of the funds as if the annuity had existed at that time.
Simple yield - Account GM (investing in IDS Life 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 IDS Life 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 ten years (or
up to the life of the account if it is less than ten 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 average
annual 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
aggregate 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>
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:
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
Putnam VT New Opportunities Fund GN
American Century VP Value GP
Templeton Developing Markets Fund: Class 1 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>
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: 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: growth of capital, with current income as a secondary objective. The
fund seeks to achieve its objective by generally investing at least 65% of its
net assets in stocks of companies believed by management to have the potential
for above average growth in revenues and earnings.
Putnam VT New Opportunities Fund
Objective: long-term capital appreciation. Invests principally in common stocks
of companies in sectors of the economy that Putnam Investment Management, Inc.,
the funds' investment manager, believes possess above-average, long-term growth
potential.
American Century VP 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.
Templeton Developing Markets Fund: Class I
Objective: long-term capital appreciation. Invests primarily in equity
securities of issuers in countries having developing markets.
<PAGE>
Warburg Pincus Trust/Small Company Growth Portfolio
Objective: capital growth. Invests primarily in equity securities of small-sized
domestic companies.
More comprehensive information regarding each fund is contained in the fund
prospectus. You should read the fund prospectus and consider carefully, and on a
continuing basis, which fund or combination of funds is best suited to your
long-term investment needs. There is no assurance that the investment objectives
of the funds will be attained nor is there any guarantee that the contract value
will equal or exceed the total purchase payments made. Some funds may involve
more risk than others--please monitor your investments accordingly.
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. Please refer to the fund
prospectuses for risk disclosure regarding mixed and shared funding.
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 that 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 of IDS Life Funds.
American Express Asset Management International, Inc., a wholly-owned
subsidiary of AEFC, is the sub-investment advisor for IDS Life
International Equity Fund;
<PAGE>
o AIM V.I. Growth and Income Fund - A I M Advisors, Inc., 11 Greenway Plaza,
Suite 100, Houston, TX 77046-1173;
o Putnam VT New Opportunities Fund - Putnam Investment Management, Inc., One
Post Office Square, Boston, MA 02109;
o American Century VP Value - American Century Investment Management, Inc.,
American Century Tower, 4500 Main Street, Kansas City, MO 64111;
o Templeton Developing Markets Fund - Templeton Asset Management Ltd.,
Temasek Blvd., #38-03, Suntec Tower One, Singapore 038987;
o Warburg Pincus Trust/Small Company Growth Portfolio - Warburg Asset
Management, 466 Lexington Avenue, New York, NY 10017-3147.
The investment managers and advisors 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 may 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. Please remember
that investment performance, expenses and deduction of certain charges affect
accumulation value.
<PAGE>
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.
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 business days after we receive it at our
Albany office. If your application is accepted, we will send you a contract. If
we cannot accept your application within five business 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 after we receive your payments at our
Albany office.
The retirement date
Upon processing your application, we will establish the retirement date to the
maximum age or date as specified on the next page. 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 and Roth IRAs, 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.
For qualified annuities except Roth IRAs, to avoid IRS penalty taxes, the
retirement date generally must be:
o on or after the date the annuitant reaches age 59 1/2; and
o for IRA's, SIMPLE IRAs and SEPs, by April 1 of the year following the
calendar year when the annuitant reaches ages 70 1/2.
o for all other qualified annuities, by April 1 of the year following the
calendar year when the annuitant reaches age 70 1/2 or, if later, retires,
except that 5% business owners may not select a retirement date that is
later than April 1 of the year following the calendar year when they reach
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.)
<PAGE>
Minimum purchase payment
If single payment:
Nonqualified: $2,000
Qualified: $1,000
o Minimum additional purchase payment: $50
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
<PAGE>
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.
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 may use any profits realized from the mortality and expense risk 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>
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 a 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: AEFC 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>
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);
o transfers into or out of the variable subaccount(s);
o partial surrenders;
<PAGE>
o surrender charges; and/or
o contract administrative charges.
Accumulation unit values will 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, or from the fixed
account to one or more variable accounts. There is no charge for dollar-cost
averaging.
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
Month invested unit value units 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 Sept.) 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>
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.
Because this strategy involves continuous investing, your success with
dollar-cost averaging will depend upon your willingness to continue to invest
regularly through periods of low price levels. Dollar-cost averaging can be an
effective way 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 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.
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 certain transfer periods 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.
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:
<PAGE>
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
subaccounts or fixed account 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)
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.
<PAGE>
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.
Note: You will be charged a fee if you request express mail delivery.
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:
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.
<PAGE>
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.
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;
<PAGE>
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 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 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, or other date permitted by the Code; 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 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;
<PAGE>
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, ten or 15 years certain: Monthly payouts are
made for a guaranteed payout period of five, ten 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 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 while both the annuitant and a joint annuitant 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 that you elect. 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;
<PAGE>
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 fixed-dollar 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 according
to our records. Roth IRAs may grow tax-free if you meet certain distribution
requirements.
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.
<PAGE>
Death benefits to beneficiaries: The death benefit under an annuity is not
tax-exempt. Any amount received by the beneficiary that represents previously
deferred income 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: For nonqualified
annuities 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. If you receive amounts from your SIMPLE IRA before reaching age 59 1/2,
generally, the IRS 10% penalty provisions apply. However, if you receive these
amounts before age 59 1/2 and within the first two years of your participation
in the SIMPLE IRA plan, the IRS penalty will be assessed at the rate of 25%
instead of 10%. 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 other qualified annuities, other penalties or exceptions may apply if you
surrender your annuity before your plan specifies that payouts can be made.
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 may 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.
<PAGE>
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, Roth IRA or SIMPLE 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 for income tax purposes, 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 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.
<PAGE>
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.
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, another registered
open-end management investment company may be substituted for fund shares held
in the subaccount(s) when IDS Life of New York believes it would be in the best
interest of persons having voting rights under the contract. IDS Life of New
York also reserves the right to change the funds in which the subaccounts invest
and to create new subaccounts that invest in additional funds.
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.
<PAGE>
About IDS Life of New York
The Flexible Portfolio Annuity is issued by IDS Life of New York. IDS Life of
New York is a wholly-owned subsidiary of IDS Life, which is a wholly-owned
subsidiary of AEFC. AEFC 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 AEFC.
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 8,600
financial advisors.
Other subsidiaries provide investment management and related services for
pension, profit-sharing, employee savings and endowment funds of businesses and
institutions.
Year 2000
The Year 2000 issue is the result of computer programs having been written using
two digits rather than four to define a year. Any programs that have
time-sensitive software may recognize a date using "00" as the year 1900 rather
than 2000. This could result in the failure of major systems or miscalculations,
which could have a material impact on the operations of the IDS Life of New York
Flexible Portfolio Annuity Account. The IDS Life of New York Flexible Portfolio
Annuity Account has no computer systems of its own but is dependent upon the
systems maintained by, AEFC and certain other third parties.
A comprehensive review of AEFC's computer systems and business processes has
been conducted to identify the major systems that could be affected by the Year
2000 issue. Steps are being taken to resolve any potential problems including
modification of existing software and the purchase of new software. These
measures are scheduled to be completed and tested on a timely basis. AEFC's goal
is to complete internal remediation and testing of each of its critical systems
by the end of 1998 and to continue compliance efforts through 1999. The Year
2000 readiness of unaffiliated investment managers and other third parties whose
system failures could have an impact on IDS Life of New York Flexible Portfolio
Annuity Account's operations currently is being evaluated. The potential
materiality of any such impact is not known at this time.
<PAGE>
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>
Table of contents of the Statement of Additional Information
IDS Life of New York Preferred Retirement Account...................3
Performance information.............................................3
Calculating annuity payouts.........................................7
Rating agencies.....................................................8
Principal underwriter...............................................9
Independent auditors................................................9
Prospectus..........................................................9
Financial statements -
IDS Life of New York Flexible Portfolio Annuity Account
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 Variable Trust
___American Century Variable 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>
STATEMENT OF ADDITIONAL INFORMATION
for
IDS LIFE OF NEW YORK FLEXIBLE PORTFOLIO ANNUITY
IDS Life of New York Flexible Portfolio Annuity Account
May 1, 1998
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 May 1, 1998, is not a
prospectus. It should be read together with the account's prospectus, dated May
1, 1998, 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
800-541-2251
<PAGE>
TABLE OF CONTENTS
IDS Life of New York Preferred Retirement Account......................p. 3
Performance Information................................................p. 3
Calculating Annuity Payouts............................................p. 7
Rating Agencies........................................................p. 8
Principal Underwriter..................................................p. 9
Independent Auditors...................................................p. 10
Prospectus.............................................................p. 10
Financial Statements
IDS Life of New York Flexible Portfolio Annuity Account
DS Life Insurance Company of New York
<PAGE>
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:
<TABLE>
<CAPTION>
IDS Life of New York Preferred Non-deductible IRA
Retirement
Account
<S> <C> <C>
- --------------------------- --------------------------------------- ----------------------------------------
Maximum amount you can $50,000 to $1 million initially, then $2,000 per year ($4,000 per year for
contribute $50,000 to $100,000 per year married individuals filing jointly)
depending on your age. (spouse can
have own plan)
- --------------------------- --------------------------------------- ----------------------------------------
Highest age you can 90th birthday 701/2years old
contribute
- --------------------------- --------------------------------------- ----------------------------------------
Types of income you can Any type: wages, investment income, Generally limited to income from
contribute gifts, inheritance, etc. employment
- --------------------------- --------------------------------------- ----------------------------------------
Records you must keep None required, but IDS Life of New You must keep all records yourself
York furnishes you regular reports
for your files
- --------------------------- --------------------------------------- ----------------------------------------
Reports you must file None You must report all contributions and
with the IRS withdrawals each year
- --------------------------- --------------------------------------- ----------------------------------------
Age at which you must 90th birthday 701/2years old
begin withdrawals
- --------------------------- --------------------------------------- ----------------------------------------
</TABLE>
<PAGE>
PERFORMANCE INFORMATION
Calculation of yield for Subaccount GM (Investing in IDS Life Moneyshare Fund)
Subaccount GM, which invests in IDS Life Moneyshare Fund, 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:
Compound Yield = [(return for seven-day period +1) x (365/7)] - 1
Annualized Yield based on the seven-day Period ended Dec. 31, 1997
Subaccount investing in: Simple Yield Compound Yield
IDS Life Moneyshare Fund 3.91% 3.99%
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 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
<PAGE>
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.
Annualized Yield based on the 30-day Period ended Dec. 31, 1997
Subaccount investing in: Yield
IDS Life Special Income (GS) 6.75%
IDS Life Global Yield (GY) 5.86
IDS Life Income Advantage (GV) 8.23
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 ten years (or,
if less, up to the life of the account), calculated according to the following
formula:
n
P(1+T) = 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).
We show actual performance from the date the subaccounts began investing in
funds. We also show performance from the commencement date of the funds as if
the annuity had existed at that time.
Average Annual Total Return For Period Ended: Dec. 31, 1997
<PAGE>
<TABLE>
<CAPTION>
Average Annual Total Return with Surrender
Performance Since Performance Since
Commencement of the Subaccount Commencement of the Fund
Since Since
Subaccount investing in:* 1 Year Commencement 1 Year 5 Years 10 Years Commencement
<S> <C> <C> <C> <C> <C> <C>
IDS LIFE
Aggressive Growth Fund 4.15% 4.46% 4.15% 10.69% -- 10.34%
(10/96;1/92)*
Capital Resource Fund 15.51 14.06 15.51 10.26 13.16 --
(10/86;10/81)
Global Yield (10/96;4/96) -4.53 -1.46 -4.53 -- -- 1.57
Growth Dimensions (10/96;4/96) 15.73 14.10 15.73 -- -- 16.40
Income Advantage (10/96;4/96) 4.88 5.68 4.88 -- -- 6.03
International Equity Fund -5.64 -2.67 -5.64 6.89 -- 6.36
(10/96;1/92)
Managed Fund (10/96;4/86) 10.94 12.56 10.94 11.13 12.40 --
Moneyshare Fund (10/96;10/81) -3.22 -1.98 -3.22 2.17 4.18 --
Special Income Fund (10/96;10/81) 0.40 2.16 0.40 7.49 8.42 --
AIM
AIM V.I. Growth and Income Fund 17.07 17.38 17.07 -- -- 18.47
(10/96;5/94)
AMERICAN
American Century VP Value 17.42 20.12 17.42 -- -- 17.79
(10/96:5/96)
PUTNAM
Putnam VT New Opportunities Fund 14.67 5.37 14.67 -- -- 20.27
(10/96;5/94)
TEMPLETON
Templeton Developing Markets -37.15 -31.56 -37.15 -- -- -25.69
Funds Class 1 (10/96;5/96)
WARBURG
Warburg Pincus Trust - Small 7.13 4.29 7.13 -- -- 18.30
Company Growth (10/.96;6/95)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Average Annual Total Return without Surrender
Performance Since Performance Since
Commencement of the Subaccount Commencement of the Fund
Since Since
Subaccount investing in:* 1 Year Commencement 1 Year 5 Years 10 Years Commencement
<S> <C> <C> <C> <C> <C>
IDS LIFE
Aggressive Growth Fund 11.15% 10.06% 11.15% 11.35% --% 10.85%
(10/96;1/92)*
Capital Resource Fund 22.51 19.55 22.51 10.93 13.16 --
(10/86;10/81)
Global Yield (10/96;4/96) 2.47 4.22 2.47 -- -- 5.66
Growth Dimensions (10/96;4/96) 22.73 19.59 22.73 -- -- 20.15
Income Advantage (10/96;4/96) 11.88 11.27 11.88 -- -- 10.01
International Equity Fund 1.36 3.02 1.36 7.65 -- 6.97
(10/96;1/92)
Managed Fund (10/96;4/86) 17.94 18.07 17.94 11.77 12.40 --
Moneyshare Fund (10/96;10/81) 3.78 3.70 3.78 3.07 4.18 --
Special Income Fund (10/96;10/81) 7.40 7.78 7.40 8.22 8.42 --
AIM
AIM V.I. Growth and Income Fund 24.07 22.84 24.07 -- -- 19.50
(10/96;5/94)
AMERICAN
American Century VP Value 24.42 25.54 24.42 -- -- 21.50
(10/96:5/96)
PUTNAM
Putnam VT New Opportunities Fund 21.67 10.96 21.67 -- -- 21.26
(10/96;5/94)
TEMPLETON
Templeton Developing Markets -30.15 -25.41 -30.15 -- -- -20.92
Funds Class 1 (10/96;5/96)
WARBURG
Warburg Pincus Trust - Small 14.13 9.90 14.13 -- -- 20.44
Company Growth (10/96;6/95)
*(Commencement dates of the subaccounts; commencement dates of the funds).
</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.
<PAGE>
Total return figures reflect the deduction of all applicable charges including
the contract administrative charge and mortality and expense risk fee.
Performance of the subaccounts may be quoted or compared to rankings, yields, or
returns or used in variable annuity accumulation or settlement illustrations 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, CDA Technologies, 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, Morningstar, 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.
<PAGE>
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,
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>
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.
Surrender charges received by IDS Life of New York for 1997 and 1996, aggregated
$688,445 and 551,374, respectively. Commissions paid IDS Life of New York for
1997 and 1996, aggregated $1,067,783 and 1,036,511, respectively. The surrender
charges were applied towards payment of commissions.
INDEPENDENT AUDITORS
The financial statements of IDS Life of New York Flexible Portfolio Annuity
Account including the statements of net assets as of Dec. 31, 1997, and the
related statements of operations for the year then ended, and the statements of
changes in net assets for the year ended Dec. 31, 1997 and for the period ended
Oct. 8, 1996 (commencement of operations) to Dec. 31, 1996, and the financial
statements of IDS Life Insurance Company of New York as of Dec. 31, 1997 and
1996, and for each of the three years in the period ended Dec. 31, 1997,
appearing in this prospectus and Statement of Additional Information have been
audited by Ernst & Young LLP, independent auditors, as stated in their reports
appearing herein.
PROSPECTUS
The prospectus dated May 1, 1998, is hereby incorporated in this Statement of
Additional Information by reference.
<PAGE>
IDS Life of New York Flexible Portfolio Annuity Account
Annual Financial Information
Report of Independent Auditors
The Board of Directors
IDS Life Insurance Company of New York
We have audited the accompanying individual and combined statements of net
assets of the segregated asset subaccounts of IDS Life of New York Flexible
Portfolio Annuity Account (comprised of subaccounts GC, GI, GA, GS, GM, GD, GG,
GY, GV, GW, GN, GP, GK and GT) as of December 31, 1997, and the related
statements of operations for the year then ended and the statements of changes
in net assets for the year ended December 31, 1997 and the period October 8,
1996 (commencement of operations) to December 31, 1996. These financial
statements are the responsibility of the management of IDS Life Insurance
Company of New York. 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. Our procedures included
confirmation of securities owned at December 31, 1997 with the affiliated and
unaffiliated mutual fund managers. 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 individual and combined financial position of the
segregated asset subaccounts of IDS Life of New York Flexible Portfolio Annuity
Account at December 31, 1997, and the individual and combined results of their
operations and changes in their net assets for the periods described above, in
conformity with generally accepted accounting principles.
Ernst & Young LLP
Minneapolis, Minnesota
March 13, 1998
<PAGE>
<TABLE>
<CAPTION>
IDS Life of New York Flexible Portfolio Annuity Account
- ------------------------------------------------------------------------------------------------------------------------------------
Statements of Net Assets Dec. 31, 1997
Segregated Asset Subaccount
--------------------------------------------------------------------------------------
Assets GC GI GA GS GM
- ------------------------------------------------------------------------------------------------------------------------------------
Investments in shares of mutual funds,
at market value:
IDS Life Capital Resource Fund
162,816 shares at net asset value
<S> <C> <C> <C> <C> <C>
of $28.58 per share (cost $4,334,011) $ 4,652,641 $ - $ - $ - $ -
IDS Life International Equity Fund
362,483 shares at net asset value
of $13.63 per share (cost $5,115,691) - 4,940,247 - - -
IDS Life Aggressive Growth
332,329 shares at net asset value
of $16.07 per share (cost $5,397,423) - - 5,340,751 - -
IDS Life Special Income Fund
600,047 shares at net asset value
of $11.80 per share (cost $7,147,573) - - - 7,077,601 -
IDS Life Moneyshare Fund, Inc.
11,276,121 shares at net asset value
of $1.00 per share (cost $11,275,168) - - - - 11,275,181
IDS Life Managed Fund, Inc.
