SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No. (File No. 333-91691) [1]
Post-Effective Amendment No. [ ]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF
1940
Amendment No. 2 (File No. 811-07623) [ X ]
(Check appropriate box or boxes)
IDS LIFE OF NEW YORK VARIABLE ANNUITY ACCOUNT
(formerly IDS Life of New York Flexible Portfolio Annuity Account)
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(Exact Name of Registrant)
IDS Life Insurance Company of New York
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(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) 671-3678
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Mary Ellyn Minenko, 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 August 1, 2000 or as soon
as possible.
<PAGE>
Prospectus
______, 2000
American Express Retirement Advisor Variable Annuity
Individual Flexible Premium Deferred Combination Fixed/Variable Annuity
IDS Life of New York Variable Annuity Account
Issued by: IDS Life Insurance Company of New York (IDS Life of New York)
20 Madison Avenue Extention
Albany, NY 12203
Telephone: 800-541-2251
This prospectus contains information that you should know before investing. You
also will receive the prospectuses for:
<TABLE>
<CAPTION>
<S> <C>
o American Express(R)Variable Portfolio Funds o Lazard Retirement Series, Inc.
o AIM Variable Insurance Funds, Inc. o MFS(R)Variable Insurance TrustSM
o American Century Variable Portfolios, Inc. o Putnam Variable Trust - Class IB Shares
o Calvert Variable Series, Inc. o Royce Capital Fund
o Fidelity Variable Insurance Products Funds - Service o Third Avenue Variable Series Trust
Class
o Franklin Templeton Variable Insurance Products Trust o Wanger Advisors Trust
(FTVIPT) - Class 2 o Warburg Pincus Trust
o Goldman Sachs Variable Insurance Trust (VIT)
o Janus Aspen Series: Service Shares
</TABLE>
Please read the prospectuses carefully and keep them for future reference.
The contract provides for purchase payment credits which we may reverse up to
the maximum surrender charge under certain circumstances.
The Securities and Exchange Commission (SEC) has not approved or disapproved
these securities or passed upon the accuracy or adequacy of this prospectus. Any
representation to the contrary is a criminal offense.
An investment in this contract is not a deposit of a bank or financial
institution and is not insured or guaranteed by the Federal Deposit Insurance
Corporation or any other government agency. An investment in this contract
involves investment risk including the possible loss of principal.
A Statement of Additional Information (SAI), dated the same date as this
prospectus, is incorporated by reference into this prospectus. It is filed with
the SEC and is available without charge by contacting IDS Life 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................................................................p
The Contract in Brief ...................................................p
Expense Summary..........................................................p
Condensed Financial Information (Unaudited)..............................p
Financial Statements.....................................................p
Performance Information..................................................p
The Variable Account and the Funds.......................................p
The Fixed Account........................................................p
Buying Your Contract.....................................................p
Charges..................................................................p
Valuing Your Investment..................................................p
Making the Most of Your Contract.........................................p
Surrenders...............................................................p
TSA -- Special Surrender Provisions......................................p
Changing Ownership.......................................................p
Benefits in Case of Death................................................p
The Annuity Payout Period................................................p
Taxes....................................................................p
Voting Rights............................................................p
Substitution of Investments..............................................p
About the Service Providers..............................................p
Year 2000................................................................p
Table of Contents of the Statement of Additional Information.............p
<PAGE>
Key Terms
These terms can help you understand details about your contract.
Accumulation unit -- A measure of the value of each subaccount before annuity
payouts begin.
Annuitant -- The person on whose life or life expectancy the annuity payouts are
based.
Annuity payouts -- An amount paid at regular intervals under one of several
plans.
Beneficiary -- The person you designate to receive benefits in case of the
owner's or annuitant's death while the contract is in force and before annuity
payouts begin.
Close of business -- When the New York Stock Exchange (NYSE) closes, normally 4
p.m. Eastern time.
Contract -- A deferred annuity contract that permits you to accumulate money for
retirement by making one or more purchase payments. It provides for lifetime or
other forms of payouts beginning at a specified time in the future.
Contract value -- The total value of your contract before we deduct any
applicable charges.
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
you allocate to this account earn interest at rates that we declare
periodically.
Funds -- Investment options under your contract. You may allocate your purchase
payments into subaccounts investing in shares of any or all of these funds.
Owner (you, your) -- The person who controls the contract (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 contract's benefits.
Purchase payment credits - An addition we make to your contract value.
Qualified annuity -- A contract that you purchase to fund one of the following
tax-deferred retirement plans that is subject to applicable federal law and any
rules of the plan itself:
o Individual Retirement Annuities (IRAs) under Section 408(b) of the
Internal Revenue Code of 1986, as amended (the Code)
o Roth IRAs under Section 408A of the Code
o SIMPLE IRAs under Section 408(p) of the Code
o Simplified Employee Pension (SEP) plans under Section 408(k) of the
Code
o Plans under Section 401(k) of the Code
o Custodial and trusteed pension and profit sharing plans under Section
401(a) of the Code
o Tax-Sheltered Annuities (TSAs) under Section 403(b) of the Code
A qualified annuity will not provide any necessary or additional tax deferral if
it is used to fund a retirement plan that is already tax-deferred.
<PAGE>
All other contracts are considered nonqualified annuities.
Settlement date -- The date when annuity payouts are scheduled to begin.
Surrender value -- The amount you are entitled to receive if you make a full
surrender from your contract. It is the contract value minus any applicable
charges.
Valuation date -- Any normal business day, Monday through Friday, that the NYSE
is open. Each valuation date ends at the close of business. We calculate the
value of each subaccount 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 fund. The value of your
investment in each subaccount changes with the performance of the particular
fund.
<PAGE>
The Contract in Brief
Purpose: The purpose of the contract is to allow you to accumulate money for
retirement. You do this by making one or more purchase payments. You may
allocate your purchase payments to the fixed account and/or subaccounts under
the contract. These accounts, in turn, may earn returns that increase the value
of the contract. Beginning at a specified time in the future called the
settlement date, the contract provides lifetime or other forms of payouts of
your contract value. As in the case of other annuities, it may not be
advantageous for you to purchase this contract as a replacement for, or in
addition to, an existing annuity.
A qualified annuity will not provide any necessary or additional tax deferral if
it is used to fund a retirement plan that is tax-deferred. However, the contract
has features other than tax deferral that may make it an appropriate investment
for your retirement plan. You should compare these features and their costs with
other investment options before deciding to purchase this contract.
Free look period: You may return your contract to your sales representative or
to our office within 10 days after it is delivered to you and receive a full
refund of all your purchase payments. We will not deduct any other charges.
Accounts: Currently, you may allocate your purchase payments among any or
all of:
o the subaccounts, each of which invests in a fund with a particular
investment objective. The value of each subaccount varies with the
performance of the particular fund in which it invests. We cannot guarantee
that the value at the retirement date will equal or exceed the total
purchase payments you allocate to the subaccounts. (p. __)
o the fixed account, which earns interest at a rate that we adjust
periodically. (p. __)
Buying your contract: Your sales representative will help you complete and
submit an application. Applications are subject to acceptance at our office. You
may buy a nonqualified annuity or a qualified annuity. After your initial
purchase payment, you have the option of making additional purchase payments in
the future. (p. __ )
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 purchase payment - $50 monthly; $23.08 biweekly
(scheduled payment plan billing).
o Maximum first-year purchase payments - $100,000 to $1,000,000 depending on
your age.
o Maximum purchase payment for each subsequent year - $50,000 to $100,000
depending upon your age.
<PAGE>
Transfers: Subject to certain restrictions you currently may redistribute your
money among the accounts without charge at any time until annuity payouts begin,
and once per contract year among the subaccounts after annuity payouts begin.
You may establish automated transfers among the accounts. Fixed account
transfers are subject to special restrictions. (p.)
Surrenders: You may surrender all or part of your contract value at any time
before the settlement date. You also may establish automated partial surrenders.
Surrenders may be subject to charges and tax penalties (including a 10% IRS
penalty if you surrender prior to your reaching age 59 1/2) and may have other
tax consequences; also, certain restrictions apply. (p.)
Changing ownership: You may change ownership of a nonqualified annuity by
written instruction, but this may have federal income tax consequences.
Restrictions apply to changing ownership of a qualified annuity. (p.)
Benefits in case of death: If you or the annuitant die before annuity payouts
begin, we will pay the beneficiary an amount at least equal to the contract
value. (p.)
Annuity Payouts: You can apply your contract value to an annuity payout plan
that begins on the settlement date. You may choose from a variety of plans to
make sure that payouts continue as long as you like. If you purchased a
qualified annuity, the payout schedule must meet the requirements of the
qualified plan. We can make payouts on a fixed or variable basis, or both. Total
monthly payouts may include amounts from each subaccount and the fixed account.
During the annuity payout period, you cannot be invested in more than five
subaccounts at any one time unless we agree otherwise. (p.)
Taxes: Generally, your contract 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 be taxed on the
income if you are the owner. (p.)
Charges:
We assess certain charges in connection with your contract:
o $30 annual contract administrative charge;
o for nonqualified annuities a 0.95% mortality and expense risk fee (if you
allocate money to one or more subaccounts);
o for qualified annuities a 0.75% mortality and expense risk fee (if you
allocate money to one or more subaccounts);
o surrender charge; and
o the operating expenses of the funds in which the subaccounts invest.
Expense Summary
The purpose of the following information is to help you understand the various
costs and expenses associated with your contract.
You pay no sales charge when you purchase your contract. We show all costs that
we deduct directly from your contract or indirectly from the subaccounts and
funds below. Some expenses may vary as we explain under "Charges." Please see
the fund prospectuses for more information on the operating expenses for each
fund.
<PAGE>
Contract owner expenses:
Surrender charge: contingent deferred sales charge as a percentage of purchase
payment surrendered.
Surrender charge schedule
Years from purchase payment receipt Surrender charge percentage
1 7%
2 7
3 7
4 6
5 5
6 4
7 2
Thereafter 0
Surrender charge under Annuity Payout Plan E --Payouts for a specified period:
The amount equal to the difference in the present value of remaining payments
using the assumed investment rate and such present value using the assumed
investment rate plus 1.22% for qualified annuities and 1.42% for nonqualified
annuities. In no event would your surrender charge exceed 9% of the amount
available for payouts under the plan.
Annual contract administrative charge $30*
*We will waive this charge when your contract value, or total purchase payments
less any payments surrendered, is $50,000 or more on the current contract
anniversary.
Annual subaccount expenses (as a percentage of average subaccount value):
Mortality and expense risk fee 0.95% for nonqualified annuities
0.75% for qualified annuities
Annual operating expenses of the funds (after fee waivers and/or expense
reimbursements, if applicable, as a percentage of average daily net assets)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Management Other
Fees 12b-1 fees Expenses Total
AXPSM Variable Portfolio
Blue Chip Advantage Fund .56% .13 .26 .95%1
Bond Fund .60% .13 .08 .81%2
Capital Resource Fund .60% .13 .06 .79%2
Cash Management Fund .51% .13 .05 .69%2
Diversified Equity Income Fund .56% .13 .26 .95%1
Emerging Markets Fund 1.27% .13 .35 1.75%1
Extra Income Fund .62% .13 .08 .83%2
Federal Income Fund .61% .13 .14 .88%1
Global Bond Fund .84% .13 .12 1.09%2
Growth Fund .63% .13 .19 .95%1
International Fund .83% .13 .11 1.07%2
Managed Fund .59% .13 .04 .76%2
<PAGE>
New Dimensions Fund(R) .61% .13 .07 .81%2
S&P 500 Index Fund .37% .13 -- .50%1
Small Cap Advantage Fund .79% .13 .31 1.23%1
Strategy Aggressive Fund .60% .13 .07 .80%2
AIM V.I.
Capital Appreciation Fund .62% -- .11 .73%3
Capital Development Fund -- -- 1.23 1.23%3,4
American Century VP
International 1.34% -- -- 1.34%5
Value 1.00% -- -- 1.00%5
Calvert CVS
Social Balanced Portfolio .70% -- .16 .86%6
Fidelity VIP
III Growth & Income Portfolio (Service Class) .48% .10 .12 .70%7
III Mid Cap Portfolio (Service Class) .57% .10 .40 1.07%8
Overseas Portfolio (Service Class) .73% .10 .18 1.01%7
FTVIPT
Franklin Real Estate Fund-Class 2 .56% .25 .02 .83%10
Franklin Value Securities Fund-Class 2 .60% .25 .21 1.06%9
Templeton International Smaller Companies Fund-Class 2 .85% .25 .26 1.36%9
Goldman Sachs VIT
CORESM Small Cap Equity Fund .75% -- .25 1.00%11
CORESM U.S. Equity Fund .70% -- .20 .90%11
Mid Cap Value Fund .80% -- .25 1.05%11
Janus Aspen Series
Aggressive Growth Portfolio: Service Shares .65% .25 .02 .92%12
Global Technology Portfolio: Service Shares .65% .25 .13 1.03%12
International Growth Portfolio: Service Shares .65% .25 .11 1.01%12
Lazard Retirement Series
International Equity Portfolio .75% .25 .25 1.25%13
MFS(R) VIT
Growth Series-Service Class .75% .20 .16 1.11%14,15,16
New Discovery Series-Service Class .90% .20 .17 1.27%14,15,16
Putnam Variable Trust
Putnam VI International New Opportunities Fund-Class 1.08% .15 .33 1.56%3
IB Shares
Putnam VT Vista Fund-Class IB Shares .65% .15 .10 .90%3
Royce
Micro-Cap Portfolio 1.25% -- .10 1.35%17
Third Avenue
Value Portfolio .90% -- .40 1.30%18
Wanger
International Small Cap 1.25% -- .24 1.49%19
U.S. Small Cap .95% -- .07 1.02%19
Warburg Pincus Trust-
Emerging Growth Portfolio -- -- 1.40 1.40%20
</TABLE>
1Based on estimated expenses after fee waivers and expense reimbursements.
Without fee waivers and expense reimbursements "Other Expenses" and "Total"
would be: 0.39% and 1.08% for AXP Variable Portfolio - Blue Chip Advantage and
AXP Variable Portfolio - Diversified Equity Income Funds, 0.26% and 1.00% for
AXP Variable Portfolio - Federal Income Fund, 0.32% and 1.08% for AXP Variable
Portfolio - Growth Fund and 0.43% and 1.35% for AXP Variable Portfolio - Small
Cap Advantage Fund.
<PAGE>
2The fund's expense figures are based on actual expenses for the fiscal year
ended Aug. 31, 1999 restated to include a Rule 12b-1 distribution fee of 0.125%
that went into effect Sept. 21, 1999.
3Figures in "Management Fees", "12b-1 Fees", "Other Expenses" and "Total" are
based on actual expenses for the fiscal year ended Dec. 31, 1999.
4Had there been no fee waiver or expenses reimbursements, expenses would have
been: 0.75%, 0.00%, 2.67% and 3.42%.
5The fund has a stepped fee schedule. As a result, the fund's management fee
rate generally decreases as fund assets increase.
6Net fund operating expenses after reductions for fees paid indirectly again
restated to reflect an indirect fee for Social Balanced would be 0.89%. Total
expenses have been restated to reflect expenses expected to be incurred in 2000.
7A portion of the brokerage commissions that certain funds pay was used to
reduce fund expenses. In addition, through arrangements with certain funds'
custodian, credits realized as a result of uninvested cash balances were used to
reduce a portion of each applicable funds' expenses. With these reductions,
"Other Expenses", and "Total" presented in the table would have been 0.11% and
0.69% for Growth & Income Portfolio and 0.15% and 0.98% for Overseas Portfolio.
8FMR agreed to reimburse a portion of Mid Cap Portfolio's expenses during the
period. Without this reimbursement, the Portfolio's management fee, distribution
& service fee (12b-1), other expenses and total expenses would have been .57%,
.10%, 2.74% and 3.41% respectively.
9The fund's Class 2 distribution plan or "Rule 12b-1 plan" is described in the
fund's prospectus.
10Previously Franklin Real Estate Securities Fund. The fund administration fee
is paid indirectly through the management fee. The fund's Class 2 distribution
plan or "Rule 12b-1 plan" is described in the fund's prospectus.
11The fund's expenses are based on estimated expenses for the fiscal year ended
Dec. 31, 2000. Goldman Sachs Asset Management and Goldman Sachs Asset Management
International, the investment advisers, have voluntarily agreed to reduce or
limit certain other expenses (excluding management fees, taxes, interest,
brokerage fees, litigation, indemnification and other extraordinary expenses) to
the extent such expenses exceed the percentage stated in the above table (as
calculated per annum) of each fund's respective average daily net assets.
Without the limitations described above, "Other Expenses" and "Total" would be
as follows: 0.75% and 1.50% for CORE Small Cap Equity Fund, 0.42% and 1.22% for
Mid Cap Value Fund (formerly the Mid Cap Equity Fund) and 0.20% and 0.90% for
CORESM U.S. Equity Fund. CORESM is a service mark of Goldman, Sachs & Co.
12Expenses are based on the estimated expenses that the new Service Shares class
of each portfolio expects to incur in its initial fiscal year. All expenses are
shown without the effect of expense offset arrangements.
13Effective May 1, 1999, the investment adviser agreed to waive its fees and/or
reimburse the Fund through Dec. 31, 2000 to the extent that Fund expenses exceed
1.25% of the Fund's average daily net assets. Absent fee waivers and/or
reimbursements, "Other Expenses" and "Total" expenses for the year ended Dec.
31, 1999 would have been 11.94% and 12.94% for International Equity.
14Each Series has adopted a distribution plan under Rule 12b-1 that permits it
to pay marketing and other fees to support the sales and distribution of service
class shares (these fees are referred to as distribution fees).
15Each series has an expense offset arrangement which reduces the series'
custodian fee based upon the amount of cash maintained by the series with its
custodian and dividend disbursing agent. The series may enter into other similar
arrangements and directed brokerage arrangements, which would also have the
effect of reducing the series' expenses. "Other Expenses" do not take into
account these expense reductions, and are therefore higher than the actual
expenses of the series. Had these fee reductions been taken into account, "Net
Expenses" would be lower, and for service class shares would be estimated to be:
1.10% for Growth Series and 1.25% for New Discovery Series.
16MFS has contractually agreed, subject to reimbursement, to bear expenses for
the series' expenses such that "Other Expenses" (after taking into account the
expense offset arrangement described above), do not exceed 0.15% annually.
Without this agreement, "Other Expenses" and "Total" would be 0.71% and 1.66%
for Growth Series and 1.59% and 2.69% for New Discovery Series. These
contractual fee arrangements will continue until at least May 1, 2001, unless
changed with the consent of the board of trustees which oversees the series.
17Royce has contractually agreed to waive its fees and reimburse expenses to the
extent necessary to maintain the Funds Net Annual Operating Expense ratio at or
below 1.35% through Dec. 31, 1999 and 1.99% through Dec. 31, 2008. Absent fee
waivers "Other Expenses" and "Total Expenses" would be 0.99% and 2.24% for Royce
Micro-Cap Portfolio.
18These expenses reflect reimbursements by the Adviser. The Adviser reimbursed
the Fund for all expenses incurred by the Fund in excess of 1.30% of Fund
assets. The fund will repay the Adviser the amount of its reimbursement for up
to three years following the reimbursement to the extent Fund expenses drop
below 1.30%. The Adviser expects to continue to reimburse the Fund for these
expenses for the foreseeable future. Either the Fund or the Adviser can
terminate this arrangement at any time. Without this reimbursement, the Fund's
"Other Expenses" and "Total" would have been 2.05% and 2.95%. Other expenses are
based on estimated amounts for the current fiscal year.
19Actual operating expenses of funds at Dec. 31, 1999.
20Expense ratios are shown after fee waivers and expense reimbursements by the
investment adviser. The total expense ratio before the waivers and
reimbursements would have been 11.16% for Emerging Growth Portfolio of the
Warburg Pincus Trust.
<PAGE>
Examples:*
You would pay the following expenses on a $1,000 investment in a nonqualified
annuity and a 0.95% mortality and expense risk fee assuming a 5% annual return
and......
<TABLE>
<CAPTION>
full surrender at the end no surrender or selection
of each time period of an annuity payout plan
at the end of each time
period
<S> <C> <C> <C> <C>
1 year 3 years 1 year 3 years
AXPSM Variable Portfolio
Blue Chip Advantage Fund $90.06 $132.00 $20.06 $62.00
Bond Fund 88.62 127.64 18.62 57.64
Capital Resource Fund 88.42 127.02 18.42 57.02
Cash Management Fund 87.39 123.90 17.39 53.90
Diversified Equity Income Fund 90.06 132.00 20.06 62.00
Emerging Markets Fund 98.26 156.63 28.26 86.63
Extra Income Fund 88.83 128.27 18.83 58.27
Federal Income Fund 89.34 129.82 19.34 59.82
Global Bond Fund 91.49 136.34 21.49 66.34
Growth Fund 90.06 132.00 20.06 62.00
International Fund 91.29 135.72 21.29 65.72
Managed Fund 88.11 126.09 18.11 56.09
New Dimensions Fund(R) 88.62 127.64 18.62 57.64
S&P 500 Index Fund 85.45 117.96 15.45 47.96
Small Cap Advantage Fund 92.93 140.67 22.93 70.67
Strategy Aggressive Fund 88.52 127.33 18.52 57.33
AIM V.I.
