Supplement Dated December 29, 2000*
to the Prospectus Dated October 3, 2000 of
American Express New Solutions Variable AnnuitySM (240355 A)
This supplement replaces the supplement dated May 1, 2000 that is printed in the
back of the American Express New Solutions Variable AnnuitySM prospectus.
The following subsection is added to the "Making the Most of Your Contract"
section of the prospectus following the subsection entitled "Automated
dollar-cost averaging."
Special dollar-cost averaging program
If your contract value** is at least $10,000, you may elect to allocate any new
purchase payments of at least $10,000 to a six-month or twelve-month account
under this program. You may not transfer money you previously invested in this
contract into the program.
We will credit your purchase payment (and any applicable purchase payment
credit) with interest at the current guaranteed annual rate in effect on the
date we receive your money. We credit a higher interest rate on program accounts
than on the one-year fixed account. We will change the rates for new purchase
payments from time to time at our discretion. We base these rates on competition
and the interest rate we credit on the one-year fixed account at the time of the
change. Once we set the interest rate for a payment, it does not change even if
your contract value changes.
We apply these rates to the balance remaining in the program accounts and we do
not credit interest after we transfer money to the accounts you selected. We
transfer money out of the program accounts into the accounts you selected on a
monthly basis. We transfer all money out of the program within the time period
(six or twelve months) you selected. If you fund this program with money from a
different existing annuity or life insurance contract (1035 exchange), we will
deposit money into the program account as it arrives. This means that some of
the money may be transferred out of the program in less than the time period you
selected (six or twelve months), and you may receive less total interest than if
we received all of the money at one time. If we receive the last of the money
from your 1035 exchange after the expiration of the six-month or twelve-month
period, you have the option of allocating this money to another program account
(if available) or any accounts you select.
If you have money in the program, you will not be able to allocate additional
purchase payments to the program unless another interest rate is in effect.
You may not participate in this program if you are making payments under a
Systematic Investment Plan. You may simultaneously participate in this program
and the automatic rebalancing program as long as your subaccount asset
allocation matches between the programs. If you elect to change your subaccount
asset allocation under one program, we will automatically change it to match
under the other program. If you have more than one account in this program, the
asset allocation for each account may be different as long as you are not also
participating in the automatic rebalancing program.
You may terminate participation in this program at any time. If you do so, you
will no longer receive the guaranteed annual interest rate on any remaining
balance in the program account. If you terminate the program, or we are unable
to accept new money into the program, we will allocate that money using the
accounts you selected for the program or in any other manner you specify.
We can modify the terms of this program or discontinue this program at any time.
Any modifications will not affect money already in the program.
** Contract value includes new purchase payments (or expected payments if you
fund the program from a 1035 exchange) and any applicable purchase payment
credit.
*240355-13 A (12/00)
Valid until April 30, 2001
