<PAGE>
PAGE 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Post-Effective Amendment No. 2 (File No. 33-47302) X
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 4 (File No. 811-3217) X
IDS LIFE ACCOUNT F
IDS LIFE ACCOUNT IZ
IDS LIFE ACCOUNT JZ
IDS LIFE ACCOUNT G
IDS LIFE ACCOUNT H
IDS LIFE ACCOUNT N
(Exact Name of Registrant)
IDS Life Insurance Company
(Name of Depositor)
IDS Tower 10, Minneapolis, MN 55440-0010
(Address of Depositor's Principal Executive Offices) (Zip Code)
Depositor's Telephone Number, including Area Code (612) 671-3678
Mary Ellyn Minenko, IDS Tower 10, Minneapolis, MN 55440-0010
(Name and Address of Agent for Service)
It is proposed that this filing will become effective:
immediately upon filing pursuant to paragraph (b) of Rule 486
X on April 29, 1994, pursuant to paragraph (b) of Rule 486
60 days after filing pursuant to paragraph (a) of Rule 486
on (date) pursuant to paragraph (a) of Rule 486
The Registrant has registered an indefinite number or amount of
securities under the Securities Act of 1933 pursuant to section 24f
of the Investment Company Act of 1940. Registrant's Rule 24f-2
Notice for its most recent fiscal year was filed on or about
Feb. 25, 1994.
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PAGE 2
<TABLE>
<CAPTION>
CROSS REFERENCE SHEET
Cross reference sheet showing location in the prospectus of the information called
for by the items enumerated in Part A and B of Form N-4.
Negative answers omitted from prospectus are so indicated.
PART A PART B
Page Number in
Page Number Statement of
Item No. in Prospectus Item No. Additional Information
<C> <C> <C> <C>
1 3 15 62
2 6-7 16 63
3(a) 10-11 17(a) NA
(b) 7-10 (b) NA
(c) 15*
4(a) 11-12
(b) 13-14 18(a) NA
(c) 13 (b) NA
(c) 67
5(a) 3,15 (d) NA
(b) 16-17 (e) NA
(c) 17-18 (f) 67
(d) 3,18
(e) 29-30 19(a) 67
(f) NA (b) 23-25*
6(a) 25-28 20(a) 67
(b) 26-27 (b) 67
(c) 27 (c) 67
(d) NA (d) NA
(e) 18
(f) NA 21(a) 64-66
(b) 64-66
7(a) 18-19
(b) 16-17,20-21,23,29 22 NA
(c) 17-18
(d) 3 23(a) 69-76
(b) 44-60*
8(a) 28
(b) NA
(c) 28-29
(d) 28-29
(e) 29
(f) NA
9(a) NA
(b) NA
10(a) 18-19,19-20
(b) 19-20
(c) 18-19,19-20
(d) NA
11(a) 21-25
(b) NA
(c) 22
(d) 25
(e) NA
12(a) 31-33
(b) 3
(c) NA
13 NA
14 61
*Designates page number in the prospectus, which is hereby incorporated by reference
in this Statement of Additional Information.
</TABLE>
<PAGE>
PAGE 3
IDS Life Group Variable Annuity Contract
Prospectus/April 29, 1994
This prospectus describes a group, unallocated deferred annuity
contract (the Contract) offered by IDS Life Insurance Company (the
Company). This Contract is designed to fund employer group
retirement plans (the Plans) that qualify as retirement programs
under Sections 401 (including 401(k)) and 457 of the Internal
Revenue Code of 1986, as amended (the Code). The Contracts provide
for the accumulation of values on a fixed and/or variable basis.
Retirement payments are made on a fixed basis.
IDS Life Accounts F, IZ, JZ, G, H and N Group, Unallocated
Fixed/Variable Annuity Contracts for Qualified Retirement Plans
Sold by: IDS Life Insurance Company IDS Tower 10 Minneapolis, MN
55440-0010 Telephone: (612) 671-3131
THIS PROSPECTUS SETS FORTH THE INFORMATION ABOUT IDS LIFE ACCOUNTS
F, IZ, JZ, G, H AND N THAT YOU SHOULD KNOW BEFORE INVESTING. THIS
PROSPECTUS IS ACCOMPANIED OR PRECEDED BY THE PROSPECTUS OF IDS LIFE
CAPITAL RESOURCE FUND, IDS LIFE INTERNATIONAL EQUITY FUND, IDS LIFE
AGGRESSIVE GROWTH FUND, IDS LIFE SPECIAL INCOME FUND, INC., IDS
LIFE MONEYSHARE FUND, INC. AND IDS LIFE MANAGED FUND, INC. ALL
PROSPECTUSES SHOULD BE RETAINED FOR FUTURE REFERENCE.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION, OR ANY STATE SECURITIES
COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
IDS LIFE INSURANCE COMPANY IS NOT A BANK AND THE SECURITIES IT
OFFERS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY ANY BANK, NOR ARE THEY INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER
AGENCY.