Capital Appreciation Fund 87.80 125.15 17.80 55.15
Capital Development Fund 92.93 140.67 22.93 70.67
American Century VP
International 94.06 144.06 24.06 74.06
Value 90.57 133.55 20.57 63.55
Calvert CVS
Social Balanced Portfolio 89.14 129.20 19.14 59.20
Fidelity VIP
III Growth & Income Portfolio (Service Class) 87.50 124.21 17.50 54.21
III Mid Cap Portfolio (Service Class) 91.29 135.72 21.29 65.72
Overseas Portfolio (Service Class) 90.67 133.86 20.67 63.86
FTVIPT
Franklin Real Estate Fund-Class 2 88.83 128.27 18.83 58.27
Franklin Value Securities Fund-Class 2 91.19 135.41 21.19 65.41
Templeton International Smaller Companies Fund-Class 2 94.26 144.67 24.26 74.67
Goldman Sachs VIT
CORE Small Cap Equity Fund 90.57 133.55 20.57 63.55
CORE U.S. Equity Fund 89.55 130.44 19.55 60.44
Mid Cap Value Fund 91.08 135.10 21.08 65.10
<PAGE>
Janus Aspen Series
Aggressive Growth Portfolio: Service Shares $89.75 $131.07 $19.75 $61.07
Global Technology Portfolio: Service Shares 90.88 134.48 20.88 64.48
International Growth Portfolio: Service Shares 90.67 133.86 20.67 63.86
Lazard Retirement Series
International Equity Portfolio 93.13 141.28 23.13 71.28
MFS(R) VIT
Growth Series-Service Class 91.70 136.96 21.70 66.96
New Discovery Series-Service Class 93.34 141.90 23.34 71.90
Putnam Variable Trust
Putnam VI International New Opportunities Fund-Class 96.31 150.82 26.31 80.82
IB Shares
Putnam VT Vista Fund-Class IB Shares 89.55 130.44 19.55 60.44
Royce
Micro-Cap Portfolio 94.16 144.37 24.16 74.37
Third Avenue
Value Portfolio 93.65 142.83 23.65 72.83
Wanger
International Small Cap 95.59 148.67 25.59 78.67
U.S. Small Cap 90.78 134.17 20.78 64.17
Warburg Pincus Trust-
Emerging Growth Portfolio 94.67 145.91 24.67 75.91
</TABLE>
You would pay the following expenses on a $1,000 investment in a nonqualified
annuity and a 0.75% mortality and expense risk fee assuming a 5% annual return
and......
<TABLE>
<CAPTION>
full surrender at the end no surrender or selection
of each time period of an annuity payout plan
at the end of each time
period
<S> <C> <C> <C> <C>
1 year 3 years 1 year 3 years
AXPSM Variable Portfolio
Blue Chip Advantage Fund $88.01 $125.77 $18.01 $55.77
Bond Fund 86.57 121.40 16.57 51.40
Capital Resource Fund 86.37 120.78 16.37 50.78
Cash Management Fund 85.34 117.65 15.34 47.65
Diversified Equity Income Fund 88.01 125.77 18.01 55.77
Emerging Markets Fund 96.21 150.51 26.21 80.51
Extra Income Fund 86.78 122.03 16.78 52.03
Federal Income Fund 87.29 123.59 17.29 53.59
Global Bond Fund 89.44 130.13 19.44 60.13
Growth Fund 88.01 125.77 18.01 55.77
International Fund 89.24 129.51 19.24 59.51
Managed Fund 86.06 119.84 16.06 49.84
New Dimensions Fund(R) 86.57 121.40 16.57 51.40
S&P 500 Index Fund 83.40 111.68 13.40 41.68
Small Cap Advantage Fund 90.88 134.48 20.88 64.48
Strategy Aggressive Fund 86.47 121.09 16.47 51.09
AIM V.I.
Capital Appreciation Fund 85.75 118.90 15.75 48.90
Capital Development Fund 90.88 134.48 20.88 64.48
American Century VP
International 92.01 137.89 22.01 67.89
Value 88.52 127.33 18.52 57.33
<PAGE>
Calvert CVS
Social Balanced Portfolio $87.09 $122.97 $17.09 $52.97
Fidelity VIP
III Growth & Income Portfolio (Service Class) 85.45 117.96 15.45 47.96
III Mid Cap Portfolio (Service Class) 89.24 129.51 19.24 59.51
Overseas Portfolio (Service Class) 88.62 127.64 18.62 57.64
FTVIPT
Franklin Real Estate Fund-Class 2 86.78 122.03 16.78 52.03
Franklin Value Securities Fund-Class 2 89.14 129.20 19.14 59.20
Templeton International Smaller Companies Fund-Class 2 92.21 138.50 22.21 68.50
Goldman Sachs VIT
CORE Small Cap Equity Fund 88.52 127.33 18.52 57.33
CORE U.S. Equity Fund 87.50 124.21 17.50 54.21
Mid Cap Value Fund 89.03 128.89 19.03 58.89
Janus Aspen Series
Aggressive Growth Portfolio: Service Shares 87.70 124.84 17.70 54.84
Global Technology Portfolio: Service Shares 88.83 128.27 18.83 58.27
International Growth Portfolio: Service Shares 88.62 127.64 18.62 57.64
Lazard Retirement Series
International Equity Portfolio 91.08 135.10 21.08 65.10
MFS(R) VIT
Growth Series-Service Class 89.65 130.75 19.65 60.75
New Discovery Series-Service Class 91.29 135.72 21.29 65.72
Putnam Variable Trust
Putnam VI International New Opportunities Fund-Class 94.26 144.67 24.26 74.67
IB Shares
Putnam VT Vista Fund-Class IB Shares 87.50 124.21 17.50 54.21
Royce
Micro-Cap Portfolio 92.11 138.19 22.11 68.19
Third Avenue
Value Portfolio 91.60 136.65 21.60 66.65
Wanger
International Small Cap 93.54 142.52 23.54 72.52
U.S. Small Cap 88.73 127.96 18.73 57.96
Warburg Pincus Trust-
Emerging Growth Portfolio 92.62 139.74 22.62 69.74
</TABLE>
You should not consider these examples as representations of past or future
expenses. Actual expenses may be more or less than those shown.
Condensed Financial Information (Unaudited)
We have not provided any condensed financial information for the subaccounts
because they are new and do not have any history.
Financial Statements
You can find our audited financial statements in the SAI. The SAI does not
include the audited financial statements of the subaccounts because they are new
and do not have any performance.
<PAGE>
Performance Information
Performance information for the subaccounts may appear from time to time in
advertisements or sales literature. This information reflects the performance of
a hypothetical investment in a particular subaccount during a specified time
period. Currently, we do not provide any performance information for the
subaccounts because they are new and have not had any activity to date. However,
we show performance from the commencement date of the funds as if the contract
existed at that time, which it did not. Although we base performance figures on
historical earnings, past performance does not guarantee future results.
We include non-recurring charges (such as surrender charges) in total return
figures, but not in yield quotations. Excluding non-recurring charges in yield
calculations increases the reported value.
Total return figures reflect deduction of all applicable charges, including:
o contract administrative charge,
o mortality and expense risk fee, and
o surrender charge (assuming a surrender at the end of the illustrated
period).
We also show optional total return quotations that do not reflect a surrender
charge deduction (assuming no surrender). We may show total return quotations by
means of schedules, charts or graphs.
Average annual total return is the average annual compounded rate of return of
the investment over a period of one, five and ten years (or up to the life of
the subaccount if it is less than ten years old).
Cumulative total return is the cumulative change in the value of an investment
over a specified time period. We assume that income earned by the investment is
reinvested. Cumulative total return generally will be higher than average annual
total return.
Annualized simple yield (for subaccounts investing in money market funds)
"annualizes" the income generated by the investment over a given seven-day
period. That is, we assume the amount of income generated by the investment
during the period will be generated each seven-day period for a year. We show
this as a percentage of the investment.
Annualized compound yield (for subaccounts investing in money market funds) is
calculated like simple yield except that we assume the income is reinvested when
we annualize it. Compound yield will be higher than the simple yield because of
the compounding effect of the assumed reinvestment.
Annualized yield (for subaccounts investing in income funds) divides the net
investment income (income less expenses) for each accumulation unit during a
given 30-day period by the value of the unit on the last day of the period. We
then convert the result to an annual percentage.
You should consider performance information in light of the investment
objectives, policies, characteristics and quality of the fund in which the
subaccount invests and the market conditions during the specified time period.
Advertised yields and total return figures include charges that reduce
advertised performance. Therefore, you should not compare subaccount performance
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 total return and
yield.)
If you would like additional information about actual performance, please
contact us.
<PAGE>
The Variable Account and the Funds
You may allocate payments to any or all of the subaccounts of the variable
account that invest in shares of the following funds:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Investment Advisor or
Subaccount Investing In Investment Objectives and Policies: Manager
BC7 AXPSM Variable Portfolio - Objective: long-term total return exceeding IDS Life, investment
BC8 Blue Chip Advantage Fund that of the U.S. stock market. Invests manager; American
primarily in common stocks of companies Express Financial
included in the unmanaged S&P 500 Index. Corporation (AEFC)
investment advisor.
BD7 AXPSM Variable Portfolio - Objective: high level of current income while IDS Life, investment
BD8 Bond Fund conserving the value of the investment for the manager; AEFC
longest time period. Invests primarily in bonds investment advisor.
and other debt obligations.
CR7 AXPSM Variable Portfolio - Objective: capital appreciation. Invests IDS Life, investment
CR8 Capital Resource Fund primarily in U.S. common stocks and other manager; AEFC
securities convertible into common stocks. investment advisor.
CM7 AXPSM Variable Portfolio - Objective: maximum current income consistent IDS Life, investment
CM8 Cash Management Fund with liquidity and conservation of capital. manager; AEFC
Invests in money market securities. investment advisor.
DE7 AXPSM Variable Portfolio - Objective: high level of current income and, as IDS Life, investment
DE8 Diversified Equity Income a secondary goal, steady growth of capital. manager; AEFC
Fund Invests primarily in dividend-paying common and investment advisor.
preferred stocks.
EM7 AXPSM Variable Portfolio - Objective: long-term capital growth. Invests IDS Life, investment
EM8 Emerging Markets Fund primarily in equity securities of companies in manager; AEFC
emerging markets. investment advisor;
American Express Asset
Management
International, Inc., a
wholly-owned subsidiary
of AEFC, is the
sub-investment advisor.
EI7 AXPSM Variable Portfolio - Objective: high current income, with capital IDS Life, investment
EI8 Extra Income Fund growth as a secondary objective. Invests manager; AEFC
primarily in high-yielding, high-risk corporate investment advisor.
bonds issued by U.S. and foreign companies and
governments.
FI7 AXPSM Variable Portfolio - Objective: high level of current income and IDS Life, investment
FI8 Federal Income Fund safety of principal consistent with an manager; AEFC
investment in U.S. government and government investment advisor.
agency securities. Invests primarily in debt
obligations issued or guaranteed as to
principal and interest by the U.S. government,
its agencies or instrumentalities.
GB7 AXPSM Variable Portfolio - Objective: high total return through income and IDS Life, investment
GB8 Global Bond Fund growth of capital. Non-diversified mutual fund manager; AEFC
that invests primarily in debt obligations of investment advisor.
U.S. and foreign issuers.
<PAGE>
GR7 AXPSM Variable Portfolio - Objective: long-term capital growth. Invests IDS Life, investment
GR8 Growth Fund primarily in common stocks and securities manager; AEFC
convertible into common stocks that appear to investment advisor.
offer growth opportunities.
IE7 AXPSM Variable Portfolio - Objective: capital appreciation. Invests primarily IDS Life, investment
IE8 International Fund in common stock or convertible securities of manager; AEFC
foreign issuers that offer growth potential. investment advisor.
American Express
Asset Management
International, Inc.,
a wholly-owned
subsidiary of AEFC,
is the
sub-investment
advisor.
MF7 AXPSM Variable Portfolio - Objective: maximum total investment return through IDS Life, investment
MF8 Managed Fund a combination of capital growth and current manager; AEFC
income. Invests primarily in stocks, convertible investment advisor.
securities, bonds and other debt securities.
ND7 AXPSM Variable Portfolio - Objective: long-term growth of capital. Invests IDS Life, investment
ND8 New Dimensions Fund(R) primarily in common stocks of U.S. and foreign manager; AEFC
companies showing potential for significant growth. investment advisor.
IV7 AXPSM Variable Portfolio - Objective: long-term capital appreciation. Invests IDS Life, investment
IV8 S&P 500 Index Fund primarily in securities that are expected to manager; AEFC
provide investment results that correspond to the investment advisor.
performance of the S&P 500 Index.
SC7 AXPSM Variable Portfolio - Objective: long-term capital growth. Invests IDS Life, investment
SC8 Small Cap Advantage Fund primarily in equity stocks of small companies that manager; AEFC
are often included in the S&P SmallCap 600 Index investment advisor.
or the Russell 2000 Index.
SA7 AXPSM Variable Portfolio - Objective: capital appreciation. Invests primarily IDS Life, investment
SA8 Strategy Aggressive Fund in common stocks of small-and medium-size manager; AEFC
companies. investment advisor.
7CA AIM V.I. Capital Objective: growth of capital. Invests primarily A I M Advisors, Inc.
8CA Appreciation Fund in common stocks, with emphasis on medium- or
small-sized growth companies.
7CD AIM V.I. Capital Objective: long term growth of capital. Invests A I M Advisors, Inc.
8CD Development Fund primarily in securities (including common stocks,
convertible securities and bonds) of small- and
medium-sized companies.
7IF American Century VP Objective: long term capital growth. Invests American Century
8IF International primarily in stocks of growing foreign companies. Investment
Management, Inc.
<PAGE>
7VA American Century VP Value Objective: long-term capital growth, with income American Century
8VA as a secondary objective. Invests primarily in Investment
securities that management believes to be Management, Inc.
undervalued at the time of purchase.
7SR Calvert Variable Series, Objective: income and capital growth. Invests Calvert Asset
8SR Inc. Social Balanced primarily in stocks, bonds and money market Management Company,
Portfolio instruments which offer income and capital growth Inc. (CAMCO),
opportunity and which satisfy the investment and investment advisor.
social criteria. NCM Capital
Management Group,
Inc. is the
investment subadvisor.
7GI Fidelity VIP III Growth & Objective: high total return through a combination Fidelity Management &
8GI Income Portfolio (Service of current income and capital appreciation. Research Company
Class) Invests primarily in common stocks with a focus on (FMR), investment
those that pay current dividends and show manager; FMR U.K. and
potential for capital appreciation. FMR Far East,
sub-investment
advisors.
7MP Fidelity VIP III Mid Cap Objective: long-term growth of capital. Invests FMR, investment
8MP Portfolio (Service Class) primarily in medium market capitalization common manager; FMR U.K. and
stocks. FMR Far East,
sub-investment
advisors.
7OS Fidelity VIP Overseas Objective: long-term growth of capital. Invests FMR, investment
8OS Portfolio (Service Class) primarily in common stocks of foreign securities. manager; FMR U.K.,
FMR Far East, Fidelity
International Investment
Advisors (FIIA) and
FIIA U.K., sub-investment
advisors.
7RE FTVIPT Franklin Real Estate Objective: capital appreciation with a Franklin Advisers, Inc.
Fund - Class 2 (previously secondary goal to earn current income.
Franklin Real Estate Invests primarily in securities of
Securities Fund) companies operating in the real estate
industry, primarily equity real estate
investment trusts (REITS).
7SI FTVIPT Franklin Value Objective: long-term total return. Invests Franklin Advisory
8SI Securities Fund - Class 2 primarily in equity securities of companies the Services, LLC
manager believes are significantly undervalued.
7IS FTVIPT Templeton Objective: long-term capital appreciation. Invests Templeton Investment
8IS International Smaller primarily in equity securities of smaller Counsel, Inc.
Companies Fund - Class 2 companies located outside the U.S., including
those in emerging markets.
7SE Goldman Sachs VIT CORE Objective: long-term growth of capital. Invests Goldman Sachs Asset
8SE Small Cap Equity Fund primarily in a broadly diversified portfolio of Management
equity securities of U.S. issuers which are
included in the Russell 2000 Index at the time of
investment.
<PAGE>
7UE Goldman Sachs VIT CORE U.S. Objective: long-term growth of capital and Goldman Sachs Asset
8UE Equity Fund dividend income. Invests primarily in a broadly Management
diversified portfolio of large-cap and blue chip
equity securities representing all major sectors
of the U.S. economy.
7MC Goldman Sachs VIT Mid Cap Objective: long-term capital appreciation. Goldman Sachs Asset
8MC Value Fund Invests primarily in mid-capitalization companies Management
within the range of the market
capitalization of companies
constituting the Russell Midcap
Value index at the time of
investment.
7AG Janus Aspen Series Objective: long-term growth of capital. Janus Capital
8AG Aggressive Growth Non-diversified mutual fund that invests primarily
Portfolio: Service Shares in common stocks selected for their growth
potential. Normally invests at least 50% of its
equity assets in medium-sized companies.
7GT Janus Aspen Series Global Objective: long-term growth of capital. Janus Capital
8GT Technology Portfolio: Non-diversified mutual fund that invests primarily
Service Shares in equity securities of U.S. and foreign companies
selected for their growth potential. Normally
invests at least 65% of total assets in securities
of companies that the portfolio manager believes
will benefit significantly from advancements or
improvements in technology.
7IG Janus Aspen Series Objective: long-term growth of capital. Invests at Janus Capital
8IG International Growth least 65%of its total assets in securities of
Portfolio: Service Shares issuers from at least five different countries,
excluding the U.S. It may at times invest all of
its assets in fewer than five countries or even a
single country.
7IP Lazard Retirement Series Objective: long-term capital appreciation. Invests Lazard Asset
8IP International Equity primarily in equity securities, principally common Management
Portfolio stocks of relatively large non-U.S. companies
(those whose total market value is more than $1
billion) that the Investment Manager believes are
undervalued based on their earnings, cash flow or
asset values.
7MG MFS(R) VIT Growth Series - Objective: long-term growth of capital and future MFS Investment
8MG Service Class income. Invests at least 80% of its total assets Management(R)
in common stocks and related
securities of companies which MFS
believes offer better than average
prospects for long-term growth.
7MD MFS(R) VIT New Discovery Objective: capital appreciation. Invests primarily MFS Investment
8MD Series - Service Class in equity securities of emerging growth companies. Management(R)
7IN Putnam VT International New Objective: long-term capital appreciation. Invests Putnam Investment
8IN Opportunities Fund - Class primarily in a diversified portfolio of common Management, Inc.
IB Shares stocks that Putnam Management
believes have above-average
potential for capital appreciation.
7VS Putnam VT Vista Fund - Objective: capital appreciation. Invests primarily Putnam Investment
8VS Class IB Shares in a diversified portfolio of common stocks that Management, Inc.
Putnam Management believes have the
potential for above-average capital
appreciation.
<PAGE>
7MI Royce Micro-Cap Portfolio Objective: long-term growth of capital. Invests Royce & Associates,
8MI primarily in a broadly diversified portfolio of Inc.
equity securities issued by micro-cap companies
(companies with stock market capitalizations below
$300 million).
7SV Third Avenue Value Portfolio Objective: long-term capital appreciation. Invests EQSF, Inc.
8SV primarily in common stocks of well-financed
companies at a substantial discount to what the
Advisor believes is their true value.
7IT Wanger International Small Objective: long-term growth of capital. Invests Wanger Asset
8IT Cap primarily in stocks of small- and medium-size Management, L.P.
non-U.S. companies.
7SP Wanger U.S. Small Cap Objective: long-term growth of capital. Invests Wanger Asset
8SP primarily in stocks of small- and medium-size U.S. Management, L.P.
companies.
7EG Warburg Pincus Trust - Objective: maximum capital appreciation. Invests Warburg Pincus Asset
8EG Emerging Growth Portfolio primarily in equity securities of small or medium Management, Inc.
sized U.S. emerging-growth companies.
</TABLE>
The investment objectives and policies of some of the funds are similar to the
investment objectives and policies of other mutual funds that an investment
advisor or its affiliates manage. Although the objectives and policies may be
similar, each fund will have its own portfolio holdings and its own fees and
expenses. Accordingly, each fund will have its own investment results, and those
results may differ significantly from other funds with similar investment
objectives and policies.
The investment managers and advisors cannot guarantee that the funds will meet
their investment objectives. Please read the fund prospectuses for facts you
should know before investing. These prospectuses are also available by
contacting us at the address or telephone number on the first page of this
prospectus.
All funds are available to serve as the underlying investments for variable
annuities. Some funds also are available to serve as investment options for
variable life insurance policies and tax-deferred retirement plans. It is
possible that in the future, it may be disadvantageous for variable annuity
accounts and variable life insurance accounts and/or tax-deferred retirement
plans to invest in the available funds simultaneously.
Although the insurance company 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 annuity
owners, policy owners and tax-deferred retirement plans and to determine what
action, if any, should be taken in response to a conflict. If a board were to
conclude that it should establish separate funds for the variable annuity,
variable life insurance and tax-deferred retirement plan accounts, you would not
bear any expenses associated with establishing separate funds. Please refer to
the fund prospectuses for risk disclosure regarding simultaneous investments by
variable annuity, variable life insurance and tax-deferred retirement plan
accounts.
The Internal Revenue Service (IRS) issued final regulations relating to the
diversification requirements under Section 817(h) of the Code. Each fund intends
to comply with these requirements.
The variable account was established under New York law on April 17, 1996, and
the subaccounts are registered together as a single 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. All obligations arising under the contracts are general obligations
of IDS Life.