590,826 shares at net asset value
of $18.04 per share (cost $10,680,370) - - - - -
IDS Life Growth Dimensions Fund
1,825,758 shares at net asset value
of $13.70 per share (cost $22,670,916) - - - - -
IDS Life Global Yield Fund
372,510 shares at net asset value
of $10.39 per share (cost $3,859,206) - - - - -
IDS Life Income Advantage Fund
980,361 shares at net asset value
of $10.38 per share (cost $10,032,784) - - - - -
AIM V.I. Growth and Income Fund
693,907 shares at net asset value
of $18.87 per share (cost $11,996,080) - - - - -
Putnam VT New Opportunities Fund
686,483 shares at net asset value
of $21.23 per share (cost $12,872,714) - - - - -
American Century VP Value
1,069,368 shares at net asset value
of $6.93 per share (cost $6,657,764) - - - - -
Templeton Developing Markets Fund: Class 1
1,155,694 shares at net asset value
of $6.63 per share (cost $10,713,510) - - - - -
Warburg Pincus Trust/Small
Company Growth Portfolio
799,073 shares at net asset value
of $16.48 per share (cost $11,880,238) - - - - -
- ------------------------------------------------------------------------------------------------------------------------------------
4,652,641 4,940,247 5,340,751 7,077,601 11,275,181
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends receivable - - - 41,972 49,941
Accounts receivable from IDS Life of New York
for contract purchase payments 21,339 5,094 1,515 12,681 53,536
Receivable from mutual funds for
share redemptions - - - 1,517 18,906
- ------------------------------------------------------------------------------------------------------------------------------------
Total assets 4,673,980 4,945,341 5,342,266 7,133,771 11,397,564
- ------------------------------------------------------------------------------------------------------------------------------------
Liabilities
- ------------------------------------------------------------------------------------------------------------------------------------
Payable to IDS Life of New York for:
Mortality and expense risk fee 5,012 5,337 5,852 7,677 11,976
Contract terminations - - - 1,517 18,906
Payable to mutual funds for investments
purchased 21,339 5,094 1,515 46,976 91,501
- ------------------------------------------------------------------------------------------------------------------------------------
Total liabilities 26,351 10,431 7,367 56,170 122,383
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to contracts in
accumulation period 4,647,629 4,934,764 5,334,899 7,077,601 11,275,181
Net assets applicable to contracts in
payment period - 146 - - -
- ------------------------------------------------------------------------------------------------------------------------------------
Total net assets $ 4,647,629 $ 4,934,910 $ 5,334,899 $ 7,077,601 $ 11,275,181
- ------------------------------------------------------------------------------------------------------------------------------------
Accumulation units outstanding 3,726,211 4,750,619 4,736,533 6,444,921 10,766,759
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value per accumulation unit $ 1.25 $ 1.04 $ 1.13 $ 1.10 $ 1.05
- ------------------------------------------------------------------------------------------------------------------------------------
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
IDS Life of New York Flexible Portfolio Annuity Account
- ------------------------------------------------------------------------------------------------------------------------------------
Statements of Net Assets - continued Dec. 31, 1997
Segregated Asset Subaccounts
---------------------------------------------------------------------------------------
Assets GD GG GY GV GW
- ------------------------------------------------------------------------------------------------------------------------------------
Investments in shares of mutual funds,
at market value:
IDS Life Capital Resource Fund
162,816 shares at net asset value
<S> <C> <C> <C> <C> <C>
of $28.58 per share (cost $4,334,011) $ - $ - $ - $ - $ -
IDS Life International Equity Fund
362,483 shares at net asset value
of $13.63 per share (cost $5,115,691) - - - - -
IDS Life Aggressive Growth
332,329 shares at net asset value
of $16.07 per share (cost $5,397,423) - - - - -
IDS Life Special Income Fund
600,047 shares at net asset value
of $11.80 per share (cost $7,147,573) - - - - -
IDS Life Moneyshare Fund, Inc.
11,276,121 shares at net asset value
of $1.00 per share (cost $11,275,168) - - - - -
IDS Life Managed Fund, Inc.
590,826 shares at net asset value
of $18.04 per share (cost $10,680,370) 10,657,052 - - - -
IDS Life Growth Dimensions Fund
1,825,758 shares at net asset value
of $13.70 per share (cost $22,670,916) - 25,012,883 - - -
IDS Life Global Yield Fund
372,510 shares at net asset value
of $10.39 per share (cost $3,859,206) - - 3,869,646 - -
IDS Life Income Advantage Fund
980,361 shares at net asset value
of $10.38 per share (cost $10,032,784) - - - 10,180,906 -
AIM V.I. Growth and Income Fund
693,907 shares at net asset value
of $18.87 per share (cost $11,996,080) - - - - 13,094,023
Putnam VT New Opportunities Fund
686,483 shares at net asset value
of $21.23 per share (cost $12,872,714) - - - - -
American Century VP Value
1,069,368 shares at net asset value
of $6.93 per share (cost $6,657,764) - - - - -
Templeton Developing Markets Fund: Class 1
1,155,694 shares at net asset value
of $6.63 per share (cost $10,713,510) - - - - -
Warburg Pincus Trust/Small
Company Growth Portfolio
799,073 shares at net asset value
of $16.48 per share (cost $11,880,238) - - - - -
- ------------------------------------------------------------------------------------------------------------------------------------
10,657,052 25,012,883 3,869,646 10,180,906 13,094,023
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends receivable - - 19,766 72,519 -
Accounts receivable from IDS Life of New York
for contract purchase payments 20,271 49,017 8,192 - -
Receivable from mutual funds for
share redemptions 25,208 - - - -
- ------------------------------------------------------------------------------------------------------------------------------------
Total assets 10,702,531 25,061,900 3,897,604 10,253,425 13,094,023
- ------------------------------------------------------------------------------------------------------------------------------------
Liabilities
- ------------------------------------------------------------------------------------------------------------------------------------
Payable to IDS Life of New York for:
Mortality and expense risk fee 11,469 27,082 4,178 10,946 14,006
Contract terminations 25,208 - - - -
Payable to mutual funds for investments
purchased 20,271 49,017 23,780 61,573 -
- ------------------------------------------------------------------------------------------------------------------------------------
Total liabilities 56,948 76,099 27,958 72,519 14,006
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to contracts in
accumulation period 10,550,806 24,930,686 3,869,514 10,180,906 13,057,482
Net assets applicable to contracts in
payment period 94,777 55,115 132 - 22,535
- ------------------------------------------------------------------------------------------------------------------------------------
Total net assets $ 10,645,583 $ 24,985,801 $ 3,869,646 $ 10,180,906 $ 13,080,017
- ------------------------------------------------------------------------------------------------------------------------------------
Accumulation units outstanding 8,588,876 19,978,769 3,672,423 8,903,708 10,124,465
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value per accumulation unit $ 1.23 $ 1.25 $ 1.05 $ 1.14 $ 1.29
- ------------------------------------------------------------------------------------------------------------------------------------
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
IDS Life of New York Flexible Portfolio Annuity Account
- ------------------------------------------------------------------------------------------------------------------------------------
Statements of Net Assets - continued Dec. 31, 1997
Segregated Asset Subaccount
------------------------------------------------------------------- Combined
Assets GN GP GK GT Variable
Account
- ------------------------------------------------------------------------------------------------------------------------------------
Investments in shares of mutual funds,
at market value:
IDS Life Capital Resource Fund
162,816 shares at net asset value
<S> <C> <C> <C> <C> <C>
of $28.58 per share (cost $4,334,011) $ - $ - $ - $ - $ 4,652,641
IDS Life International Equity Fund
362,483 shares at net asset value
of $13.63 per share (cost $5,115,691) - - - - 4,940,247
IDS Life Aggressive Growth
332,329 shares at net asset value
of $16.07 per share (cost $5,397,423) - - - - 5,340,751
IDS Life Special Income Fund
600,047 shares at net asset value
of $11.80 per share (cost $7,147,573) - - - - 7,077,601
IDS Life Moneyshare Fund, Inc.
11,276,121 shares at net asset value
of $1.00 per share (cost $11,275,168) - - - - 11,275,181
IDS Life Managed Fund, Inc.
590,826 shares at net asset value
of $18.04 per share (cost $10,680,370) - - - - 10,657,052
IDS Life Growth Dimensions Fund
1,825,758 shares at net asset value
of $13.70 per share (cost $22,670,916) - - - - 25,012,883
IDS Life Global Yield Fund
372,510 shares at net asset value
of $10.39 per share (cost $3,859,206) - - - - 3,869,646
IDS Life Income Advantage Fund
980,361 shares at net asset value
of $10.38 per share (cost $10,032,784) - - - - 10,180,906
AIM V.I. Growth and Income Fund
693,907 shares at net asset value
of $18.87 per share (cost $11,996,080) - - - - 13,094,023
Putnam VT New Opportunities Fund
686,483 shares at net asset value
of $21.23 per share (cost $12,872,714) 14,574,038 - - - 14,574,038
American Century VP Value
1,069,368 shares at net asset value
of $6.93 per share (cost $6,657,764) - 7,410,713 - - 7,410,713
Templeton Developing Markets Fund: Class 1
1,155,694 shares at net asset value
of $6.63 per share (cost $10,713,510) - - 7,662,250 - 7,662,250
Warburg Pincus Trust/Small
Company Growth Portfolio
799,073 shares at net asset value
of $16.48 per share (cost $11,880,238) - - - 13,168,722 13,168,722
- ------------------------------------------------------------------------------------------------------------------------------------
14,574,038 7,410,713 7,662,250 13,168,722 138,916,654
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends receivable - - - - 184,198
Accounts receivable from IDS Life of New York
for contract purchase payments - - - - 171,645
Receivable from mutual funds for
share redemptions - - - - 45,631
- ------------------------------------------------------------------------------------------------------------------------------------
Total assets 14,574,038 7,410,713 7,662,250 13,168,722 139,318,128
- ------------------------------------------------------------------------------------------------------------------------------------
Liabilities
- ------------------------------------------------------------------------------------------------------------------------------------
Payable to IDS Life of New York for:
Mortality and expense risk fee 15,724 7,862 8,264 14,244 149,629
Contract terminations - - - - 45,631
Payable to mutual funds for investments
purchased - - - - 321,066
- ------------------------------------------------------------------------------------------------------------------------------------
Total liabilities 15,724 7,862 8,264 14,244 516,326
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to contracts in
accumulation period 14,535,362 7,402,851 7,648,331 13,147,524 138,593,536
Net assets applicable to contracts in
payment period 22,952 - 5,656 6,954 208,267
- ------------------------------------------------------------------------------------------------------------------------------------
Total net assets $ 14,558,314 $ 7,402,851 $ 7,653,987 $ 13,154,478 $ 138,801,803
- ------------------------------------------------------------------------------------------------------------------------------------
Accumulation units outstanding 12,771,996 5,588,897 10,949,809 11,690,211
- --------------------------------------------------------------------------------------------------------------------
Net asset value per accumulation unit $ 1.14 $ 1.32 $ 0.70 $ 1.12
- --------------------------------------------------------------------------------------------------------------------
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
IDS Life of New York Flexible Portfolio Annuity Account
- ------------------------------------------------------------------------------------------------------------------------------------
Statements of Operations Year ended Dec. 31, 1997
Segretated Asset Subaccount
-------------------------------------------------------------------------------------
GC GI GA GS GM
Investment income
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Dividend income from mutual funds $ 106,567 $ 129,116 $ 429,112 $ 440,008 $ 391,971
Mortality and expense risk fee 30,721 33,575 38,955 53,110 96,933
- ------------------------------------------------------------------------------------------------------------------------------------
Investment income (loss) - net 75,846 95,541 390,157 386,898 295,038
- ------------------------------------------------------------------------------------------------------------------------------------
Realized and unrealized gain (loss) on investments - net
- ------------------------------------------------------------------------------------------------------------------------------------
Realized gain (loss) on sales of investments in mutual funds:
Proceeds from sales 167,144 46,931 201,525 406,708 6,451,459
Cost of investments sold 162,690 45,988 205,725 403,557 6,451,463
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on investments 4,454 943 (4,200) 3,151 (4)
- ------------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or
depreciation of investments 366,848 (179,569) 29,548 (65,525) 4
- ------------------------------------------------------------------------------------------------------------------------------------
Net gain (loss) on investments 371,302 (178,626) 25,348 (62,374) -
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations $ 447,148 $ (83,085) $ 415,505 $ 324,524 $ 295,038
- ------------------------------------------------------------------------------------------------------------------------------------
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
IDS Life of New York Flexible Portfolio Annuity Account
- ------------------------------------------------------------------------------------------------------------------------------------
Statements of Operations - continued Year ended Dec. 31, 1997
Segregated Asset Subaccount
-----------------------------------------------------------------------------------
GD GG GY GV GW
Investment income
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Dividend income from mutual funds $ 894,970 $ 115,872 $ 111,519 $ 524,255 $ 16,322
Mortality and expense risk fee 72,404 166,037 26,022 70,439 82,287
- ------------------------------------------------------------------------------------------------------------------------------------
Investment income (loss) - net 822,566 (50,165) 85,497 453,816 (65,965)
- ------------------------------------------------------------------------------------------------------------------------------------
Realized and unrealized gain (loss) on investments - net
- ------------------------------------------------------------------------------------------------------------------------------------
Realized gain (loss) on sales of investments in mutual funds:
Proceeds from sales 278,332 192,075 184,177 334,348 164,179
Cost of investments sold 279,897 170,130 184,563 331,956 147,829
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on investments (1,565) 21,945 (386) 2,392 16,350
- ------------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or
depreciation of investments 19,113 2,359,308 7,928 132,931 1,086,162
- ------------------------------------------------------------------------------------------------------------------------------------
Net gain (loss) on investments 17,548 2,381,253 7,542 135,323 1,102,512
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting
from operations $ 840,114 $ 2,331,088 $ 93,039 $ 589,139 $ 1,036,547
- ------------------------------------------------------------------------------------------------------------------------------------
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
IDS Life of New York Flexible Portfolio Annuity Account
- ------------------------------------------------------------------------------------------------------------------------------------
Statements of Operations - continued Year ended Dec. 31, 1997
Segregated Asset Subaccount
------------------------------------------------------------------------------ Combined
GN GP GK GT Variable
Investment income Account
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Dividend income from mutual funds $ - $ 23,003 $ 17,618 $ - $ 3,200,333
Mortality and expense risk fee 100,521 44,816 62,447 83,771 962,038
- ------------------------------------------------------------------------------------------------------------------------------------
Investment income (loss) - net (100,521) (21,813) (44,829) (83,771) 2,238,295
- ------------------------------------------------------------------------------------------------------------------------------------
Realized and unrealized gain (loss) on investments - net
- ------------------------------------------------------------------------------------------------------------------------------------
Realized gain (loss) on sales of investments in mutual funds:
Proceeds from sales 289,511 171,083 172,167 77,397 9,137,036
Cost of investments sold 273,228 153,153 174,541 70,949 9,055,669
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on investments 16,283 17,930 (2,374) 6,448 81,367
- ------------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or
depreciation of investments 1,751,084 726,149 (3,060,129) 1,239,168 4,413,020
- ------------------------------------------------------------------------------------------------------------------------------------
Net gain (loss) on investments 1,767,367 744,079 (3,062,503) 1,245,616 4,494,387
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations $ 1,666,846 $ 722,266 $ (3,107,332) $ 1,161,845 $ 6,732,682
- ------------------------------------------------------------------------------------------------------------------------------------
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
IDS Life of New York Flexible Portfolio Annuity Account
- ------------------------------------------------------------------------------------------------------------------------------------
Statements of Changes in Net Assets Year ended Dec. 31, 1997
Segregated Asset Subaccount
---------------------------------------------------------------------------------------
Operations GC GI GA GS GM
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment income (loss) - net $ 75,846 $ 95,541 $ 390,157 $ 386,898 $ 295,038
Net realized gain (loss) on investments 4,454 943 (4,200) 3,151 (4)
Net change in unrealized appreciation or
depreciation of investments 366,848 (179,569) 29,548 (65,525) 4
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting
from operations 447,148 (83,085) 415,505 324,524 295,038
- ------------------------------------------------------------------------------------------------------------------------------------
Contract Transactions
- ------------------------------------------------------------------------------------------------------------------------------------
Contract purchase payments 2,450,819 2,437,303 2,439,595 5,308,422 20,460,120
Net transfers* 1,099,174 1,869,148 1,498,450 162,836 (12,329,944)
Transfers for policy loans - 107 38 220 1,411
Annuity payments - - - - -
Contract charges (843) (849) (1,695) (412) (164)
Contract terminations:
Surrender benefits (15,537) (16,626) (32,770) (26,327) (40,487)
Death benefits - - (1,516) (2,339) -
- ------------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) from
contract transactions 3,533,613 4,289,083 3,902,102 5,442,400 8,090,936
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets at beginning of year 666,868 728,912 1,017,292 1,310,677 2,889,207
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets at end of year $ 4,647,629 $ 4,934,910 $ 5,334,899 $ 7,077,601 $ 11,275,181
- ------------------------------------------------------------------------------------------------------------------------------------
Accumulation Unit Activity
- ------------------------------------------------------------------------------------------------------------------------------------
Units outstanding at beginning of year 655,487 711,793 1,004,549 1,282,750 2,865,321
Contract purchase payments 2,157,496 2,299,123 2,342,369 5,032,759 19,890,315
Net transfers* 927,613 1,756,089 1,422,446 156,776 (11,950,989)
Transfers for policy loans - 99 36 202 1,352
Contract charges (701) (830) (1,511) (378) (157)
Contract terminations:
Surrender benefits (13,684) (15,655) (29,863) (24,967) (39,083)
Death benefits - - (1,493) (2,221) -
- ------------------------------------------------------------------------------------------------------------------------------------
Units outstanding at end of year 3,726,211 4,750,619 4,736,533 6,444,921 10,766,759
- ------------------------------------------------------------------------------------------------------------------------------------
*Includes transfer activity from (to) other subaccounts and transfers (from) to
IDS Life of New York for conversion from (to) fixed account.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
IDS Life of New York Flexible Portfolio Annuity Account
- ------------------------------------------------------------------------------------------------------------------------------------
Statements of Changes in Net Assets - continued Year ended Dec. 31, 1997
Segregated Asset Subaccount
--------------------------------------------------------------------------------------
Operations GD GG GY GV GW
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment income (loss) - net $ 822,566 $ (50,165) $ 85,497 $ 453,816 $ (65,965)
Net realized gain (loss) on investments (1,565) 21,945 (386) 2,392 16,350
Net change in unrealized appreciation or
depreciation of investments 19,113 2,359,308 7,928 132,931 1,086,162
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting
from operations 840,114 2,331,088 93,039 589,139 1,036,547
- ------------------------------------------------------------------------------------------------------------------------------------
Contract Transactions
- ------------------------------------------------------------------------------------------------------------------------------------
Contract purchase payments 5,619,073 12,266,806 1,946,252 6,288,864 6,923,961
Net transfers* 2,914,390 6,820,155 1,254,831 1,414,883 3,742,141
Transfers for policy loans 680 3,945 38 22 623
Annuity payments (7,024) (3,956) - (132) (243)
Contract charges (1,792) (6,631) (364) (738) (2,260)
Contract terminations:
Surrender benefits (73,885) (104,821) (26,105) (59,746) (60,312)
Death benefits - (46,009) (6,290) (6,927) -
- ------------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) from
contract transactions 8,451,442 18,929,489 3,168,362 7,636,226 10,603,910
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets at beginning of year 1,354,027 3,725,224 608,245 1,955,541 1,439,560
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets at end of year $ 10,645,583 $ 24,985,801 $ 3,869,646 $ 10,180,906 $ 13,080,017
- ------------------------------------------------------------------------------------------------------------------------------------
Accumulation Unit Activity
- ------------------------------------------------------------------------------------------------------------------------------------
Units outstanding at beginning of year 1,300,874 3,667,122 591,941 1,917,299 1,385,927
Contract purchase payments 4,935,470 10,644,073 1,894,305 5,772,299 5,752,786
Net transfers* 2,504,240 5,847,128 1,218,102 1,287,584 3,057,581
Transfers for policy loans 561 3,532 36 19 487
Contract charges (1,482) (5,458) (355) (676) (1,773)
Contract terminations:
Surrender benefits (150,787) (138,865) (25,499) (66,580) (70,543)
Death benefits - (38,763) (6,107) (6,237) -
- ------------------------------------------------------------------------------------------------------------------------------------
Units outstanding at end of year 8,588,876 19,978,769 3,672,423 8,903,708 10,124,465
- ------------------------------------------------------------------------------------------------------------------------------------
*Includes transfer activity from (to) other subaccounts and transfers (from) to
IDS Life of New York for conversion from (to) fixed account.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
IDS Life of New York Flexible Portfolio Annuity Account
- ------------------------------------------------------------------------------------------------------------------------------------
Statements of Changes in Net Assets - continued Year ended Dec. 31, 1997
Segregated Asset Subaccount
------------------------------------------------------------------- Combined
Operations GN GP GK GT Variable
Account
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment income (loss) - net $ (100,521) $ (21,813) $ (44,829) $ (83,771) $ 2,238,295
Net realized gain (loss) on investments 16,283 17,930 (2,374) 6,448 81,367
Net change in unrealized appreciation or
depreciation of investments 1,751,084 726,149 (3,060,129) 1,239,168 4,413,020
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting
from operations 1,666,846 722,266 (3,107,332) 1,161,845 6,732,682
- ------------------------------------------------------------------------------------------------------------------------------------
Contract Transactions
- ------------------------------------------------------------------------------------------------------------------------------------
Contract purchase payments 6,377,316 3,569,964 6,070,701 5,955,983 88,115,179
Net transfers* 4,074,747 2,308,606 3,355,024 4,342,808 22,527,249
Transfers for policy loans 3,546 285 492 220 11,627
Annuity payments (242) - (62) (64) (11,723)
Contract charges (4,776) (1,177) (1,630) (2,244) (25,575)
Contract terminations:
Surrender benefits (46,813) (54,779) (49,243) (50,468) (657,919)
Death benefits (19,243) - (11,809) (6,993) (101,126)
- ------------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) from
contract transactions 10,384,535 5,822,899 9,363,473 10,239,242 109,857,712
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets at beginning of year 2,506,933 857,686 1,397,846 1,753,391 22,211,409
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets at end of year $ 14,558,314 $ 7,402,851 $ 7,653,987 $ 13,154,478 $ 138,801,803
- ------------------------------------------------------------------------------------------------------------------------------------
Accumulation Unit Activity
- --------------------------------------------------------------------------------------------------------------------
Units outstanding at beginning of year 2,682,128 806,200 1,398,887 1,780,636
Contract purchase payments 6,228,058 2,944,807 6,136,005 5,783,092
Net transfers* 3,944,584 1,881,855 3,488,822 4,190,627
Transfers for policy loans 3,636 247 525 199
Contract charges (4,288) (917) (2,037) (2,030)
Contract terminations:
Surrender benefits (64,169) (43,295) (59,585) (55,810)
Death benefits (17,953) - (12,808) (6,503)
- --------------------------------------------------------------------------------------------------------------------
Units outstanding at end of year 12,771,996 5,588,897 10,949,809 11,690,211
- --------------------------------------------------------------------------------------------------------------------
*Includes transfer activity from (to) other subaccounts and transfers (from) to
IDS Life of New York for conversion from (to) fixed account.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
IDS Life of New York Flexible Portfolio Annuity Account
- ------------------------------------------------------------------------------------------------------------------------------------
Statements of Changes in Net Assets * Period ended Dec. 31, 1996
Segregated Asset Subaccount
------------------------------------------------------------------------
Operations GC GI GA GS GM
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment income (loss) - net $ 47,722 $ 4,944 $ 53,135 $ 7,724 $ 10,251
Net realized gain (loss) on investments (467) 286 47,230 16 -
Net change in unrealized appreciation or
depreciation of investments (48,218) 4,125 (86,220) (4,447) 9
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations (963) 9,355 14,145 3,293 10,260
- ------------------------------------------------------------------------------------------------------------------------------------
Contract Transactions
- ------------------------------------------------------------------------------------------------------------------------------------
Contract purchase payments 640,115 662,945 989,369 1,269,850 3,312,798
Net transfers** 27,716 56,639 13,778 37,534 (433,851)
Contract terminations:
Surrender benefits - (27) - - -
- ------------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) from contract transactions 667,831 719,557 1,003,147 1,307,384 2,878,947
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets at beginning of period - - - - -
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period $666,868 $728,912 $1,017,292 $1,310,677 $2,889,207
- ------------------------------------------------------------------------------------------------------------------------------------
Accumulation Unit Activity
- ------------------------------------------------------------------------------------------------------------------------------------
Units outstanding at beginning of period - - - - -
Contract purchase payments 628,152 655,908 990,500 1,245,785 3,296,776
Net transfers** 27,335 55,912 14,049 36,965 (431,455)
Contract terminations:
Surrender benefits - (27) - - -
- ------------------------------------------------------------------------------------------------------------------------------------
Units outstanding at end of period 655,487 711,793 1,004,549 1,282,750 2,865,321
- ------------------------------------------------------------------------------------------------------------------------------------
*Period from Oct. 8, 1996 (commencement of operations) to Dec. 31, 1996.