A Statement of Additional Information dated April 29, 1994 has been
filed with the Securities and Exchange Commission (SEC) and is
available without charge by contacting the Company at the telephone
number or address shown above.
The Table of Contents of the Statement of Additional Information
appears on page 51 of this prospectus.
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PAGE 4
Table of Contents
Definitions......................................................3
Summary of Contents..............................................4
Expense Summary..................................................7
Condensed Financial Information..................................8
Financial Statements.............................................9
Performance Information..........................................10
Yield............................................................10
Total Return.....................................................10
About the Contract...............................................11
Purpose of the Contract..........................................11
Who Issues the Contract..........................................11
About the Accounts and Funds.....................................11
The Fixed Account................................................11
The Variable Accounts............................................12
Investment Objectives of the Funds...............................13
Using the Contract...............................................14
Buying the Contract..............................................14
Allocation of Purchase Payments..................................14
Contract Value...................................................14
Transfers of Contract Values.....................................15
Cash Withdrawals, Loans and Conversions..........................16
Contract Transfer, Termination and Market Value
Adjustment.......................................................17
Contract Charges - Charges Against the Accounts..................19
Annuity Settlement Provisions....................................20
Other Contractual Provisions.....................................21
Nontransferability...............................................21
Voting of Fund Shares............................................22
Periodic Reports.................................................22
Substitution.....................................................22
Modification.....................................................22
Prohibited Investments...........................................23
Proof of Condition or Event......................................23
Distribution of Contracts........................................23
Federal Tax Status...............................................23
Introduction.....................................................23
Tax Treatment of the Company and the Variable Account............24
Taxation of Annuities in General.................................24
Recordkeeper.....................................................25
Additional Information about the Company.........................25
Selected Financial Data..........................................25
Management's Discussion and Analysis of Consolidated Financial
Condition and Results of Operations..............................25
Reinsurance......................................................29
Reserves.........................................................29
Investments......................................................29
Competition......................................................29
Employees........................................................29
Properties.......................................................30
State Regulation.................................................30
Directors and Executive Officers.................................30
Executive Compensation...........................................31
Security Ownership of Management.................................32
Legal Proceedings and Opinion....................................32
<PAGE>
PAGE 5
Experts..........................................................32
Appendix.........................................................33
IDS Life Financial Information...................................34
Table of Contents of the Statement of Additional
Information......................................................49
<PAGE>
PAGE 6
Definitions
Accounts (Variable Accounts) - IDS Life Account F, IDS Life Account
IZ, IDS Life Account JZ, IDS Life Account G, IDS Life Account H and
IDS Life Account N. These are the Variable Accounts from which the
Owner may choose. Each Account invests in shares of a separate
Mutual Fund. IDS Life Account F invests in shares of IDS Life
Capital Resource Fund, IDS Life Account IZ invests in shares of IDS
Life International Equity Fund, IDS Life Account JZ invests in
shares of IDS Life Aggressive Growth Fund, IDS Life Account G
invests in shares of IDS Life Special Income Fund, Inc., IDS Life
Account H invests in shares of IDS Life Moneyshare Fund, Inc. and
IDS Life Account N invests in shares of IDS Life Managed Fund, Inc.
Accumulation Unit - A unit of measure used in the calculation of
the value of the Variable Accounts.
Contract Anniversary - An anniversary of the effective date of this
Contract.
Contract Value - The total value of the Contract before any
applicable withdrawal charge, market value adjustment and contract
administrative charge or other applicable charge have been
deducted.
Contract Year - Any period of one year commencing with the
effective date of this Contract or with any contract anniversary.
Fixed Account - An additional account the Owner may choose to
allocate purchase payments and contract values. It provides
guaranteed values and periodically adjusted interest rates.
Mutual Funds (Funds) - IDS Life Capital Resource Fund (Capital
Resource Fund),IDS Life International Equity Fund (International
Equity Fund), IDS Life Aggressive Growth Fund (Aggressive Growth
Fund), IDS Life Special Income Fund, Inc. (Special Income Fund),
IDS Life Moneyshare Fund, Inc. (Moneyshare Fund) and IDS Life
Managed Fund, Inc. (Managed Fund). These Funds are referred to as
the IDS Life Retirement Annuity Mutual Funds. The Owner may choose
to invest purchase payments into a Variable Account investing in
shares of one of these Funds.
Owner - The plan sponsor or trustee of the Plan.
Participant - An eligible employee or other person who is entitled
to benefits under the Plan.
Plan - The retirement Plan under which the Contract is issued and
which meets the requirements of Code Sections 401 (including
401(k)) or 457.
Purchase Payment (Payment) - An amount paid to the Company as
consideration for the benefits provided by the Contract.
Valuation Date - Each day the New York Stock Exchange is open for
trading.