<PAGE>
The variable account meets the definition of a separate account under federal
securities laws. We credit or charge income, capital gains and capital losses of
each subaccount only to that subaccount. State insurance law prohibits us from
charging a subaccount with liabilities of any other subaccount or of our general
business. The variable account includes other subaccounts that are available
under contracts that are not described in this prospectus.
The U.S. Treasury and the IRS indicated that they may provide additional
guidance on investment control. This concerns how many variable subaccounts an
insurance company may offer and how many exchanges among subaccounts it may
allow before the contract owner would be currently taxed on income earned within
subaccount assets. At this time, we do not know what the additional guidance
will be or when action will be taken. We reserve the right to modify the
contract, as necessary, so that the owner will not be subject to current
taxation as the owner of the subaccount assets.
We intend to comply with all federal tax laws so 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 Fixed Account
You also may allocate purchase payments to the fixed account. We back the
principal and interest guarantees relating to the fixed account. The value of
the fixed account increases as we credit interest to the account. Purchase
payments and transfers to the fixed account become part of our general account.
We credit interest daily and compound it annually. We will change the interest
rates from time to time at our discretion. These rates will be based on various
factors including, but not limited to, the interest rate environment, returns
earned on investments backing these annuities, the rates currently in effect for
new and existing company annuities, product design, competition and the
company's revenues and expenses.
Interests in the fixed account are not required to be registered with the SEC.
The SEC staff does not review the disclosures in this prospectus on 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. (See
"Making the Most of Your Contract -Transfer policies" for restrictions on
transfers involving the fixed account.)
Buying Your Contract
You can fill out an application and send it along with your initial purchase
payment to our office. As the owner, you have all rights and may receive all
benefits under the contract. You can own a nonqualified annuity in joint tenancy
with rights of survivorship only in spousal situations. You cannot own a
qualified annuity in joint tenancy. You can buy a contract or become an
annuitant if you are 90 or younger.
When you apply, you may select:
o the fixed account and/or subaccounts 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 the fixed account and subaccounts you selected within two business
days after we receive it at our office. If we accept your application, 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 you make to your accounts on the valuation date we receive
them. We will value the additional payments at the next accumulation unit value
calculated after we receive your payments at our office.
<PAGE>
The settlement date
Annuity payouts are scheduled to begin on the settlement date. When we process
your application, we will establish the settlement date to the maximum age or
date described below. You can also select a date within the maximum limits. You
can align this date 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 also can change the date, provided you send us written
instructions at least 30 days before annuity payouts begin.
For nonqualified annuities and Roth IRAs, the settlement 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
settlement date generally must be:
o on or after the date the annuitant reaches age 59 1/2; and
o for IRAs, SIMPLE IRAs and SEPs, by April 1 of the year following the
calendar year when the annuitant reaches age 70 1/2; or
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 settlement date that is
later than April 1 of the year following the calendar year when they reach
age 70 1/2).
If you take 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
contract, annuity payouts can start as late as the annuitant's 90th birthday.
Beneficiary
If death benefits become payable before the settlement date while the contract
is in force and before annuity payouts begin, we will pay your named beneficiary
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.)
Purchase payments:
Minimum allowable purchase payments*
<TABLE>
<CAPTION>
<S> <C>
If paying by installments under a scheduled payment If paying by any other method:
plan: $1,000 initial payment for qualified annuities
$23.08 biweekly, or $2,000 initial payment for nonqualified annuities
$50 per month $50 for any additional payments
</TABLE>
* Installments must total at least $600 in the first year. If you do not make
any 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 allowable purchase payments** based on the age of you or the
annuitant, whoever is older, on the effective date of the contract:
For the first year: For each subsequent year:
$1,000,000 up to age 85 $100,000 up to age 85
$100,000 for ages 86 to 90 $50,000 for 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
tax-deferred retirement plan's limits on annual contributions also apply.
<PAGE>
How to make purchase payments
1
By letter:
Send your check along with your name and contract 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 Avenue Extention
Albany, NY 12203
2
By scheduled payment plan
We 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
We charge this fee for establishing and maintaining your records. We deduct $30
from the contract value on your contract anniversary at the end of each contract
year. We prorate this charge among the subaccounts and the fixed account in the
same proportion your interest in each account bears to your total contract
value.
We will waive this charge when your contract value, or total purchase payments
less any payments surrendered, is $50,000 or more on the current contract
anniversary.
If you surrender your contract, we will deduct the charge at the time of
surrender regardless of the contract value or purchase payments made. We cannot
increase the annual contract administrative charge and it does not apply after
annuity payouts begin or when we pay death benefits.
Mortality and expense risk fee
We charge this fee daily to the subaccounts. The unit values of your subaccounts
reflect this fee. For nonqualified annuities the fee totals 0.95% of the average
daily net assets on an annual basis. For qualified annuities the fee totals
0.75% of the average daily net assets on an annual basis. This fee covers the
mortality and expense risk that we assume. 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.
<PAGE>
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 our entire
group of annuitants live. If, as a group, annuitants outlive the life expectancy
we assumed in our actuarial tables, then we must take money from our general
assets to meet our obligations. If, as a group, annuitants do not live as long
as expected, we could profit from the mortality risk fee.
Expense risk arises because we cannot increase the contract administrative
charge and this charge may not cover our expenses. We would have to make up any
deficit from our general assets.
The subaccounts pay us the mortality and expense risk fee they accrued as
follows:
o first, to the extent possible, the subaccounts pay this fee from any
dividends distributed from the funds in which they invest;
o then, if necessary, the funds redeem shares to cover any remaining fees
payable.
We may use any profits we realize from the subaccounts' payment to us of 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
If you surrender all or part of your contract, you may be subject to a surrender
charge. A surrender charge applies if all or part of the surrender amount is
from purchase payments we received within seven (7) years before surrender.
For purposes of calculating any surrender charge, we treat amounts surrendered
from your contract value in the following order:
1. First, we surrender any contract earnings (contract value less purchase
payments received and not previously surrendered). We do not assess a
surrender charge on contract earnings.
NOTE: We determine contract earnings by looking at the entire contract value,
not the earnings of any particular subaccount or the fixed account.
2. Next, in each contract year, we surrender amounts totaling up to 10% of
your prior contract anniversary contract value, but only to the extent not
included and surrendered in number one above. (Your initial purchase
payment is considered the prior contract anniversary contract value during
the first contract year.) We do not assess a surrender charge on this
amount.
3. Next we surrender purchase payments received prior to the surrender charge
period. We do not assess a surrender charge on these purchase payments.
4. Finally, if necessary, we surrender purchase payments received that are
still within the surrender charge period. We surrender these payments on a
"first-in, first-out" (FIFO) basis. We do assess a surrender charge on
these payments.
<PAGE>
We determine your surrender charge by multiplying each of your payments
surrendered by the applicable surrender charge percentage, and then adding the
total surrender charges.
The surrender charge percentage depends on the number of years since you made
the payments that are surrendered:
Surrender charge schedule
Years from purchase payment Surrender charge percentage
receipt
1 7%
2 7
3 7
4 6
5 5
6 4
7 2
Thereafter 0
For a partial surrender that is subject to a surrender charge, the amount
deducted for the surrender charge will be a percentage of the total amount
surrendered. We will deduct the charge from the value remaining after we pay you
the amount you requested. Example: Assume you request a surrender of $1,000 and
there is a 7% surrender charge. The surrender charge is $75.26 for a total
surrender amount of $1,075.26. This charge represents 7% of the total amount
surrendered and we deduct it from the contract value remaining after we pay you
the $1,000 you requested.
Surrender charge under Annuity Payout Plan E: Payouts for a specified period.
Under this payout plan, you can choose to take a surrender. The amount that you
can surrender is the present value of any remaining variable payouts. For
qualified contracts, the discount rate we use in the calculation will be 4.72%
if the assumed investment rate is 3.5% and 6.22% if the assumed investment rate
is 5%. For nonqualified contracts, the discount rate we use in the calculation
will be 4.92% if the assumed investment rate is 3.5% and 6.42% if the assumed
investment rate is 5%. The surrender charge is equal to the difference in
discount values using the above discount rates and the assumed investment rate.
In no event would your surrender charge exceed 9% of the amount available for
payouts under the plan.
Surrender charge calculation example
The following is an example of the calculation we would make to determine the
surrender charge on a contract:
o The contract date is July 1, 2001 with a contract year of July 1 through
June 30 and with an anniversary date of July 1 each year; and
o We received these payments:
-$10,000 July 1, 2001;
-$ 8,000 Dec. 31, 2006
-$ 6,000 Feb. 20, 2009; and
o The owner surrenders the contract for its total surrender value of $26,500
on Aug. 5, 2010 and had not made any other surrenders during that contract
year; and
o The prior anniversary July 1, 2009 contract value was $28,000.
<PAGE>
Surrender charge Explanation
$ 0 $2,500 is contract earnings surrendered without charge; and
0 $300 is 10% of the prior anniversary contract value that is
in excess of contract earnings surrendered without charge
(from above). 10% of $28,000= $2,800 minus $2,500 = $300
0 $10,000 July 1, 2001 payment was received eight or
more years before surrender and is surrendered
without surrender charge; and
400 $8,000 Dec. 31, 2006 payment is in its fifth year from
receipt, surrendered with a 5% surrender charge; and
420 $6,000 Feb. 20, 2009 payment is in its third year from
receipt, surrendered with a 7% surrender charge.
____
$820
For a partial surrender that is subject to a surrender charge, the amount we
actually surrender from your contract will be the amount you request plus any
applicable surrender charge. We apply the surrender charge to this total amount.
We pay you the amount you requested. If you make a full surrender of your
contract, we also will deduct the $30 contract administrative charge.
Waiver of surrender charges
We do not assess surrender charges for:
o surrenders of any contract earnings;
o surrenders of amounts totaling up to 10% of your prior contract anniversary
contract value to the extent it exceeds contract earnings;
o required minimum distributions from a qualified annuity (for those amounts
required to be distributed from the contract described in this prospectus);
o contracts settled using an annuity payout plan;
o amounts we refund to you during the free look period*; and
o death benefits*.
* However, we will reverse certain purchase payment credits up to the maximum
surrender charge. (See "Valuing Your Investment - Purchase payment credits.")
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 our annuities. Fees for these services start at $30 per calendar year
per participant. AEFC will charge a termination fee for owners under age 591/2
(fee waived in case of death or disability).
Possible group reductions: In some cases we may incur lower sales and
administrative expenses 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
We value your accounts as follows:
Fixed account
We value the amounts you allocated to the fixed account directly in dollars. The
fixed account value equals:
o the sum of your purchase payments and transfer amounts allocated to the
fixed account;
o plus any purchase payment credits allocated to the fixed account;
o plus interest credited;
o minus the sum of amounts surrendered (including any applicable surrender
charges) and amounts transferred out; and
o minus any prorated contract administrative charge.
Subaccounts
We convert amounts you allocated to the subaccounts into accumulation units.
Each time you make a purchase payment or transfer amounts into one of the
subaccounts or we apply any purchase payment credits to a subaccount, we credit
a certain number of accumulation units to your contract for that subaccount.
Conversely, each time you take a partial surrender, transfer amounts out of a
subaccount, or we assess a contract administrative charge, we subtract a certain
number of accumulation units 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 fund in which the subaccount invests. The dollar
value of each accumulation unit can rise or fall daily depending on the variable
account expenses, performance of the fund and on certain fund expenses. Here is
how we calculate accumulation unit values:
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 subaccount
equals the last value times the subaccount's current net investment factor.
We determine the net investment factor by:
o adding the fund's current net asset value per share, plus the per share
amount of any accrued income or capital gain dividends to obtain a current
adjusted net asset value per share; then
o dividing that sum by the previous adjusted 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 fund may fluctuate, the accumulation unit
value may increase or decrease. You bear all the investment risk in a
subaccount.
<PAGE>
Factors that affect subaccount accumulation units: accumulation units may change
in two ways - in number and in value.
The number of accumulation units you own may fluctuate due to:
o additional purchase payments you allocate to the subaccounts;
o any purchase payment credits allocated to the subaccounts;
o transfers into or out of the subaccounts;
o partial surrenders;
o surrender charges; and/or
o prorated portions of the contract administrative charge.
Accumulation unit values will fluctuate due to:
o changes in funds' net asset value;
o dividends distributed to the subaccounts;
o capital gains or losses of funds;
o fund operating expenses; and/or
o mortality and expense risk fees.
Purchase payment credits
We add a credit to your contract in the amount of 1% of each purchase payment
received if your initial purchase payment to the contract is at least $100,000.
We fund the credit from our general account. We do not consider credits to be
"investments" for income tax purposes. (See "Taxes.")
We allocate each credit to your contract value when the applicable purchase
payment is applied to your contract value. We allocate such credits to your
contract value according to allocation instructions in effect for your purchase
payments.
We will reverse credits from the contract value for any purchase payment that is
not honored.
To the extent a death benefit or surrender payment includes purchase payment
credits applied within twelve months preceding the date of death that results in
a lump sum death benefit under this contract, we will assess a charge, similar
to a surrender charge, equal to the amount of the purchase payment credits. The
amount we pay to you under these circumstances will always equal or exceed your
surrender value. The amount returned to you under the free look provision also
will not include any credits applied to your contract.
This credit is available because of lower costs associated with larger sized
contracts and lower compensation paid on the sales of these contracts. We
reserve the right to increase the amount of the credit for certain groups of
contract owners. The increase will not be greater than 8% of total net payments.
Increases in credit amounts are funded by reduced expenses expected from such
groups.
<PAGE>
Making the Most of Your Contract
Automated dollar-cost averaging
Currently, you can use automated transfers to take advantage of dollar-cost
averaging (investing a fixed amount at regular intervals). For example, you
might transfer a set amount monthly from a relatively conservative subaccount to
a more aggressive one, or to several others, or from the fixed account to one or
more subaccounts. 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 values of the funds. Since you
invest the same amount each period, you automatically acquire more units when
the market value falls and fewer units when it rises. The potential effect is to
lower your average cost per unit.
<TABLE>
<CAPTION>
How dollar-cost averaging works
<S> <C> <C> <C> <C>
Amount Accumulation Number of
Month invested unit value units purchased
----------- ------------- ----------------- -------------------
By investing an Jan $100 $20 5.00
equal number of
dollars each month... Feb 100 18 5.56
Mar 100 17 5.88
you automatically Apr 100 15 6.67
buy more units
when the per unit May 100 16 6.25
market price is low...
Jun 100 18 5.56
Jul 100 17 5.88
Aug 100 19 5.26
and fewer units Sept 100 21 4.76
when the per unit
market price is high. Oct 100 20 5.00
</TABLE>
You paid an average price of only $17.91 per unit over the 10 months, while the
average market price actually was $18.10.
Dollar-cost averaging does not guarantee that any subaccount will gain in value
nor will it protect against a decline in value if market prices fall. Because
dollar-cost averaging involves continuous investing, your success 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. For specific features contact your sales representative.
Transferring money between accounts
You may transfer money from any one subaccount, or the fixed account, to another
subaccount before annuity payouts begin. (Certain restrictions apply to
transfers involving the fixed account.) We will process your transfer on the
valuation date we receive your request. We will value your transfer at the next
accumulation unit value calculated after we receive your request. There is no
charge for transfers. Before making a transfer, you should consider the risks
involved in switching investments.
<PAGE>
Transfer policies
o Before annuity payouts begin, you may transfer contract values between the
subaccounts, or from the subaccounts to the fixed account at any time.
However, if you made a transfer from the fixed account to the subaccounts,
you may not make a transfer from any subaccount back to the fixed account
until after 90 days have elapsed.
o You may transfer contract values from the fixed account to the subaccounts
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 request within 30 days before the contract anniversary
date, the transfer from the fixed account to the subaccounts 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 subaccounts
will be effective on the valuation date we receive it.
o We will not accept requests for transfers from the fixed account at any
other time.
o Once annuity payouts begin, you may not make transfers to or from the fixed
account, but you may make transfers once per contract year among the
subaccounts. During the annuity payout period, you cannot invest in more
than five subaccounts at any one time unless we agree otherwise.
How to request a transfer or surrender
1 By letter
Send your name, contract number, Social Security Number or Taxpayer
Identification Number and signed request for a transfer or surrender to:
Regular mail:
IDS Life Insurance Company of New York
Box 5144
Albany, NY 12205
Express mail:
IDS Life Insurance Company of New York
20 Madison Avenue Extension
Albany, NY 12203
Minimum amount
Transfers or surrenders: $250 or entire account balance
Maximum amount
Transfers or surrenders: Contract value or entire account balance
2 By automated transfers and automated partial surrenders
Your sales representative can help you set up automated transfers among your
subaccounts or fixed account or partial surrenders from the accounts.
<PAGE>
You can start or stop this service by written request or other method acceptable
to us. You must allow 30 days for us to change any instructions that are
currently in place.
o Automated transfers from the fixed account to any one of the subaccounts
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
Transfers or surrenders: $50
Maximum amount
Transfers or surrenders: None (except for automated transfers from the fixed
account)
Surrenders
You may surrender all or part of your contract at any time before annuity
payouts begin by sending us a written request or calling us. We will process
your surrender request on the valuation date we receive it. For total
surrenders, we will compute the value of your contract at the next accumulation
unit value calculated after we receive your request. We may ask you to return
the contract. You may have to pay surrender charges (see "Charges - Surrender
charge") and IRS taxes and penalties (see "Taxes"). You cannot make surrenders
after annuity payouts begin except under Plan E (see "The Annuity Payout Period
Annuity payout plans").
Surrender policies
If you have a balance in more than one account and you request a partial
surrender, we will withdraw money from all your subaccounts and/or the fixed
account in the same proportion as your value in each account correlates to your
total contract value, unless you request otherwise.
Receiving payment By regular or express mail:
o payable to you;
o mailed to address of record.
NOTE: We will charge you 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; and o
pre-authorization required.
For instructions, contact your sales representative.
<PAGE>
Normally, we will send the payment 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;
- the SEC permits us to delay payment for the protection of security
holders; or
- and to the extent permitted or required under the Federal Investment
Company Act of 1940, as amended, and any other applicable federal or state
law.
TSA -- Special Surrender Provisions
Participants in Tax-Sheltered Annuities
The Code imposes certain restrictions on your right to receive early
distributions from a TSA:
o Distributions attributable to salary reduction contributions (plus
earnings) made after Dec. 31, 1988, or to transfers or rollovers from other
contracts, may be made from the TSA only if:
-- you are at least age 59 1/2;
-- you are disabled as defined in the Code;
-- you separated from the service of the employer who purchased the
contract; or
-- the distribution is because of your death.
o If you encounter a financial hardship (as defined by 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 may
be subject to IRS taxes and penalties (see "Taxes").
o The employer must comply with certain nondiscrimination requirements for
certain types of contributions under a TSA contract to be excluded from
taxable income. You should consult your employer to determine whether the
nondiscrimination rules apply to you.
o The above restrictions on distributions do not affect the availability of
the amount credited to the contract as of Dec. 31, 1988. The restrictions
also do not apply to transfers or exchanges of contract value within the
contract, 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 as
described in detail in your contract.
Changing Ownership
You may change ownership of your nonqualified annuity at any time by completing
a change of ownership form we approve and sending it to our office. The change
will become binding upon us when we receive and record it. We will honor any
change of ownership request that we believe is authentic and we will use
reasonable procedures to confirm authenticity. If we follow these procedures, we
will not take any responsibility for the validity of the change.
If you have a nonqualified annuity, you may incur income tax liability by
transferring, assigning or pledging any part of it. (See "Taxes.")
<PAGE>
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 except as required or
permitted by the Code. However, if the owner is a trust or custodian, or an
employer acting in a similar capacity, ownership of the contract may be
transferred to the annuitant.
Benefits in Case of Death
We will pay the death benefit to your beneficiary upon the earlier of your death
or the annuitant's death. If a contract has more than one person as the owner,
we will pay benefits upon the first to die of any owner or the annuitant.
If you or the annuitant die before annuity payouts begin while this contract is
in force, we will pay the beneficiary as follows:
If both you and the annuitant are age 80 or younger on the date of death, the
beneficiary receives the greatest of:
o the contract value;
o purchase payments, minus any "adjusted partial surrenders"; or
o the contract value as of the most recent sixth contract anniversary, plus
any purchase payments paid and minus any "adjusted partial surrenders"
since that anniversary.
If either you or the annuitant are age 81 or older on the date of death, the
beneficiary receives the greater of:
o the contract value; or
o purchase payments minus any "adjusted partial surrenders."
Adjusted partial surrenders: We calculate an "adjusted partial surrender" for
each partial surrender as the product of (a) times (b) where
(a) is the ratio of the amount of the partial surrender
(including any applicable surrender charge) to the contract
value on the date of (but prior to) the partial surrender; and
(b) is the death benefit on the date of (but prior to) the
partial surrender.
Example of death benefit calculation when the owner and annuitant are age 80 or
younger:
o You purchase the contract with a payment of $20,000 on Jan. 1, 2001.
o On Jan 1, 2007 (the 6th contract anniversary) the contract value grows to
$30,000.
o March 1, 2007 the contract value falls to $28,000 at which point you take a
$1,500 partial surrender, leaving a contract value of $26,500.