**Includes transfer activity from (to) other subaccounts and transfers (from) to IDS Life
of New York for conversion from (to) fixed account.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
IDS Life of New York Flexible Portfolio Annuity Account
- ------------------------------------------------------------------------------------------------------------------------------------
Statements of Changes in Net Assets * - continued Period ended Dec. 31, 1996
Segregated Asset Subaccount
------------------------------------------------------------------------
Operations GD GG GY GV GW
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment income (loss) - net $ 46,579 $ (1,255) $ 1,235 $ 12,959 $ 11,147
Net realized gain (loss) on investments (9) 742 265 147 434
Net change in unrealized appreciation or
depreciation of investments (42,431) (17,341) 2,512 15,191 11,773
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations 4,139 (17,854) 4,012 28,297 23,354
- ------------------------------------------------------------------------------------------------------------------------------------
Contract Transactions
- ------------------------------------------------------------------------------------------------------------------------------------
Contract purchase payments 1,270,380 3,496,209 537,267 1,835,892 1,262,754
Net transfers** 79,578 246,923 66,990 91,390 153,452
Contract terminations:
Surrender benefits (70) (54) (24) (38) -
- ------------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) from contract transactions 1,349,888 3,743,078 604,233 1,927,244 1,416,206
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets at beginning of period - - - - -
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period $1,354,027 $3,725,224 $608,245 $1,955,541 $1,439,560
- ------------------------------------------------------------------------------------------------------------------------------------
Accumulation Unit Activity
- ------------------------------------------------------------------------------------------------------------------------------------
Units outstanding at beginning of period - - - - -
Contract purchase payments 1,224,359 3,425,193 526,438 1,826,587 1,236,087
Net transfers** 76,583 241,982 65,527 90,750 149,840
Contract terminations:
Surrender benefits (68) (53) (24) (38) -
- ------------------------------------------------------------------------------------------------------------------------------------
Units outstanding at end of period 1,300,874 3,667,122 591,941 1,917,299 1,385,927
- ------------------------------------------------------------------------------------------------------------------------------------
*Period from Oct. 8, 1996 (commencement of operations) to Dec. 31, 1996.
**Includes transfer activity from (to) other subaccounts and transfers (from) to IDS Life
of New York for conversion from (to) fixed account.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
IDS Life of New York Flexible Portfolio Annuity Account
- ------------------------------------------------------------------------------------------------------------------------------------
Statements of Changes in Net Assets * - continued Period ended Dec. 31, 1996
Segregated Asset Subaccount
--------------------------------------------------------- Combined
Operations GN GP GK GT Variable
Account
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment income (loss) - net $ (3,269) $ (1,124) $ (1,645) $ (2,166) $ 186,237
Net realized gain (loss) on investments (768) 263 12 (158) 47,993
Net change in unrealized appreciation or
depreciation of investments (49,760) 26,800 8,869 49,316 (129,822)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations (53,797) 25,939 7,236 46,992 104,408
- ------------------------------------------------------------------------------------------------------------------------------------
Contract Transactions
- ------------------------------------------------------------------------------------------------------------------------------------
Contract purchase payments 2,392,793 745,842 1,255,828 1,590,766 21,262,808
Net transfers** 167,937 85,905 134,807 115,665 844,463
Contract terminations:
Surrender benefits - - (25) (32) (270)
- ------------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) from contract transactions 2,560,730 831,747 1,390,610 1,706,399 22,107,001
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets at beginning of period - - - - -
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period $2,506,933 $857,686 $1,397,846 $1,753,391 $22,211,409
- ------------------------------------------------------------------------------------------------------------------------------------
Accumulation Unit Activity
- -----------------------------------------------------------------------------------------------------------------------
Units outstanding at beginning of period - - - -
Contract purchase payments 2,504,655 723,028 1,263,919 1,659,770
Net transfers** 177,473 83,172 134,993 120,900
Contract terminations:
Surrender benefits - - (25) (34)
- -----------------------------------------------------------------------------------------------------------------------
Units outstanding at end of period 2,682,128 806,200 1,398,887 1,780,636
- -----------------------------------------------------------------------------------------------------------------------
*Period from Oct. 8, 1996 (commencement of operations) to Dec. 31, 1996.
**Includes transfer activity from (to) other subaccounts and transfers (from) to
IDS Life of New York for conversion from (to) fixed account.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
IDS Life of New York Flexible Portfolio Annuity Account
Notes to Financial Statements
- ---------------------------------------------------------------
1. Organization
IDS Life of New York Flexible Portfolio Annuity Account (the Account) was
established on April 17, 1996 as a segregated asset account of IDS Life
Insurance Company of New York (IDS Life of New York) under New York law and is
registered as a unit investment trust under the Investment Company Act of 1940.
The Account commenced operations on Oct. 8, 1996.
The assets of the Account are held for the exclusive benefit of the Flexible
Portfolio Annuity contract owners and are not chargeable with liabilities
arising out of the business conducted by any other segregated asset accounts or
by IDS Life of New York. Contract owners allocate their variable purchase
payments to one or more of the fourteen subaccounts. Such funds are then
invested in shares of nine mutual funds organized by IDS Life Insurance Company
(IDS Life) or in shares of one fund organized by AIM Advisors, Inc., one fund
organized by Putnam Investment Management, Inc., one fund organized by American
Century Investment Management, Inc., one fund organized by Templeton Asset
Management Ltd. or one fund portfolio organized by Warburg Pincus Counsellors,
Inc.
Each Fund is registered under the Investment Company Act of 1940 as a
diversified (non-diversified for Global Yield and Warburg Pincus Trust/Small
Company Growth Portfolio) open-end management investment company or series of an
open-end management investment company. IDS Life Capital Resource Fund, IDS Life
Special Income Fund and IDS Life Moneyshare Fund, Inc. commenced operations on
Oct. 13, 1981. IDS Life Managed Fund, Inc. commenced operations on April 30,
1986. IDS Life Aggressive Growth Fund and IDS Life International Equity Fund
commenced operations on Jan. 13, 1992. IDS Life Global Yield Fund, IDS Life
Income Advantage Fund and IDS Life Growth Dimensions Fund commenced operations
on April 30, 1996. AIM V.I. Growth and Income Fund commenced operations on May
2, 1994. Putnam VT New Opportunities Fund commenced operations on May 2, 1994.
American Century VP Value commenced operations on May 1, 1996. Templeton
Developing Markets Fund: Class 1 commenced operations March 4, 1996. Warburg
Pincus Trust/Small Company Growth Portfolio commenced operations on June 30,
1995. Funds allocated to subaccount GC are invested in the shares of IDS Life
Capital Resource Fund; subaccount GI invests in the shares of IDS Life
International Equity Fund; subaccount GA invests in the shares of IDS Life
Aggressive Growth Fund; subaccount GS invests in the shares of IDS Life Special
Income Fund; subaccount GM invests in the shares of IDS Life Moneyshare Fund,
Inc.; subaccount GD invests in the shares of IDS Life Managed Fund, Inc.;
subaccount GG invests in the shares of IDS Life Growth Dimensions Fund;
subaccount GY invests in the shares of IDS Life Global Yield Fund; subaccount GV
invests in the shares of IDS Life Income Advantage Fund; subaccount GW invests
in the shares of AIM V.I. Growth and Income Fund; subaccount GN invests in the
shares of Putnam VT New Opportunities Fund; subaccount GP invests in the shares
of American Century VP Value; subaccount GK invests in the shares of Templeton
Developing Markets Fund: Class 1 and subaccount GT invests in the shares of
Warburg Pincus Trust/Small Company Growth Portfolio.
IDS Life, parent company of IDS Life of New York, acts as the investment manager
and American Express Financial Corporation (AEFC), an affiliated company, acts
as the investment advisor for each of the IDS Life Funds. American Express Asset
Management International, Inc., a wholly owned subsidiary of AEFC, is the
sub-investment advisor for IDS Life International Equity Fund. AIM Advisors,
Inc. is the investment manager for AIM V.I. Growth and Income Fund. Putnam
Investment Management, Inc. is the investment manager for Putnam VT New
Opportunities Fund. American Century Investment Management, Inc. is the
investment manager for American Century VP Value. Templeton Asset Management
Ltd. is the investment manager for the Templeton Developing Markets Fund: Class
1. Warburg Pincus Counsellors, Inc. is the investment manager for the Warburg
Pincus Trust/Small Company Growth Portfolio. American Express Financial
Advisors, Inc. serves as the issuer of the contracts that invest in the IDS Life
of New York Flexible Portfolio Annuity Account.
- ---------------------------------------------------------------
2. Summary of Significant Accounting Policies
Investments in Mutual Funds
Investments in shares of the mutual funds are stated at market value, which is
the net asset value per share as determined by the respective funds. Investment
transactions are accounted for on the date the shares are purchased and sold.
The cost of investments sold and redeemed is determined on the average cost
method. Dividend distributions received from the mutual funds are reinvested in
additional shares of the mutual funds and are recorded as income by the
subaccounts on the ex-dividend date.
Unrealized appreciation or depreciation of investments in the accompanying
financial statements represents the subaccounts' share of the mutual funds'
undistributed net investment income, undistributed realized gain or loss and the
unrealized appreciation or depreciation on their investment securities.
Use of Estimates
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 disclosures of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of increase and decrease in net assets from operations
during the period. Actual results could differ from those estimates.
Federal Income Taxes
IDS Life of New York is taxed as a life insurance company. The Account is
treated as part of IDS Life of New York for federal income tax purposes. Under
existing tax law, no income taxes are payable with respect to any investment
income of the Account.
- ---------------------------------------------------------------
3. Mortality and Expense Risk Fee and Contract Charges
IDS Life of New York makes contractual assurances to the Account that possible
future adverse changes in administrative expenses and mortality experience of
the annuitants and beneficiaries will not affect the Account. The mortality and
expense risk fee paid to IDS Life of New York is computed daily and is equal, on
an annual basis, to 1.25 percent of the average daily net assets of the
subaccounts.
An annual charge of $30 is deducted from the contract value of each Flexible
Portfolio Annuity contract. The annual charges are deducted on each contract
anniversary for administrative services provided to the Account by IDS Life of
New York. The deduction will be allocated to the subaccounts on a pro-rata
basis. If the contract value or total purchase payments (less any payments
surrendered) equals or exceeds $25,000 on the contract anniversary, the charge
will be waived. The charge cannot be increased and does not apply after annuity
payouts begin.
- ---------------------------------------------------------------
4. Surrender Charges
There are surrender charges for all purchase payments surrendered in the first
eight contract years. Charges by IDS Life of New York for surrenders are not
identified on an individual segregated asset account basis. Charges for all
segregated asset accounts amounted to $688,445 in 1997 and $551,374 in 1996.
Such charges are not treated as a separate expense of the subaccounts. They are
ultimately deducted from contract surrender benefits paid by IDS Life of New
York.
- --------------------------------------------------------------
5. Investment Transactions
The subaccounts' purchases of mutual fund shares including reinvestment of
dividend distributions, were as follows:
Period from
Oct.8,1996
(commencement
Year ended of operations)
Subaccount Investment Dec. 31,1997 to Dec.31,1996
- -----------------------------------------------------------------------------
GC IDS Life Capital Resource Fund......... $ 3,781,016 $ 728,688
GI IDS Life International Equity Fund..... 4,436,257 736,590
GA IDS Life Aggressive Growth Fund........ 4,498,755 1,151,150
GS IDS Life Special Income Fund........... 6,236,006 1,321,971
GM IDS Life Moneyshare Fund, Inc.......... 14,837,432 3,148,716
GD IDS Life Managed Fund, Inc............. 9,562,701 1,397,776
GG IDS Life Growth Dimensions Fund........ 19,095,388 3,782,372
GY IDS Life Global Yield Fund............. 3,438,036 664,719
GV IDS Life Income Advantage Fund......... 8,424,390 2,015,206
GW AIM V.I. Growth and Income Fund........ 10,714,878 1,444,838
GN Putnam VT New Opportunities Fund....... 10,587,081 2,590,884
GP American Century VP Value.............. 5,979,292 838,917
GK Templeton Developing Markets Fund:Class 1 9,497,888 1,404,660
GT Warburg Pincus Trust/Small Company
Growth Portfolio....................... 10,245,620 1,720,373
- --------------------------------------------------------------------------------
Combined Variable Account $121,334,740 $22,946,860
- --------------------------------------------------------------------------------
- ------------------------------------------------------------
6. Year 2000 Issue (Unaudited)
The Year 2000 issue is the result of computer programs having been written using
two digits rather than four to define a year. Any programs that have
time-sensitive software may recognize a date using "00" as the year 1900 rather
than 2000. This could result in the failure of major systems or miscalculations,
which could have a material impact on the operations of the Variable Account.
The Variable Account has no computer systems of its own but is dependent upon
the systems maintained by AEFC and certain other third parties.
A comprehensive review of AEFC's computer systems and business processes has
been conducted to identify the major systems that could be affected by the Year
2000 issue. Steps are being taken to resolve any potential problems including
modification to existing software and the purchase of new software. These
measures are scheduled to be completed and tested on a timely basis. AEFC's goal
is to complete internal remediation and testing of each system by the end of
1998 and to continue compliance efforts through 1999.
The Year 2000 readiness of unaffiliated investment managers and other third
parties whose system failures could have an impact on Variable Account's
operations is currently is being evaluated. The potential materiality of any
such impact is not known at this time.
<PAGE>
<PAGE>
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, 1997 and 1996, and the
related statements of income, stockholder's equity and cash flows
for each of the three years in the period ended December 31, 1997.
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, 1997
and 1996, and the results of its operations and its cash flows
for each of the three years in the period ended December 31,
1997, in conformity with generally accepted accounting
principles.
Ernst & Young LLP
Minneapolis, Minnesota
February 5, 1998
<PAGE>
IDS LIFE INSURANCE COMPANY OF NEW YORK
- --------------------------------------------------------------------------
BALANCE SHEETS Dec. 31, 1997 Dec. 31, 1996
ASSETS (thousands)
- --------------------------------------------------------------------------
Investments:
Fixed maturities:
Held to maturity, at amortized cost (Fair value:
1997, $562,979; 1996, $604,635) $ 535,651 $ 585,812
Available for sale, at fair value (Fair value:
1996, $582,962; 1996, $590,608) 603,576 601,623
Mortgage loans on real estate 178,826 160,017
Policy loans 23,349 20,077
Other investments 970 1,374
- --------------------------------------------------------------------------
Total investments 1,342,372 1,368,903
- --------------------------------------------------------------------------
Accrued investment income 20,205 21,068
Deferred policy acquisition costs 126,614 119,183
Other assets 4,227 3,950
Separate account assets 1,236,759 950,018
- --------------------------------------------------------------------------
Total assets $2,730,177 $2,463,122
- --------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDER'S EQUITY
- --------------------------------------------------------------------------
Liabilities:
Future policy benefits:
Fixed annuities $964,483 $1,054,954
Universal life-type insurance 147,744 142,278
Traditional life, disability income
and long-term care insurance 50,469 45,338
Policy claims and other policyholders' funds 4,013 3,155
Deferred income taxes 11,445 9,046
Amounts due to brokers 29,054 3,007
Other liabilities 28,931 25,463
Separate account liabilities 1,236,759 950,018
- --------------------------------------------------------------------------
Total liabilities 2,472,898 2,233,259
- --------------------------------------------------------------------------
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 on investments 13,175 6,937
Retained earnings 193,104 171,926
- --------------------------------------------------------------------------
Total stockholder's equity 257,279 229,863
- --------------------------------------------------------------------------
Total liabilities and stockholder's equity $2,730,177 $2,463,122
- --------------------------------------------------------------------------
See accompanying notes.