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PAGE 7
Valuation Period - The interval of time commencing at the close of
business on each valuation date and ending at the close of business
on the next valuation date. Close of business is normally 3 p.m.
(Central time).
Withdrawal Charge - A deferred sales charge that may be applied if
the Owner takes a total or partial withdrawal or the Contract is
transferred or terminated.
Summary of Contents
About the Contract
Purpose of the Contract - The Contract is available for Plans that
meet the requirements of Code Sections 401 (including 401(k)) and
457. The Contract allows the Owner to elect to have Contract
Values accumulate in all of six Variable Accounts, as well as the
Fixed Account. Retirement payments will be made on a fixed basis
(page 11).
Who Issues the Contract - IDS Life Insurance Company, a subsidiary
of IDS Financial Corporation (IDS), issues the Contract (page 11).
About the Accounts and Funds
The Fixed Account and the Variable Accounts - There are six
separate Variable Accounts available for investment and a Fixed
Account. The six Variable Accounts are registered together as a
single unit investment trust under the Investment Company Act of
1940 (1940 Act) (page 11).
Investment Objectives of the Funds - Each Fund has a different
investment objective. Capital Resource Fund invests primarily in
common stocks and securities convertible into common stocks.
International Equity Fund invests primarily in equity securities of
foreign issuers. Aggressive Growth Fund invests primarily in
common stocks of small- and medium-size companies. Special Income
Fund invests primarily in bonds of the four highest ratings or the
equivalent. Moneyshare Fund invests in money market securities.
Managed Fund invests in common and preferred stock, securities
convertible into common stock, bonds and money-market instruments
(page 13).
Using the Contract
Buying the Contract - The Owner may obtain an application for the
Contract from an IDS financial planner. Applications are subject
to acceptance at the Company's office in Minneapolis (page 14).
Purchase payments are to be paid to the Company at its Minneapolis
office. Generally, payments may be made annually, semiannually,
quarterly or monthly or on any other frequency acceptable to the
Company (page 14).
Allocation of Purchase Payments - Upon receipt by the Company,
purchase payments will be allocated to the Account(s) the Owner
chooses (page 14).
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PAGE 8
Contract Value - The contract value at any time is the sum of the
Fixed Account contract value and the Variable Account contract
value. Purchase payments or contract values allocated to any
Variable Account will be credited in the form of accumulation
units. The variable accumulation unit value increases or decreases
with the performance of the underlying Mutual Fund (page 14).
Transfers of Contract Values - While this Contract is in force, the
Owner can give the Company instructions to redistribute investments
among the six Variable Accounts and, subject to certain
restrictions, between the Variable Accounts and the Fixed Account
(page 15).
Cash Withdrawals, Loans and Conversions - While this Contract is in
force, the Owner may request a total or partial withdrawal of the
contract value. Withdrawals may be subject to withdrawal charges
and income taxes and may be subject to federal tax penalties.
Total withdrawals may be subject to a market value adjustment.
Payment usually will be mailed within seven days of the receipt of
a request for a withdrawal (page 16).
The Owner also may request a withdrawal for the purpose of funding
loans for participants in accordance with the terms of the Plan. A
withdrawal for the purpose of funding a loan will not be subject to
withdrawal charges. However, the Company reserves the right to
deduct such withdrawal charges from the remaining contract value to
the extent of any unpaid loans at the time of a total withdrawal of
contract value or at Contract transfer or termination (page 16).
If a participant terminates employment, the Owner may direct the
Company to withdraw a part of the contract value so that the
participant can purchase an individual deferred annuity contract
then offered by the Company. No withdrawal charges will apply at
the time of such withdrawal for conversion (page 16).
Contract Transfer, Termination and Market Value Adjustment - The
Owner may direct the Company to withdraw the total contract value
and transfer that value to another funding agent (page 17).
Under certain circumstances, the Company may terminate the Contract
(page 18).
If the value of the Fixed Account is canceled due to total
withdrawal, Contract transfer or Contract termination, a market
value adjustment may be imposed in addition to applicable Contract
charges. The amount of the market value adjustment approximates
the gain or loss resulting from sale by the Company of assets
purchased by the purchase payments (page 19).
Contract Charges - The Company charges a fee for establishing and
maintaining its records and for normal administrative expenses and
services for this Contract. The annual charge is $500 deducted
from the contract value on a quarterly basis ($125 per quarter)
each contract year or, if earlier, when the contract value is
totally withdrawn or the Contract is transferred or terminated.
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PAGE 9
The Company reserves the right to increase this contract
administrative charge in the future, but guarantees that it will
never exceed $1,000 per year ($250 per quarter) (page 19).
The Company also deducts a mortality and expense risk charge at an
annual rate of 1 percent of the average daily net assets of the
Variable Accounts (page 19). Subject to certain exceptions, a
withdrawal charge applies to amounts withdrawn from the Contract
prior to the eighth contract year. The withdrawal charge starts at
6 percent of the amount withdrawn in the first two contract years
and reduces by 1 percent per year thereafter so that there is no
withdrawal charge in the eighth and later contract years (page 19).