<PAGE>
We calculate the death benefit on March 1, 2007 as follows:
The contract value on the most recent 6th contract anniversary: $30,000.00
plus any purchase payments paid since that anniversary: + 0.00
minus any "adjusted partial surrenders" taken since that anniversary
calculated as: $1,500 x $30,000 =
$28,000 - 1,607.14
------------
for a death benefit of: $ 28,392.86
If your spouse is sole beneficiary under a nonqualified annuity and you die
before the settlement date, your spouse may keep the contract 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 Code requires
distributions to begin, and the spouse is the only beneficiary, the spouse may
keep the contract as owner 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: Under a nonqualified annuity we will pay the beneficiary in a single
sum unless you give us other written instructions. A death benefit paid in a
single sum will be reduced by the amount of any purchase payment credits applied
to the contract within 12 months of the date of death. (See "Valuing Your
Investment - Purchase Payment credits.") We must fully distribute the death
benefit within five years of your death. However, 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; and
o payouts begin no later than one year after your death, or other date as
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 process the death claim on the valuation
date our death claim requirements are fulfilled. We will determine the
contract's value at the next accumulation unit value calculated after our death
claim requirements are fulfilled. We pay interest, if any, 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.
Other rules may apply to qualified annuities. (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 settlement date. You may select one of the
annuity payout plans outlined below, or we may mutually agree on other payout
arrangements. We do not deduct any surrender charges under the payout plans
listed below.
You also decide whether we will make annuity payouts on a fixed or variable
basis, or a combination of fixed and variable. The amounts available to purchase
payouts under the plan you select is the contract value on your settlement date.
You may reallocate this contract value to the fixed account to provide fixed
dollar payouts and/or among the subaccounts to provide variable annuity payouts.
During the annuity payout period, you cannot invest in more than five
subaccounts at any one time unless we agree otherwise.
<PAGE>
Amounts of fixed and variable payouts depend on:
o the annuity payout plan you select;
o the annuitant's age and, in most cases, sex;
o the annuity table in the contract; and
o the amounts you allocated to the accounts at settlement.
In addition, for variable payouts only, amounts depend on the investment
performance of the subaccounts you select. These payouts will vary from month to
month because the performance of the 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 "Making the Most of Your Contract -- Transfer policies."
Annuity table
The annuity table in your contract shows the amount of the first monthly payment
for each $1,000 of contract value according to the age and, when applicable, the
sex of the annuitant. (Where required by law, we will use a unisex table of
settlement rates.) The table assumes that the contract value is invested at the
beginning of the annuity payout period and earns a 5% rate of return, which is
reinvested and helps to support future payouts.
Substitution of 3.5% table
If you ask us at least 30 days before the retirement date, we will substitute an
annuity table based on an assumed 3.5% investment rate for the 5% table in the
contract. The assumed investment rate affects both the amount of the first
payout and the extent to which subsequent payouts increase or decrease. Using
the 5% table results in a higher initial payment, but later payouts will
increase more slowly when annuity unit values rise and decrease more rapidly
when they decline.
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 used to purchase the
payout plan:
o Plan A - Life annuity - no refund: We make monthly payouts until the
annuitant's death. Payouts end with the last payout before the annuitant's
death. We will not make any further payouts. This means that if the
annuitant dies after we made only one monthly payout, we will not make any
more payouts.
o Plan B - Life annuity with five, ten or 15 years certain: We make monthly
payouts for a guaranteed payout period of five, ten or 15 years that you
elect. This election will determine the length of the payout period to the
beneficiary if the annuitant should die before the elected period expires.
We calculate the guaranteed payout period from the settlement date. If the
annuitant outlives the elected guaranteed payout period, we will continue
to make payouts until the annuitant's death.
o Plan C - Life annuity - installment refund: We make monthly payouts until
the annuitant's death, with our guarantee that payouts will continue for
some period of time. We will make payouts 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: We make monthly
payouts while both the annuitant and a joint annuitant are living. If
either annuitant dies, we will continue to make monthly payouts at the full
amount until the death of the surviving annuitant. Payouts end with the
death of the second annuitant.
<PAGE>
o Plan E - Payouts for a specified period: We make monthly payouts for a
specific payout period of ten to 30 years that you elect. We will make
payouts only for the number of years specified whether the annuitant is
living or not. Depending on the selected time period, it is foreseeable
that an annuitant can outlive the payout period selected. During the payout
period, you can elect to have us determine the present value of any
remaining variable payouts and pay it to you in a lump sum. We determine
the present value of the remaining annuity payouts which are assumed to
remain level at the initial payment. For qualified contracts, the discount
rate we use in the calculation will vary between 4.72% and 6.22%, depending
on the applicable assumed investment rate. For nonqualified contracts, the
discount rate we use in the calculation will vary between 4.92% and 6.42%,
depending on the applicable assumed investment rate. (See "Charges -
Surrender charge under Annuity Payout Plan E.") You can also take a portion
of the discounted value once a year. If you do so, your monthly payouts
will be reduced by the proportion of your surrender to the full discounted
value. A 10% IRS penalty tax could apply if you take a surrender. (See
"Taxes.")
Restrictions for some tax-deferred retirement plans: If you purchased a
qualified annuity, you may be required to select a payout plan that provides for
payouts:
o over the life of the annuitant;
o over the joint lives of the annuitant and a designated beneficiary;
o for a period not exceeding the life expectancy of the annuitant; or
o for a period not exceeding the joint life expectancies of the annuitant and
a designated beneficiary.
You have the responsibility for electing a payout plan that complies with your
contract and with applicable law.
If we do not receive instructions: You must give us written instructions for the
annuity payouts at least 30 days before the annuitant's retirement date. If you
do not, we will make payouts under Plan B, with 120 monthly payouts guaranteed.
Contract values that you allocated to the fixed account will provide fixed
dollar payouts and contract values that you allocated among the subaccounts will
provide variable annuity payouts.
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 or to change
the frequency of the payouts.
Death after annuity payouts begin
If you or the annuitant die after annuity payouts begin, we will pay any amount
payable to the beneficiary as provided in the annuity payout plan in effect.
Taxes
Generally, under current law, your contract has a tax deferral feature. This
means, any increase in the value of the fixed account and/or subaccounts in
which you invest 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. We
will send you a tax information reporting form for any year in which we made a
taxable distribution according to our records. Roth IRAs may grow and be
distributed tax-free if you meet certain distribution requirements.
<PAGE>
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 you receive after your investment in the contract is fully recovered
will be subject to tax.
Tax law requires that all nonqualified deferred annuities issued by the same
company (and possibly its affiliates) to the same owner during a calendar year
be taxed as a single, unified contract when you take distributions from any one
of those contracts.
Qualified annuities: Your contract may be used to fund a tax-deferred retirement
plan that is already tax-deferred under the Code. The contract will not provide
any necessary or additional tax deferral if it is used to fund a retirement plan
that is tax deferred. Special rules apply to these retirement plans. Your rights
to benefits may be subject to the terms and conditions of these retirement plans
regardless of the terms of the contract.
Adverse tax consequences may result if you do not ensure that contributions,
distributions and other transactions under the contract comply with the law.
Qualified annuities have minimum distribution rules that govern the timing and
amount of distributions during your life (except for Roth IRAs) and after your
death. You should refer to your retirement plan or adoption agreement or consult
a tax advisor for more information about your distribution rules.
Annuity payouts under qualified annuities (except Roth IRAs): Under a qualified
annuity, the entire payout generally is includable as ordinary income and is
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 deductible or
pre-tax dollars as part of a tax-deferred retirement plan, such amounts are not
considered to be part of your investment in the contract and will be taxed when
paid to you.
Purchase payment credits: These are considered earnings and are taxed
accordingly.
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 you make before reaching
age 59 1/2 unless certain exceptions apply. For qualified annuities, other
penalties may apply if you surrender your contract before your plan specifies
that you can receive payouts.
Death benefits to beneficiaries: The death benefit under a contract (except a
Roth IRA) is not tax-exempt. Any amount your beneficiary receives that
represents previously deferred earnings within the contract is taxable as
ordinary income to the beneficiary in the years he or she receives the payments.
The death benefit under a Roth IRA generally is not taxable as ordinary income
to the beneficiary if certain distribution requirements are met.
Annuities owned by corporations, partnerships or trusts: For nonqualified
annuities any annual increase in the value of annuities held by such entities
generally will be treated as ordinary income received during that year. This
provision is effective for purchase payments made after Feb. 28, 1986. However,
if the trust was set up for the benefit of a natural person only, the income
will remain tax-deferred.
<PAGE>
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 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 a 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 a qualified annuity, other penalties or exceptions may apply if you
surrender your contract before your plan specifies that payouts can be made.
Withholding, generally: If you receive all or part of the contract value, we may
deduct withholding against the taxable income portion of the payment. Any
withholding represents a prepayment of your tax due for the year. You take
credit for these amounts on your annual tax return.
If the payment is part of an annuity payout plan, we generally compute the
amount of withholding using payroll tables. You may 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), we compute withholding using 10% of the taxable portion. Similar to
above, as long as you have provided us with a valid Social Security Number or
Taxpayer Identification Number, you can elect not to have this withholding
occur.
Some states also impose withholding requirements similar to the federal
withholding described above. If this should be the case, we may deduct state
withholding from any payment from which we deduct federal withholding. The
withholding requirements may differ if we are making payment to a non-U.S.
citizen or if we deliver the payment 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, SIMPLE IRA or
SEP), mandatory 20% federal income tax withholding (and possibly state income
tax withholding) generally will be imposed at the time we make payout. 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 payout is a minimum distribution required under the Code.
Payments we make to a surviving spouse instead of being directly rolled over to
an IRA also may be subject to mandatory 20% income tax withholding.
State withholding also may be imposed on taxable distributions.
<PAGE>
Transfer of ownership of a nonqualified annuity: If you transfer a nonqualified
annuity without receiving adequate consideration, the transfer is a gift and
also may be a surrender for federal income tax purposes. If the gift is a
currently taxable event for income tax purposes, the original owner will be
taxed on the amount of deferred earnings at the time of the transfer and also
may be subject to the 10% IRS penalty discussed earlier. In this case, the new
owner's investment in the contract will be the value of the contract 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
current interpretations of these laws. 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: We intend that the contract 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, in spite of 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 amendments.
Voting Rights
As a contract owner with investments in the subaccounts, you may vote on
important 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 you have is determined by
applying your percentage interest in each subaccount to the total number of
votes allowed to the subaccount.
After annuity payouts begin, the number of votes you have is equal to:
o the reserve held in each subaccount for your contract; divided by
o the net asset value of one share of the applicable fund.
As we make annuity payouts, the reserve for the contract decreases; therefore,
the number of votes also will decrease.
We calculate votes separately for each subaccount. We will send notice of
shareholders' meetings, proxy materials and a statement of the number of votes
to which the voter is entitled. We will vote shares for which we have not
received instructions in the same proportion as the votes for which we received
instructions. We also will vote the shares for which we have voting rights in
the same proportion as the votes for which we received instructions.
Substitution of Investments
We may substitute the funds in which the subaccounts invest if:
o laws or regulations change;
o the existing funds become unavailable; or
o in our judgment, the funds no longer are suitable for the subaccounts.
<PAGE>
If any of these situations occur, and if we believe it is in the best interest
of persons having voting rights under the contract, we have the right to
substitute the funds currently listed in this prospectus for other funds.
We may also:
o add new subaccounts;
o combine any two or more subaccounts;
o make additional subaccounts investing in additional funds;
o transfer assets to and from the subaccounts or the variable account; and
o eliminate or close any subaccounts.
In the event of substitution or any of these changes, we may amend the contract
and take whatever action is necessary and appropriate without your consent or
approval. However, we will not make any substitution or change without the
necessary approval of the SEC and state insurance departments. We will notify
you of any substitution or change.
About the Service Providers
Principal underwriter
American Express Financial Advisors Inc. (AEFA) is the principal underwriter for
the contract. Its offices are located at 200 AXP Financial Center, Minneapolis,
MN 55474. AEFA is a wholly-owned subsidiary of American Express Financial
Corporation (AEFC) which is a wholly-owned subsidiary of American Express
Company, a financial services company headquartered in New York City.
The AEFC family of companies offers not only insurance and annuities, but also
mutual funds, investment certificates, and a broad range of financial management
services. AEFA serves individuals and businesses through its nationwide network
of more than _____ supervisory offices, more than ____ branch offices and _____
financial advisors.
Issuer
IDS Life of New York issues the contracts. IDS Life of New York is a
wholly-owned subsidiary of IDS Life, which is a wholly-owned subsidiary of AEFC.
IDS Life of New York is a stock life insurance company organized in 1972 under
the laws of the State of New York and is located at 20 Madison Avenue Extension,
Albany, New York 12203. Its mailing address is P.O. Box 5144, Albany, NY 12205.
IDS Life of New York conducts a conventional life insurance business.
IDS Life of New York pays commissions for sales of the contracts of up to 7% of
the total purchase payments it receives. This revenue is used to cover
distribution costs that include compensation to advisors and field leadership
for the selling advisors. These commissions consist of a combination of time of
sale and on-going service/trail commissions (which, when totaled, could exceed
7% of purchase payments). From time to time, IDS Life of New York will pay or
permit other promotional incentives, in cash or credit or other compensation.
<PAGE>
Legal proceedings
A number of lawsuits have been filed against life and health insurers in
jurisdictions in which IDS Life of New York and its affiliates do business
involving insurers' sales practices, alleged agent misconduct, failure to
properly supervise agents, and other matters. IDS Life is a defendant in three
class action lawsuits of this nature. IDS Life of New York is a named defendant
in one of these suits, Richard W. and Elizabeth J. Thoresen vs. American Express
Financial Corporation, American Centurion Life Assurance Company, American
Enterprise Life Insurance Company, American Partners Life Insurance Company, IDS
Life Insurance Company and IDS Life Insurance Company of New York which was
commenced in Minnesota State Court in October 1998. The action was brought by
individuals who purchased an annuity in a qualified plan. The plaintiffs allege
that the sale of annuities in tax-deferred contributory retirement investment
plans (e.g., IRAs) is never appropriate. The plaintiffs purport to represent a
class consisting of all persons who made similar purchases. The plaintiffs seek
damages in an unspecified amount.
IDS Life of New York is included as a party to preliminary settlement of all
three class action lawsuits. We believe this approach will put these cases
behind us and provide a fair outcome for our clients. Our decision to settle
does not include any admission of wrongdoing. We do not anticipate that this
proposed settlement, or any other lawsuits in which IDS Life of New York is a
defendant, will have a material adverse effect on our financial condition.
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 IDS Life of New York and
the variable accounts. All of the major systems used by IDS Life of New York and
the variable accounts are maintained by AEFC and are utilized by multiple
subsidiaries and affiliates of AEFC. IDS Life of New York's and the variable
accounts' businesses are heavily dependent upon AEFC's computer systems and have
significant interaction with systems of third parties.
A comprehensive review of AEFC's computer systems and business processes,
including those specific to IDS Life of New York and the variable accounts, was
conducted to identify the major systems that could be affected by the Year 2000
issue. Steps were taken to resolve potential problems including modification to
existing software and the purchase of new software. As of Dec. 31, 1999, AEFC
had completed its program of corrective measures on its internal systems and
applications, including Year 2000 compliance testing. As of Dec. 31, 1999, AEFC
had also completed an evaluation of the Year 2000 readiness of other third
parties whose system failures could have an impact on IDS Life of New York's and
the variable accounts' operations.
AEFC's Year 2000 project also included establishing Year 2000 contingency plans
for all key business units. Business continuation plans, which address business
continuation in the event of a system disruption, are in place for all key
business units. At Dec. 31, 1999, these plans had been amended to include
specific Year 2000 considerations.
In assessing its Year 2000 initiatives and the results of actual production
since Jan. 1, 2000, management believes no material adverse consequences were
experienced, and there was no material effect on IDS Life of New York's and the
variable accounts' business, results of operations, or financial condition as a
result of the Year 2000 issue.
<PAGE>
Table of Contents of the Statement of Additional Information
Performance Information......................................3
Calculating Annuity Payouts.................................13
Rating Agencies.............................................15
Principal Underwriter.......................................15
Independent Auditors........................................15
Financial Statements
<PAGE>
Please check the appropriate box to receive a copy of the Statement of
Additional Information for:
[ ] American Express Retirement Advisor Variable AnnuitySM
[ ] American Express Variable Portfolio Funds
[ ] AIM Variable Insurance Funds, Inc.
[ ] American Century Variable Portfolios, Inc.
[ ] Calvert Variable Series, Inc.
[ ] Fidelity Variable Insurance Products Funds - Service Class
[ ] Franklin Templeton Variable Insurance Products Trust - Class 2
[ ] Goldman Sachs Variable Insurance Trust (VIT)
[ ] Janus Aspen Series: Service Shares
[ ] Lazard Retirement Series, Inc.
[ ] MFS(R) Variable Insurance Trust SM
[ ] Putnam Variable Trust
[ ] Royce Capital Fund
[ ] Third Avenue Variable Series Trust
[ ] Wanger Advisors Trust
[ ] Warburg Pincus Trust - Emerging Growth Portfolio
Mail your request to:
IDS Life of New York Annuity Service
IDS Life Insurance Company of New York
Box 5144
Albany, NY 12205
We will mail your request to:
Your name_______________________________________________________________________
Address_________________________________________________________________________
City________________________________________ State_______________ Zip___________
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
for
AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITYSM
IDS Life of New York Variable Annuity Account
__________, 2000
IDS Life of New York Variable 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 (SAI) is not a prospectus. It should be
read together with the prospectus dated the same date as this SAI, which may be
obtained by writing or calling us at the address and telephone number below. The
prospectus is incorporated in this SAI by reference.
IDS Life Insurance Company of New York
20 Madison Avenue Extension
Albany, NY 12203
800-541-2251
<PAGE>
American Express Retirement Advisor Variable Annuity
IDS Life of New York Variable Annuity Account
TABLE OF CONTENTS
Performance Information...................................p. 3
Calculating Annuity Payouts.............................. p. 13
Rating Agencies...........................................p. 15
Principal Underwriter.....................................p. 15
Independent Auditors......................................p. 15
Financial Statements
<PAGE>
PERFORMANCE INFORMATION
The subaccounts may quote various performance figures to illustrate past
performance. We base total return and current yield quotations (if applicable)
on standardized methods of computing performance as required by the Securities
and Exchange Commission (SEC). An explanation of the methods used to compute
performance follows below.
Average Annual Total Return
We will express quotations of average annual total return for the subaccounts in
terms of the average annual compounded rate of return of a hypothetical
investment in the contract over a period of one, five and ten years (or, if
less, up to the life of the subaccounts), calculated according to the following
formula:
P(1+T)n = ERV
where: P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = Ending Redeemable Value of a hypothetical $1,000 payment
made at the beginning of the period, at the end of the
period (or fractional portion thereof)
We calculated the following performance figures on the basis of historical
performance of each fund. Currently we do not show any performance information
for the subaccounts because they are new and have not had any activity to date.
However, we show performance from the commencement date of the funds as if the
contract existed at that time, which it did not. Past performance does not
guarantee future results.
<PAGE>
Average Annual Total Return For Nonqualified Annuities (Without Purchase Payment
Credits) Without a Surrender For Periods Ending Dec. 31, 1999
<TABLE>
<CAPTION>
Performance Since Commencement of the
Fund*
<S> <C> <C> <C> <C> <C>
Since
Subaccount Investing In: 1 Year 5 Years 10 Years Commencement
---------- ------------- ------ ------- -------- ------------
AXPSM VARIABLE PORTFOLIO -
BC7 Blue Chip Advantage Fund (9/99)** --% --% --% 10.98%
BD7 Bond Fund (10/81) 0.69 6.93 7.10 9.62
CR7 Capital Resource Fund (10/81) 22.52 20.15 14.36 14.83
CM7 Cash Management Fund (10/81) 3.68 4.07 3.86 5.52
DE7 Diversified Equity Income Fund (9/99) -- -- -- 2.53
EM7 Emerging Markets Fund (5/00)+ -- -- -- --
EI7 Extra Income Fund (5/96) 5.18 -- -- 4.46
FI7 Federal Income Fund (9/99) -- -- -- 0.30
GB7 Global Bond Fund (5/96) -5.37 -- -- 3.03
GR7 Growth Fund (9/99) -- -- -- 17.89
IE7 International Fund (1/92) 44.19 14.99 -- 12.25
MF7 Managed Fund (4/86) 13.70 17.05 12.41 11.76
ND7 New Dimensions Fund(R)(5/96) 30.70 -- -- 25.10
IV7 S&P 500 Index Fund (5/00)+ -- -- -- --
SC7 Small Cap Advantage Fund (9/99) -- -- -- 12.35
SA7 Strategy Aggressive Fund (1/92) 69.36 23.56 -- 15.86
AIM V.I.
7CA Capital Appreciation Fund (5/93) 43.21 24.34 -- 21.11
7CD Capital Development Fund (5/98) 27.82 -- -- 10.09
American Century VARIABLE PORTFOLIOS, INC.