<PAGE>
- -------------------------------------------------------------------------------
STATEMENTS OF INCOME
Years ended Dec. 31,
1997 1996 1995
(thousands)
- -------------------------------------------------------------------------------
Revenues:
Traditional life, disability income
and long-term care insurance
premiums $ 12,376 $ 10,931 $ 9,280
Policyholder and contractholder charges 18,319 15,832 13,216
Mortality and expense risk fees 11,312 8,574 6,213
Net investment income 106,274 109,468 110,924
Net realized gains (losses) on investments 547 (1,424) 1,548
- -------------------------------------------------------------------------------
Total revenues 148,828 143,381 141,181
- -------------------------------------------------------------------------------
Benefits and expenses:
Death and other benefits:
Traditional life, disability income
and long-term care insurance 3,633 4,182 3,354
Universal life-type insurance
and investment contracts 3,852 4,409 4,548
Increase in liabilities for future
policy benefits for traditional life,
disability income and
long-term care insurance 3,979 2,324 1,958
Interest credited on universal life-type
insurance and investment contracts 62,294 65,099 68,630
Amortization of deferred policy
acquisition costs 17,201 16,071 13,085
Other insurance and operating expenses 10,220 8,972 7,474
- -------------------------------------------------------------------------------
Total benefits and expenses 101,179 101,057 99,049
- -------------------------------------------------------------------------------
Income before income taxes 47,649 42,324 42,132
Income taxes 16,471 14,640 14,745
- -------------------------------------------------------------------------------
Net income $ 31,178 $ 27,684 $ 27,387
- -------------------------------------------------------------------------------
See accompanying notes.
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF STOCKHOLDER'S EQUITY
Three years ended December 31, 1997
(thousands)
Additional Net Unrealized
Capital Paid-In Gains (Losses) Retained
Stock Capital on Investments Earnings Total
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1994 $2,000 $ 49,000 $ (12,369) $133,090 $171,721
Net income -- -- -- 27,387 27,387
Change in net unrealized
gains (losses) on investments -- -- 27,710 -- 27,710
Cash dividends -- -- -- (8,000) (8,000)
Loss on investment transfer
to parent -- -- -- (235) (235)
- ----------------------------------------------------------------------------------------
Balance, December 31, 1995 2,000 49,000 15,341 152,242 218,583
Net income -- -- -- 27,684 27,684
Change in net unrealized
gains (losses) on investments -- -- (8,404) -- (8,404)
Cash dividends -- -- -- (8,000) (8,000)
- ----------------------------------------------------------------------------------------
Balance, December 31, 1996 2,000 49,000 6,937 171,926 229,863
Net income -- -- -- 31,178 31,178
Change in net unrealized
gains (losses) on investments -- -- 6,238 -- 6,238
Cash dividends -- -- -- (10,000) (10,000)
- ----------------------------------------------------------------------------------------
Balance, December 31, 1997 $2,000 $49,000 $ 13,175 $193,104 $257,279
- ----------------------------------------------------------------------------------------
See accompanying notes.
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
STATEMENTS OF CASH FLOWS Years ended Dec. 31,
1997 1996 1995
(thousands)
- --------------------------------------------------------------------------------
Cash flows from operating activities:
Net income $31,178 $27,684 $27,387
Adjustments to reconcile net income to net
cash provided by operating activities:
Policy loan issuance, excluding universal
life-type insurance (3,073) (2,473) (2,093)
Policy loan repayment, excluding universal
life-type insurance 1,897 1,571 881
Change in accrued investment income 863 1,504 (1,055)
Change in deferred policy acquisition
costs, net (7,431) (9,087) (11,017)
Change in liabilities for future policy
benefits for traditional life, disability income
and long-term care insurance 5,131 2,861 1,931
Change in policy claims and other
policyholders' funds 858 (489) 427
Deferred income tax benefit (960) (2,095) (1,301)
Change in other liabilities 3,468 4,434 2,429
(Accretion of discount)
amortization of premium, net (352) (652) (480)
Net realized (gain) loss on investments (547) 1,424 (1,548)
Policyholder and contractholder
charges, non-cash (8,772) (7,831) (6,962)
Other, net (557) (1,781) (508)
- --------------------------------------------------------------------------------
Net cash provided by operating activities $21,703 $15,070 $ 8,091
- --------------------------------------------------------------------------------
Cash flows from investing activities:
Fixed maturities held to maturity:
Purchases $ -- $ -- $ (37,540)
Maturities, sinking fund payments and calls 36,511 39,082 34,216
Sales 12,616 14,465 28,905
Fixed maturities available for sale:
Purchases (101,818) (97,370) (133,503)
Maturities, sinking fund payments and calls 84,229 71,939 44,234
Sales 27,055 15,669 8,839
Other investments, excluding policy loans:
Purchases (33,243) (14,802) (1,939)
Sales 14,233 12,659 5,993
Change in amounts due from broker 995 -- --
Change in amounts due to broker 26,047 (6,993) 10,000
- --------------------------------------------------------------------------------
Net cash provided by (used in) investing
activities 66,625 34,649 (40,795)
- --------------------------------------------------------------------------------
Cash flows from financing activities:
Activity related to universal life-type insurance
and investment contracts:
Considerations received 112,732 131,011 159,431
Surrenders and death benefits (251,259) (236,689) (190,695)
Interest credited to account balances 62,294 65,099 68,630
Universal life-type insurance policy loans:
Issuance (4,848) (4,490) (4,870)
Repayment 2,753 3,350 2,946
Cash dividend to parent (10,000) (8,000) (8,000)
- --------------------------------------------------------------------------------
Net cash (used in) provided by financing
activities (88,328) (49,719) 27,442
- --------------------------------------------------------------------------------
Net (decrease) increase in cash and cash
equivalents -- -- (5,262)
Cash and cash equivalents at beginning of year -- -- 5,262
- --------------------------------------------------------------------------------
Cash and cash equivalents at end of year $ -- $ -- $ --
- --------------------------------------------------------------------------------
See accompanying notes.
<PAGE>
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 flexible 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.
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 (AEFC), which is a wholly owned subsidiary of
American Express Company. The accompanying financial statements have
been prepared in conformity with generally accepted 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 reported as a separate component
of stockholder's equity, net of deferred income taxes.
Realized investment gains or losses are 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.
Mortgage loans on real estate are carried at amortized cost less
allowances for mortgage loan losses. The estimated 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.
<PAGE>
1. Summary of significant accounting policies (continued)
------------------------------------------------------
Impairment of mortgage loans 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
in an allowance for mortgage loan losses. The allowance for mortgage
loan losses is maintained at a level that management believes is
adequate to absorb estimated losses in the portfolio. The level of the
allowance 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 allowance for mortgage loan losses.
The Company generally stops accruing interest on mortgage loans for
which interest payments are delinquent more than three months. 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.
The cost of interest rate caps is amortized to investment income over
the life of the contracts and payments received as a result of these
agreements are recorded as investment income when realized. The
amortized cost of interest rate caps is included in other investments.
Policy loans are carried at the aggregate of the unpaid loan balances
which do not exceed the cash surrender values of the related policies.
When evidence indicates a decline, which is other than temporary, in
the underlying value or earning power of individual investments, such
investments are written down to the fair value by a charge to income.
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.
Supplementary information to the statements of cash flows for the years
ended December 31 is summarized as follows:
1997 1996 1995
---- ---- ----
Cash paid during the year for:
Income taxes $17,811 $15,247 $15,026
Interest on borrowings 1,026 777 742
Recognition of profits on annuity contracts and insurance policies
Profits on fixed deferred annuities are recognized by the Company over
the lives of the contracts, using primarily the interest method.
Profits 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.
<PAGE>
1. Summary of significant accounting policies (continued)
------------------------------------------------------
Premiums on traditional life, disability income and long-term care
insurance policies are recognized as revenue when 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.
Policyholder and contractholder charges include the monthly cost of
insurance charges and issue and administrative fees. These charges
also include the minimum death benefit guarantee fees received from the
variable life insurance separate accounts. Mortality and expense fees
are charged to the variable annuity and variable life insurance
separate accounts.
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 most single premium deferred
annuities and installment annuities are amortized in relation to
accumulation values and surrender charge revenue. The costs for
universal life-type insurance and certain installment annuities are
amortized as a percentage of the estimated gross profits expected to be
realized 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 and deferred annuities
are accumulation values.
Liabilities for fixed annuities in a benefit status are based on
mortality tables with various interest rates ranging from 5% to 9.5%,
depending on year of issue.
Liabilities for future benefits on traditional life insurance are based
on the net level premium method, using anticipated mortality, policy
persistency and interest earning rates. Anticipated mortality rates
are based on established industry mortality tables. Anticipated policy
persistency rates vary by policy form, issue age and policy duration
with persistency on cash value plans generally anticipated to be better
than persistency on term insurance plans. Anticipated interest rates
range from 4% to 10%, depending on policy form, issue year and policy
duration.
Liabilities for future disability income and long-term care policy
benefits include both policy reserves and claim reserves. Policy
reserves are based on the net level premium method, using anticipated
morbidity, mortality, policy persistency and interest earning rates.
Anticipated morbidity and mortality rates are based on established
industry morbidity and mortality tables. Anticipated policy
persistency rates vary by policy form, issue age, policy duration and,
for disability income policies, occupation class. Anticipated interest
rates for disability income and long-term care policy reserves are 3%
to 9.5% at policy issue and grade to ultimate rates of 5% to 7% over 4
to 10 years.
Claim reserves are calculated based on claim continuance tables and
anticipated interest earnings. Anticipated claim continuance rates are
based on a national survey. Anticipated interest rates for claim
reserves for both disability income and long-term care range from 6% to
8%.
<PAGE>
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. Long-term care policies are primarily reinsured on a
coinsurance 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 AEFC 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 AEFC and its subsidiaries
that AEFC will reimburse subsidiaries for all tax benefits.
Included in other liabilities at December 31, 1997 and 1996 are $5,026
and $5,161, 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 mortality and expense
risk fees from the variable annuity 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. For variable life insurance, the Company
guarantees that the rates at which insurance charges and administrative
fees are deducted from contract funds will not exceed contractual
maximums. The Company also guarantees that the death benefit will
continue payable at the initial level regardless of investment
performance so long as minimum premium payments are made.
Reclassifications
Certain 1996 and 1995 amounts have been reclassified to conform to the
1997 presentation.
<PAGE>
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.
The amortized cost, gross unrealized gains and losses and fair value of
investments in fixed maturities at December 31, 1997 are as follows:
Gross Gross
Amortized Unrealized Unrealized Fair
Held to maturity Cost Gains Losses Value
---------------- ---- ----- ------ -----
U.S. Government agency
obligations $ 3,690 $ 253 $ -- $ 3,943
Corporate bonds and
obligations 476,108 27,361 444 503,025
Mortgage-backed securities 55,853 452 294 56,011
------- ------ --- -------
$535,651 $28,066 $738 $562,979
======= ====== === =======
Gross Gross
Amortized Unrealized Unrealized Fair
Available for sale Cost Gains Losses Value
------------------ ---- ----- ------ -----
State and municipal
obligations $ 104 $ 10 $ -- $ 114
Corporate bonds and
obligations 281,555 14,272 1,635 294,192
Mortgage-backed securities 301,303 8,253 286 309,270
------- ------ ----- -------
$582,962 $22,535 $1,921 $603,576
======= ====== ===== =======
The amortized cost, gross unrealized gains and losses and fair value of
investments in fixed maturities at December 31, 1996 are as follows:
Gross Gross
Amortized Unrealized Unrealized Fair
Held to maturity Cost Gains Losses Value
---------------- ---- ----- ------ -----
U.S. Government agency
obligations $ 4,498 $ 144 $ -- $ 4,642
Corporate bonds and
obligations 523,807 23,060 2,964 543,903
Mortgage-backed securities 57,507 409 1,826 56,090
------- ------ ----- -------
$585,812 $23,613 $4,790 $604,635
======= ====== ===== =======
Gross Gross
Amortized Unrealized Unrealized Fair
Available for sale Cost Gains Losses Value
------------------ --------- ---------- ---------- -----
State and municipal
obligations $ 105 $ 10 $ -- $ 115
Corporate bonds and
obligations 260,966 8,857 1,181 268,642
Mortgage-backed securities 329,537 5,788 2,459 332,866
------- ------ ----- -------
$590,608 $14,655 $3,640 $601,623
======= ====== ===== =======
<PAGE>
2. Investments (continued)
-----------------------
The amortized cost and fair value of investments in fixed maturities at
December 31, 1997 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 $18,376 $ 18,593
Due from one to five years 84,712 89,432
Due from five to ten years 309,104 325,967
Due in more than ten years 67,606 72,976
Mortgage-backed securities 55,853 56,011
------- -------
$535,651 $562,979
======= =======
Amortized Fair
Available for sale Cost Value
------------------ --------- -----
Due in one year or less $12,635 $ 12,747
Due from one to five years 39,808 42,497
Due from five to ten years 139,686 145,567
Due in more than ten years 89,530 93,495
Mortgage-backed securities 301,303 309,270
------- -------
$582,962 $603,576
======= =======
During the years ended December 31, 1997, 1996 and 1995, fixed
maturities classified as held to maturity were sold with amortized cost
of $12,737, $14,507 and $27,971, respectively. Net gains and losses on
these sales were not significant. The sale of these fixed maturities
was due to significant deterioration in the issuers' creditworthiness.
Fixed maturities available for sale were sold during 1997 with proceeds
of $27,055 and gross realized gains and losses of $461 and $309,
respectively. Fixed maturities available for sale were sold during
1996 with proceeds of $15,669 and gross realized gains and losses of
$28 and $1,541, respectively. Fixed maturities available for sale were
sold during 1995 with proceeds of $8,839 and gross realized gains and
losses of $nil and $74, respectively.
At December 31, 1997, bonds carried at $259 were on deposit with the
state of New York as required by law.
<PAGE>
2. Investments (continued)
-----------------------
At December 31, 1997, investments in fixed maturities comprised
85 percent of the Company's total invested assets. These securities
are rated by Moody's and Standard & Poor's (S&P), except for securities
carried at approximately $117 million which are rated by AEFC internal
analysts using criteria similar to Moody's and S&P. A summary of
investments in fixed maturities, at amortized cost, by rating on
December 31 is as follows:
Rating 1997 1996
--------- ---- ----
Aaa/AAA $ 367,242 $ 396,097
Aa/AA 9,685 13,996
Aa/A 13,646 10,197
A/A 162,275 196,542
A/BBB 81,463 62,488
Baa/BBB 343,519 336,706
Baa/BB 21,519 51,639
Below investment grade 119,264 108,755
--------- ---------
$1,118,613 $1,176,420
========= =========
At December 31, 1997, 96 percent of the securities rated Aaa/AAA are
GNMA, FNMA and FHLMC mortgage-backed securities. No holdings of any
other issuer are greater than one percent of the Company's total
investments in fixed maturities.
At December 31, 1997, approximately 13 percent of the Company's
investments were mortgage loans on real estate. Summaries of mortgage
loans by region of the United States and by type of real estate are as
follows:
December 31, 1997 December 31, 1996
----------------------- -----------------------
On Balance Commitments On Balance Commitments
Region Sheet to Purchase Sheet to Purchase
------ ----- ----------- ----- -----------
West North Central $ 27,833 $ -- $ 23,191 $1,342
East North Central 33,515 -- 33,430 1,708
South Atlantic 34,182 2,750 35,501 --
Middle Atlantic 24,485 -- 22,889 --
Pacific 9,873 -- 12,986 --
Mountain 32,864 6,417 15,425 --
New England 8,624 -- 8,805 --
East South Central 8,698 -- 8,825 --
West South Central 252 -- 265 --
------- ----- ------- -----
180,326 9,167 161,317 3,050
Less allowance for
losses 1,500 -- 1,300 --
------- ----- ------- -----
$178,826 $9,167 $160,017 $3,050
======= ===== ======= =====
December 31, 1997 December 31, 1996
---------------------- ------------------------
On Balance Commitments On Balance Commitments
Property type Sheet to Purchase Sheet to Purchase
-------------- ----- ----------- ----- -----------
Apartments $ 68,823 $ -- $ 70,292 $1,708
Department/retail 54,622 6,417 48,476 1,342
stores
Office buildings 25,042 1,650 18,684 --
Industrial buildings 17,975 1,100 11,956 --
Nursing/retirement 6,035 -- 6,477 --
Medical buildings 7,577 -- 5,167 --
Hotels/motels 252 -- 265 --
------- ----- ------- -----
180,326 9,167 161,317 3,050
Less allowance for
losses 1,500 -- 1,300 --
------- ----- ------- -----
$178,826 $9,167 $160,017 $3,050
======= ===== ======= =====
<PAGE>
2. Investments (continued)
-----------------------
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 it 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.
At December 31, 1997 and 1996, the Company's recorded investment in
impaired loans was $1,299 and $1,327, with allowances of $300 and $300,
respectively. During 1997 and 1996, the average recorded investment in
impaired loans was $1,312 and $1,628, respectively.
The Company recognized $126 and $152 of interest income related to
impaired loans for the years ended December 31, 1997 and 1996,
respectively.
The following table presents changes in the allowance for investment
losses related to all loans:
1997 1996 1995
---- ---- ----
Balance, January 1 $1,300 $ 445 $445
Provision for investment losses 200 855 --
----- ----- ---
Balance, December 31 $1,500 $1,300 $445
===== ===== ===
Net investment income for the years ended December 31 is summarized as
follows:
1997 1996 1995
---- ---- ----
Interest on fixed maturities $ 92,007 $ 95,574 $ 97,092
Interest on mortgage loans 14,228 14,171 13,888
Other investment income 1,715 1,293 1,291
Interest on cash equivalents 91 67 186
------- ------- -------
108,041 111,105 112,457
Less investment expenses 1,767 1,637 1,533
------- ------- -------
$106,274 $109,468 $110,924
======= ======= =======
Net realized gains (losses) on investments for the years ended December
31 is summarized as follows:
1997 1996 1995
---- ---- ----
Fixed maturities $844 $ (572) $1,997
Mortgage loans (200) (855) (487)
Other investments (97) 3 38
---- ------ -----
$547 $(1,424) $1,548
=== ===== =====
Changes in net unrealized appreciation (depreciation) of investments
for the years ended December 31 are summarized as follows:
1997 1996 1995
---- ---- ----
Fixed maturities
available for sale 9,599 (13,215) 43,726
<PAGE>
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.
The income tax expense for the years ending December 31 consists of the
following:
1997 1996 1995
---- ---- ----
Federal income taxes:
Current $16,371 $15,735 $15,146
Deferred (960) (2,095) (1,301)
------ -------- --------
15,411 13,640 13,845
State income taxes-current 1,060 1,000 900
------ ------ ------
Income tax expense $16,471 $14,640 $14,745
====== ====== ======
Increases (decreases) to the federal tax provision applicable to pretax
income based on the statutory
rate are attributable to:
1997 1996 1995
-------------- -------------- -------------
Provision Rate Provision Rate Provision Rate
--------- ---- --------- ---- --------- ----
Federal income taxes based
on the statutory rate $16,677 35.0% $14,814 35.0% $14,746 35.0%
Increases (decreases)
are attributable to:
Tax-excluded interest
and dividend income (569) (1.2) (458) (1.1) (464) (1.1)
State tax, net benefit 689 1.4 650 1.5 585 1.4
Other, net (326) (0.6) (366) (0.8) (122) (0.3)
------ ---- ------ ---- ------ ----
Federal income taxes $16,471 34.6% $14,640 34.6% $14,745 35.0%
====== ==== ====== ==== ====== ====
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 December 31, 1997, 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 income tax assets and
liabilities as of December 31 are as follows:
1997 1996
Deferred income tax assets:
Policy reserves $28,922 $28,809
Other 5,467 4,018
----- -----
Total deferred income tax assets 34,389 32,827
Deferred income tax liabilities:
Deferred policy acquisition costs 36,594 35,302
Investments 9,240 6,571
------ -------
Total deferred income tax
liabilities 45,834 41,873
------ ------
Net deferred income tax liabilities $11,445 $9,046
====== =====
<PAGE>
3. Income taxes (continued)
------------------------
The Company is required to establish a valuation allowance for any
portion of the deferred income 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.