The Company may be able to reduce or eliminate certain contract
charges for some purchases (page 20).
Certain state and local governments may impose premium taxes (page
20).
Annuity Settlement Provisions - The Owner may select one of five
annuity payout options under the Contract and direct the Company to
begin retirement payments to a payee under the option. The payment
schedule under the option selected must meet the requirements of
the Plan. The benefits under an option will be provided on a fixed
basis (page 20).
Other Contractual Provisions
Nontransferability - In general, no benefit or privilege under this
Contract may be assigned (page 21).
Voting of Fund Shares - The Company will vote fund shares held by
the Variable Accounts at meetings of shareholders of the funds in
accordance with instructions received from persons having the right
to give voting instructions (page 22).
Periodic Reports - The Company will send the Owner quarterly
reports (page 22).
Substitution - Under certain circumstances, the Company may
substitute shares of another registered open-end management
investment company both for fund shares already purchased by the
Variable Accounts and for purchases to be made in the future (page
22).
Modification - Upon notice to the Owner, the Company may modify the
Contract under certain circumstances (page 22).
Prohibited Investments - The Owner will not offer under the Plan as
a funding vehicle to which future contributions may be made: (1)
guaranteed investment contracts; (2) bank investment contracts; (3)
annuity contracts; or (4) funding vehicles providing a guarantee of
principal (page 23).
Proof of Condition or Event - Under certain circumstances, the
Company may require proof that a certain condition has been met
prior to making payment (page 23).
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PAGE 10
Distribution of Contracts
The Company is the principal underwriter for the Contracts (page
23).
Federal Tax Status
Tax Treatment of the Company and the Variable Accounts - The
Company is taxed as a life insurance company under the Code. The
income and capital gains of the Variable Accounts, to the extent
applied to increase reserves under the Contract, are not taxable to
the Company (page 24).
Taxation of Annuities in General - According to current
interpretations of federal income tax law, generally there is no
federal income tax to Participants on contributions made by the
Owner to the Contract or on any increases in the Contract's value
until distributions are made. Under certain circumstances, there
also may be a 10 percent IRS penalty tax and 20 percent income tax
withholding imposed on distributions. The rights of any person to
benefits under the Plans will be subject to the terms of the Plans
themselves (page 24).
Recordkeeper
Any person or entity authorized by the Owner to administer
recordkeeping services for the Plan and Participants must be
approved by the Company (page 25).
Expense Summary
The purpose of the following table is to help Owners and
prospective purchasers understand the costs and expenses that are
borne, directly and indirectly, by Owners. The table reflects
expenses of the Variable Accounts and the underlying Mutual Funds.
The information set forth should be considered together with the
narrative provided under the heading "Contract Charges - Charges
Against the Accounts" in this prospectus, and with the prospectus
for the Funds. For more information about withdrawal charges, see
page 20.
Withdrawal Charge
(as a percentage of amounts withdrawn)
_________________________________________________________________
Amount Withdrawn
in Contract Year Withdrawal Charge
_________________________________________________________________
1 6%
2 6
3 5
4 4
5 3
6 2
7 1
8 and later 0
_________________________________________________________________
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PAGE 11
Annual Contract
Administrative Charge $500
Total Separate Account Annual Expenses*
(as a percentage of
average daily net assets)
Mortality and Expense Risk Charge 1%
Annual Operating Expenses of Underlying Mutual Funds
<TABLE>
<CAPTION>
_____________________________________________________________________________________________________________________________
(as a percentage of Capital International Aggressive Special
average daily net assets) Resource Equity Growth Income Moneyshare Managed
<S> <C> <C> <C> <C> <C> <C>
Management Fees.............. .65% .89% .65% .65% .55% .65%
Other Expenses............... .04 .14 .07 .04 .04 .04
Total Operating Expenses of
Underlying Mutual Funds**.... .69% 1.03% .72% .69% .59% .69%
</TABLE>
<TABLE>
<CAPTION>
Example**
You would pay the following expenses on a $1,000 investment, assuming (1) 5-percent annual return and (2) surrender at the end of
each time period:
<S> <C> <C> <C> <C> <C> <C>
1 year........... $ 84.47 $ 87.74 $ 84.76 $ 84.47 $ 83.50 $ 84.47
3 years.......... 124.57 134.49 125.45 124.57 121.65 124.57
5 years.......... 154.86 171.72 156.36 154.86 149.36 154.86
10 years......... 258.41 293.11 261.52 258.41 247.97 258.41
You would pay the following expenses on the same investment assuming no surrender:
1 year........... $ 22.84 $ 26.32 $ 23.14 $ 22.84 $ 21.81 $ 22.84
3 years.......... 70.39 80.55 71.31 70.39 67.30 70.39
5 years.......... 120.56 137.99 122.11 120.56 115.38 120.56
10 years......... 258.41 293.11 261.52 258.41 247.97 258.41
_____________________________________________________________________________________________________________________________
This example should not be considered a representation of past or future expenses. Actual expenses may be more or less than those
shown.