7IF VP International (5/94) 62.44 20.97 -- 17.07
7VA VP Value (5/96) -1.84 -- -- 9.99
CALVERT CVS
7SR Social Balanced Portfolio (9/86) 11.13 15.73 11.22 14.68
FIDELITY VIP
7GI III Growth & Income Portfolio (Service Class) 6.62 -- -- 19.63
(12/96)
7MP III Mid Cap Portfolio (Service Class) (12/98) 47.28 -- -- 51.32
7OS Overseas Portfolio (Service Class) (12/87) 40.99 16.16 10.29 11.29
FRANKLIN TEMPLETON VIP TRUST
7RE Franklin Real Estate Fund - Class 2 (1/89)*** -7.62 6.45 7.59 7.28
7SI Franklin Value Securities Fund - Class 2 0.38 -- -- -14.08
(5/98)***
7IS Templeton International Smaller Companies 22.70 -- -- 4.20
Fund - Class 2 (5/96)***
GOLDMAN SACHS VIT
7SE CORESM Small Cap Equity Fund (2/98)**** 16.37 -- -- 2.37
7UE CORESM U.S. Equity Fund (2/98) 23.07 -- -- 19.53
7MC Mid Cap Value Fund (4/98) -1.95 -- -- -9.80
JANUS ASPEN SERIES
7AG Aggressive Growth Portfolio - Service Shares 121.13 34.52 -- 32.68
(9/93)
7GT Global Technology Portfolio - Service Shares -- -- -- --
(1/00) +
7IG International Growth Portfolio - Service 77.84 31.99 -- 27.28
Shares (4/94)
LAZARD RETIREMENT SERIES
7IP International Equity Portfolio (9/98) 20.21 -- -- 24.97
MFS(R) VARIABLE INSURANCE TRUST (VIT)
7MG Growth Series - Service Class (5/99) -- -- -- 51.04
7MD New Discovery Series - Service Class (5/98) 92.33 -- -- 40.64
<PAGE>
PUTNAM VARIABLE TRUST
7IN Putnam VT International New Opportunities 100.85 -- -- 50.24
Fund - Class IB Shares (4/98)*****
7VS Putnam VT Vista Fund - Class IB Shares 51.18 -- -- 29.77
(1/97)*****
ROYCE CAPITAL FUND
7MI Micro-Cap Portfolio (12/96) 26.85 -- -- 16.16
THIRD AVENUE
7SV Value Portfolio (9/99) -- -- -- 8.06
WANGER
7IT International Small Cap (5/95) 124.28 -- -- 37.40
7SP U.S. Small Cap (5/95) 23.66 -- -- 25.20
WARBURG PINCUS TRUST
7EG Emerging Growth Portfolio (9/99) -- -- -- 34.51
</TABLE>
*Current applicable charges deducted from fund performance include a $30
contract administrative charge and a 0.95% mortality and expense risk fee.
+ Fund had not commenced operations as of Dec. 31, 1999.
**(Commencement date of the Funds)
***Because no Class 2 Shares were issued until Jan. 6, 1999, Class 2 performance
represents the historical results of Class 1 Shares. Performance of Class 2
Shares for periods after its January 6, 1999 inception will reflect Class 2's
additional 12b-1 fee expense which also affects all future performance.
****CoreSM is a service mark of Goldman, Sachs & Co. ***** Each of the above
Funds' Class IB Shares commenced operations on April 30, 1998. For periods prior
to inception of Class IB Shares, performance information for Class IB Shares is
based upon performance of Class IA Shares (not offered) of the fund, adjusted to
reflect the fees paid by Class IB Shares, including the 12b-1 fee of 0.15%.
<PAGE>
Average Annual Total Return For Nonqualified Annuities (Without Purchase Payment
Credits) With a Surrender For Periods Ending Dec. 31, 1999
<TABLE>
<CAPTION>
Performance Since Commencement of the
Fund*
<S> <C> <C> <C> <C> <C>
Since
Subaccount Investing In: 1 Year 5 Years 10 Years Commencement
---------- ------------- ------ ------- -------- ------------
AXPSM VARIABLE PORTFOLIO -
BC7 Blue Chip Advantage Fund (9/99)** --% --% --% 3.98%
BD7 Bond Fund (10/81) -5.66 6.32 7.10 9.62
CR7 Capital Resource Fund (10/81) 15.52 19.77 14.36 14.83
CM7 Cash Management Fund (10/81) -2.88 3.37 3.86 5.52
DE7 Diversified Equity Income Fund (9/99) -- -- -- -3.95
EM7 Emerging Markets Fund (5/00)+ -- -- -- --
EI7 Extra Income Fund (5/96) -1.48 -- -- 3.23
FI7 Federal Income Fund (9/99) -- -- -- -6.03
GB7 Global Bond Fund (5/96) -11.29 -- -- 1.75
GR7 Growth Fund (9/99) -- -- -- 10.89
IE7 International Fund (1/92) 37.19 14.53 -- 12.25
MF7 Managed Fund (4/86) 6.70 16.62 12.41 11.76
ND7 New Dimensions Fund(R)(5/96) 23.70 -- --
IV7 S&P 500 Index Fund (5/00)+ -- -- -- --
SC7 Small Cap Advantage Fund (9/99) -- -- -- 5.35
SA7 Strategy Aggressive Fund (1/92) 62.36 23.22 -- 15.86
AIM V.I.
7CA Capital Appreciation Fund (5/93) 36.21 24.01 -- 21.01
7CD Capital Development Fund (5/98) 20.82 -- -- 6.11
American Century variable portfolios, inc.
7IF VP International (5/94) 55.44 20.59 -- 16.82
7VA VP Value (5/96) -8.02 -- -- 8.92
CALVERT CVS
7SR Social Balanced Portfolio (9/86) 4.13 11.73 11.22 14.68
FIDELITY VIP
7GI III Growth & Income Portfolio (Service Class) -0.14 -- -- 18.21
(12/96)
7MP III Mid Cap Portfolio (Service Class) (12/98) 40.28 -- -- 44.40
7OS Overseas Portfolio (Service Class) (12/87) 33.99 15.71 10.29 11.29
FRANKLIN TEMPLETON VIP TRUST
7RE Franklin Real Estate Fund - Class 2 (1/89)*** -13.38 5.82 7.59 7.28
7SI Franklin Value Securities Fund - Class 2 -5.95 -- -- -17.35
(5/98)***
7IS Templeton International Smaller Companies 15.70 -- -- 2.96
Fund - Class 2 (5/96)***
GOLDMAN SACHS VIT
7SE CORESM Small Cap Equity Fund (2/98)**** 9.37 -- -- -1.20
7UE CORESM U.S. Equity Fund (2/98) 16.07 -- -- 16.30
7MC Mid Cap Value Fund (4/98) -8.11 -- -- -13.20
JANUS ASPEN SERIES
7AG Aggressive Growth Portfolio - Service Shares 114.13 34.27 -- 32.61
(9/93)
7GT Global Technology Portfolio - Service Shares -- -- -- --
1/00) +
7IG International Growth Portfolio - Service 70.84 31.72 -- 27.10
Shares (4/94)
LAZARD RETIREMENT SERIES
7IP International Equity Portfolio (9/98) 13.21 -- -- 20.06
MFS(R) VARIABLE INSURANCE TRUST (VIT)
7MG Growth Series - Service Class (5/99) -- -- -- 44.04
7MD New Discovery Series - Service Class (5/98) 85.33 -- -- 33.64
<PAGE>
PUTNAM VARIABLE TRUST
7IN Putnam VT International New Opportunities 93.85 -- -- 47.03
Fund - Class IB Shares (4/98) *****
7VS Putnam VT Vista Fund - Class IB Shares (1/97) 44.18 -- -- 28.57
*****
ROYCE CAPITAL FUND
7MI Micro-Cap Portfolio (12/96) 19.85 -- -- 14.66
THIRD AVENUE
7SV Value Portfolio (9/99) -- -- -- 1.19
WANGER
7IT International Small Cap (5/95) 117.28 -- -- 37.13
7SP U.S. Small Cap (5/95) 16.66 -- -- 24.82
WARBURG PINCUS TRUST
7EG Emerging Growth Portfolio (9/99) -- -- -- 27.51
</TABLE>
*Current applicable charges deducted from fund performance include a $30
contract administrative charge, a 0.95% mortality and expense risk fee and
applicable surrender charges.
+ Fund had not commenced operations as of Dec. 31, 1999.
**(Commencement date of the Funds)
***Because no Class 2 Shares were issued until Jan. 6, 1999, Class 2 performance
represents the historical results of Class 1 Shares. Performance of Class 2
Shares for periods after its January 6, 1999 inception will reflect Class 2's
additional 12b-1 fee expense which also affects all future performance.
****CoreSM is a service mark of Goldman, Sachs & Co.
*****Each of the above Funds' Class IB Shares commenced operations on April 30,
1998. For periods prior to inception of Class IB Shares, performance information
for Class IB Shares is based upon performance of Class IA Shares (not offered)
of the fund, adjusted to reflect the fees paid by Class IB Shares, including the
12b-1 fee of 0.15%.
<PAGE>
Average Annual Total Return For Qualified Annuities (Without Purchase Payment
Credits) Without Surrender For Periods Ending Dec. 31, 1999
<TABLE>
<CAPTION>
Performance Since Commencement of the
Fund*
<S> <C> <C> <C> <C> <C>
Since
Subaccount Investing In: 1 Year 5 Years 10 Years Commencement
---------- ------------- ------ ------- -------- ------------
AXPSM VARIABLE PORTFOLIO -
BC8 Blue Chip Advantage Fund (9/99)** --% --% --% 11.04%
BD8 Bond Fund (10/81) 0.89 7.15 7.31 9.84
CR8 Capital Resource Fund (10/81) 22.77 20.39 14.59 15.07
CM8 Cash Management Fund (10/81) 3.89 4.27 4.07 5.74
DE8 Diversified Equity Income Fund (9/99) -- -- -- 2.59
EM8 Emerging Markets Fund (5/00)+ -- -- -- --
EI8 Extra Income Fund (5/96) 5.39 -- -- 4.67
FI8 Federal Income Fund (9/99) -- -- -- 0.36
GB8 Global Bond Fund (5/96) -5.18 -- -- 3.24
GR8 Growth Fund (9/99) -- -- -- 17.96
IE8 International Fund (1/92) 13.44 9.78 -- 9.12
MF8 Managed Fund (4/86) 13.93 17.28 12.64 11.99
ND8 New Dimensions Fund(R)(5/96) 30.96 -- -- 25.35
IV8 S&P 500 Index Fund (5/00)+ -- -- -- --
SC8 Small Cap Advantage Fund (9/99) -- -- -- 12.42
SA8 Strategy Aggressive Fund (1/92) 69.69 23.81 -- 16.09
AIM V.I.
8CA Capital Appreciation Fund (5/93) 43.49 24.59 -- 21.35
8CD Capital Development Fund (5/98) 28.08 -- -- 10.31
American Century variable portfolios, inc.
8IF VP International (5/94) 62.76 21.21 -- 17.30
8VA VP Value (5/96) -1.65 -- -- 10.21
CALVERT CVS
8SR Social Balanced Portfolio (9/86) 10.93 15.53 11.02 14.48
FIDELITY VIP
8GI III Growth & Income Portfolio (Service Class) 6.83 -- -- 19.87
(12/96)
8MP III Mid Cap Portfolio (Service Class) (12/98) 47.58 -- -- 51.63
8OS Overseas Portfolio (Service Class) (12/87) 41.27 16.39 10.51 11.51
FRANKLIN TEMPLETON VIP TRUST
8RE Franklin Real Estate Fund - Class 2 (1/89)*** -7.12 7.12 8.13 7.79
8SI Franklin Value Securities Fund - Class 2 0.58 -- -- -13.90
(5/98)***
8IS Templeton International Smaller Companies 22.94 -- -- 4.40
Fund - Class 2 (5/96)***
GOLDMAN SACHS VIT
8SE CORESM Small Cap Equity Fund (2/98)**** 16.58 -- -- 2.57
8UE CORESM U.S. Equity Fund (2/98) 23.32 -- -- 19.77
8MC Mid Cap Value Fund (4/98) -1.75 -- -- -9.61
JANUS ASPEN SERIES
8AG Aggressive Growth Portfolio - Service Shares 121.54 34.78 -- 32.94
( 9/93)
8GT Global Technology Portfolio - Service Shares -- -- -- --
(1/00) +
8IG International Growth Portfolio - Service 78.18 32.25 -- 27.53
Shares (4/94)
LAZARD RETIREMENT SERIES
8IP International Equity Portfolio (9/98) 20.45 -- -- 25.22
MFS(R) VARIABLE INSURANCE TRUST (VIT)
8MG Growth Series - Service Class (5/99) -- -- -- 50.84
8MD New Discovery Series - Service Class (5/98) 92.13 -- -- 40.44
<PAGE>
PUTNAM VARIABLE TRUST
8IN Putnam VT International New Opportunities 101.25 -- -- 50.54
Fund - Class IB Shares (4/98)*****
8VS Putnam VT Vista Fund - Class IB Shares 51.50 -- -- 30.03
(1/97)*****
ROYCE CAPITAL FUND
8MI Micro-Cap Portfolio (12/96) 27.13 -- -- 16.40
THIRD AVENUE
8SV Value Portfolio (9/99) -- -- -- 8.12
WANGER
8IT International Small Cap (5/95) 124.71 -- -- 37.67
8SP U.S. Small Cap (5/95) 23.90 -- -- 25.44
WARBURG PINCUS TRUST
8EG Emerging Growth Portfolio (9/99) -- -- -- 34.58
</TABLE>
*Current applicable charges deducted from fund performance include a $30
contract administrative charge and a 0.75% mortality and expense risk fee.
+ Fund had not commenced operations as of Dec. 31, 1999.
**(Commencement date of the Funds)
***Because no Class 2 Shares were issued until Jan. 6, 1999, Class 2 performance
represents the historical results of Class 1 shares. Performance of Class 2
Shares for periods after its January 6, 1999 inception will reflect Class 2's
additional 12b-1 fee expense which also affects all future performance.
****CoreSM is a service mark of Goldman, Sachs & Co.
***** Each of the above Funds' Class IB Shares commenced operations on April 30,
1998. For periods prior to inception of Class IB Shares, performance information
for Class IB Shares is based upon performance of Class IA shares (not offered)
of the fund, adjusted to reflect the fees paid by Class IB Shares, including the
12b-1 fee of 0.15%.
<PAGE>
Average Annual Total Return For Qualified Annuities (Without Purchase Payment
Credits) With a Surrender For Periods Ending Dec. 31, 1999
<TABLE>
<CAPTION>
Performance Since Commencement of the
Fund*
<S> <C> <C> <C> <C> <C>
Since
Subaccount Investing In: 1 Year 5 Years 10 Years Commencement
---------- ------------- ------ ------- -------- ------------
AXPSM VARIABLE PORTFOLIO -
BC8 Blue Chip Advantage Fund (9/99)** --% --% --% 4.04%
BD8 Bond Fund (10/81) -5.47 6.54 7.31 9.84
CR8 Capital Resource Fund (10/81) 15.77 20.01 14.59 15.07
CM8 Cash Management Fund (10/81) -2.68 3.59 4.07 5.74
DE8 Diversified Equity Income Fund (9/99) -- -- -- -3.89
EM8 Emerging Markets Fund (5/00)+ -- -- -- --
EI8 Extra Income Fund (5/96) -1.29 -- -- 3.44
FI8 Federal Income Fund (9/99) -- -- -- -5.97
GB8 Global Bond Fund (5/96) -11.11 -- -- 1.97
GR8 Growth Fund (9/99) -- -- -- 10.96
IE8 International Fund (1/92) 6.44 9.22 -- 9.12
MF8 Managed Fund (4/86) 6.93 16.85 12.64 11.99
ND8 New Dimensions Fund(R)(5/96) 23.96 -- -- 24.60
IV8 S&P 500 Index Fund (5/00)+ -- -- -- --
SC8 Small Cap Advantage Fund (9/99) -- -- -- 5.42
SA8 Strategy Aggressive Fund (1/92) 62.69 23.47 -- 16.09
AIM V.I.
8CA Capital Appreciation Fund (5/93) 36.49 24.26 -- 21.25
8CD Capital Development Fund (5/98) 21.08 -- -- 6.33
American Century variable portfolios, inc.
8IF VP International (5/94) 55.76 20.84 -- 17.05
8VA VP Value (5/96) -7.83 -- -- 9.15
CALVERT CVS
8SR Social Balanced Portfolio (9/86) 3.93 11.53 11.02 14.48
FIDELITY VIP
8GI III Growth & Income Portfolio (Service Class) 0.06 -- -- 18.46
(12/96)
8MP III Mid Cap Portfolio (Service Class) (12/98) 40.58 -- -- 44.71
8OS Overseas Portfolio (Service Class) (12/87) 34.27 15.95 10.51 11.51
FRANKLIN TEMPLETON VIP TRUST
8RE Franklin Real Estate Fund - Class 2 (1/89)*** -12.92 6.50 8.13 7.79
8SI Franklin Value Securities Fund - Class 2 -5.76 -- -- -17.18
(5/98)***
8IS Templeton International Smaller Companies 15.94 -- -- 3.17
Fund - Class 2 (5/96)***
GOLDMAN SACHS VIT
8SE CORESM Small Cap Equity Fund (2/98)**** 9.58 -- -- -1.01
8UE CORESM U.S. Equity Fund (2/98) 16.32 -- -- 16.55
8MC Mid Cap Value Fund (4/98) -7.93 -- -- -13.03
JANUS ASPEN SERIES
8AG Aggressive Growth Portfolio - Service Shares 114.54 34.54 -- 32.87
(9/93)
8GT Global Technology Portfolio - Service Shares -- -- -- --
(1/00) +
8IG International Growth Portfolio - Service 71.18 31.98 -- 27.36
Shares (4/94)
LAZARD RETIREMENT SERIES
8IP International Equity Portfolio (9/98) 13.45 -- -- 20.31
MFS(R) VARIABLE INSURANCE TRUST (VIT)
8MG Growth Series - Service Class (5/99) -- -- -- 43.84
8MD New Discovery Series - Service Class (5/98) 85.13 -- -- 33.44
<PAGE>
PUTNAM VARIABLE TRUST
8IN Putnam VT International New Opportunities 94.25 -- -- 47.33
Fund - Class IB Shares (4/98)*****
8VS Putnam VT Vista Fund - Class IB Shares 44.50 -- -- 28.84
(1/97)*****
ROYCE CAPITAL FUND
8MI Micro-Cap Portfolio (12/96) 20.13 -- -- 14.90
THIRD AVENUE
8SV Value Portfolio (9/99) -- -- -- 1.25
WANGER
8IT International Small Cap (5/95) 117.71 -- -- 37.40
8SP U.S. Small Cap (5/95) 16.90 -- -- 25.07
WARBURG PINCUS TRUST
8EG Emerging Growth Portfolio (9/99) -- -- -- 27.58
</TABLE>
*Current applicable charges deducted from fund performance include a $30
contract administrative charge, a 0.75% mortality and expense risk fee and
applicable surrender charges.
+ Fund had not commenced operations as of Dec. 31, 1999.
**(Commencement date of the Funds)
***Because no Class 2 Shares were issued until Jan. 6, 1999, Class 2 performance
represents the historical results of Class 1 Shares. Performance of Class 2
Shares for periods after its January 6, 1999 inception will reflect Class 2's
additional 12b-1 fee expense which also affects all future performance.
****CoreSM is a service mark of Goldman, Sachs & Co.
*****Each of the above Funds' Class IB Shares commenced operations on April 30,
1998. For periods prior to inception of Class IB Shares, performance information
for Class IB Shares is based upon performance of Class IA Shares (not offered)
of the fund, adjusted to reflect the fees paid by Class IB Shares, including the
12b-1 fee of 0.15%.
<PAGE>
Cumulative Total Return
Cumulative total return represents the cumulative change in the value of an
investment for a given period (reflecting change in a subaccount's accumulation
unit value). We compute cumulative total return by using 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 period, at the
end of the period (or fractional portion thereof).
Total return figures reflect the deduction of the surrender charge which assumes
you withdraw the entire contract value at the end of the one, five and ten year
periods (or, if less, up to the life of the subaccount). We also may show
performance figures without the deduction of a surrender charge. In addition,
total return figures reflect the deduction of all other applicable charges
including the contract administrative charge and mortality and expense risk fee.
Annualized Calculation of Yield for Subaccounts Investing in Money Market Funds
Annualized Simple Yield
For the subaccounts investing in money market funds, we base quotations of
simple yield on:
(a) the change in the value of a hypothetical subaccount (exclusive of capital
changes and income other than investment income) at the beginning of a
particular seven-day period;
(b) less a pro rata share of the subaccount expenses accrued over the period;
(c) dividing this difference by the value of the subaccount at the beginning of
the period to obtain the base period return; and
(d) multiplying the base period return by 365/7.
The subaccount's value includes:
o any declared dividends,
o the value of any shares purchased with dividends paid during the period, and
o any dividends declared for such shares.
It does not include:
o the effect of any applicable surrender charge, or
o any realized or unrealized gains or losses.
Annualized Compound Yield
We calculate compound yield using the base period return described above, which
we then compound according to the following formula:
Compound Yield = [(Base Period Return + 1)365/7] -1
<PAGE>
You must consider (when comparing an investment in subaccounts investing in
money market funds with fixed annuities) that fixed annuities often provide an
agreed-to or guaranteed yield for a stated period of time, whereas the
subaccount's yield fluctuates. In comparing the yield of the subaccount to a
money market fund, you should consider the different services that the contract
provides.
Annualized Yield for Subaccounts Investing in Income Funds
For the subaccounts investing in income funds, we base quotations of yield on
all investment income earned during a particular 30-day period, less expenses
accrued during the period (net investment income) and compute it 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
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
The subaccount earns yield from the increase in the net asset value of shares of
the fund in which it invests and from dividends declared and paid by the fund,
which are automatically invested in shares of the fund.
The yield on the subaccount's accumulation unit may fluctuate daily and does not
provide a basis for determining future yields.
Independent rating or statistical services or publishers or publications such as
those listed below may quote subaccount performance, compare it to rankings,
yields or returns, or use it in variable annuity accumulation or settlement
illustrations they publish or prepare.
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
We do the following calculations 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 contract as of the valuation date that
falls on (or closest to the valuation date that falls before) the seventh
calendar day before the settlement date and then deduct any applicable
premium tax; then
o apply the result to the annuity table contained in the contract or another
table at least as favorable.