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. All dividend distributions must be approved by the New York
Department of Insurance. Statutory unassigned surplus aggregated
$115,828 and $94,007 as of December 31, 1997 and 1996, respectively
(see Note 3 with respect to the income tax effect of certain
distributions and Note 11 for a reconciliation of net income and
stockholder's equity per the accompanying financial statements to
statutory net income and surplus).
5. Benefit plans
-------------
The Company participates in the American Express Company Retirement
Plan which covers all permanent employees age 21 and over who have met
certain employment requirements. 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 $39, $34 and
$33 in 1997, 1996 and 1995, respectively.
The Company has a "Sales Benefit Plan" which is an unfunded,
noncontributory retirement plan for all eligible financial advisors.
Total plan costs for 1997, 1996 and 1995, which are calculated on the
basis of commission earnings of the individual financial advisors, were
$1,965, $1,474 and $1,392, 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 1997,
1996 and 1995 were $312, $248 and $231, respectively.
The Company participates in defined benefit health care plans of AEFC
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 AEFC. AEFC 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.
<PAGE>
6. Incentive plan and related party 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 1997, 1996 and 1995 were $1,490, $1,424 and $1,720,
respectively. Such costs are included in deferred policy acquisition
costs.
Charges by IDS Life and AEFC for the use of joint facilities, marketing
services and other services aggregated $11,589, $12,389 and $12,122 for
1997, 1996 and 1995, respectively. Certain of these costs are included
in deferred policy acquisition costs.
7. Commitments and contingencies
-----------------------------
At December 31, 1997 and 1996, traditional life insurance and universal
life-type insurance in force aggregated $4,513,251 and $4,053,561,
respectively, of which $220,798 and $203,963 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 $115, $98 and $85 for the years ended December 31, 1997,
1996 and 1995, respectively. Claim recoveries under the terms of this
reinsurance agreement were $963, $861 and $1,426 in 1997, 1996 and
1995, respectively.
Premiums ceded to reinsurers other than IDS Life amounted to $1,583,
$747 and $667 for the years ended December 31, 1997, 1996 and 1995,
respectively. Reinsurance recovered from reinsurers other than IDS
Life amounted to $1,366, $66 and $576 for the years ended
December 31, 1997, 1996 and 1995.
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 $303,263 and $345,943 at December 31, 1997 and 1996,
respectively. The accompanying statement of income includes premiums of
$nil for the years ended December 31, 1997, 1996 and 1995, and decreases
in liabilities for future policy benefits of $1,889, $2,010 and $2,039
related to this agreement for the years ended December 31, 1997, 1996 and
1995, respectively.
8. Lines of credit
---------------
The Company has an available line of credit with AEFC aggregating
$25,000. The line of credit is at 45 basis points over the Federal
Funds rate. A $20,000 line of credit with another bank expired on
June 30, 1997 and the Company did not seek renewal. Outstanding
borrowings under these agreements were $nil at December 31, 1997 and
1996.
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 does not hold derivative
instruments for trading purposes. The Company manages risks associated
with these instruments as described below.
<PAGE>
9. Derivative financial instruments (continued)
--------------------------------------------
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 risk 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.
Credit risk related to interest rate caps is measured by replacement
cost of the contracts. The replacement cost represents the fair value
of the instruments.
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.
The Company's holdings of derivative financial instruments are as
follows:
Notional Carrying Fair Total Credit
December 31, 1997 Amount Amount Value Exposure
----------------- ------ ------ ----- --------
Assets:
Interest rate caps $200,000 $ 970 $ 62 $ 62
======= === == ==
December 31, 1996
-----------------
Assets:
Interest rate caps $250,000 $1,374 $832 $832
======= ===== === ===
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 through 2000.
Interest rate caps are used to manage the Company's exposure to
interest rate risk. 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.
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 practicable 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 of the field force, are also excluded. Management
believes the value of excluded assets and liabilities is significant.
The fair value of the Company, therefore, cannot be estimated by
aggregating the amounts presented.
<PAGE>
10. Fair values of financial instruments (continued)
------------------------------------------------
1997 1996
------------------ -----------------
Carrying Fair Carrying Fair
Financial Assets Amount Value Amount Value
---------------- ------ ----- ------ -----
Investments:
Fixed maturities (Note 2):
Held to maturity $ 535,651 $ 562,979 $585,812 $604,635
Available for sale 603,576 603,576 601,623 601,623
Mortgage loans on real estate 178,826 187,992 160,017 164,444
(Note 2)
Other:
Derivative financial 970 62 1,374 832
instruments (Note 9)
Separate accounts assets (Note 1) 1,236,759 1,236,759 950,018 950,018
Financial Liabilities
Future policy benefits for
fixed annuities 880,809 852,391 979,030 946,359
Separate account liabilities 1,136,408 1,086,565 880,160 838,492
At December 31, 1997 and 1996, the carrying amount and fair value of
future policy benefits for fixed annuities exclude life
insurance-related contracts carried at $78,853 and $72,252,
respectively, and policy loans of $4,821 and $3,672, respectively. The
fair value of these benefits is based on the status of the annuities at
December 31, 1997 and 1996. The fair value of deferred annuities is
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 1997 and 1996.
At December 31, 1997 and 1996, 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
$100,351and $69,859, respectively.
<PAGE>
11. Statutory insurance accounting practices
----------------------------------------
Reconciliations of net income for 1997, 1996 and 1995 and stockholder's
equity at December 31, 1997 and 1996, as shown in the accompanying
financial statements, to that determined using statutory accounting
practices are as follows:
1997 1996 1995
---- ---- ----
Net income, per accompanying
financial statements $31,178 $27,684 $27,387
Deferred policy acquisition costs (7,432) (9,087) (11,017)
Adjustments of future policy
benefit liabilities (4,928) (9,683) (10,655)
Deferred income tax benefit (960) (2,095) (1,301)
Provision for losses on 296 877 --
investments
IMR gain/loss transfer and (119) 1,010 (331)
amortization
Adjustment to separate account 10,267 8,863 20,769
reserves
Other, net 430 116 948
------ ------ ------
Net income, on basis of
statutory accounting practices $28,732 $17,685 $25,800
====== ====== ======
Stockholder's equity, per accompanying
financial statements $257,279 $229,863
Deferred policy acquisition costs (126,614) (119,183)
Adjustments of future policy 9,452 13,458
benefit
liabilities
Deferred income taxes 11,445 9,046
Asset valuation reserve (16,698) (19,446)
Adjustments of separate account 53,456 43,189
liabilities
Adjustments of investments to
amortized cost (20,613) (11,016)
Premiums due, deferred and advance 1,237 1,149
Deferred revenue liability 1,941 1,342
Allowance for losses 1,645 1,349
Non-admitted assets (552) (634)
Interest maintenance reserve (1,551) (1,432)
Other, net (1,463) (281)
-------- --------
Stockholder's equity, on basis of
statutory accounting practices $168,963 $147,404
======= =======
<PAGE>
12. Year 2000 Issue (unaudited)
---------------------------
The Year 2000 issue is the result of computer programs having been
written using two digits rather than four to define a year. Any
programs that have time-sensitive software may recognize a date using "00"
as the year 1900 rather than 2000. This could result in the failure of
major systems or miscalculations, which could have a material impact on
the operations of the Company. All of the systems used by the Company are
maintained by AEFC and are utilized by multiple subsidiaries and
affiliates of AEFC. The Company's business is heavily dependent upon
AEFC's computer systems and has significant interactions with systems of
third parties.
A comprehensive review of AEFC's computer systems and business
processes, including those specific to the Company, has been
conducted to identify the major systems that could be affected by the
Year 2000 issue. Steps are being taken to resolve any potential
problems including modification to existing software and the purchase
of new software. These measures are scheduled to be completed and
tested on a timely basis. AEFC's goal is to complete internal remediation
and testing of each system by the end of 1998 and to continue compliance
efforts through 1999.
AEFC is evaluating the Year 2000 readiness of advisors and other third
parties whose system failures could have an impact on the Company's
operations. The potential materiality of any such impact is not known at
this time.
<PAGE>
PART C.
Item 24. Financial Statements and Exhibits
(a) Financial statements included in part B of this Registration Statement:
IDS Life Insurance Company of New York:
Balance sheets as of Dec. 31, 1997 and 1996.
Statements of Income for three years ended Dec. 31, 1997, 1996 and
1995.
Statements of Stockholder's Equity, for the three years ended Dec. 31,
1997, 1996 and 1995.
Statements of Cash Flows for the three years ended Dec. 31, 1997, 1996
and 1995.
Notes to Financial Statements.
Report of Independent Auditors for IDS Life Insurance Company of New
York's Financial Statements, dated February 5, 1998.
The audited financial statements of the Variable Account including:
Statements of net assets as of Dec. 31, 1997;
Statements of operations for the year ended Dec. 31, 1997;
Statements of changes in net assets for the year ended Dec. 31, 1997
and for the period from Oct. 8, 1996 (commencement of operations) to
Dec. 31, 1996.
Notes to financial statements, and
Report of Independent Auditors for IDS Life Insurance Company of New
York Flexible Portfolio Annuity Account, dated March 13, 1998.
(b) Exhibits:
1. Consent in writing in Lieu of Meeting of IDS Life of New York establishing
the IDS Life of New York Flexible Portfolio Annuity Account dated on April
17, 1996, filed electronically as Exhibit 1 to Initial Registration
Statement is incorporated herein by reference.
2. Not applicable.
3. Not applicable.
4.1 Copy of Qualified Deferred Annuity Contract Form No. 31037-NY (10/95) filed
electronically as Exhibit 4.1 to Initial Registration Statement is
incorporated herein by reference.
4.2 Copy of Non-Qualified Deferred Annuity Contract, Form No. 31036-NY (10/95),
filed electronically as Exhibit 4.2 to Initial Registration Statement is
incorporated herein by reference.
4.3 Copy of Deferred Annuity Contract (IRA), Form No. 31038-NY (10/95), filed
electronically as Exhibit 4.3 to Initial Registration Statement is
incorporated herein by reference.
<PAGE>
4.4 Copy of Deferred Annuity Contract (SEP), Form No. 31039-NY (10/95), filed
electronically as Exhibit 4.4 to Initial Registration Statement is
incorporated herein by reference.
5. Copy of the Annuity Application is filed electronically herewith.
6.1 Copy of the revised charter of IDS Life of New York dated April 1992, filed
electronically as Exhibit 6.1 to Initial Registration Statement is
incorporated herein by reference.
6.2 Copy of Amended By-Laws of IDS Life of New York dated May 1992, filed
electronically as Exhibit 6.2 to Initial Registration Statement is
incorporated herein by reference.
7. Not applicable.
8.1 Copy of Participation Agreement between IDS Life Insurance Company of New
York and Putnam Capital Manager Trust and Putnam Mutual Funds Corp., filed
electronically as Exhibit 8.1 to the Post-Effective Amendment No. 1 to the
Registration Statement on Form N-4 is incorporated herein by reference.
8.2 Copy of Participation Agreement between IDS Life Insurance Company of New
York and Templeton Variable Products Series Fund and Franklin Templeton
Distributors, Inc., filed electronically as Exhibit 8.2 to the
Post-Effective Amendment No. 1 to the Registration Statement on Form N-4 is
incorporated herein by reference.
8.3 Copy of Participation Agreement between IDS Life Insurance Company of New
York and Warburg Pincus Trust and Warburg Pincus Counsellors, Inc. and
Counsellors Securities, Inc., filed electronically as Exhibit 8.3 to the
Post-Effective Amendment No. 1 to the Registration Statement on Form N-4 is
incorporated herein by reference.
8.4 Copy of Participation Agreement between IDS Life Insurance Company of New
York and AIM Variable Insurance Funds, Inc. and AIM Distributors, Inc.,
filed electronically as Exhibit 8.4 to the Post-Effective Amendment No. 1
to the Registration Statement on Form N-4 is incorporated herein by
reference.
8.5 Copy of Participation Agreement between IDS Life Insurance Company of New
York and TCI Portfolios, Inc. and Investors Research Corporation, filed
electronically as Exhibit 8.5 to the Post-Effective Amendment No. 1 to the
Registration Statement on Form N-4 is incorporated herein by reference.
9. Opinion of counsel is filed electronically herewith.
10. Consent of Independent Auditors is filed electronically herewith.
<PAGE>
11. Financial Statement Schedules and Report of Independent Auditors, filed
electronically herewith.
Financial Statement Schedules:
Schedule I - Consolidated Summary of Investments Other Than
Investments In Related Parties
Schedule III - Supplementary Insurance Information
Schedule IV - Reinsurance
Schedule V - Valuation and Qualifying Accounts
Report of Independent Auditors for IDS Life Insurance Company of New
York's Financial Statement Schedules dated February 5, 1998
All other schedules to the Financial Statements required by Article 7
of Regulation S-X are not required under the related instructions or
are inapplicable and, therefore, have been omitted.
12. Not applicable.
13. Copy of schedule for computation of each performance quotation provided in
the Registration Statement in response to Item 21, filed electronically as
Exhibit 13 to Initial Registration Statement is incorporated herein by
reference.
14. Financial Data Schedules are filed electronically herewith.
15. Power of Attorney to sign this Registration Statement dated March 26, 1997,
filed electronically as Exhibit 15 to the Post-Effective Amendment No. 1 to
the Registration Statement on Form N-4 is incorporated herein by reference.
<TABLE>
<CAPTION>
Item 25. Directors and Officers of the Depositor (IDS Life Insurance Company of New York)
--------------------------------------------------------------------------------
Positions and Offices with Depositor
Name Principal Business Address
- ------------------------------------ ---------------------------------------- --------------------------------------
<S> <C> <C>
Mario Alaia 20 Madison Avenue Extension Claims Officer and Assistant
Albany, NY Secretary
Darrell C. Beckstrom IDS Tower 10 Underwriting Officer
Minneapolis, MN 55440
John C. Boeder 20 Madison Avenue Extension Director
Albany, NY
Eugene C. Chen 20 Madison Avenue Extension Chief Actuary
Albany, NY
Roger C. Corea 20 Madison Avenue Extension Director
Albany, NY
Charles A. Cuccinello 20 Madison Avenue Extension Director
Albany, NY
<PAGE>
Darlene S. Farron 20 Madison Avenue Extension Treasurer
Albany, NY
Milton R. Fenster 20 Madison Avenue Extension Director
Albany, NY
Donna M. Gaglione 20 Madison Avenue Extension Secretary
Albany, NY
Robert R. Grew 20 Madison Avenue Extension Director
Albany, NY
Margaret M. Grogan, M.D. Bethlehem Terrace Apts. Medical Director
Slingerland, NY
Lorraine R. Hart IDS Tower 10 Investment Officer
Minneapolis, MN 55440
Robert A. Hatton IDS Tower 10 Director, Vice President and Chief
Minneapolis, MN 55440 Operating Officer
Richard W. Kling IDS Tower 10 Director, Chairman of the Board and
Minneapolis, MN 55440 President
Edward Landes IDS Tower 10 Director
Minneapolis, MN 55440
Thomas V. Nicolosi Suite 220 Director
500 Mamaroneck Avenue
Harrison, NY 10528
Stephen P. Norman World Financial Center Director
New York, NY
Carl N. Platou IDS Tower 10 Director
Minneapolis, MN 55440
Gordon H. Ritz 404 WCCO Radio Bldg. Director
Minneapolis, MN
F. Dale Simmons IDS Tower 10 Vice President and Assistant
Minneapolis, MN 55440 Treasurer
Richard M. Starr 20 Madison Avenue Extension Director
Albany, NY
William A. Stoltzmann IDS Tower 10 Counsel and Assistant Secretary
Minneapolis, MN 55440
Michael R. Woodward 20 Madison Avenue Extension Director
Albany, NY
</TABLE>
<PAGE>
Item 26. Persons Controlled by or Under Common Control with the
Depositor or Registrant
IDS Life Insurance Company of New York is a wholly-owned
subsidiary of IDS Life Insurance Company which is a
wholly-owned subsidiary of American Express Financial
Corporation. American Express Financial Corporation is a
wholly-owned subsidiary of American Express Company (American
Express).
The following list includes the names of major subsidiaries of
American Express.
<TABLE>
<CAPTION>
<S> <C>
Jurisdiction of
Name of Subsidiary Incorporation
I. Travel Related Services
American Express Travel Related Services Company, Inc. New York
II. International Banking Services
American Express Bank Ltd. Connecticut
III. Companies engaged in Financial Services
Advisory Capital Strategies Group Inc. Minnesota
American Centurion Life Assurance Company New York
American Enterprise Investment Services Inc. Minnesota
American Enterprise Life Insurance Company Indiana
American Express Asset Management Group Inc. Minnesota
American Express Asset Management International Inc. Delaware
American Express Asset Management International (Japan) Ltd. Japan
American Express Asset Management Ltd. England
American Express Client Service Corporation Minnesota
American Express Corporation Delaware
American Express Financial Advisors Inc. Delaware
American Express Financial Corporation Minnesota
Delaware
American Express Insurance Agency of Arizona Inc. Arizona
American Express Insurance Agency of Idaho Inc. Idaho
American Express Insurance Agency of Nevada Inc. Nevada
American Express Insurance Agency of Oregon Inc. Oregon
American Express Minnesota Foundation Minnesota
American Express Property Casualty Insurance Agency of Kentucky Inc. Kentucky
American Express Property Casualty Insurance Agency of Maryland Inc. Maryland
American Express Property Casualty Insurance Agency of Pennsylvania Inc. Pennsylvania
American Express Trust Company Minnesota
American Partners Life Insurance Company Arizona
IDS Cable Corporation Minnesota
IDS Cable II Corporation Minnesota
IDS Capital Holdings Inc. Minnesota
IDS Certificate Company Delaware
IDS Futures Corporation Minnesota
<PAGE>
Item 26. Persons Controlled by or Under Common Control with the Depositor or Registrant
(Continued)
Jurisdiction of
Name of Subsidiary Incorporation
IDS Insurance Agency of Alabama Inc. Alabama
IDS Insurance Agency of Arkansas Inc. Arkansas
IDS Insurance Agency of Massachusetts Inc. Massachusetts
IDS Insurance Agency of New Mexico Inc. New Mexico
IDS Insurance Agency of North Carolina Inc. North Carolina
IDS Insurance Agency of Utah Inc. Utah
IDS Insurance Agency of Wyoming Inc. Wyoming
IDS Life Insurance Company Minnesota
IDS Life Insurance Company of New York New York
IDS Management Corporation Minnesota
IDS Partnership Services Corporation Minnesota
IDS Plan Services of California, Inc. Minnesota
IDS Property Casualty Insurance Company Wisconsin
IDS Real Estate Services, Inc. Delaware
IDS Realty Corporation Minnesota
IDS Sales Support Inc. Minnesota
IDS Securities Corporation Delaware
Investors Syndicate Development Corp. Nevada
North Dakota Public Employee Payment Company Minnesota
</TABLE>
Item 27. Number of Contractowners
On February 28, 1998, there were 2,498 contract owners of
qualified contracts and there were 3,906 owners of
non-qualified contracts.
Item 28. Indemnification
The By-Laws of the depositor provide that it shall indemnify
any person who was or is a party or is threatened to be made a
party, by reason of the fact that he is or was a director,
officer, employee or agent of this Corporation, or is or was
serving at the direction of the Corporation as a director,
officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, to any
threatened, pending or completed action, suit or proceeding,
wherever brought, to the fullest extent permitted by the laws
of the State of Minnesota, as now existing or hereafter
amended, provided that this Article shall not indemnify or
protect any such director, officer, employee or agent against
any liability to the Corporation or its security holders to
which he would otherwise be subject by reason of willful
misfeasance, bad faith, or gross negligence, in the
performance of his duties or by reason of his reckless
disregard of his obligations and duties.