*Premium taxes imposed by some state and local governments may be applicable. They are not reflected in this table.
**Annualized operating expenses of underlying Mutual Funds at Dec. 31, 1993.
***In this example, the $500 Annual Contract Administrative Charge is approximated as a .538 percent charge based on IDS Life's
average contract size.
</TABLE>
Condensed Financial Information (Unaudited)
The tables below give per-unit information about the financial
history of each Account.
<TABLE>
<CAPTION>
Years Ended Dec. 31,
1993 1992 1991 1990 1989 1988 1987 1986 1985 1984
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Account F (Investing in shares of Capital Resource Fund)
Accumulation unit value at
beginning of period .......... $4.82 $4.67 $3.22 $3.23 $2.57 $2.31 $2.07 $1.92 $1.52 $1.61
Accumulation unit value at
end of period ................ $4.93 $4.82 $4.67 $3.22 $3.23 $2.57 $2.31 $2.07 $1.92 $1.52
Number of accumulation units
outstanding at end of period
(000 omitted) ................ 488,632 402,977 309,984 242,767 204,645 186,639 180,907 148,626 112,2981 73,572
Ratio of operating expense to
average net assets ........... 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00%
Account IZ2 (Investing in shares of International Equity Fund)
Accumulation unit value at
beginning of period .......... $0.98 $1.00 - - - - - - - -
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PAGE 12
Accumulation unit value at
end of period ................ $1.29 $0.98 - - - - - - - -
Number of accumulation units
outstanding at end of period
(000 omitted) ................ 405,536 69,874 - - - - - - - -
Ratio of operating expense to
average net assets ........... 1.00% 1.00% - - - - - - - -
Account JZ3 (Investing in shares of Aggressive Growth Fund)
Accumulation unit value at
beginning of period .......... $1.08 $1.00 - - - - - - - -
Accumulation unit value at
end of period ................ $1.21 $1.08 - - - - - - - -
Number of accumulation units
outstanding at end of period
(000 omitted) ................ 347,336 115,574 - - - - - - - -
Ratio of operating expense to
average net assets ........... 1.00% 1.00% - - - - - - - -
Account G (Investing in shares of Special Income Fund)
Accumulation unit value at
beginning of period .......... $3.48 $3.21 $2.76 $2.67 $2.48 $2.27 $2.27 $1.93 $1.59 $1.42
Accumulation unit value at
end of period ................ $3.99 $3.48 $3.21 $2.76 $2.67 $2.48 $2.27 $2.27 $1.93 $1.59
Number of accumulation units
outstanding at end of period
(000 omitted) ................ 405,429 330,000 270,858 236,926 222,248 175,878 170,241 156,811 93,0544 49,052
________________________________________________________________________________________________________________________
Ratio of operating expense to
average net assets ........... 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00%
1Account F includes 17,665,211 accumulation units issued in the merger of Account C into Account F on Dec. 13, 1985.
2Account IZ commenced operations on Jan. 13, 1992.
3Account JZ commenced operations on Jan. 13, 1992.
4Account G includes 23,659,421 accumulation units issued in the merger of Account D into Account G on Dec. 13, 1985.
</TABLE>
<TABLE>
<CAPTION>
Years Ended Dec. 31,
1993 1992 1991 1990 1989 1988 1987 1986 1985 1984
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Account H (Investing in shares of Moneyshare Fund)
Accumulation unit value at
beginning of period .......... $2.09 $2.04 $1.95 $1.82 $1.69 $1.59 $1.51 $1.43 $1.34 $1.22
Accumulation unit value at
end of period ................ $2.12 $2.09 $2.04 $1.95 $1.82 $1.69 $1.59 $1.51 $1.43 $1.34
Number of accumulation units
outstanding at end of period
(000 omitted) ................ 74,935 102,277 126,489 139,005 108,690 63,005 51,578 38,126 42,7475 29,247
________________________________________________________________________________________________________________________
Ratio of operating expense to
average net assets ........... 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00%
Simple yield6 ................ 1.48% 1.60% 3.26% 6.25% 6.81% 7.30% 5.72% 4.14% 6.39% 7.51%
________________________________________________________________________________________________________________________
Compound yield6 .............. 1.49% 1.62% 3.31% 6.44% 7.04% 7.57% 5.88% 4.22% 6.59% 7.79%
________________________________________________________________________________________________________________________
Account N7 (Investing in shares of Managed Fund)
Accumulation unit value at
beginning of period .......... $1.98 $1.86 $1.45 $1.42 $1.14 $1.06 $1.01 $1.00 - -
Accumulation unit value at
end of period ................ $2.21 $1.98 $1.86 $1.45 $1.42 $1.14 $1.06 $1.01 - -
Number of accumulation units
outstanding at end of period
(000 omitted) ................ 910,254 650,797 496,554 400,961 331,315 325,918 321,395 101,678 - -
Ratio of operating expense to
average net assets ........... 1.00% 1.00% 1.00 1.00% 1.00% 1.00% 1.00% 1.00% - -
5Account H includes 17,002,551 accumulation units issued in the merger of Account E into Account H on Dec. 13, 1985.