<PAGE>
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: We then convert the value of your subaccount to annuity units. To
compute the number of units credited to you, we divide the first monthly payment
by the annuity unit value (see below) on the valuation date. The number of units
in your subaccount is fixed. The value of the units fluctuates with the
performance of the underlying fund.
Subsequent Payouts: To compute later payouts, we multiply:
o the annuity unit value on the valuation date that falls on (or closest to
the valuation date that falls before) the seventh calendar day before the
payout is due; by
o the fixed number of annuity units credited to you.
Annuity Unit Values: We originally set this value at $1 for each 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
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:
We determine the net investment factor by:
o adding the fund's current net asset value per share plus the per share
amount of any accrued income or capital gain dividends to obtain a current
adjusted net asset value per share; then
o dividing that sum by the previous adjusted 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 fund may fluctuate, the net investment factor
may be greater or less than one, and the annuity unit value may increase or
decrease. You bear this investment risk in a variable subaccount.
The Fixed Account
We guarantee your fixed annuity payout amounts. 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 settlement date or the date you
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.
The annuity payout table we use will be the one in effect at the time you choose
to begin your annuity payouts. The values in the table will be equal to or
greater than the table in your contract.
<PAGE>
RATING AGENCIES
The following chart reflects the ratings given to us 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 subaccounts
of the contract. This information relates only to the fixed account and reflects
our ability to make annuity payouts and to pay death benefits and other
distributions from the contract.
Rating Agency Rating
A.M. Best A+
(Superior)
Duff & Phelps AAA
Moody's Aa2
PRINCIPAL UNDERWRITER
The principal underwriter for the contract is American Express Financial
Advisors, Inc. (AEFA) which offers the contract on a continuous basis.
The contract is new and, therefore, we have not received any surrender charges
or paid any commissions.
INDEPENDENT AUDITORS
The financial statements appearing in this SAI have been audited by Ernst &
Young LLP (1400 Pillsbury Center, 200 South Sixth Street, Minneapolis, MN 55402)
independent auditors, as stated in their report appearing herein.
FINANCIAL STATEMENTS
<PAGE>
<PAGE>
IDS LIFE INSURANCE COMPANY OF NEW YORK
FINANCIAL INFORMATION
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, 1999 and 1998, and the related statements of income, stockholder's
equity and cash flows for each of the three years in the period ended December
31, 1999. 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 auditing standards generally accepted
in the United States. 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, 1999 and 1998, and the results of its operations and
its cash flows for each of the three years in the period ended December 31,
1999, in conformity with accounting principles generally accepted in the
United States.
ERNST & YOUNG LLP
February 3, 2000
Minneapolis, Minnesota
--------------------------------------------------------------------------------
IDS LIFE INSURANCE COMPANY OF NEW YORK F-1
<PAGE>
IDS LIFE INSURANCE COMPANY OF NEW YORK
BALANCE SHEETS
<TABLE>
<CAPTION>
DECEMBER 31, ($ THOUSANDS) 1999 1998
<S> <C> <C>
ASSETS
-----------------------------------------------------------------
Investments:
Fixed maturities:
Held to maturity, at amortized cost
(fair value:
1999, $432,004; 1998, $503,909) $ 434,343 $ 473,592
Available for sale, at fair value
(amortized cost:
1999, $579,014; 1998, $561,325) 555,574 578,591
-----------------------------------------------------------------
989,917 1,052,183
Mortgage loans on real estate 154,062 166,835
Policy loans 27,528 25,421
Other investments -- 566
-----------------------------------------------------------------
Total investments 1,171,507 1,245,005
Cash and cash equivalents 8,131 3,007
Amounts recoverable from reinsurers 6,914 4,077
Accounts receivable 567 842
Premiums due 199 204
Accrued investment income 18,365 19,893
Deferred policy acquisition costs 136,229 129,477
Deferred income taxes 3,881 --
Other assets 723 1,042
Separate account assets 1,957,703 1,491,679
-----------------------------------------------------------------
Total assets $3,304,219 $2,895,226
-----------------------------------------------------------------
LIABILITIES AND STOCKHOLDER'S EQUITY
-----------------------------------------------------------------
Liabilities:
Future policy benefits:
Fixed annuities $ 821,992 $ 875,507
Universal life-type insurance 156,420 152,195
Traditional life, disability income and
long-term care insurance 64,278 55,910
Policy claims and other policyholders'
funds 2,584 3,105
Deferred income taxes -- 7,912
Amounts due to brokers -- 4,507
Other liabilities 21,432 24,945
Separate account liabilities 1,957,703 1,491,679
-----------------------------------------------------------------
Total liabilities 3,024,409 2,615,760
-----------------------------------------------------------------
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
Accumulated other comprehensive (loss)
income:
Net unrealized securities (losses) gains (14,966) 11,014
-----------------------------------------------------------------
Retained earnings 243,776 217,452
-----------------------------------------------------------------
Total stockholder's equity 279,810 279,466
-----------------------------------------------------------------
Total liabilities and stockholder's
equity $3,304,219 $2,895,226
=================================================================
</TABLE>
See accompanying notes.
--------------------------------------------------------------------------------
F-2 IDS LIFE INSURANCE COMPANY OF NEW YORK
<PAGE>
IDS LIFE INSURANCE COMPANY OF NEW YORK
STATEMENTS OF INCOME
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31, ($ THOUSANDS) 1999 1998 1997
<S> <C> <C> <C>
REVENUES:
--------------------------------------------------------------------------------------------
Traditional life, disability income and long-term care
insurance premiums $ 15,613 $ 13,852 $ 12,376
Policyholder and contractholder charges 22,502 20,467 18,319
Mortality and expense risk fees 17,019 13,980 11,312
Net investment income 95,514 100,871 106,274
Net realized gains on investments 1,386 2,163 547
--------------------------------------------------------------------------------------------
Total revenues 152,034 151,333 148,828
--------------------------------------------------------------------------------------------
BENEFITS AND EXPENSE:
--------------------------------------------------------------------------------------------
Death and other benefits:
Traditional life, disability income and long-term care
insurance 5,579 5,553 3,633
Universal life-type insurance and investment contracts 6,313 4,320 3,852
Increase in liabilities for future policy benefits for for
traditional life, disability income and long-term care
insurance 6,098 3,662 3,979
Interest credited on universal life-type insurance and
investment contracts 50,767 55,073 62,294
Amortization of deferred policy acquisition costs 15,787 18,362 17,201
Other insurance and operating expenses 9,925 8,917 10,220
--------------------------------------------------------------------------------------------
Total benefits and expenses 94,469 95,887 101,179
--------------------------------------------------------------------------------------------
Income before income taxes 57,565 55,446 47,649
Income taxes 19,241 19,098 16,471
--------------------------------------------------------------------------------------------
Net income $ 38,324 $ 36,348 $ 31,178
============================================================================================
</TABLE>
See accompanying notes.
--------------------------------------------------------------------------------
IDS LIFE INSURANCE COMPANY OF NEW YORK F-3
<PAGE>
IDS LIFE INSURANCE COMPANY OF NEW YORK
STATEMENTS OF STOCKHOLDER'S EQUITY
<TABLE>
<CAPTION>
ACCUMULATED
OTHER
TOTAL ADDITIONAL COMPREHENSIVE
STOCKHOLDER'S CAPITAL PAID-IN (LOSS) INCOME, RETAINED
THREE YEARS ENDED DECEMBER 31, 1999 ($ THOUSANDS) EQUITY STOCK CAPITAL NET OF TAX EARNINGS
<S> <C> <C> <C> <C> <C>
COMPREHENSIVE INCOME:
---------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1996 $ 229,863 $ 2,000 $ 49,000 $ 6,937 $171,926
Net income 31,178 -- -- -- 31,178
Unrealized holding gains arising during the year,
net of deferred policy acquisition costs of ($1)
and taxes of ($3,412) 6,337 -- -- 6,337 --
Reclassification adjustment for gains included in
net income, net of tax of $54 (99) -- -- (99) --
Other comprehensive income 6,238 -- -- 6,238 --
---------------------------------------------------------------------------------------------------------------------
Comprehensive income 37,416 -- --
Cash dividends to parent (10,000) -- -- -- (10,000)
---------------------------------------------------------------------------------------------------------------------
COMPREHENSIVE INCOME:
---------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1997 257,279 2,000 49,000 13,175 193,104
Net income 36,348 -- -- -- 36,348
Unrealized holding losses arising during the year,
net of deferred policy acquisition costs of $22
and taxes of $1,415 (2,628) -- -- (2,628) --
Reclassification adjustment for losses included in
net income, net of tax of ($252) 467 -- -- 467 --
---------------------------------------------------------------------------------------------------------------------
Other comprehensive loss (2,161) -- -- (2,161) --
Comprehensive income 34,187 -- --
---------------------------------------------------------------------------------------------------------------------
Cash dividends to parent (12,000) -- -- -- (12,000)
---------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1998 279,466 2,000 49,000 11,014 217,452
COMPREHENSIVE INCOME:
---------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1998 279,466 2,000 49,000 11,014 217,452
Net income 38,324 -- -- -- 38,324
Unrealized holding losses arising during the year,
net of deferred policy acquisition costs of $737
and of taxes of $13,537 (25,140) -- -- (25,140) --
Reclassification adjustment for gains included in
net income, net of tax of $452 (840) -- -- (840) --
---------------------------------------------------------------------------------------------------------------------
Other comprehensive loss (25,980) -- -- (25,980) --
Comprehensive income 12,344 -- --
---------------------------------------------------------------------------------------------------------------------
Cash dividends to parent (12,000) -- -- -- (12,000)
---------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1999 $ 279,810 $ 2,000 $ 49,000 $(14,966) $243,776
---------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes.
--------------------------------------------------------------------------------
F-4 IDS LIFE INSURANCE COMPANY OF NEW YORK
<PAGE>
IDS LIFE INSURANCE COMPANY OF NEW YORK
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31, ($ THOUSANDS) 1999 1998 1997
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
-----------------------------------------------------------------------------------------------
Net income $ 38,324 $ 36,348 $ 31,178
Adjustments to reconcile net income to net cash provided by
operating activities:
Policy loans, excluding universal life-type insurance:
Issuance (3,063) (3,110) (3,073)
Repayment 2,826 2,660 1,897
Change in accrued investment income 1,528 312 863
Change in amounts recoverable from reinsurer (2,837) (1,760) (1,345)
Change in premiums due 5 (12) (50)
Change in accounts receivable 275 (119) 218
Change in other assets 319 (47) (95)
Change in deferred policy acquisition costs, net (6,015) (2,841) (7,431)
Change in liabilities for future policy benefits for
traditional life, disability income and long-term care
insurance 8,368 5,441 5,131
Change in policy claims and other policyholders' funds (522) (908) 858
Deferred income tax provision (benefit) 2,196 (2,369) (960)
Change in other liabilities (3,513) (3,986) 3,468
Accretion of discount, net (1,794) (342) (352)
Net realized gain on investments (1,386) (2,163) (547)
Policyholder and contractholder charges, non-cash (9,875) (9,661) (8,772)
Other, net 1,859 118 715
-----------------------------------------------------------------------------------------------
Net cash provided by operating activities $ 26,695 $ 17,561 $ 21,703
CASH FLOWS FROM INVESTING ACTIVITIES:
-----------------------------------------------------------------------------------------------
Fixed maturities held to maturity:
Maturities, sinking fund payments and calls $ 37,852 $ 46,629 $ 36,511
Sales 790 16,173 12,616
Fixed maturities available for sale:
Purchases (155,690) (86,072) (101,818)
Maturities, sinking fund payments and calls 50,515 96,578 84,229
Sales 89,683 13,180 27,055
Other investments, excluding policy loans:
Purchases (3,598) (9,121) (33,243)
Sales 16,671 21,113 14,233
Change in amounts due from brokers -- -- 995
Change in amounts due to brokers (4,507) (24,547) 26,047
-----------------------------------------------------------------------------------------------
Net cash provided by investing activities 31,716 73,933 66,625
CASH FLOWS FROM FINANCING ACTIVITIES:
-----------------------------------------------------------------------------------------------
Activity related to universal life-type insurance and
investment contracts:
Considerations received 68,978 76,009 112,732
Surrenders and death benefits (159,161) (205,946) (251,259)
Interest credited to account balances 50,767 55,073 62,294
Universal life-type insurance policy loans:
Issuance (5,057) (5,222) (4,848)
Repayment 3,186 3,599 2,753
Cash dividend to parent (12,000) (12,000) (10,000)
-----------------------------------------------------------------------------------------------
Net cash used in financing activities (53,287) (88,487) (88,328)
-----------------------------------------------------------------------------------------------
Net increase in cash and cash equivalents 5,124 3,007 --
Cash and cash equivalents at beginning of year 3,007 -- --
-----------------------------------------------------------------------------------------------
Cash and cash equivalents at end of year $ 8,131 $ 3,007 $ --
-----------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes.
--------------------------------------------------------------------------------
IDS LIFE INSURANCE COMPANY OF NEW YORK F-5
<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 accounting principles generally accepted in the United States 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 accounting principles
generally accepted in the United States 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 accumulated other comprehensive (loss) income, net of deferred
policy acquisition costs and 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 reserves 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.
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
--------------------------------------------------------------------------------
F-6 IDS LIFE INSURANCE COMPANY OF NEW YORK
<PAGE>
values, and current 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.
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:
<TABLE>
<CAPTION>
1999 1998 1997
--------------------------------------------------------------
<S> <C> <C> <C>
Cash paid during the year for:
Income taxes $20,670 $22,470 $17,811
Interest on borrowings 124 1,600 1,026
</TABLE>
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.
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, issue and administrative fees and surrender charges. These charges also
include the minimum death benefit guarantee fees received from the variable life
insurance separate accounts. Mortality and expense fees are received from 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
--------------------------------------------------------------------------------
IDS LIFE INSURANCE COMPANY OF NEW YORK F-7
<PAGE>
and installment annuities are amortized primarily using the interest method. 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.
Amortization of deferred policy acquisition costs requires the use of
assumptions including interest margins, mortality margins, persistency rates,
maintenance expense levels and, for variable products, separate account
performance. For universal life-type insurance and deferred annuities, actual
experience is reflected in the Company's amortization models monthly. As actual
experience differs from the current assumptions, management considers the need
to change key assumptions underlying the amortization models prospectively. The
impact of changing prospective assumptions is reflected in the period that such
changes are made and is generally referred to as an unlocking adjustment. Net
unlocking adjustments in 1999, 1998 and 1997 were not significant.
LIABILITIES FOR FUTURE POLICY BENEFITS
Liabilities for universal-life type insurance and fixed and variable deferred
annuities are accumulation values.
Liabilities for equity indexed deferred annuities are determined as the present
value of guaranteed benefits and the intrinsic value of index-based benefits.
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 established
industry tables. Anticipated interest rates for claim reserves for both
disability income and long-term care range from 5% to 8%.
REINSURANCE
The maximum amount of life insurance risk retained by the Company is $750 on any
policy insuring a single life and $1,500 on any policy insuring a joint-life
combination. Risk not retained is reinsured with other life insurance companies,
primarily on a yearly renewable term basis. Long-term care policies are
primarily reinsured on a coinsurance basis. The Company retains all disability
income and waiver of premium risk. Beginning in 2000, the Company will retain
all accidental death benefit risk.
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
--------------------------------------------------------------------------------
F-8 IDS LIFE INSURANCE COMPANY OF NEW YORK
<PAGE>
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, 1999 and 1998 are $366, and
$3,647, 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 beneficiaries from the mortality assumptions implicit in the
annuity contracts. The Company makes periodic fund transfers to, or withdrawals
from, the separate account assets for such actuarial adjustments for variable
annuities that are in the benefit payment period. The Company also guarantees
that the rates at which administrative fees are deducted from contract funds
will not exceed contractual maximums.
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.
ACCOUNTING CHANGES
American Institute of Certified Public Accountants (AICPA) Statement of Position
(SOP) 98-1, "Accounting for Costs of Computer Software Developed or Obtained for
Internal Use" became effective January 1, 1999. The SOP requires the
capitalization of certain costs incurred after the date of adoption to develop
or obtain software for internal use. Software utilized by the Company is owned
by AEFC and capitalized by AEFC. As a result, the new rule did not have a
material impact on the Company's results of operations or financial condition.
Effective January 1, 1999, the Company adopted AICPA SOP 97-3, "Accounting by
Insurance and Other Enterprises for Insurance-Related Assessments," providing
guidance for the timing of recognition of liabilities related to guaranty fund
assessments. The Company had historically carried a balance in other liabilities
on the balance sheet for potential guaranty fund assessment exposure. Adoption
of the SOP did not have a material impact on the Company's results of operations
or financial condition.
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments
and Hedging Activities," which is effective January 1, 2001. This Statement
establishes accounting and reporting standards for derivative instruments,
including certain derivative instruments embedded in other contracts, and for
hedging activities. It requires that an entity recognize all derivatives as
either assets or liabilities in the balance sheet and measure those instruments
at fair value. The accounting for changes in the fair value of a derivative
depends on the intended use of the derivative and the resulting designation. The
ultimate financial effect of the new rule will be measured based on the
derivatives in place at adoption and cannot be estimated at this time.
PERMITTED STATUTORY ACCOUNTING PRACTICES
The Company's statutory-basis financial statements are prepared in accordance
with accounting practices prescribed or permitted by the New York Insurance
Department. Currently, "prescribed" statutory practices are interspersed
throughout state insurance laws and regulations, the NAIC ACCOUNTING PRACTICES
AND PROCEDURES MANUAL and a variety of other NAIC publications. "Permitted"
--------------------------------------------------------------------------------
IDS LIFE INSURANCE COMPANY OF NEW YORK F-9
<PAGE>
statutory accounting practices encompass all accounting practices that are not
prescribed: such practices may differ from state to state, may differ from
company to company within a state, and may change in the future.
In 1998, the NAIC adopted codified statutory accounting principles
("Codification") effective January 1, 2001. Codification will likely change, to
some extent, prescribed statutory accounting practices and may result in changes
to the accounting practices that the Company uses to prepare its statutory-basis
financial statements. Codification will require adoption by the various states
before it becomes the prescribed statutory basis of accounting for insurance
companies domesticated within those states. Accordingly, before Codification
becomes effective for the Company, the State of New York must adopt Codification
as the prescribed basis of accounting on which domestic insurers must report
their statutory-basis results to the Insurance Department. New York has not yet
made a decision regarding whether or not it will accept Codification. While
management has not yet determined the impact of Codification to the Company's
statutory-basis financial statements, it does not believe the impact will be
material.
RECLASSIFICATIONS
Certain 1998 and 1997 amounts have been reclassified to conform to the 1999
presentation.
2. INVESTMENTS
Fair values of investments in fixed maturities represent quoted market prices
and estimated values when quoted prices are not available. Estimated values are
determined by established procedures involving, among other things, review of
market indices, price levels of current offerings of comparable issues, price
estimates and market data from independent brokers and financial files.
The amortized cost, gross unrealized gains and losses and fair value of
investments in fixed maturities at December 31, 1999 are as follows:
<TABLE>
<CAPTION>
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED FAIR
HELD TO MATURITY COST GAINS LOSSES VALUE
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. Government agency
obligations $ 2,490 $ 20 $ 150 $ 2,360
Corporate bonds and
obligations 384,241 6,066 7,058 383,249
Mortgage-backed securities 47,612 103 1,320 46,395
----------------------------------------------------------------------------------------
$434,343 $ 6,189 $ 8,528 $432,004
----------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED FAIR
AVAILABLE FOR SALE COST GAINS LOSSES VALUE
----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
State and municipal
obligations $ 104 $ 6 $ -- $ 110
Corporate bonds and
obligations 374,846 2,324 20,325 356,845
Mortgage-backed securities 204,064 580 6,025 198,619
----------------------------------------------------------------------------
$579,014 $ 2,910 $26,350 $555,574
----------------------------------------------------------------------------
----------------------------------------------------------------------------
</TABLE>
--------------------------------------------------------------------------------
F-10 IDS LIFE INSURANCE COMPANY OF NEW YORK
<PAGE>
The amortized cost, gross unrealized gains and losses and fair value of
investments in fixed maturities at December 31, 1998 are as follows:
<TABLE>
<CAPTION>
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED FAIR
HELD TO MATURITY COST GAINS LOSSES VALUE
----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. Government agency
obligations $ 2,871 $ 159 $ -- $ 3,030
Corporate bonds and
obligations 417,648 29,795 474 446,969
Mortgage-backed securities 53,073 844 7 53,910
----------------------------------------------------------------------------
$473,592 $30,798 $ 481 $503,909
----------------------------------------------------------------------------
----------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED FAIR
AVAILABLE FOR SALE COST GAINS LOSSES VALUE
----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
State and municipal
obligations $ 105 $ 9 $ -- $ 114
Corporate bonds and
obligations 336,985 15,939 6,296 346,628
Mortgage-backed securities 224,235 7,614 -- 231,849
----------------------------------------------------------------------------
$561,325 $23,562 $ 6,296 $578,591
----------------------------------------------------------------------------
----------------------------------------------------------------------------
</TABLE>
The amortized cost and fair value of investments in fixed maturities at December
31, 1999 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.