Insofar as indemnification for liability arising under the
Securities Act of 1933 may be permitted to director, officers
and controlling persons of the registrant pursuant to the
foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in
<PAGE>
the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than
the payment by the registrant of expenses incurred or paid by
a director, officer or controlling person of the registrant in
the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in
connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.
<PAGE>
Item 29. Principal Underwriters.
(a) American Express Financial Advisors acts as principal underwriter for
the following investment companies:
IDS Bond Fund, Inc.; IDS California Tax-Exempt Trust; IDS Discovery
Fund, Inc.; IDS Equity Select Fund, Inc.; IDS Extra Income Fund, Inc.;
IDS Federal Income Fund, Inc.; IDS Global Series, Inc.; IDS Growth
Fund, Inc.; IDS High Yield Tax-Exempt Fund, Inc.; IDS International
Fund, Inc.; IDS Investment Series, Inc.; IDS Managed Retirement Fund,
Inc.; IDS Market Advantage Series, Inc.; IDS Money Market Series, Inc.;
IDS New Dimensions Fund, Inc.; IDS Precious Metals Fund, Inc.; IDS
Progressive Fund, Inc.; IDS Selective Fund, Inc.; IDS Special
Tax-Exempt Series Trust; IDS Stock Fund, Inc.; IDS Strategy Fund, Inc.;
IDS Tax-Exempt Bond Fund, Inc.; IDS Tax-Free Money Fund, Inc.; IDS
Utilities Income Fund, Inc., Growth Trust; Growth and Income Trust;
Income Trust, Tax-Free Income Trust, World Trust and IDS Certificate
Company.
(b) As to each director, officer or partner of the principal underwriter:
<TABLE>
<CAPTION>
Name and Principal Business Address Position and Offices with Positions with Offices with
Underwriter Registrant
- ----------------------------------------- ------------------------------------ -----------------------------
<S> <C> <C>
Ronald. G. Abrahamson Vice President - Service Quality None
IDS Tower 10 and Reengineering
Minneapolis, MN 55440
Douglas A. Alger Senior Vice President - Human None
IDS Tower 10 Resources
Minneapolis, MN 55440
Peter J. Anderson Senior Vice President - Investment Vice President
IDS Tower 10 Operations
Minneapolis, MN 55440
Ward D. Armstrong Vice President - American Express None
IDS Tower 10 Retirement Services
Minneapolis, MN 55440
John M. Baker Vice President - Plan Sponsor None
IDS Tower 10 Services
Minneapolis, MN 55440
Joseph M. Barksy, III Vice President - Senior Portfolio None
IDS Tower 10 Manager
Minneapolis, MN 55440
Robert C. Basten Vice President - Tax and Business None
IDS Tower 10 Services
Minneapolis, MN 55440
Timothy V. Bechtold Vice President - Risk Management None
IDS Tower 10 Products
Minneapolis, MN 55440
John D. Begley Group Vice President - Ohio/Indiana None
Suite 100
7760 Olentangy River Rd.
Columbus, OH 43235
Jack A. Benjamin Group Vice President - Greater None
Suite 200 Pennsylvania
3500 Market Street
Camp Hill, PA 17011
Brent L. Bisson Group Vice President - Los Angeles None
Suite 900 Metro
E. Westside Twr
11835 West Olympic Blvd.
Los Angeles, CA 90064
John C. Boeder Vice President - Mature Market Director
IDS Tower 10 Group
Minneapolis, MN 55440
Walter K. Booker Group Vice President - New Jersey None
IDS Tower 10
Minneapolis, MN 55440
Bruce J. Bordelon Group Vice President - Gulf States None
Galleria One Suite 1900
Galleria Blvd.
Metairie, LA 70001
Charles R. Branch Group Vice President - Northwest None
Suite 200
West 111 North River Dr.
Spokane, WA 99201
Douglas W. Brewers Vice President - Sales Support None
IDS Tower 10
Minneapolis, MN 55440
Karl J. Breyer Senior Vice President - Law and None
IDS Tower 10 Corporate Affairs
Minneapolis, MN 55440
Daniel J. Candura Vice President - Marketing Support None
IDS Tower 10
Minneapolis, MN 55440
Cynthia M. Carlson Vice President - American Express None
IDS Tower 10 Securities Services
Minneapolis, MN 55440
Mark W. Carter Senior Vice President and Chief None
IDS Tower 10 Marketing Officer
Minneapolis, MN 55440
James E. Choat Senior Vice President - None
IDS Tower 10 Institutional Products Group
Minneapolis, MN 55440
Kenneth J. Ciak Vice President and General Manager None
IDS Property Casualty - DS Property Casualty
1400 Lombardi Avenue
Green Bay, WI 54304
Paul A. Connolly Vice President - Advisor Staffing, None
IDS Tower 10 Training and Support
Minneapolis, MN 55440
Roger C. Corea Group Vice President - Upstate New Director
290 Woodcliff Drive York
Fairport, NY 14450
Henry J. Cormier Group Vice President - Connecticut None
Commerce Center One
333 East River Drive
East Hartford, CT 06108
John M. Crawford Group Vice President - None
Suite 200 Arkansas/Springfield/Memphis
10800 Financial Ctr Pkwy
Little Rock, AR 72211
Kevin F. Crowe Group Vice President - None
Suite 312 Carolinas/Eastern Georgia
7300 Carmel Executive Pk
Charlotte, NC 28226
Colleen Curran Vice President and General Counsel None
IDS Tower 10
Minneapolis, MN 55440
Regenia David Vice President - Systems Services None
IDS Tower 10
Minneapolis, MN 55440
Luz Maria Davis Vice President - Communications None
IDS Tower 10
Minneapolis, MN 55440
Scott M. DiGiammarino Group Vice President - None
Suite 500 Washington/Baltimore
8045 Leesburg Pike
Vienna, VA 22182
Bradford L. Drew Group Vice President - Eastern None
Two Datran Center Florida
Penthouse One B
9130 S. Dadeland Blvd.
Miami, FL 33156
Gordon L. Eid Senior Vice President, General None
IDS Tower 10 Counsel and Chief Compliance
Minneapolis, MN 55440 Officer
Robert M. Elconin Vice President - Government None
IDS Tower 10 Relations
Minneapolis, MN 55440
Mark A. Ernst Senior Vice President - Third Director
IDS Tower 10 Party Distribution
Minneapolis, MN 55440
Joseph Evanovich Jr. Group Vice President - None
One Old Mill Nebraska/Iowa/Dakotas
101 South 108th Avenue
Omaha, NE 68154
Louise P. Evenson Group Vice President - San None
Suite 200 Francisco Bay Area
1333 N. California Blvd.
Walnut Creek, CA 94596
Gordon M. Fines Vice President - Mutual Fund None
IDS Tower 10 Equity Investments
Minneapolis, MN 55440
Douglas L. Forsberg Vice President - Institutional None
IDS Tower 10 Products Group
Minneapolis, MN 55440
Jeffrey P. Fox Vice President and Corporate None
IDS Tower 10 Controller
Minneapolis, MN 55440
William P. Fritz Group Vice President - Northern None
Suite 160 Missouri
12855 Flushing Meadows Dr.
St. Louis, MO 63131
Carl W. Gans Group Vice President - Twin City None
8500 Tower Suite 1770 Metro
8500 Normandale Lake Blvd.
Bloomington, MN 55437
David A. Hammer Vice President and Marketing None
IDS Tower 10 Controller
Minneapolis, MN 55440
Teresa A. Hanratty Group Vice President - Northern None
Suites 6&7 New England
169 South River Road
Bedford, NH 03110
Robert L. Harden Group Vice President - Boston Metro None
Two Constitution Plaza
Boston, MA 02129
Lorraine R. Hart Vice President - Insurance None
IDS Tower 10 Investments
Minneapolis, MN 55440
Scott A. Hawkinson Vice President - Assured Assets None
IDS Tower 10 Product Development and Management
Minneapolis, MN 55440
Brian M. Heath Group Vice President - North Texas None
Suite 150
801 E. Campbell Road
Richardson, TX 75081
Janis K. Heaney Vice President - Incentive None
IDS Tower 10 Compensation
Minneapolis, MN 55440
James G. Hirsh Vice President and Assistant None
IDS Tower 10 General Counsel
Minneapolis, MN 55440
Jon E. Hjelm Group Vice President - Rhode None
310 Southbridge Street Island/Central - Western
Auburn, MA 01501 Massachusetts
David J. Hockenberry Group Vice President - Eastern None
30 Burton Hills Blvd. Tennessee
Suite 175
Nashville, TN 37215
Jeffrey S. Horton Vice President and Treasurer None
IDS Tower 10
Minneapolis, MN 55440
David R. Hubers Chairman, President and Chief Board member
IDS Tower 10 Executive Officer
Minneapolis, MN 55440
Martin G. Hurwitz Vice President - Senior Portfolio None
IDS Tower 10 Manager
Minneapolis, MN 55440
James M. Jensen Vice President - Insurance Product None
IDS Tower 10 Development and Management
Minneapolis, MN 55440
Marietta L. Johns Senior Vice President - Field None
IDS Tower 10 Management
Minneapolis, MN 55440
Nancy E. Jones Vice President - Business None
IDS Tower 10 Development
Minneapolis, MN 55440
James E. Kaarre Vice President - Marketing None
IDS Tower 10 Promotions
Minneapolis, MN 55440
Matthew N. Karstetter Vice President - Investment None
IDS Tower 10 Accounting
Minneapolis, MN 55440
Linda B. Keene Vice President - Market Development None
IDS Tower 10
Minneapolis, MN 55440
G. Michael Kennedy Vice President - Investment None
IDS Tower 10 Services and Investment Research
Minneapolis, MN 55440
Susan D. Kinder Senior Vice President - None
IDS Tower 10 Distribution Services
Minneapolis, MN 55440
Brian Kleinberg Executive Vice President - None
IDS Tower 10 Financial Direct
Minneapolis, MN 55440
Richard W. Kling Senior Vice President - Risk Director, Chairman of the
IDS Tower 10 Management Products Board and President
Minneapolis, MN 55440
Paul F. Kolkman Vice President - Actuarial Finance None
IDS Tower 10
Minneapolis, MN 55440
Claire Kolmodin Vice President - Service Quality None
IDS Tower 10
Minneapolis, MN 55440
David S. Kreager Group Vice President - Greater None
Suite 108 Michigan
Trestle Bridge V
5126 Lovers Lane
Kalamazoo, MI 49002
Steven C. Kumagai Director and Senior Vice President None
IDS Tower 10 - Field Management and Business
Minneapolis, MN 55440 Systems
Mitre Kutanovski Group Vice President - Chicago None
Suite 680 Metro
8585 Broadway
Merrillville, IN 48410
Edward Labenski Jr. Vice President - Senior Portfolio None
IDS Tower 10 Manager
Minneapolis, MN 55440
Kurt A. Larson Vice President - Senior Portfolio None
IDS Tower 10 Manager
Minneapolis, MN 55440
Lori J. Larson Vice President - Brokerage and None
IDS Tower 10 Direct Services
Minneapolis, MN 55440
Daniel E. Laufenberg Vice President and Chief U.S. None
IDS Tower 10 Economist
Minneapolis, MN 55440
Richard J. Lazarchic Vice President - Senior Portfolio None
IDS Tower 10 Manager
Minneapolis, MN 55440
Peter A. Lefferts Senior Vice President - Corporate None
IDS Tower 10 Strategy and Development
Minneapolis, MN 55440
Douglas A. Lennick Director and Executive Vice None
IDS Tower 10 President - Private Client Group
Minneapolis, MN 55440
Mary J. Malevich Vice President - Senior Portfolio None
IDS Tower 10 Manager
Minneapolis, MN 55440
Fred A. Mandell Vice President - Field Marketing None
IDS Tower 10 Readiness
Minneapolis, MN 55440
Daniel E. Martin Group Vice President - Pittsburgh None
Suite 650 Metro
5700 Corporate Drive
Pittsburgh, PA 15237
Thomas W. Medcalf Vice President - Senior Portfolio None
IDS Tower 10 Manager
Minneapolis, MN 55440
William C. Melton Vice President - International None
IDS Tower 10 Research and Chief International
Minneapolis, MN 55440 Economist
William P. Miller Vice President and Senior None
IDS Tower 10 Portfolio Manager
Minneapolis, MN 55440
James A. Mitchell Executive Vice President - None
IDS Tower 10 Marketing and Products
Minneapolis, MN 55440
Pamela J. Moret Vice President - Variable Assets None
IDS Tower 10
Minneapolis, MN 55440
Alan D. Morgenstern Group Vice President - Central None
Suite 200 California/Western Nevada
3500 Market Street
Camp Hill, NJ 17011
Barry J. Murphy Senior Vice President - Client None
IDS Tower 10 Service
Minneapolis, MN 55440
Mary Owens Neal Vice President - Mature Market None
IDS Tower 10 Segment
Minneapolis, MN 55440
Robert J. Neis Vice President - Technology None
IDS Tower 10 Services
Minneapolis, MN 55440
Thomas V. Nicolosi Group Vice President - New York None
Suite 220 Metro Area
500 Mamaroneck Avenue
Harrison, NY 10528
James R. Palmer Vice President - Taxes None
IDS Tower 10
Minneapolis, MN 55440
Carla P. Pavone Vice President - Compensation and None
IDS Tower 10 Field Administration
Minneapolis, MN 55440
Thomas P. Perrine Senior Vice President - Group None
IDS Tower 10 Relationship Leader / AXP
Minneapolis, MN 55440 Technologies Financial Services
Susan B. Plimpton Vice President - Marketing Services None
IDS Tower 10
Minneapolis, MN 55440
Larry M. Post Group Vice President - None
One Tower Bridge Philadelphia Metro
100 Front Street, 8th Fl
West Conshohocken, PA 19428
Ronald W. Powell Vice President and Assistant None
IDS Tower 10 General Counsel
Minneapolis, MN 55440
James M. Punch Vice President - Special Projects None
IDS Tower 10
Minneapolis, MN 55440
Frederick C. Quirsfeld Senior Vice President - Fixed None
IDS Tower 10 Income
Minneapolis, MN 55440
Debra J. Rabe Vice President - Financial Planning None
IDS Tower 10
Minneapolis, MN 55440
R. Daniel Richardson Group Vice President - Southern None
Suite 800 Texas
Arboretum Plaza One
9442 Capital of Texas Hwy. N
Austin, TX 78759
ReBecca K. Roloff Senior Vice President - Field None
IDS Tower 10 Management and Financial Advisor
Minneapolis, MN 55440 Service
Stephen W. Roszell Senior Vice President - None
IDS Tower 10 Institutional
Minneapolis, MN 55440
Max G. Roth Group Vice President - None
Suite 201 S. IDS Ctr Wisconsin/Upper Michigan
1400 Lombardi Avenue
Green Bay, WI 54304
John P. Ryan Vice President and General Auditor None
IDS Tower 10
Minneapolis, MN 55440
Erven A. Samsel Senior Vice President - Field None
45 Braintree Hill Park Management
Suite 402
Braintree, MA 02184
Russell L. Scalfano Group Vice President - None
Suite 201 Illinois/Indiana/Kentucky
101 Plaza East Blvd.
Evansville, IN 47715
William G. Scholz Group Vice President - Arizona/Las None
Suite 205 Vegas
7333 E. Doubletree Ranch Rd
Scottsdale, AZ 85258
Stuart A. Sedlacek Senior Vice President and Chief None
IDS Tower 10 Financial Officer
Minneapolis, MN 55440
Donald K. Shanks Vice President - Property Casualty None
IDS Tower 10
Minneapolis, MN 55440
F. Dale Simmons Vice President - Senior Portfolio Vice President and
IDS Tower 10 Manager, Insurance Investments Assistant Treasurer
Minneapolis, MN 55440
Judy P. Skoglund Vice President - Human Resources None
IDS Tower 10 and Organization Development
Minneapolis, MN 55440
Ben C. Smith Vice President - Workplace None
IDS Tower 10 Marketing
Minneapolis, MN 55440
William A. Smith Vice President and Controller - None
IDS Tower 10 Private Client Group
Minneapolis, MN 55440
James B. Solberg Group Vice President - Eastern None
466 Westdale Mall Iowa Area
Cedar Rapids, IA 52404
Bridget Sperl Vice President - Geographic None
IDS Tower 10 Service Teams
Minneapolis, MN 55440
Paul J. Stanislaw Group Vice President - Southern None
Suite 1100 California
Two Park Plaza
Irvine, CA 92714
Lois A. Stilwell Group Vice President - Outstate None
Suite 433 Minnesota Area/North
9900 East Bren Road Dakota/Western Wisconsin
Minnetonka, MN 55343
William A. Stoltzmann Vice President and Assistant None
IDS Tower 10 General Counsel
Minneapolis, MN 55440
James J. Strauss Vice President - Corporate None
IDS Tower 10 Planning and Analysis
Minneapolis, MN 55440
Jeffrey J. Stremcha Vice President - Information None
IDS Tower 10 Resource Management/ISD
Minneapolis, MN 55440
Barbara Stroup Stewart Vice President - Channel None
IDS Tower 10 Development
Minneapolis, MN 55440
Craig P. Taucher Group Vice President - None
Suite 150 Orlando/Jacksonville
4190 Belfort Road
Jacksonville, FL 32216
Neil G. Taylor Group Vice President - None
Suite 425 Seattle/Tacoma
101 Elliott Avenue West
Seattle, WA 98119
Peter S. Velardi Group Vice President - None
Suite 180 Atlanta/Birmingham
1200 Ashwood Parkway
Atlanta, GA 30338
Charles F. Wachendorfer Group Vice President - Denver/Salt None
Suite 100 Lake City/Albuquerque
Stanford Plaza II
7979 East Tufts Ave. Pkwy
Denver, CO 80237
Wesley W. Wadman Vice President - Senior Portfolio None
IDS Tower 10 Manager
Minneapolis, MN 55440
Norman Weaver Jr. Senior Vice President - Field None
1010 Main St, Suite 2B Management
Huntington Beach, CA 92648
Michael L. Weiner Vice President - Tax Research and None
IDS Tower 10 Audit
Minneapolis, MN 55440
Lawrence J. Welte Vice President - Investment None
IDS Tower 10 Administration
Minneapolis, MN 55440
Jeffrey M. Welter Vice President - Equity and Fixed None
IDS Tower 10 Income Trading
Minneapolis, MN 55440
Thomas L. White Group Vice President - Cleveland None
Suite 200 Metro
28601 Chagrin Blvd.
Woodmere, OH 44122
Eric S. Williams Group Vice President - Virginia None
Suite 250
3951 Westerre Parkway
Richmond, VA 23233
William J. Williams Group Vice President - Western None
Two North Tamiami Trail Florida
Suite 702
Sarasota, FL 34236
Edwin M. Wistrand Vice President and Assistant None
IDS Tower 10 General Counsel
Minneapolis, MN 55440
Michael D. Wolf Vice President - Senior Portfolio None
IDS Tower 10 Manager
Minneapolis, MN 55440
Michael R. Woodward Senior Vice President - Field Director
32 Ellicott St. Management
Suite 100
Batavia, NY 14020
</TABLE>
<TABLE>
<CAPTION>
Item 29 (c).
Net Underwriting
Name of Principal Discounts and Compensation on Brokerage
Underwriter Commissions Redemption Commissions Compensation
<S> <C> <C> <C> <C>
American Express $1,067,783 $688,445 None None
Financial Advisors
Inc.
</TABLE>
<PAGE>
Item 30. Location of Accounts and Records
IDS Life Insurance Company of New York
20 Madison Avenue Extension
Albany, NY 12203
Item 31. Management Services
Not applicable.
Item 32. Undertakings
(a) Registrant undertakes to file a post-effective amendment to this
registration statement as frequently as is necessary to ensure that
the audited financial statements in the registration statement are
never more than 16 months old for so long as payments under the
variable annuity contracts may be accepted.
(b) Registrant undertakes to include either (1) as part of any application
to purchase a contract offered by the prospectus, a space that an
applicant can check to request a Statement of Additional Information,
or (2) a post card or similar written communication affixed to or
included in the prospectus that the applicant can remove to send for a
Statement of Additional Information.