6Net of annual contract administrative charge and mortality and expense risk charge.
7Account N commenced operations on April 30, 1986.
</TABLE>
<PAGE>
PAGE 13
Financial Statements
The SAI dated April 29, 1994, contains complete audited financial
statements of the variable accounts including statements of net
assets as of Dec. 31, 1993; statements of operations for the year
ended Dec. 31, 1993; and statements of changes in net assets for
the years ended Dec. 31, 1993 and Dec. 31, 1992 (for Accounts IZ
and JZ, the period from Jan. 13, 1992 when they commenced
operations, to Dec. 31, 1992). The SAI also includes complete
audited financial statements for IDS Life including consolidated
balance sheets as of Dec. 31, 1993 and Dec. 31, 1992; and related
consolidated statements of income and cash flows for each of three
years in the period ended Dec. 31, 1993.
Complete financial statements for IDS Life Insurance Company are
presented in this prospectus beginning on page __. These financial
statements include: audited consolidated balance sheets as of Dec.
31, 1993 and 1992, and audited related consolidated statements of
income and cash flows for each of the three years in the period
ended Dec. 31, 1993.
Performance Information
Yield
Performance information for the Variable Accounts, including simple
yield, compound yield and average annual total return for IDS Life
Account H (investing in Moneyshare Fund), and yield and average
annual total return for the remaining Variable Accounts, may appear
from time to time in advertisements or sales literature.
For Account H, simple yield is based on income received by a
hypothetical investment (exclusive of capital change) over a given
seven-day period. This income then is "annualized" by assuming
that the seven-day yield would be received for 52 weeks and is
stated in terms of an annual percentage return on the investment.
The compound yield is calculated in a manner similar to that used
to calculate simple yield. However, when annualized, the income
earned by the investment is assumed to be reinvested. The compound
yield will be slightly higher than the simple yield due to the
compounding effect of this assumed reinvestment.
Yield quotations for the remaining Variable Accounts will be based
on all investment income per accumulation unit earned during a
given 30-day period, less expenses accrued during the period (net
investment income). Yield quotations are computed by dividing this
net investment income by the value of an accumulation unit on the
last day of the period.
Total Return
Average annual total return quotations will be expressed in terms
of the average annual compounded rate of return of a hypothetical
investment in a Contract over a period of one, five and 10 years
(or, if less, up to the life of the Variable Account). The total
return quotations will reflect the deduction of all applicable
<PAGE>
PAGE 14
charges including the contract administrative charge and the
mortality and expense risk charge. Total return quotations will be
made that reflect the deduction of the applicable withdrawal charge
(assuming a withdrawal at the end of the illustrated period).
Additional total return quotations may be made that do not reflect
a withdrawal charge deduction (assuming no withdrawal at the end of
the illustrated period).
A Variable Account also may use aggregate total return figures for
various periods, representing the cumulative change in value of an
investment in an Account for the specific period (again reflecting
changes in an Account's accumulation unit value and assuming
reinvestment of investment earnings). Aggregate total returns may
be shown by means of schedules, charts or graphs.
Performance information reflects only the performance of a
hypothetical investment in a Variable Account during the particular
time period on which the calculations are based. Performance
information should be considered in light of the investment
objectives and policies, characteristics and quality of the fund in
which the Account invests, and the market conditions during the
given time period and is not intended to indicate future
performance. Advertised yields and total return figures for the
Variable Accounts include all charges attributable to the Contract
which have the effect of decreasing the advertised performance of
an Account. For this reason, performance information for a
Variable Account should not be compared to that for mutual funds
that sell their shares directly to the public. See the Statement
of Additional Information for a description of the methods used to
determine yield and total return information for the Variable
Accounts.
About the Contract
Purpose of the Contract
The Contract is designed for use in connection with retirement
Plans which meet the requirements of Code Sections 401 (including
401(k)) and 457. Certain federal tax advantages are currently
available to these Plans. The Contract permits purchase payments
to be allocated to any one or more of six Variable Accounts or to
the Fixed Account. Each Variable Account invests only in shares of
a single Mutual Fund. Retirement benefits will be paid under a
fixed annuity.
A variable annuity differs from a fixed annuity in that the Owner
assumes the risk of gain or loss according to the performance of
the investment in the underlying mutual fund. The Owner should
read the prospectus carefully to decide if the Contract will meet
the needs of the Owner and the Plan. The Owner also must read the
prospectus for the IDS Life Retirement Annuity Mutual Funds to help
determine the most appropriate investments. These prospectuses
should be kept for future reference.