<TABLE>
<CAPTION>
AMORTIZED FAIR
HELD TO MATURITY COST VALUE
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
Due in one year or less $ 14,966 $ 15,118
Due from one to five years 213,933 214,972
Due from five to ten years 111,707 111,314
Due in more than ten years 46,125 44,205
Mortgage-backed securities 47,612 46,395
--------------------------------------------------------------------
$434,343 $432,004
--------------------------------------------------------------------
--------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
AMORTIZED FAIR
AVAILABLE FOR SALE COST VALUE
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
Due in one year or less $ 14,422 $ 14,657
Due from one to five years 37,204 37,477
Due from five to ten years 214,169 203,150
Due in more than ten years 109,155 101,671
Mortgage-backed securities 204,064 198,619
--------------------------------------------------------------------
$579,014 $555,574
--------------------------------------------------------------------
--------------------------------------------------------------------
</TABLE>
During the years ended December 31, 1999, 1998 and 1997, fixed maturities
classified as held to maturity were sold with amortized cost of $790, $16,175
and $12,737, 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 1999 with proceeds of
$89,683 and gross realized gains and losses of $1,917 and $625, respectively.
Fixed maturities available for sale were sold during 1998 with proceeds of
$13,180 and gross realized gains and
--------------------------------------------------------------------------------
IDS LIFE INSURANCE COMPANY OF NEW YORK F-11
<PAGE>
losses of $1,159 and $440, respectively. 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.
At December 31, 1999, bonds carried at $254 were on deposit with the state of
New York as required by law.
At December 31, 1999, 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 $147
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:
<TABLE>
<CAPTION>
RATING 1999 1998
----------------------------------------------------------------
<S> <C> <C>
Aaa/AAA $ 250,577 $ 280,669
Aa/AA 12,992 15,815
Aa/A 25,489 16,327
A/A 150,187 151,838
A/BBB 68,417 68,640
Baa/BBB 354,331 366,776
Baa/BB 23,562 39,666
Below investment grade 127,802 95,186
----------------------------------------------------------------
$1,013,357 $1,034,917
----------------------------------------------------------------
----------------------------------------------------------------
</TABLE>
At December 31, 1999, 94 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, 1999, 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:
<TABLE>
<CAPTION>
DECEMBER 31, 1999 DECEMBER 31, 1998
ON BALANCE COMMITMENTS ON BALANCE COMMITMENTS
REGION SHEET TO PURCHASE SHEET TO PURCHASE
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
West North Central $ 22,686 $ -- $ 24,725 $ --
East North Central 25,195 -- 29,134 59
South Atlantic 31,748 -- 34,175 598
Middle Atlantic 17,672 -- 18,350 --
Pacific 6,751 -- 9,706 --
Mountain 35,608 -- 36,636 --
New England 8,209 -- 7,851 --
East South Central 7,394 -- 7,521 --
West South Central 0 -- 237 --
--------------------------------------------------------------------------------
155,262 -- 168,335 657
Less allowance for losses 1,200 -- 1,500 --
--------------------------------------------------------------------------------
$154,062 $ -- $166,835 $657
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
</TABLE>
--------------------------------------------------------------------------------
F-12 IDS LIFE INSURANCE COMPANY OF NEW YORK
<PAGE>
<TABLE>
<CAPTION>
DECEMBER 31, 1999 DECEMBER 31, 1998
ON BALANCE COMMITMENTS ON BALANCE COMMITMENTS
PROPERTY TYPE SHEET TO PURCHASE SHEET TO PURCHASE
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Apartments $ 54,118 $ -- $ 59,019 $ --
Department/retail stores 49,810 -- 54,018 624
Office buildings 22,090 -- 23,902 --
Industrial buildings 16,938 -- 18,590 33
Nursing/retirement 5,058 -- 5,153 --
Medical buildings 7,248 -- 7,416 --
Hotels/motels -- -- 237 --
--------------------------------------------------------------------------------
155,262 -- 168,335 657
Less allowance for losses 1,200 -- 1,500 --
--------------------------------------------------------------------------------
$154,062 $ -- $166,835 $657
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
</TABLE>
Mortgage loan fundings are restricted by state insurance regulatory authority to
80 percent or less of the market value of the real estate at the time of
origination of the loan. The Company holds the mortgage document, which gives 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, 1999 and 1998, the Company's recorded investment in impaired
loans was $nil and $1,268, with allowances of $nil and $300, respectively.
During 1999 and 1998, the average recorded investment in impaired loans was $nil
and $1,282, respectively.
The Company recognized $2, $123 and $126 of interest income related to impaired
loans for the years ended December 31, 1999, 1998 and 1997, respectively.
The following table presents changes in the allowance for investment losses
related to all loans:
<TABLE>
<CAPTION>
1999 1998 1997
-----------------------------------------------------------
<S> <C> <C> <C>
Balance, January 1 $1,500 $1,500 $1,300
Provision (reduction) for
investment losses (300) -- 200
-----------------------------------------------------------
Balance, December 31 $1,200 $1,500 $1,500
-----------------------------------------------------------
-----------------------------------------------------------
</TABLE>
Net investment income for the years ended December 31 is summarized as follows:
<TABLE>
<CAPTION>
1999 1998 1997
----------------------------------------------------------------
<S> <C> <C> <C>
Interest on fixed maturities $78,342 $ 85,164 $ 92,007
Interest on mortgage loans 12,895 14,599 14,228
Other investment income 4,764 3,365 1,715
Interest on cash equivalents 350 64 91
----------------------------------------------------------------
96,351 103,192 108,041
Less investment expenses 837 2,321 1,767
----------------------------------------------------------------
$95,514 $100,871 $106,274
----------------------------------------------------------------
----------------------------------------------------------------
</TABLE>
--------------------------------------------------------------------------------
IDS LIFE INSURANCE COMPANY OF NEW YORK F-13
<PAGE>
Net realized gains (losses) on investments for the years ended December 31 is
summarized as follows:
<TABLE>
<CAPTION>
1999 1998 1997
-----------------------------------------------------------
<S> <C> <C> <C>
Fixed maturities $1,086 $2,018 $ 844
Mortgage loans 300 -- (200)
Other investments -- 145 (97)
-----------------------------------------------------------
$1,386 $2,163 $ 547
-----------------------------------------------------------
-----------------------------------------------------------
</TABLE>
Changes in net unrealized appreciation (depreciation) of investments for the
years ended December 31 are summarized as follows:
<TABLE>
<CAPTION>
1999 1998 1997
--------------------------------------------------------------
<S> <C> <C> <C>
Fixed maturities available for sale $(40,706) $(3,347) $9,599
</TABLE>
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 (benefit) for the years ending December 31 consists of
the following:
<TABLE>
<CAPTION>
1999 1998 1997
--------------------------------------------------------------
<S> <C> <C> <C>
Federal income taxes:
Current $16,426 $20,192 $16,371
Deferred 2,196 (2,369) (960)
--------------------------------------------------------------
18,622 17,823 15,411
State income taxes-current 619 1,275 1,060
--------------------------------------------------------------
Income tax expense $19,241 $19,098 $16,471
--------------------------------------------------------------
--------------------------------------------------------------
</TABLE>
Increases (decreases) to the income tax provision applicable to pretax income
based on the statutory rate are attributable to:
<TABLE>
<CAPTION>
1999 1998 1997
PROVISION RATE PROVISION RATE PROVISION RATE
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Federal income taxes
based on the statutory
rate $20,148 35.0% $19,406 35.0% $16,677 35.0%
Increases (decreases) are
attributable to:
Tax-excluded interest and
dividend income (509) (0.9) (660) (1.2) (569) (1.2)
State tax, net of federal
benefit 402 0.7 829 1.5 689 1.4
Other, net (800) (1.4) (477) (0.9) (326) (0.6)
-------------------------------------------------------------------------------
Total income taxes $19,241 33.4% $19,098 34.4% $16,471 34.6%
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
</TABLE>
A portion of life insurance company income earned prior to 1984 was not subject
to current taxation but was accumulated, for tax purposes, in a "policyholders'
surplus account." At December 31, 1999, 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.
--------------------------------------------------------------------------------
F-14 IDS LIFE INSURANCE COMPANY OF NEW YORK
<PAGE>
Significant components of the Company's deferred income tax assets and
liabilities as of December 31 are as follows:
<TABLE>
<CAPTION>
1999 1998
----------------------------------------------------------
<S> <C> <C>
Deferred income tax assets:
Policy reserves $28,245 $29,318
Investments 6,980 --
Other 6,690 6,502
----------------------------------------------------------
Total deferred income tax assets 41,915 35,820
----------------------------------------------------------
----------------------------------------------------------
Deferred income tax liabilities:
Deferred policy acquisition costs 38,033 36,673
Investments -- 7,059
----------------------------------------------------------
Total deferred income tax liabilities 38,033 43,732
----------------------------------------------------------
Net deferred income tax assets
(liabilities) $ 3,882 ($7,912)
----------------------------------------------------------
----------------------------------------------------------
</TABLE>
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 IDS Life 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 $155,952 and $132,702 as of
December 31, 1999 and 1998, 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).
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 $27, $37 and $39 in 1999, 1998 and 1997, respectively.
The Company has a "Sales Benefit Plan" which is an unfunded, noncontributory
retirement plan for all eligible financial advisors. Total plan costs for 1999,
1998 and 1997, which are calculated on the basis of commission earnings of the
individual financial advisors, were $1,446, $1,480 and $1,965, 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 1999, 1998 and 1997 were $218, $252 and $312,
respectively.
--------------------------------------------------------------------------------
IDS LIFE INSURANCE COMPANY OF NEW YORK F-15
<PAGE>
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. Costs of these plans charged to
operations in 1999, 1998 and 1997 were $nil.
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 1999, 1998 and
1997 were $96, $140 and $1,490, 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 $13,042, $9,403 and $11,589 for 1999, 1998 and
1997, respectively. Certain of these costs are included in deferred policy
acquisition costs.
7. COMMITMENTS AND CONTINGENCIES
In January 2000, AEFC reached an agreement in principle to settle three
class-action lawsuits. The Company had been named as a co-defendant in one of
these lawsuits. It is expected the settlement will provide $215 million of
benefits to more than 2 million participants. The agreement in principle to
settle also provides for release by class members of all insurance and annuity
market conduct claims dating back to 1985 and is subject to a number of
contingencies including a definitive agreement and court approval. The portion
of the settlement allocated to the Company did not have a material impact on the
Company's financial position or results from operations.
At December 31, 1999 and 1998, traditional life insurance and universal
life-type insurance in force aggregated $5,448,451 and $4,941,727 respectively,
of which $272,276 and $248,280 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 $150, $134 and $115
for the years ended December 31, 1999, 1998 and 1997, respectively. Claim
recoveries under the terms of this reinsurance agreement were $nil, $nil and
$963 in 1999, 1998 and 1997, respectively.
Premiums ceded to reinsurers other than IDS Life amounted to $2,873, $2,178 and
$1,583 for the years ended December 31, 1999, 1998 and 1997, respectively. Claim
recoveries from reinsurers other than IDS Life amounted to $473, $228 and $1,366
for the years ended December 31, 1999, 1998 and 1997, respectively.
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
$237,038 and $267,806 at December 31, 1999 and 1998, respectively. The
accompanying statement of income includes premiums of $nil for the years ended
December 31, 1999, 1998 and 1997, and decreases in liabilities for future policy
benefits of $1,277, $1,742 and $1,889 related to this agreement for the years
ended December 31, 1999, 1998 and 1997, respectively.
--------------------------------------------------------------------------------
F-16 IDS LIFE INSURANCE COMPANY OF NEW YORK
<PAGE>
8. LINES OF CREDIT
The Company has an available line of credit with AEFC aggregating $25,000. The
interest rate for any borrowing is established by reference to various indicies
plus 20 to 45 basis points depending on the term. There were no borrowings
outstanding under this agreement at December 31, 1999 or 1998.
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.
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 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. The Company's counterpart is 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:
<TABLE>
<CAPTION>
NOTIONAL CARRYING FAIR TOTAL CREDIT
DECEMBER 31, 1999 AMOUNT AMOUNT VALUE EXPOSURE
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Assets:
Interest rate caps $200,000 $ -- $ -- $ --
------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31, 1998
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Assets:
Interest rate caps $200,000 $566 $ 2 $ 2
------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------
</TABLE>
The fair values of derivative financial instruments are based on market values,
dealer quotes or pricing models. The interest rate caps expire in the year 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.
--------------------------------------------------------------------------------
IDS LIFE INSURANCE COMPANY OF NEW YORK F-17
<PAGE>
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.
<TABLE>
<CAPTION>
1999 1998
CARRYING FAIR CARRYING FAIR
FINANCIAL ASSETS AMOUNT VALUE AMOUNT VALUE
------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investments:
Fixed maturities (Note 2):
Held to maturity $ 434,343 $ 432,004 $ 473,592 $ 503,909
Available for sale 555,574 555,574 578,591 578,591
Mortgage loans on real
estate (Note 2) 154,062 152,942 166,835 178,559
Other:
Derivative financial
instruments (Note 9) -- -- 566 2
Separate accounts assets
(Note 1) 1,957,703 1,957,703 1,491,679 1,491,679
</TABLE>
<TABLE>
<CAPTION>
1999 1998
CARRYING FAIR CARRYING FAIR
FINANCIAL LIABILITIES AMOUNT VALUE AMOUNT VALUE
------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Future policy benefits for
fixed annuities $ 732,752 $ 715,213 $ 788,780 $ 765,430
Separate account liabilities 1,722,028 1,668,067 1,355,430 1,302,422
</TABLE>
At December 31, 1999 and 1998, the carrying amount and fair value of future
policy benefits for fixed annuities exclude life insurance-related contracts
carried at $83,646 and $81,358, respectively, and policy loans of $5,594 and
$5,369, respectively. The fair value of these benefits is based on the status of
the annuities at December 31, 1999 and 1998. 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 1999 and 1998.
At December 31, 1999 and 1998, 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 $235,675 and $136,249,
respectively.
--------------------------------------------------------------------------------
F-18 IDS LIFE INSURANCE COMPANY OF NEW YORK
<PAGE>
11. STATUTORY INSURANCE ACCOUNTING PRACTICES
Reconciliations of net income for the years ended December 31 and stockholder's
equity at December 31, as shown in the accompanying financial statements, to
that determined using statutory accounting practices are as follows:
<TABLE>
<CAPTION>
1999 1998 1997
-----------------------------------------------------------------
<S> <C> <C> <C>
Net income, per accompanying
financial statements $ 38,324 $ 36,348 $ 31,178
Deferred policy acquisition costs (6,015) (2,841) (7,432)
Adjustments of future policy
benefit liabilities (4,615) (6,199) (4,928)
Deferred income tax benefit 2,196 (2,369) (960)
Provision for losses on investments (161) 862 296
IMR gain/loss transfer and
amortization (154) (1,451) (119)
Adjustment to separate account
reserves 5,498 2,767 10,267
Other, net 766 (350) 430
-----------------------------------------------------------------
Net income, on basis of statutory
accounting practices $ 35,839 $ 26,767 $ 28,732
-----------------------------------------------------------------
-----------------------------------------------------------------
Stockholder's equity, per
accompanying financial statements $279,810 $279,466 $257,279
Deferred policy acquisition costs (136,229) (129,477) (126,614)
Adjustments of future policy
benefit liabilities 2,845 4,697 9,452
Deferred income taxes (3,881) 7,912 11,445
Asset valuation reserve (16,164) (15,516) (16,698)
Adjustments of separate account
liabilities 61,721 56,223 53,456
Adjustments of investments to
amortized cost 23,440 (17,266) (20,613)
Premiums due, deferred and advance 1,485 1,381 1,237
Deferred revenue liability 3,021 2,482 1,941
Allowance for losses 1,200 1,500 1,645
Non-admitted assets (421) (450) (552)
Interest maintenance reserve (3,155) (3,001) (1,551)
Other, net (5,416) (2,915) (1,463)
-----------------------------------------------------------------
Stockholder's equity, on basis of
statutory accounting practices $208,256 $185,036 $168,963
-----------------------------------------------------------------
-----------------------------------------------------------------
</TABLE>
12. YEAR 2000 (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
major systems used by the Company are maintained by AEFC and are utilized by
multiple subsidiaries and affiliates of AEFC. The Company's businesses are
heavily dependent upon AEFC's computer systems and have significant interaction
with systems of third parties.
A comprehensive review of AEFC's computer systems and business processes,
including those specific to the Company, was conducted to identify the major
systems that could be affected by the Year 2000 issue. Steps were taken to
resolve potential problems including modification to existing software and the
purchase of new software. As of December 31, 1999, AEFC had completed its
program of corrective measures on its internal systems and applications,
including Year 2000 compliance testing. As of December 31, 1999, AEFC had also
completed an evaluation of the Year 2000 readiness of other third parties whose
system failures could have an impact on the Company's operations.
--------------------------------------------------------------------------------
IDS LIFE INSURANCE COMPANY OF NEW YORK F-19
<PAGE>
AEFC's Year 2000 project also included establishing Year 2000 contingency plans
for all key business units. Business continuation plans, which address business
continuation in the event of a system disruption, are in place for all key
business units. At December 31, 1999, these plans had been amended to include
specific Year 2000 considerations.
In assessing its Year 2000 initiatives and the results of actual production
since January 1, 2000, management believes no material adverse consequences were
experienced, and there was no material effect on the Company's business, results
of operations, or financial condition as a result of the Year 2000 issue.
--------------------------------------------------------------------------------
F-20 IDS LIFE INSURANCE COMPANY OF NEW YORK
<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, 1999 and 1998.
Statements of Income for years ended Dec. 31, 1999, 1998, and 1997.
Statements of Stockholder's Equity, for years ended Dec. 31, 1999,
1998, and 1997.
Statements of Cash Flows for years ended Dec. 31, 1999, 1998, and 1997.
Notes to Financial Statements.
Report of Independent Auditors dated March 17, 2000.
(b) Exhibits:
1.1 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 April 17, 1996, filed electronically as Exhibit 1 to
Registrant's Initial Registration Statement No. 333-03867 is
incorporated herein by reference.
1.2 Consent in writing in Lieu of Meeting of IDS Life of New York
establishing 105 additional subaccounts within the separate account
dated November 19, 1999 filed electronically as Exhibit 1.2 to
Registrant's Initial Registration Statement No. 333-91691 filed on or
about Nov. 29, 1999, is incorporated herein by reference.
1.3 Resolution of the Board of Directors of IDS Life of New York
establishing 86 additional subaccounts within the separate account,
dated June 27, 2000 is filed electronically herewith.
2 Not applicable.
3. Not applicable.
4.1 Form of Deferred Annuity Contract to be filed by amendment.
5. Form of Variable Annuity Application to be filed by amendment.
6.1 Certificate of Incorporation of IDS Life dated July 24, 1957, filed
electronically as Exhibit 6.1 to Registrant's Initial Registration
Statement No. 33-62407 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 Registrant's Initial Registration
Statement No. 333-03867 is incorporated herein by reference.
7. Not applicable.
8. Participation Agreements to be filed by amendment.
9. Opinion of counsel and consent to its use as the legality of the
securities being registered, filed electronically herewith.
10. Consent of Independent Auditors, filed electronically herewith.
11. None.
12. Not applicable.
<PAGE>
13. Copy of schedule for computation of each performance quotation provided
in the Registration Statement in response to Item 21, to be filed by
Amendment.
14. Not applicable.
15. Power of Attorney to sign this Registration Statement dated April 14,
1999, filed electronically as Exhibit 14 to Post-Effective Amendment
No. 3 to Registration Statement No. 333-03867, filed on or about April
28, 1999, is incorporated herein by reference.
Item 25. Directors and Officers of the Depositor (IDS Life Insurance Company of
New York)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C>
Name Principal Business Address Positions and Offices with Depositor
------------------------------------- ----------------------------------------- -------------------------------------
Timothy V. Bechtold 200 AXP Financial Center Director and President
Minneapolis, MN 55474
Maureen A. Buckley 20 Madison Ave. Extension Director, Vice President, Chief
Albany, NY Operating Officer and Consumer
Affairs Officer
Rodney P. Burwell Xerxes Corporation Director
790 Xerxes Ave. So.
Minneapolis, MN
John R. Cattau 20 Madison Ave. Extension Director
Albany, NY
James E. Choat 200 AXP Financial Center Executive Vice President,
Minneapolis, MN 55474 Institutional Products Group
Robert R. Grew 20 Madison Avenue Extension Director
Albany, NY
Lorraine R. Hart 200 AXP Financial Center Vice President, Investments
Minneapolis, MN 55474
Jeffrey S. Horton 200 AXP Financial Center Vice President and Treasurer
Minneapolis, MN 55474
Jean B. Keffeler 3424 Zenith Ave. So. Director
Minneapolis, MN
Richard W. Kling 200 AXP Financial Center Director and Chairman of the Board
Minneapolis, MN 55474
Bruce A. Kohn 200 AXP Financial Center Counsel and Assistant Secretary
Minneapolis, MN 55474
Eric L. Marhoun 200 AXP Financial Center General Counsel and Secretary
Minneapolis, MN 55474
Thomas R. McBurney 1700 Foshay Tower Director
821 Marquette Ave.
Minneapolis, MN
Mary Ellyn Minenko 200 AXP Financial Center Counsel and Assistant Secretary
Minneapolis, MN 55474
<PAGE>
Edward J. Muhl 200 AXP Financial Center Director
Minneapolis, MN 55474
Thomas V. Nicolosi Suite 220 Director
500 Mamaroneck Avenue
Harrison, NY 10528
Stephen P. Norman World Financial Center Director
New York, NY
Richard M. Starr 20 Madison Avenue Extension Director
Albany, NY
William A. Stoltzmann 200 AXP Financial Center Counsel and Assistant Secretary
Minneapolis, MN 55474
Philip C. Wentzel 200 AXP Financial Center Vice President and Controller, Risk
Minneapolis, MN 55474 Management
Michael R. Woodward 20 Madison Avenue Extension Director
Albany, NY
</TABLE>
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 Partners LLC Delaware
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
<PAGE>
American Express Financial Advisors Japan Inc. Delaware
American Express Financial Corporation 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 Mississippi Inc. Mississippi
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 Brokerage Group Minnesota
IDS Futures Corporation Minnesota
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 Mississippi Ltd. Mississippi
IDS Insurance Agency of New Mexico Inc. New Mexico
IDS Insurance Agency of North Carolina Inc. North Carolina
IDS Insurance Agency of Ohio Inc. Ohio
IDS Insurance Agency of Texas Inc. Texas
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
Investors Syndicate Development Corp. Nevada
Public Employee Payment Company Minnesota
</TABLE>
Item 27. Number of Contractowners
Not applicable.
