<PAGE>
AMERICAN GENERAL LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT E
GENERATIONS-Registered Trademark-
FLEXIBLE PAYMENT VARIABLE AND FIXED GROUP DEFERRED
ANNUITY CERTIFICATES
SUPPLEMENT DATED SEPTEMBER 25, 2000
TO
PROSPECTUS AND STATEMENT OF ADDITIONAL INFORMATION
DATED APRIL 30, 1999
AS SUPPLEMENTED AUGUST 1, 2000 AND AUGUST 10, 2000
On May 1, 2000, American General Securities Incorporated ("AGSI") replaced Van
Kampen Funds Inc. as the distributor of the Generations Certificates.
Effective September 25, 2000, the Morgan Stanley Real Estate Securities
Portfolio, a Series of the Van Kampen Life Investment Trust, was replaced by the
U.S. Real Estate Portfolio, a Series of The Universal Institutional Funds, Inc.,
as the underlying investment option for the Morgan Stanley Real Estate
Securities Division. On this date, all of the assets and liabilities of the
Morgan Stanley Real Estate Securities Portfolio were automatically allocated to
the U.S. Real Estate Portfolio. Additionally, the Morgan Stanley Real Estate
Securities Division was re-named the U.S. Real Estate Division.
The purpose of this Supplement is to provide you with the following information
regarding the U.S. Real Estate Portfolio.
THE SERIES' ANNUAL EXPENSES(1) (as a percentage of average net assets)
<TABLE>
<CAPTION>
Management Other Annual
Fees After Expenses Expenses
Expense After Expense After Expense
Reimbursement Reimbursement Reimbursement
------------- ------------- -------------
<S> <C> <C> <C>
U.S. Real Estate 0.00% 1.10% 1.10%
</TABLE>
--------------------
(1) Management fees and other expenses would have been the percentages shown in
the following table without certain voluntary expense reimbursements from
the investment adviser.
<TABLE>
<CAPTION>
Management Other Total Annual
Fees Expenses Expenses
---------- -------- ------------
<S> <C> <C> <C>
U.S. Real Estate 0.80% 1.10% 1.90%
</TABLE>
<PAGE>
EXAMPLE The following expenses would apply to a $1,000 investment at the end
of the applicable time period, if you surrender your Certificate (or if you
annuitize under circumstances where you owe a surrender charge)(2), and if
you assume a 5% annual return on assets:
<TABLE>
<CAPTION>
If all amounts are invested
in the following Series 1 year 3 years 5 years 10 years
----------------------- ------ ------- ------- --------
<S> <C> <C> <C> <C>
U.S. Real Estate $77 $123 $171 $290
</TABLE>
EXAMPLE The following expenses would apply to a $1,000 investment at the end
of the applicable time period, if you do NOT surrender your Certificate (or
if you annuitize under circumstances where a surrender charge is not
payable)(2), and if you assume a 5% annual return on assets:
<TABLE>
<CAPTION>
If all amounts are invested
in the following Series 1 year 3 years 5 years 10 years
----------------------- ------ ------- ------- --------
<S> <C> <C> <C> <C>
U.S. Real Estate $26 $80 $137 $290
</TABLE>
(2) See "Surrender Charge" for a description of the circumstances when you may
be required to pay the Surrender Charge upon annuitization.
SELECTED ACCUMULATION UNIT DATA
The following table shows the Accumulation Unit value for the U.S. Real Estate
Division.
<TABLE>
<CAPTION>
Accumulation Accumulation Accumulation
Unit Values Unit Values Unit Values
(Beginning of at at
Division Period)(1) 12/31/98 12/31/99
------------- ------------- ------------ ------------
<S> <C> <C> <C>
U.S. Real Estate(2) $8.779844 $7.783358 $7.416917
<CAPTION>
Accumulation Accumulation
Units Units
Outstanding Outstanding
Division at 12/31/98 at 12/31/99
------------- ------------ ------------
U.S. Real Estate(2) 569.486 1,713.877
</TABLE>
(1) The date when the U.S. Real Estate Division commenced operations is May 5,
1998.
(2) Effective September 25, 2000, the Morgan Stanley Real Estate Securities
Portfolio (previously offered under the Certificate) merged into the U.S. Real
Estate Portfolio. Accordingly, the Morgan Stanley Real Estate Securities
Division was renamed the U.S. Real Estate Division. The Selected Accumulation
Unit Data (Unaudited) for the Division through December 31, 1999, reflects units
of the Morgan Stanley Real Estate Securities Division.