(c) Registrant undertakes to deliver any Statement of Additional
Information and any financial statements required to be made available
under this Form promptly upon written or oral request.
(d) Registrant represents that it is relying upon the no-action assurance
given to the American Council of Life Insurance (pub. avail. Nov. 28,
1988). Further, Registrant represents that it has complied with the
provisions of paragraphs (1)-(4) of that no-action letter.
(e) The sponsoring insurance company represents that the fees and charges
deducted under the contract, in the aggregate, are reasonable in
relation to the services rendered, the expenses expected to be
incurred, and the risks assumed by the insurance company.
<PAGE>
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company Act of
1940, IDS Life Insurance Company of New York, on behalf of the Registrant
certifies that it meets requirements for effectiveness of this Amendment to its
Registration Statement pursuant to Rule 485(b) under the Securities Act of 1933
and has duly caused this Registration Statement to be signed on its behalf in
the City of Minneapolis, and State of Minnesota, on the ___ day of April, 1998.
IDS LIFE OF NEW YORK FLEXIBLE
PORTFOLIO ANNUITY ACCOUNT
(Registrant)
By IDS Life Insurance Company of New York
(Sponsor)
By /s/ Richard W. Kling
Richard W. Kling
President
As required by the Securities Act of 1933, this Registration Statement has been
signed by the following persons in the capacities indicated on the ____ day of
April, 1998.
Signature Title
/s/ John C. Boeder* Director
John C. Boeder
/s/ Roger C. Corea* Director
Roger C. Corea
/s/ Charles A. Cuccinello* Director
Charles A. Cuccinello
/s/ Darlene S. Farron* Treasurer
Darlene S. Farron
/s/ Robert Hatton* Director, Vice President
Robert Hatton and Chief Operating Officer
/s/ Richard W. Kling* Director, Chairman of the
Richard W. Kling Board and President
/s/ Edward Landes* Director
Edward Landes
/s/ Thomas V. Nicolosi* Director
Thomas V. Nicolosi
<PAGE>
Signature Title
/s/ Stephen P. Norman* Director
Stephen P. Norman
/s/ Carl N. Platou* Director
Carl N. Platou
/s/ Gordon H. Ritz* Director
Gordon H. Ritz
/s/ Richard M. Starr* Director
Richard M. Starr
/s/ Michael R. Woodward* Director
Michael R. Woodward
*Signed pursuant to Power of Attorney dated March 26, 1997 filed electronically
as an Exhibit to Post-Effective Amendment No. 1 to the Registration Statement on
N-4 is herein incorporated by reference.
______________________________
Sherilyn K. Beck
<PAGE>
CONTENTS OF POST-EFFECTIVE AMENDMENT NO. 2
This Registration Statement is comprised of the following papers and documents:
The Cover Page.
Cross-reference sheet.
Part A.
The prospectus.
Part B.
Statement of Additional Information.
Financial Statements.
Part C.
Other Information.
The signatures.
Exhibits.
IDS Life of New York Flexible Portfolio Annuity Account (FPA-NY)
Registration No. 333-03867/811-07623
EXHIBIT INDEX
5. Copy of the Annuity Application
9. Opinion of counsel
10. Consent of Independent Auditors
11. Financial Statement Schedules
14. Financial Data Schedules
IDS Life Insurance Company Annuity
of New York Application
P.O. Box 5144
Albany, New York 12205
Section A Clients
- -------------------------------------------------------------------------------
1 Annuitant
a Name (first)_____________________________(mi)___(last)___________________
b Social Security no. ___-__-___ __ Male __ Female
c Birthdate ___/___/___ Age__ (submit proof of age for immediate annuity)
2 Joint Annuitant (for Immediate Joint Annuity)
a Name (first)_____________________________(mi)___(last)___________________
b Social Security no. ___-__-___ __ Male __ Female
c Birthdate ___/___/___ Age__ (submit proof of age)
3 Owner
a Will the annuitant own this annuity (must be "Yes" for IRA and TSA)
__ Yes (complete the following if not on attached Client Profile
or Client Review Document)
Home address (street, city, state, zip)___________________________
___________________________________________________________________
_____________________________________Phone no. (____)______________
__ No (complete the following seven (o) items)
o Owner's name(s) __ American Express Trust Co. __ Other___________
o Type of ownership (check one)
__ Trustee __ Sole Proprietorship __ 457 Governmental
__ Custodian __ Partnership
__ Individual __ Corporation (State of incorporation)
__ Other
o Trust or Custodial ownership basis (complete one if applicable)
__ Retirement plan (name) ______________________________________
__ Trust (name) Trust date ___/___/___
__ Purchased under Uniform Gifts/Transfers to Minors Act of
(state)
o Owner's relationship to annuitant__________________________________
(Complete the following if not on attached Client Profile or
Client Review Document)
o Owner's address (street, city, state, zip)_________________________
___________________________________________________________________
_______________________________Phone no. (____)____________________
o Owner's Social Security or Taxpayer Identification no.___-___-_____
o If ownership is individual, give owner's birthdate __/__/__ Age___
b Mailing address if different from owner___________________________
_________________________________________________________________
___________________________________Phone no. (____)______________
39986 E 1 (7/96)
<PAGE>
Section B Purchase Basis (complete only one of the four (o) sections on this
page) See New Business Section of Reference Manual for required papers
- -------------------------------------------------------------------------------
__ Nonqualified
__ individual purchase
__ 1035 exchange
__ deferred compensation plan (nongovernmental) (private)
__ Gift under Uniform Gifts/Transfers to Minor's Act (If donor is not
custodian give donor's name, Soc. Sec. no., residence state and
relationship to annuitant.)
__ Other nonqualified:____________________________________________________
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
__ IRA (complete all that apply) _ SEP Adoption Agreement is with another company
1 __ Regular (active) IRA Group no. of SEP __________________________
a Type __ Personal __ Spousal __ SEP Name of employer __________________________
(1) (2) (3)
Address ____________________________________
b.Amount paid with this application for prior year $___________________
c Amount paid with this application for current year $___________________
2 __ Rollover IRA (Rollover qualifications are specified in Your Guide to
IRAs) a Source __ IRA/SEP distribution __ Deductible voluntary employee contribution
__ Trusteed or Custodial plan, Tax-Sheltered Annuity or Custodial Account
b Amount paid with this application for rollover
$____________________
3 __ Transfer IRA (must submit "Request for Transfer" from along with
application)
- ------------------------------------------------------------------------------------------------------------------------------------
__ Tax-qualified Retirement Plan (IRC Section 401)
1 Type __ Profit Sharing (05) __ Assumed/Target Benefit (04) __ 401 (k) (02) ________
__ Money Purchase (06) __ Defined Benefit Pension (01) __ Other (10) __________
2 Plan fiscal year-end Mo. _____ Day _____ Plan starting date Mo.______
Yr._____ 3 Is the Plan an American Express Financial Advisors prototype?
___ Yes ___ No 4 If Custodial Plan, identify participant (annuitant) as __
Employer/Sponsor __ Other participant
- ------------------------------------------------------------------------------------------------------------------------------------
__ Other Tax-qualified Plan
1 Type of Plan __ 403(b) TSA __ 457/Government (07)
2 Type of Group a.__ Public schools and universities a.__ State or subdivision
b.__ 501(c)(3) Nonprofit
3 __ This is a TSA Transfer.
__ This is a TSA Rollover.
See explanation section on Page 14 for more information.
4 403(b) participant (owner/annuitant) information
a Current annual salary from employer $ (required)
b Employment date ___/___/___ Has employment been continuous? __ Yes __ No
c Is owner/annuitant covered by employer's retirement plan? __ Yes __No
If yes, give name of plan_______________________________________________________
If contribution amount exceeds 20% of net salary, a copy of the InfoServ
TSA/TSCA calculation must be attached.
Complete and initial the TSA Disclosure and Acknowledgement on Page 7, Form
38647.
</TABLE>
39986 E 2 (7/96)
<PAGE>
Section C Annuity Applied For
- --------------------------------------------------------------------------------
Deferred Annuities
__ Flexible Portfolio Annuity (check A or B or C; complete amount)
__ A. Single payment only: $___________________________
NOTE: minimum single payment $1,000 TQ, $2,000 NQ
__ B. Installment payments only: $_________________________annually
NOTE: minimum $600/year (BAs, PDS, group billing only)
See instructions on page 14
__ C. Combination:
Single payment: $______________________ with installment payments
$___________________ annually
<TABLE>
<CAPTION>
<S> <C>
Initial Payment Allocation: Future Payment Allocation
(if different from initial)
Capital Resource....................................._________% Capital Resource..................................._________%
Special Income......................................._________% Special Income....................................._________%
Moneyshare..........................................._________% Money Share........................................_________%
Fixed................................................_________% Fixed.............................................._________%
Managed.............................................._________% Managed............................................_________%
International Equity................................._________% International Equity..............................._________%
Aggressive Growth...................................._________% Aggressive Growth.................................._________%
Global Yield........................................._________% Global Yield......................................._________%
Income Advantage....................................._________% Income Advantage..................................._________%
Growth Dimensions...................................._________% Growth Dimensions.................................._________%
Total must equal 100% Total must equal 100%
Future Payments (Flexible only)
1) Frequency of payment
__ Annually 1/Year __ Quarterly 4/Year __ Bifortnightly 13/Year __ Biweekly 26/Year
__ Semiannually 2/Year __ Monthly 12/Year __ Semimonthly 24/Year __ Weekly 52/Year
__ Other (specify months) __Jan __Feb __March __April __May __June
__July __Aug __Sept __Oct __Nov __Dec
</TABLE>
2) Payments to start* ___/___/___
*Must be at least 30 days from date received in corporate office (if omitted,
the corporate office will establish start date)
3) Method of payment
__ Add to existing BA with account no.
__ New BA form 1748 (see Page 13 of application)
__ Add to existing PDS/Employer Billing no.___________________ (contact the
employer)
__ New PDS/Employer Billing Form 38188 (see Page 11 of application)
__ Systematic Payout, submit Form F137
__ Other allowed method (see reference manual)
39986 E 3 (7/96)
<PAGE>
Section C Annuity Applied For (continued)
- -------------------------------------------------------------------------------
__ Fixed Retirement Annuity - VP Single payment $ __________________
Note: minimum $5,000
- -------------------------------------------------------------------------------
__ Other _________________________________________________________________
_________________________________________________________________
<TABLE>
<CAPTION>
<S> <C>
__ Fixed Immediate Annuity Required Proof of Age
1) Single Payment $_________________ Note $5,000 minimum Proof of age submitted:
Monthly payment quoted $_____________________
2) Payout Option: __ Copy of birth certificate enclosed or:
__ Individual annuitant __ Joint and full to survivor
__ Joint and 2/3 to survivor __ Joint and 1/2 to survivor Submit copies of two (2) of the following when birth
3) Payout Mode: certificate is not available:
__ Nonrefund
__ Life income with period certain. Circle one: 5 10 15 20 years __ Baptism certificate
__ Installment refund (not available with Joint and 2/3 or1/2option) __ Family record of birth
__ Term certain only (Mode E) ______ year (5 to 30 years) __ Confirmation record showing age at time of
4) Payout checks to start / / confirmation
-------------------------
Month Day Year __ Marriage certificate
Note: Must be at least 30 days from received corporate office date. __ Naturalization record
__Monthly __Quarterly __ Semiannual __ Annual __ Passport (at least five years old)
5) Withholding to apply? __Yes __ No If yes, indicate $_______ __ Military discharge papers
6) __ Direct Deposit. Form 33581 must be submitted and signed by
bank official
7) __ Direct Deposit to account no._______________________
8) __ Special payee name _________________________________
Address____________________________________________
</TABLE>
39986 E 4 (7/96)
<PAGE>
Section D Agreements and Signatures
- -------------------------------------------------------------------------------
a) All Annuities ____________ Client's initials
__ Investment Objectives: You understand the investment objectives and risks of
the contract(s) for which you are applying. There can be no assurance that
such objectives will be achieved. Your risk tolerance for investment is:
__ Low __ Medium __ High
Your specific long-term goals and objectives are:
__ Aggressive Growth __ Growth with Income __ Income
__ Growth __ Preservation of Principal __ Tax Deferral
__ Other _______________
(specify)
__ Earnings: The method for crediting fixed and/or variable earnings for your
particular contract has been explained to you. Any interest crediting rates
are annual effective rates.
__ Changes: Only officers of the company have the authority to accept any
representation or information not contained in this application or to modify
any annuity contract or waive any requirement in the application. They must
do so in writing. Our representatives do not have the authority to make any
changes.
__ Cancellation: You understand the contract provides you with certain
cancellation privileges for a period of time from receipt (usually 10 days)
under which no surrender charges or fees will be charges by the company.
b) Products ___________________ Clients initials
Deferred Annuity (Please read all headings, because several categories may
apply to your type of contract)
__ You understand that the basic purpose of an annuity is to provide lifetime
income at retirement and it should be purchased for this purpose. You
understand the benefits and consequences of tax deferral, and are confident
that it can work to your advantage. The contract value may be surrendered in
full or in part before annuity payments begin, but not after. Surrender of a
contract may result in a loss to you because of fees and charges. These fees
and charges, including possible surrender charges and state or federal
taxes, have been explained to you. They are explained in detail in the
contract.
__ You have received the current prospectus(es) for the variable annuity
applied for. Investment earnings, values and monthly income benefits based
on the performance of a Variable Fund or Variable Account are not guaranteed
and may both increase and decrease.
__ We reserve the right to terminate certain installment payment contracts for
full value, if in any 36-month period no purchase payments have been
received and the amount paid is less than $600.
Immediate Annuity
__ You cannot surrender or take loans from an Immediate Annuity. Also, there is
no death benefit under the nonrefund payout mode.
__ You understand that this transaction is not reversible after the expiration
of the free-look period.
IRA Applications
__ You have received a copy of Your Guide to IRAs and understand the terms
contained in it.
__ You assume all responsibility for any tax consequences and penalties that
may result from making contributions to, transactions with, and
distributions from this IRA.
39986 E 5 (7/96)
<PAGE>
Section D Agreements and Signatures (continued)
- -------------------------------------------------------------------------------
c) Additional disclosures: (must have client initial)
- -------------------------------------------------------------------------------
__ Serial Annuity
Instructions: Complete Section A when applying for any nonqualified deferred
annuity; and/or Section B when more than one Fixed Retirement Annuity-VP is
being purchased whether nonqualified or tax-qualified.
- -------------------------------------------------------------------------------
Section A ____________ Client's initials
This section discusses current federal tax laws as IDS Life of New York
understands them. Federal tax laws and their interpretations may change. The
client must initial above indicating that he/she has read and understands the
following:
Multiple Contracts (Serial Annuities)
Tax law requires that all nonqualified deferred annuity contracts issued by the
same company, to the same policyholder (owner), during a calendar year are to be
treated as a single, unified contract. The amount of income included and taxed
in a distribution (or a transaction deemed a distribution under tax law) taken
from any one of such contracts is determined by summing all such contracts
together.
- --------------------------------------------------------------------------------
Section B _____________Client's initials
If more than one Fixed Retirement Annuity-VP product is being purchased, the
client must initial above and provide the requested information below.
Benefits of Larger Contracts
The single premium Fixed Retirement Annuity-VP provides for crediting interest
at a higher rate at certain premium sizes. You may be able to receive a higher
interest crediting rate by purchasing one larger contract rather than two or
more smaller ones.
Multiple Beneficiaries
More than one beneficiary may be named under a single contract. Each beneficiary
has a choice to receive any death benefit as either a lump sum or in the form of
annuity payments as provided by the contract.
Reasons:
Your reason(s) for purchasing more than one contract is (are):
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Client acknowledges that the representative has reviewed and explained the above
information. Client should consult a tax advisor if he/she has questions about
the taxation of his/her annuity contract.
39986 E 6 (7/96)
<PAGE>
Section D Agreements and Signatures (continued)
- -------------------------------------------------------------------------------
__ Tax-Sheltered Annuity (TSA) _______________Client's initials
Disclosure and Acknowledgment
(Form 31647)
Effective January 1, 1989, a distribution from a Tax-Sheltered Annuity (TSA)
purchased under ss403(b) of the Internal Revenue Code may be made only if the
employee/participant has:
1. attained age 591/2; or
2. separated from the service of the employer that purchased the TSA; or
3. died; or
4. become disabled, as defined in Section 72(m)(7) of the Code; or
5. encountered financial hardship within the meaning of Section 403(b) of the
Code.
The restriction applies to contributions of deferred salary made after December
31, 1988, and all earnings credited to the contract after that date. The
"hardship" exception above is limited to the amount of contributions made and
does not apply to any earnings credited to the contract.
The restriction does not apply to any values in the TSA as of December 31, 1988,
nor to transfers or exchanges of contract values within the annuity or to
another registered variable annuity contract or investment vehicle available
through the employer.
- --------------------------------------------------------------------------------
Backup Withholding
__ Check here if the IRS has notified that you are subject to backup
withholding because of a failure to report all interests and dividends.
__ Check here if you are a tax-exempt payee.
Replacement
__ Is this annuity intended to replace existing annuities or life insurance?
__ Yes __ No If "Yes", see State Requirements section of the Annuity
Reference Manual for required papers.
Certification
__ You certify, under the penalties of perjury as required by Form W-9 of the
Internal Revenue Service, that the names, addresses, Social Security
(taxpayer ID) numbers, and backup withholding information provided in this
application are true, correct and complete.
__ Release of Information. It is our policy and practice to respect each
individual's right to privacy. Releasing limited client information occurs
when there us a service we do not provide and believe could meet your
specific financial needs. If you object to such release, check here __ .
__ Consolidated Statement
We periodically send out informational statements, for each of our
accounts, which are consolidated into one statement covering all accounts
owned by members of the same household. If you don't want this account
reported that way, check here __.
39986 E 7 (7/96)
<PAGE>
Section D Agreements and Signatures (continued)
- --------------------------------------------------------------------------------
__ Declaration Agreement
You declare that each of the statements and answers given in this
application is true and complete to the best of your knowledge and belief
and will be the basis of any annuity issued from this application.
By signing this application and checking each statement that pertains to
your annuity, you understand and acknowledge the above:
Signatures
Signatures of all Annuitants x____________________________
x____________________________
Owner/trustee/plan administrator signature x____________________________
Other applicant's signature (if required) x____________________________
Signed at (city) ________________ (state) ______, on (date) _____/_______/______
Advisor's Report
- --------------------------------------------------------------------------------
Declaration and signature. You certify that you personally solicited this
application and witnessed its signing. The application and this report are
complete and accurate to the best of your knowledge and belief.
Are you related to the annuitant/owner? Please state relationship ______________
_______________ (required)
This application __ does __ does not involve replacement of existing
insurance or annuities.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
- --------------------- --------------- ------------ ---------- (---)-------
Advisor's signature Advisor ID *Compensation Area Office Phone
(Set up as client's servicing advisor) %
_______________ Best time for
Team ID corporate office
______________________ ________________ ____________ __________ to contact advisor
Joint Advisors signature Advisor ID *Compensation Area Office ______________
---------------- %
Team ID
Fax no.
*Total percentages must equal 100%. (___)_______
</TABLE>
__ Junior
Name _______________________________________ No. _______________________________
Send contract to: __ Owner __ Advisor (If sent to advisor, delivery assurance
form is required)
Note: Contract will be mailed to owner unless otherwise indicated.
39986 E 8 (7/96)
<PAGE>
FLEXIBLE PORTFOLIO ANNUITY
Payment Allocation Instructions and Supplemental Information
NOTE: Submit these allocation instructions together with the current
application. This information is provided in connection with my annuity
application for the Flexible Portfolio Annuity.