<PAGE>
PAGE 15
Who Issues the Contract
IDS Life Insurance Company issues the Contract. The Company is a
wholly owned subsidiary of IDS, which itself is a wholly owned
subsidiary of American Express Company (American Express).
American Express is a financial services company principally
engaged through subsidiaries (in addition to IDS) in travel related
services, investment services and international banking services.
The Company is a stock insurance company organized in 1957 under
the laws of the State of Minnesota. The Company's corporate office
is at IDS Tower 10, Minneapolis, MN 55440-0010. The Company
conducts a conventional life insurance business in the District of
Columbia and all states except New York.
About the Accounts and Funds
The Fixed Account
The Fixed Account is made up of all of the general assets of the
Company other than those allocated to any variable account.
Purchase payments will be allocated to the Fixed Account to the
extent elected by the Owner at the time the Contract is issued or
as subsequently changed. The Company will invest the assets of the
Fixed Account in those assets chosen by the Company and allowed by
applicable state laws regarding the nature and quality of
investments that may be made by life insurance companies and the
percentage of their assets that may be committed to any particular
type of investment. In general, these laws permit investments,
within specified limits and subject to certain qualifications, in
federal, state and municipal obligations, corporate bonds,
preferred and common stocks, real estate mortgages, real estate and
certain other investments.
The Company will credit interest to the Fixed Account contract
value. The interest rate credited to a purchase payment is
guaranteed for one year from the date the payment is allocated to
the Fixed Account. After that, the amount of interest credited
will be determined by the Company from time to time. However, the
Company guarantees that it will credit interest at a rate of not
less than a compounded yield of 4 percent per year to amounts
allocated to the Fixed Account under the Contract. The Owner
assumes the risk that interest credited to Fixed Account
allocations may not exceed the minimum guarantee of a compounded
yield of 4 percent for any given year.
In addition, a market value adjustment is imposed on the Fixed
Account if the Owner cancels the value of the Fixed Account due to
total withdrawal, Contract transfer or Contract termination. The
amount of the market value adjustment approximates the gain or loss
resulting from sale by the Company of assets purchased with
purchase payments. See "Market Value Adjustment." Interests in the
Contract relating to the Fixed Account are registered under the
Securities Act of 1933, but the Fixed Account is not subject to the
restrictions of the 1940 Act.
<PAGE>
PAGE 16
The Variable Accounts
In addition to the Fixed Account, the Owner may choose to invest
purchase payments in any or all of six Variable Accounts. Each of
the Variable Accounts invests only in a single Mutual Fund:
o IDS Life Account F invests in shares of Capital Resource Fund;
o IDS Life Account IZ invests in shares of International Equity
Fund;
o IDS Life Account JZ invests in shares of Aggressive Growth Fund;
o IDS Life Account G invests in shares of Special Income Fund;
o IDS Life Account H invests in shares of Moneyshare Fund; and
o IDS Life Account N invests in shares of Managed Fund.
Accounts F, G and H were established on May 13, 1981. Account N
was established on April 17, 1985. Accounts IZ and JZ were
established on Sept. 20, 1991. All Variable Accounts were
established as separate accounts under Minnesota law and are
registered together as a single unit investment trust under the
1940 Act. This registration does not involve any supervision of
the Company's management or investment practices or policies by the
SEC. Each Variable Account meets the definition of a separate
account under federal securities laws. Income, capital gains and
capital losses of each Account are credited or charged to that
Account alone. No Account will be charged with liabilities of any
other Account or of the Company's general business.
Nevertheless, all obligations arising under the Contracts are
general corporate obligations of the Company.
Since purchase payments are fully invested in fund shares, the
investment performance of the Variable Accounts reflects the
investment performance of the underlying Funds. Values of fund
shares held by each Variable Account fluctuate and are subject to
the risks of changing economic conditions and of the ability of the
management of the Funds to anticipate these changes and make
necessary changes to their portfolios. Therefore, the Owner bears
the entire investment risk.
The Treasury and the Internal Revenue Service (IRS) have indicated
they may provide additional guidance concerning investment control.
The additional guidance would address the number of Variable
Accounts offered to the Owner and the number of exchanges that
would be allowed before the Owner would be considered to have
investment control and thus would be currently taxed on the income
earned on the underlying separate account assets. It is not clear,
at this time, what the additional guidance would be and the timing
of further action is unknown. The Company reserves the right to
modify the Contract, as necessary, to prevent the Owner from being
currently taxed as the owner of the assets of the Variable Accounts
for income tax purposes.
<PAGE>
PAGE 17
The IRS has issued final regulations relating to the
diversification requirements under Section 817(h) of the Code.
Each Mutual Fund intends to comply with those diversification
requirements.