<PAGE>
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 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.
Item 29. Principal Underwriters.
(a) American Express Financial Advisors acts as principal underwriter for
the following investment companies:
AXP Bond Fund, Inc.; AXP California Tax-Exempt Trust; AXP Discovery
Fund, Inc.; AXP Equity Select Fund, Inc.; AXP Extra Income Fund, Inc.;
AXP Federal Income Fund, Inc.; AXP Global Series, Inc.; AXP Growth
Series, Inc.; AXP High Yield Tax-Exempt Fund, Inc.; AXP International
Fund, Inc.; AXP Investment Series, Inc.; AXP Managed Series, Inc.; AXP
Market Advantage Series, Inc.; AXP Money Market Series, Inc.; AXP New
Dimensions Fund, Inc.; AXP Precious Metals Fund, Inc.; AXP Progressive
Fund, Inc.; AXP Selective Fund, Inc.; AXP Special Tax-Exempt Series
Trust; AXP Stock Fund, Inc.; AXP Strategy Series, Inc.; AXP Tax-Exempt
Series, Inc.; AXP Tax-Free Money Fund, Inc.; AXP Utilities Income Fund,
Inc., Growth Trust; Growth and Income Trust; Income Trust; Tax-Free
Income Trust; World Trust; IDS Certificate Company; Strategist Income
Fund, Inc.; Strategist Growth Fund, Inc.; Strategist Growth and Income
Fund, Inc.; Strategist World Fund, Inc. and Strategist Tax-Free Income
Fund, Inc.
(b) As to each director, officer or partner of the principal underwriter:
Name and Principal Business Address Position and Offices with
Underwriter
------------------------------------- -----------------------------------
Ronald. G. Abrahamson Vice President - Business
200 AXP Financial Center Transformation
Minneapolis, MN 55474
Douglas A. Alger Senior Vice President - Human
200 AXP Financial Center Resources
Minneapolis, MN 55474
<PAGE>
Peter J. Anderson Senior Vice President -
200 AXP Financial Center Investment Operations
Minneapolis, MN 55474
Ward D. Armstrong Senior Vice President -
200 AXP Financial Center Retirement Services
Minneapolis, MN 55474
John M. Baker Vice President - Plan Sponsor
200 AXP Financial Center Services
Minneapolis, MN 55474
Joseph M. Barsky, III Vice President - Mutual Fund
200 AXP Financial Center Equities
Minneapolis, MN 55474
Timothy V. Bechtold Vice President - Risk Management
200 AXP Financial Center Products
Minneapolis, MN 55474
John D. Begley Group Vice President -
Suite 100 Ohio/Indiana
7760 Olentangy River Rd.
Columbus, OH 43235
Brent L. Bisson Group Vice President - Los
Suite 900 Angeles Metro
E. Westside Twr
11835 West Olympic Blvd.
Los Angeles, CA 90064
John C. Boeder Vice President - Nonproprietary
200 AXP Financial Center Products
Minneapolis, MN 55474
Walter K. Booker Group Vice President - New Jersey
200 AXP Financial Center
Minneapolis, MN 55474
Bruce J. Bordelon Group Vice President - San
1333 N. California Blvd., Suite 200 Francisco Bay Area
Walnut Creek, CA 94596
Charles R. Branch Group Vice President - Northwest
Suite 200
West 111 North River Dr.
Spokane, WA 99201
<PAGE>
Douglas W. Brewers Vice President - Sales Support
200 AXP Financial Center
Minneapolis, MN 55474
Karl J. Breyer Corporate Senior Vice President
200 AXP Financial Center
Minneapolis, MN 55474
Cynthia M. Carlson Vice President - American Express
200 AXP Financial Center Securities Services
Minneapolis, MN 55474
<PAGE>
Mark W. Carter Senior Vice President and Chief
200 AXP Financial Center Marketing Officer
Minneapolis, MN 55474
James E. Choat Senior Vice President - Third
200 AXP Financial Center Party Distribution
Minneapolis, MN 55474
<PAGE>
Kenneth J. Ciak Vice President and General
IDS Property Casualty Manager - IDS Property Casualty
1400 Lombardi Avenue
Green Bay, WI 54304
Paul A. Connolly Vice President - Advisor
200 AXP Financial Center Staffing, Training and Support
Minneapolis, MN 55474
Henry J. Cormier Group Vice President - Connecticut
Commerce Center One
333 East River Drive
East Hartford, CT 06108
John M. Crawford Group Vice President -
Suite 200 Arkansas/Springfield/Memphis
10800 Financial Ctr Pkwy
Little Rock, AR 72211
Kevin F. Crowe Group Vice President -
Suite 312 Carolinas/Eastern Georgia
7300 Carmel Executive Pk
Charlotte, NC 28226
Colleen Curran Vice President and Assistant
200 AXP Financial Center General Counsel
Minneapolis, MN 55474
Luz Maria Davis Vice President - Communications
200 AXP Financial Center
Minneapolis, MN 55474
Arthur E. DeLorenzo Group Vice President - Upstate
4 Atrium Drive, #100 New York
Albany, NY 12205
Scott M. DiGiammarino Group Vice President -
Suite 500 Washington/Baltimore
8045 Leesburg Pike
Vienna, VA 22182
Bradford L. Drew Group Vice President - Eastern
Two Datran Center Florida
Penthouse One B
9130 S. Dadeland Blvd.
Miami, FL 33156
Douglas K. Dunning Vice President - Assured Assets
200 AXP Financial Center Product Development and Management
Minneapolis, MN 55474
<PAGE>
James P. Egge Group Vice President - Western
4305 South Louise, Suite 202 Iowa, Nebraska, Dakotas
Sioux Falls, SD 57103
Gordon L. Eid Senior Vice President, General
200 AXP Financial Center Counsel and Chief Compliance
Minneapolis, MN 55474 Officer
<PAGE>
Robert M. Elconin Vice President - Government
200 AXP Financial Center Relations
Minneapolis, MN 55474
Phillip W. Evans, Group Vice President - Rocky
Suite 600 Mountain
6985 Union Park Center
Midvale, UT 84047-4177
Gordon M. Fines Vice President - Mutual Fund
200 AXP Financial Center Equity Investments
Minneapolis, MN 55474
Douglas L. Forsberg Vice President - International
200 AXP Financial Center
Minneapolis, MN 55474
Jeffrey P. Fox Vice President and Corporate
200 AXP Financial Center Controller
Minneapolis, MN 55474
William P. Fritz Group Vice President - Gateway
Suite 160
12855 Flushing Meadows Dr.
St. Louis, MO 63131
Carl W. Gans Group Vice President - Twin City
8500 Tower Suite 1770 Metro
8500 Normandale Lake Blvd.
Bloomington, MN 55437
Peter A. Gallus Vice President-Investment
200 AXP Financial Center Administration
Minneapolis, MN 55474
Derek G. Gledhill Vice President - Integrated
200 AXP Financial Center Financial Services Field
Minneapolis, MN 55474 Implementation
David A. Hammer Vice President and Marketing
200 AXP Financial Center Controller
Minneapolis, MN 55474
Teresa A. Hanratty Senior Vice President-Field
Suites 6&7 Management
169 South River Road
Bedford, NH 03110
Robert L. Harden Group Vice President - Boston
Two Constitution Plaza Metro
Boston, MA 02129
Lorraine R. Hart Vice President - Insurance
200 AXP Financial Center Investments
Minneapolis, MN 55474
<PAGE>
Scott A. Hawkinson Vice President and Controller -
200 AXP Financial Center Private Client Group
Minneapolis, MN 55474
Brian M. Heath Senior Vice President and General
Suite 150 Sales Manager
801 E. Campbell Road
Richardson, TX 75081
Janis K. Heaney Vice President - Incentive
200 AXP Financial Center Management
Minneapolis, MN 55474
Jon E. Hjelm Group Vice President - Rhode
310 Southbridge Street Island/Central - Western
Auburn, MA 01501 Massachusetts
David J. Hockenberry Group Vice President - Tennessee
30 Burton Hills Blvd. Valley
Suite 175
Nashville, TN 37215
Jeffrey S. Horton Vice President and Treasurer
200 AXP Financial Center
Minneapolis, MN 55474
David R. Hubers Chairman, President and Chief
200 AXP Financial Center Executive Officer
Minneapolis, MN 55474
Debra A. Hutchinson Vice President - Relationship
200 AXP Financial Center Leader
Minneapolis, MN 55474
James M. Jensen Vice President and
200 AXP Financial Center Controller-Advice and Retail
Minneapolis, MN 55474 Distribution Group
Marietta L. Johns Senior Vice President - Field
200 AXP Financial Center Management
Minneapolis, MN 55474
Nancy E. Jones Vice President - Business
200 AXP Financial Center Development
Minneapolis, MN 55474
Ora J. Kaine Vice President - Financial
200 AXP Financial Center Advisory Services
Minneapolis, MN 55474
Linda B. Keene Vice President - Market
200 AXP Financial Center Development
Minneapolis, MN 55474
G. Michael Kennedy Vice President - Senior Portfolio
200 AXP Financial Center Manager
Minneapolis, MN 55474
<PAGE>
Richard W. Kling Senior Vice President - Products
200 AXP Financial Center
Minneapolis, MN 55474
John M. Knight Vice President - Investment
200 AXP Financial Center Accounting
Minneapolis, MN 55474
Paul F. Kolkman Vice President - Actuarial Finance
200 AXP Financial Center
Minneapolis, MN 55474
Claire Kolmodin Vice President - Service Quality
200 AXP Financial Center
Minneapolis, MN 55474
David S. Kreager Group Vice President - Greater
Suite 108 Michigan
Trestle Bridge V
5126 Lovers Lane
Kalamazoo, MI 49002
Steven C. Kumagai Director and Senior Vice
200 AXP Financial Center President-Direct and Interactive
Minneapolis, MN 55474 Group
Mitre Kutanovski Group Vice President - Chicago
Suite 680 Metro
8585 Broadway
Merrillville, IN 48410
Kurt A. Larson Vice President - Senior Portfolio
200 AXP Financial Center Manager
Minneapolis, MN 55474
Lori J. Larson Vice President - Brokerage and
200 AXP Financial Center Direct Services
Minneapolis, MN 55474
Daniel E. Laufenberg Vice President and Chief U.S.
200 AXP Financial Center Economist
Minneapolis, MN 55474
Jane W. Lee Vice President - New Business
200 AXP Financial Center Development and Marketing
Minneapolis, MN 55474
Peter A. Lefferts Senior Vice President - Corporate
200 AXP Financial Center Strategy and Development
Minneapolis, MN 55474
Douglas A. Lennick Director and Executive Vice
200 AXP Financial Center President - Private Client Group
Minneapolis, MN 55474
Fred A. Mandell Vice President - Field Marketing
200 AXP Financial Center Readiness
Minneapolis, MN 55474
<PAGE>
Daniel E. Martin Group Vice President - Pittsburgh
Suite 650 Metro
5700 Corporate Drive
Pittsburgh, PA 15237
Timothy J. Masek Vice President and Director of
200 AXP Financial Center Global Research
Minneapolis, MN 55474
Sarah A. Mealey Vice President - Mutual Funds
200 AXP Financial Center
Minneapolis, MN 55474
Paula R. Meyer Vice President - Assured Assets
200 AXP Financial Center
Minneapolis, MN 55474
William P. Miller Vice President and Senior
200 AXP Financial Center Portfolio Manager
Minneapolis, MN 55474
Shashank B. Modak Vice President - Technology Leader
200 AXP Financial Center
Minneapolis, MN 55474
Pamela J. Moret Vice President - Variable Assets
200 AXP Financial Center
Minneapolis, MN 55474
Barry J. Murphy Senior Vice President - Client
200 AXP Financial Center Service
Minneapolis, MN 55474
Mary Owens Neal Vice President-Consumer Marketing
200 AXP Financial Center
Minneapolis, MN 55474
Thomas V. Nicolosi Group Vice President - New York
Suite 220 Metro Area
500 Mamaroneck Avenue
Harrison, NY 10528
Michael J. O'Keefe Vice President - Advisory
200 AXP Financial Center Business Systems
Minneapolis, MN 55474
James R. Palmer Vice President - Taxes
200 AXP Financial Center
Minneapolis, MN 55474
Marc A. Parker Group Vice President -
10200 SW Greenburg Road Portland/Eugene
Suite 110
Portland, OR 97223
Carla P. Pavone Vice President-Compensation
200 AXP Financial Center Services and ARD Product
Minneapolis, MN 55474 Distribution
<PAGE>
Thomas P. Perrine Senior Vice President - Group
200 AXP Financial Center Relationship Leader/American
Minneapolis, MN 55474 Express Technologies Financial
Services
Susan B. Plimpton Vice President - Marketing
200 AXP Financial Center Services
Minneapolis, MN 55474
Larry M. Post Group Vice President -
One Tower Bridge Philadelphia Metro and Northern
100 Front Street, 8th Fl New England
West Conshohocken, PA 19428
Ronald W. Powell Vice President and Assistant
200 AXP Financial Center General Counsel
Minneapolis, MN 55474
Diana R. Prost Group Vice President -
3030 N.W. Expressway Kansas/Oklahoma
Suite 900
Oklahoma City, OK 73112
James M. Punch Vice President and Project
200 AXP Financial Center Manager - Platform I Value
Minneapolis, MN 55474 Enhanced
Frederick C. Quirsfeld Senior Vice President - Fixed
200 AXP Financial Center Income
Minneapolis, MN 55474
Rollyn C. Renstrom Vice President - Corporate
200 AXP Financial Center Planning and Analysis
Minneapolis, MN 55474
R. Daniel Richardson Group Vice President - Southern
Suite 800 Texas
Arboretum Plaza One
9442 Capital of Texas Hwy. N
Austin, TX 78759
ReBecca K. Roloff Senior Vice President - Field
200 AXP Financial Center Management and Financial Advisory
Minneapolis, MN 55474 Service
Stephen W. Roszell Senior Vice President -
200 AXP Financial Center Institutional
Minneapolis, MN 55474
Max G. Roth Group Vice President -
Suite 201 S. IDS Ctr Wisconsin/Upper Michigan
1400 Lombardi Avenue
Green Bay, WI 54304
Erven A. Samsel Senior Vice President - Field
45 Braintree Hill Park Management
Suite 402
Braintree, MA 02184
<PAGE>
Theresa M. Sapp Vice President - Relationship
200 AXP Financial Center Leader
Minneapolis, MN 55474
Russell L. Scalfano Group Vice President -
Suite 201 Illinois/Indiana/Kentucky
101 Plaza East Blvd.
Evansville, IN 47715
William G. Scholz Group Vice President -
Suite 205 Arizona/Las Vegas
7333 E. Doubletree Ranch Rd
Scottsdale, AZ 85258
Stuart A. Sedlacek Senior Vice President and Chief
200 AXP Financial Center Financial Officer
Minneapolis, MN 55474
Donald K. Shanks Vice President - Property Casualty
200 AXP Financial Center
Minneapolis, MN 55474
Judy P. Skoglund Vice President - Quality and
200 AXP Financial Center Service Support
Minneapolis, MN 55474
James B. Solberg Group Vice President - Eastern
466 Westdale Mall Iowa Area
Cedar Rapids, IA 52404
Bridget Sperl Vice President - Geographic
200 AXP Financial Center Service Teams
Minneapolis, MN 55474
Paul J. Stanislaw Group Vice President - Southern
Suite 1100 California
Two Park Plaza
Irvine, CA 92714
Lisa A. Steffes Vice President - Marketing Offer
200 AXP Financial Center Development
Minneapolis, MN 55474
Lois A. Stilwell Group Vice President - Outstate
Suite 433 Minnesota Area/North
9900 East Bren Road Dakota/Western Wisconsin
Minnetonka, MN 55343
William A. Stoltzmann Vice President and Assistant
200 AXP Financial Center General Counsel
Minneapolis, MN 55474
James J. Strauss Vice President and General Auditor
200 AXP Financial Center
Minneapolis, MN 55474
Jeffrey J. Stremcha Vice President - Information
200 AXP Financial Center Resource Management/ISD
Minneapolis, MN 55474
<PAGE>
Barbara Stroup Stewart Vice President - Channel
200 AXP Financial Center Development
Minneapolis, MN 55474
Craig P. Taucher Group Vice President -
Suite 150 Orlando/Jacksonville
4190 Belfort Road
Jacksonville, FL 32216
Neil G. Taylor Group Vice President -
Suite 425 Seattle/Tacoma/Hawaii
101 Elliott Avenue West
Seattle, WA 98119
John R. Thomas Senior Vice President
200 AXP Financial Center
Minneapolis, MN 55474
Keith N. Tufte Vice President and Director of
200 AXP Financial Center Equity Research
Minneapolis, MN 55474
Peter S. Velardi Group Vice President -
Suite 180 Atlanta/Birmingham
1200 Ashwood Parkway
Atlanta, GA 30338
Charles F. Wachendorfer Group Vice President - Detroit
Suite 100 Metro
Stanford Plaza II
7979 East Tufts Ave. Pkwy
Denver, CO 80237
Donald F. Weaver Group Vice President - Greater
3500 Market Street, Suite 200 Pennsylvania
Camp Hill, PA 17011
Norman Weaver Jr. Senior Vice President - Alliance
1010 Main St., Suite 2B Group
Huntington Beach, CA 92648
Michael L. Weiner Vice President - Tax Research and
200 AXP Financial Center Audit
Minneapolis, MN 55474
Jeffry M. Welter Vice President - Equity and Fixed
200 AXP Financial Center Income Trading
Minneapolis, MN 55474
Thomas L. White Group Vice President - Cleveland
Suite 200 Metro
28601 Chagrin Blvd.
Woodmere, OH 44122
Eric S. Williams Group Vice President - Virginia
Suite 250
3951 Westerre Parkway
Richmond, VA 23233
<PAGE>
William J. Williams Group Vice President - Western
Two North Tamiami Trail Florida
Suite 702
Sarasota, FL 34236
<PAGE>
Edwin M. Wistrand Vice President and Assistant
200 AXP Financial Center General Counsel
Minneapolis, MN 55474
Michael D. Wolf Vice President - Senior Portfolio
200 AXP Financial Center Manager
Minneapolis, MN 55474
Michael R. Woodward Senior Vice President - Field
32 Ellicott St. Management
Suite 100
Batavia, NY 14020
Rande L. Zellers Group Vice President-Gulf States
1 Galleria Blvd., Suite 1900
Metairie, LA 70001
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, has
duly caused this Registration Statement to be signed on its behalf in the City
of Minneapolis, and State of Minnesota, on the 7th day of July, 2000.
IDS LIFE OF NEW YORK VARIABLE ANNUITY ACCOUNT
(formerly IDS Life of New York Flexible Portfolio Annuity Account)
(Registrant)
By IDS Life Insurance Company of New York
(Sponsor)
By /s/ Timothy V. Bechtold*
Timothy V. Bechtold
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 7th day of
July, 2000.
/s/ Timothy V. Bechtold* /s/ Thomas R. McBurney*
Timothy V. Bechtold Thomas R. McBurney
Director and President Director
/s/ Maureen A. Buckley* /s/ Edward J. Muhl*
Maureen A. Buckley Edward J. Muhl
Director, Vice President, Chief Operating Officer, Director
Consumer Affairs Officer and Claims Officer
/s/ Rodney P. Burwell* /s/ Thomas V. Nicolosi*
Rodney P. Burwell Thomas V. Nicolosi
Director Director
/s/ John R. Cattau* /s/ Stephen P. Norman*
John R. Cattau Stephen P. Norman
Director Director
/s/ Robert R. Grew* /s/ Richard M. Starr*
Robert R. Grew Richard M. Starr
Director Director
/s/ Jeffrey S. Horton* /s/ Philip C. Wentzel*
Jeffrey S. Horton Philip C. Wentzel
Vice President and Treasurer Vice President and
Controller - Risk
Management
<PAGE>
/s/ Jean B. Keffeler* /s/ Michael R. Woodward*
Jean B. Keffeler Michael R. Woodward
Director Director
/s/ Richard W. Kling*
Richard W. Kling
Director and Chairman of the Board
*Signed pursuant to Power of Attorney dated April 14, 1999, filed electronically
as Exhibit 14 to Post-Effective Amendment No. 3 to Registration Statement No.
333-03867, is incorporated herein by reference.
By /s/Mary Ellyn Minenko
Mary Ellyn Minenko
Vice President and Group Counsel
<PAGE>
CONTENTS OF PRE-EFFECTIVE AMENDMENT NO. 1
This Pre-Effective Amendment No. 1 is comprised of the following papers and
documents:
The Cover Page.
Part A.
The prospectus.
Part B.
Statement of Additional Information.
Financial Statements
Part C.
Other Information.
The signatures.
Exhibits.