<TABLE>
<CAPTION>
<S> <C>
INITIAL PAYMENT ALLOCATION: FUTURE PAYMENT ALLOCATION
To be used with Bank Authorization
(FA) IDS Life of New York Fixed Account _________% (FA) IDS Life of New York Fixed Account ________%
(CR) IDS Life Capital Resource Fund _________% (CR) IDS Life Capital Resource Fund ________%
(SI) IDS Life Special Income Fund _________% (SI) IDS Life Special Income Fund ________%
(MS) IDS Life Moneyshare Fund _________% (MS) IDS Life Moneyshare Fund ________%
(MF) IDS Life Managed Fund _________% (MF) IDS Life Managed Fund ________%
(IE) IDS Life International Equity Fund _________% (IE) IDS Life International Equity Fund ________%
(AG) IDS Life Aggressive Growth Fund _________% (AG) IDS Life Aggressive Growth Fund ________%
(GY) IDS Life Global Yield Fund _________% (GY) IDS Life Global Yield Fund ________%
(GD) IDS Life Growth Dimensions Fund _________% (GD) IDS Life Growth Dimensions Fund ________%
(IA) IDS Life Income Advantage Fund _________% (IA) IDS Life Income Advantage Fund ________%
(GI) AIM Variable Ins. Growth & Income Fund _________% (GI) AIM Variable Ins. Growth & Income Fund ________%
(NO) PCM New Opportunities Fund _________% (NO) PCM New Opportunities Fund ________%
(SC) Warburg Pincus Trust Small Co. Portfolio _________% (SC) Warburg Pincus Trust Small Co. Portfolio ________%
(DM) Templeton Developing Markets Fund _________% (DM) Templeton Developing Markets Fund ________%
(TV) TCI Value _________% (TV) TCI Value ________%
TOTAL MUST EQUAL 100% _________% TOTAL MUST EQUAL 100% ________%
</TABLE>
I acknowledge receiving the current prospectus(es) for the Flexible Portfolio
Annuity and the underlying mutual funds.
- --------------------------------------- ------------------------
Owner's Name, Please Print Date
- --------------------------------------------------------------------------------
Owner's Signature
- ------------------------------------- ---------------------- -------
Advisor's Signature Advisor's Number Area Office Number
<TABLE>
<CAPTION>
<S> <C> <C> <C>
- ---------------------------------- -------------------------------- --------------------------------- ------------------------------
Surrender Charge Contract Charge Mortality and Fund
for Flexible for Administration Expense Risk Fee Management Fees
Portfolio Annuity
$30.00 annually. Charge will 1.25% annually on variable Varies by Fund as described in
Contract Surrender be waived if purchase payments accounts/subaccounts. underlying mutual fund
Year Charge made less purchase payments prospectuses.
1 through 3 7% (of paymentssurrendered, or the contract
4 6% value equals or exceeds
5 5% $25,000.
6 4%
7 3%
8 2%
Thereafter 0%
- ---------------------------------- -------------------------------- --------------------------------- ------------------------------
</TABLE>
38001 A (8/96) (See DCA form on back)
<PAGE>
Request for Automated Dollar-Cost Averaging (DCA)
- -----------------------------------------
Contract Number
- ----------------------------------------- ------------------------------
Contract Owner Taxpayer ID
For Flexible Portfolio Annuity
Transfer money ($50.00 minimum) from each of the accounts shown below. Amounts
requested to be transferred from the fixed account are restricted. The maximum
Fixed Account transfer amount = current fixed value divided by 12.
<TABLE>
<CAPTION>
TRANSFER FROM: TRANSFER TO:
<S> <C>
(FA) IDS Life of New York Fixed Account _________% (FA) IDS Life of New York Fixed Account ________%
(CR) IDS Life Capital Resource Fund _________% (CR) IDS Life Capital Resource Fund ________%
(SI) IDS Life Special Income Fund _________% (SI) IDS Life Special Income Fund ________%
(MS) IDS Life Moneyshare Fund _________% (MS) IDS Life Moneyshare Fund ________%
(MF) IDS Life Managed Fund _________% (MF) IDS Life Managed Fund ________%
(IE) IDS Life International Equity Fund _________% (IE) IDS Life International Equity Fund ________%
(AG) IDS Life Aggressive Growth Fund _________% (AG) IDS Life Aggressive Growth Fund ________%
(GY) IDS Life Global Yield Fund _________% (GY) IDS Life Global Yield Fund ________%
(GD) IDS Life Growth Dimensions Fund _________% (GD) IDS Life Growth Dimensions Fund ________%
(IA) IDS Life Income Advantage Fund _________% (IA) IDS Life Income Advantage Fund ________%
(GI) AIM Variable Ins. Growth & Income Fund _________% (GI) AIM Variable Ins. Growth & Income Fund ________%
(NO) PCM New Opportunities Fund _________% (NO) PCM New Opportunities Fund ________%
(SC) Warburg Pincus Trust Small Co. Portfolio _________% (SC) Warburg Pincus Trust Small Co. Portfolio ________%
(DM) Templeton Developing Markets Fund _________% (DM) Templeton Developing Markets Fund ________%
(TV) TCI Value _________% (TV) TCI Value ________%
FREQUENCY: WHEN:
How often? (|X| one) If frequency is not noted, transfers will be Begin transfers on ______/______/_____
set up to take place on a monthly basis. and end transfers on ______/______/_____
__ Annually (1/yr) __ Monthly (12/yr) If no start date is specified, arrangement will be effective on
__ Semiannually (2/yr) __ Bifortnightly (13/yr) the date received in the home office or as soon as the contract
__ Every 4 months (3/yr) __ Semimonthly (24/yr) allows change to take place. If no end date is specified, DCA
__ Quarterly (4/yr) __ Biweekly (26/yr) will continue until you later stop the DCA. If the value of ANY
__ Bimonthly (6/yr) __ Weekly (52/yr) of the requested "Transfer From" funds becomes too low to allow
a transfer of the requested amount, the DCA will suspend.
</TABLE>
AUTHORIZATION AND ACKNOWLEDGMENTS:
I understand the following with respect to my request:
o If any automated transfer, as scheduled, falls on a date that is not a
normal business day, the transfer will be made on the last normal business
day preceding such date.
o Automated transfers and any random transfers are subject to the provisions
of my contract, the current prospectus and such other rules as IDS of New
York shall establish.
o No written confirmation of the initial set-up of this request will be sent
out, but transactions will appear on the quarterly consolidated statement.
o I agree to notify IDS Life of New York within 90 days if the requested
transactions does not appear.
o If this request is received by the IDS of New York home office after the
requested start date, transfers will begin the following month.
__________________________________ __________________
Contract Owner's Signature Date
__________________________________ __________________
Advisor's Name Advisor's Number
(_____)_____________________ ___________________ ____________
Advisor's Telephone Number Area Office Number Group ID Number
April 28, 1998
IDS Life Insurance Company of New York
20 Madison Avenue Extension
Albany, NY 12203
Re: IDS Life of New York Flexible Portfolio Annuity Account
Post-Effective Amendment No. 2
File No. 333-03867/811-07623
Ladies and Gentlemen:
I am familiar with the establishment of the IDS Life of New York Flexible
Portfolio Annuity Account ("Account"), which is a separate account of IDS Life
Insurance Company of New York ("Company") established by the Company's Board of
Directors according to applicable insurance law. I also am familiar with the
above-referenced Registration Statement filed by the Company on behalf of the
Account with the Securities and Exchange Commission.
I have made such examination of law and examined such documents and records as
in my judgment are necessary and appropriate to enable me to give the following
opinion:
1. The Company is duly incorporated, validly existing and in good standing
under applicable state law and is duly licensed or qualified to do
business in each jurisdiction where it transacts business. The Company
has all corporate powers required to carry on its business and to issue
the contracts.
2. The Account is a validly created and existing separate account of the
Company and is duly authorized to issue the securities registered.
3. The contracts issued by the Company during the past fiscal year, when
offered and sold in accordance with the prospectus contained in the
Registration Statement and in compliance with applicable law, were
legally issued and represent binding obligations of the Company in
accordance with their terms.
I hereby consent to the filing of this opinion as an exhibit to the Registration
Statement.
Sincerely,
Sherilyn K. Beck
Associate Counsel
SKB/SP/dm
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Independent Auditors"
and to the use of our reports dated February 5, 1998 on the financial statements
and schedules of IDS Life Insurance Company of New York and our report dated
March 13, 1998 on the financial statements of the Flexible Portfolio Annuity
Account in Post-Effective Amendment No. 2 to the Registration Statement (Form
N-4, No. 333-03867) and related Prospectus for the registration of the Flexible
Portfolio Annuity to be offered by IDS Life Insurance Company of New York.
Ernst & Young LLP
Minneapolis, Minnesota
April 27, 1998
<PAGE>
Report of Independent Auditors
The Board of Directors
IDS Life Insurance Company of New York
We have audited the financial statements of IDS Life Insurance Company of New
York (a wholly owned subsidiary of IDS Life Insurance Company) as of December
31, 1997 and 1996, and for each of the three years in the period ended December
31, 1997 and have issued our report thereon dated February 5, 1998 (included
elsewhere in this Registration Statement). Our audits also included the
financial statement schedules listed in the index to financial statement
schedules of this Registration Statement. These schedules are the responsibility
of the Company's management. Our responsibility is to express an opinion based
on our audits.
In our opinion, the financial statement schedules referred to above, when
considered in relation to the basic financial statements taken as a whole,
present fairly, in all material respects, the information set forth therein.
Ernst & Young LLP
Minneapolis, Minnesota
February 5, 1998
<PAGE>
IDS LIFE INSURANCE COMPANY OF NEW YORK
SCHEDULE I - CONSOLIDATED SUMMARY OF INVESTMENTS
OTHER THAN INVESTMENTS IN RELATED PARTIES ($ thousands)
AS OF DECEMBER 31, 1997
- -----------------------------------------------------------------------------
Column A Column B Column C Column D
Type of Investment Cost Value Amount at which
shown in the
balance sheet
- -----------------------------------------------------------------------------
Fixed maturities:
Held to maturity:
United States Government and
government agencies and
authorities (a) $ 59,543 $ 59,954 $ 59,543
All other corporate bonds 476,108 503,025 476,108
---------- ----------- ----------------
Total held to maturity 535,651 562,979 535,651
Available for sale:
United States Government and
government agencies and
authorities (b) 293,815 301,506 301,506
States, municipalities and
political subdivisions 104 114 114
All other corporate bonds 289,043 301,956 301,956
---------- ----------- ----------------
Total available for sale 582,962 603,576 603,576
Mortgage loans on real estate 178,826 XXXXXXXXX 178,826
Policy loans 23,349 XXXXXXXXX 23,349
Other investments 970 XXXXXXXXX 970
---------- ----------------
Total investments $ 1,321,758 $XXXXXXXXX $ 1,342,372
========== ================
(a)- Includes mortgage-backed securities with a cost and market value of
$55,853 and $56,011, respectively.
(b)- Includes mortgage-backed securities with a cost and market value of
$293,815 and $301,506, respectively.
(c)- Includes mortgage-backed securities with a cost and market value
of $7,488 and $7,764, respectively.
<PAGE>
<TABLE>
<CAPTION>
IDS LIFE INSURANCE COMPANY OF NEW YORK
SCHEDULE III - SUPPLEMENTARY INSURANCE INFORMATION ($ thousands)
FOR THE YEAR ENDED DECEMBER 31, 1997
Column A Column B Column C Column D Column E Column F Column G Column H Column I Column J Column K
Segment Deferred Future Unearned Other Premium Net Benefits, Amortization Other Premiums
policy policy premiums policy revenue investment claims, of deferred operating written
acquisition benefits, claims income* losses and policy expenses*
cost losses, and settlement acquisition
claims and benefits expenses costs
loss payable
expenses
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Annuities $68,386 $964,483 $ - $ 1,848 $ - $ 89,268 $ 495 $ 12,266 $ 4,653 N/A
Life, DI and
Long-term Care
Insurance 58,228 198,213 - 2,165 12,376 17,006 10,969 4,935 5,567 N/A
- -------------------------------------------------------------------------------------------------------------------------
Total $126,614 $1,162,696 $ - $ 4,013 $12,376 $106,274 $11,464 $ 17,201 $10,220 N/A
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
*Allocations of net investment income and other operating expenses are based on
various assumptions and estimates.
<PAGE>
<TABLE>
<CAPTION>
IDS LIFE INSURANCE COMPANY OF NEW YORK
SCHEDULE III - SUPPLEMENTARY INSURANCE INFORMATION ($ thousands)
FOR THE YEAR ENDED DECEMBER 31, 1996
Column A Column B Column C Column D Column E Column F Column G Column H Column I Column J Column K
Segment Deferred Future Unearned Other Premium Net Benefits, Amortization Other Premiums
policy policy premiums policy revenue investment claims, of deferred operating written
acquisition benefits, claims income* losses and policy expenses*
cost losses, and settlement acquisition
claims and benefits expenses costs
loss payable
expenses
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Annuities $67,568 $1,054,954$ - $ 1,055 $ - $ 93,319 $ 80 $ 11,257 $ 3,923 N/A
Life, DI and
Long-term Care
Insurance 51,615 187,616 - 2,100 10,931 16,149 10,835 4,814 5,049 N/A
- -----------------------------------------------------------------------------------------------------------
Total $119,183 $1,242,570$ - $ 3,155 $10,931 $109,468 $10,915 $ 16,071 $ 8,972 N/A
- ------------------------------------------------------------------------------------------------------------
</TABLE>
*Allocations of net investment income and other operating expenses are based on
various assumptions and estimates.
<PAGE>
<TABLE>
<CAPTION>
IDS LIFE INSURANCE COMPANY OF NEW YORK
SCHEDULE III - SUPPLEMENTARY INSURANCE INFORMATION ($ thousands)
FOR THE YEAR ENDED DECEMBER 31, 1995
Column A Column B Column C Column D Column E Column F Column G Column H Column I Column J Column K
Segment Deferred Future Unearned Other Premium Net Benefits, Amortization Other Premiums
policy policy premiums policy revenue investment claims, of deferred operating written
acquisition benefits, claims income* losses and policy expenses*
cost losses, and settlement acquisition
claims and benefits expenses costs
loss payable
expenses
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Annuities $ 65,283 $1,109,167$ - $ 2,222 $ - $ 95,323 $ 171 $ 9,138 $ 6,908 N/A
Life, DI and
Long-term Care
Insurance 44,517 178,952 - 1,422 9,280 15,601 9,689 3,947 566 N/A
- -----------------------------------------------------------------------------------------------------------------
Total $ 109,800 $1,288,119$ - $ 3,644 $ 9,280 $110,924 $ 9,860 $ 13,085 $ 7,474 N/A
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
*Allocations of net investment income and other operating expenses are based on
various assumptions and estimates.
<PAGE>
<TABLE>
<CAPTION>
IDS LIFE INSURANCE COMPANY OF NEW YORK
SCHEDULE IV - REINSURANCE ($ thousands)
FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
- ---------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Gross amount Ceded to other Assumed from Net % of amount
companies other companies Amount assumed to net
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
For the year ended
December 31, 1997
Life insurance in force $ 4,209,990 $ 220,798 $ 303,263 $ 4,292,455 7.07%
===================================================================================================
Premiums:
Life insurance & annuities $ 2,822 $ 346 $ -- $ 2,476 0.00%
DI & long-term care insurance 10,658 759 -- 9,899 0.00%
- ---------------------------------------------------------------------------------------------------
Total premiums $ 13,480 $ 1,105 $ 0 $ 12,375 0.00%
===================================================================================================
For the year ended
December 31, 1996
Life insurance in force $ 3,707,618 $ 203,963 $ 345,943 $ 3,849,598 8.99%
===================================================================================================
Premiums:
Life insurance & annuities $ 2,634 $ 222 $ -- $ 2,412 0.00%
DI & long-term care insurance 8,651 132 -- 8,519 0.00%
- ---------------------------------------------------------------------------------------------------
Total premiums $ 11,285 $ 354 $ 0 $ 10,931 0.00%
===================================================================================================
For the year ended
December 31, 1995
Life insurance in force $ 3,110,745 $ 163,462 $ 392,106 $ 3,339,389 11.74%
===================================================================================================
Premiums:
Life insurance & annuities $ 2,327 $ 185 $ -- $ 2,142 0.00%
DI & long-term care insurance 7,221 83 -- 7,138 0.00%
- ---------------------------------------------------------------------------------------------------
Total premiums $ 9,548 $ 268 $ 0 $ 9,280 0.00%
===================================================================================================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
IDS LIFE INSURANCE COMPANY OF NEW YORK
SCHEDULE V - VALUATION AND QUALIFYING ACCOUNTS ($ thousands)
FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
- -----------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E
Additions
---------------------------------
Balance at Charged to
Description Beginning Charged to Other Accounts-Deductions- Balance at End
of Period Costs & Expenses Describe Describe of Period
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
For the year ended
December 31, 1997
- ---------------------------
Reserve for Mortgage Loans . $1,300 $ 200 $ 0 $ 0 $1,500
Reserve for Fixed Maturities $ 49 $ 96 $ 0 $ 0 $ 145
For the year ended
December 31, 1996
- ---------------------------
Reserve for Mortgage Loans . $ 445 $ 855 $ 0 $ 0 $1,300
Reserve for Fixed Maturities $ 26 $ 23 $ 0 $ 0 $ 49
For the year ended
December 31, 1995
- ---------------------------
Reserve for Mortgage Loans . $ 445 $ 0 $ 0 $ 0 $ 445
Reserve for Fixed Maturities $ 0 $ 26 $ 0 $ 0 $ 26
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLAR
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> OCT-08-1997
<PERIOD-END> DEC-31-1997
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 134633448
<INVESTMENTS-AT-VALUE> 138916654
<RECEIVABLES> 401474
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 139318128
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> (516326)
<TOTAL-LIABILITIES> (516326)
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 122694197
<SHARES-COMMON-PRIOR> 22050914
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 138801803
<DIVIDEND-INCOME> 3200333
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> (962038)
<NET-INVESTMENT-INCOME> 2238295
<REALIZED-GAINS-CURRENT> 81367
<APPREC-INCREASE-CURRENT> 4413020
<NET-CHANGE-FROM-OPS> 6732682
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 128878858
<NUMBER-OF-SHARES-REDEEMED> (12594657)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 116590394
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (962038)
<AVERAGE-NET-ASSETS> 80506606
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 7
<MULTIPLIER> 1000
<CURRENCY> U.S. DOLLAR
<S> <C>
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<PERIOD-TYPE> YEAR
<EXCHANGE-RATE> 1
<DEBT-HELD-FOR-SALE> 603576
<DEBT-CARRYING-VALUE> 535651
<DEBT-MARKET-VALUE> 562979
<EQUITIES> 0
<MORTGAGE> 178826
<REAL-ESTATE> 0
<TOTAL-INVEST> 1342372
<CASH> 0
<RECOVER-REINSURE> 9
<DEFERRED-ACQUISITION> 126614
<TOTAL-ASSETS> 2730177
<POLICY-LOSSES> 1162696
<UNEARNED-PREMIUMS> 0
<POLICY-OTHER> 0
<POLICY-HOLDER-FUNDS> 4013
<NOTES-PAYABLE> 0
<COMMON> 2000
0
0
<OTHER-SE> 255279
<TOTAL-LIABILITY-AND-EQUITY> 2730177
12376
<INVESTMENT-INCOME> 106274
<INVESTMENT-GAINS> 547
<OTHER-INCOME> 29631
<BENEFITS> 73758
<UNDERWRITING-AMORTIZATION> 17201
<UNDERWRITING-OTHER> 10220
<INCOME-PRETAX> 47649
<INCOME-TAX> 16471
<INCOME-CONTINUING> 31178
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 31178
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<RESERVE-OPEN> 1480
<PROVISION-CURRENT> 7485
<PROVISION-PRIOR> 0
<PAYMENTS-CURRENT> 7297
<PAYMENTS-PRIOR> 0
<RESERVE-CLOSE> 1668
<CUMULATIVE-DEFICIENCY> 0
</TABLE>