The Company intends to comply with all Treasury guidance to insure
that the Contract continues to qualify as an annuity for federal
income tax purposes.
Investment Objectives of the Funds
The investment objectives of the Mutual Funds are as follows:
o Capital Resource Fund seeks capital appreciation by investing
primarily in U.S. common stocks listed on national securities
exchanges and other securities convertible into common stock.
Stocks and other securities will be selected for capital
appreciation based on the investment manager's assessment of market
conditions. The Fund attempts to reduce overall exposure to risk
from declines in securities prices by spreading its investments
over many different companies in a variety of industries.
o International Equity Fund seeks capital appreciation by investing
primarily in common stock and securities convertible into common
stock of foreign issuers. The Fund may invest in bonds issued or
guaranteed by countries that are members of the Organization for
Economic Cooperation and Development or bonds issued or guaranteed
by international agencies (such as the World Bank or the European
Investment Bank) if the manager believes they have a greater
potential for capital appreciation than equity securities. The
Fund may enter into foreign currency exchange transactions.
The securities in which the Fund invests may be thought of as
speculative and may involve substantial risk. Risks arising from
investments in foreign securities include fluctuations in currency
exchange rates, adverse political and economic developments and
lack of comparable regulatory requirements applicable to U.S.
companies. The Owner should invest in the Fund only if willing to
assume such risks.
o Aggressive Growth Fund seeks capital appreciation by investing
primarily in common stock and emphasizes investments in small- and
medium-size companies. The Fund also may invest in warrants or
debt securities or in large, well-established companies when the
investment manager believes such investments offer the best
opportunity for capital appreciation.
An investment risk of small companies is that they often have
limited product lines,smaller markets or fewer financial resources.
In addition, many of the companies in which the Fund invests are
without business histories. The securities of small companies also
may be subject to more abrupt or erratic market movements than the
securities of large, more-established companies or market averages
in general. Some of the securities in which the Fund invests may
be considered speculative and may involve substantial risk.
<PAGE>
PAGE 18
o Special Income Fund seeks a high level of current income while
conserving the value of the investment by investing primarily in
corporate bonds of the four highest ratings, in other corporate
bonds that are not rated but that the Fund believes have the same
investment qualities and in government bonds. Bonds in the top
four ratings are of the highest quality and involve less risk than
bonds with lower ratings. The Fund attempts to reduce overall
exposure to risk from declines in securities prices by spreading
its investments over many different companies in a variety of
industries.
o Moneyshare Fund seeks maximum current income consistent with
liquidity and conservation of capital by investing in money-market
securities. The Fund intends to use the amortized cost method of
valuing portfolio securities to help maintain a constant net asset
value of $1 per share. In doing so, the Fund will not purchase any
security with a remaining maturity of more than 13 months. The
Fund also will maintain a dollar-weighted average portfolio
maturity of 90 days or less and will limit its investments to those
that are denominated in U.S. dollars, are of high quality and
present minimal credit risks.
o Managed Fund seeks to maximize total investment return by
investing primarily in U.S. common stocks listed on national
securities exchanges and other securities convertible into common
stock, warrants, fixed income securities (primarily high-quality
corporate bonds), and money-market instruments. The Fund attempts
to reduce overall exposure to risk from declines in securities
prices by spreading its investments over many different companies
in a variety of industries.
The Company does not guarantee that the Funds will meet their
investment objectives. Whether they meet their goals depends on
their management's ability to manage the risks of changing economic
conditions. The Company is the investment adviser for each of the
Funds.
Detailed information about each Mutual Fund is in the separate
prospectus for the Funds. The Owner may obtain a copy from the
Company or from an IDS planner. Be sure to read it carefully.
There are deductions from, and expenses paid out of, the assets of
the Funds that are described in the prospectus for the Funds.
Using the Contract
Buying the Contract
An IDS financial planner will help the Owner prepare the
application, which will be sent with the initial purchase payments
to the Company's office in Minneapolis. If the application is
complete, the Company will apply the payments not later than two
days after their receipt. The Company may retain the purchase
payments for up to five days while attempting to complete an
incomplete application or to obtain any other necessary
documentation. If the Company cannot accept the application within
<PAGE>
PAGE 19
five days, the prospective Owner will be informed of the reasons
for the delay and the purchase payments will be returned
immediately unless the parties agree otherwise.
When the Company accepts the application, it will send the Owner a
Contract. All purchase payments are to be paid to the Company at
its Minneapolis office unless the Company agrees otherwise.
Purchase payments may be made annually, semiannually, quarterly,
monthly, or on any other frequency acceptable to the Company.
Allocation of Purchase Payments
The Owner selects the Accounts to which purchase payments will be
allocated at the time of application. Purchase payments will be
allocated to the Accounts the Owner has chosen at the next close of
business after the Company accepts the application or receives a
purchase payment, whichever is later. Purchase payments can be
allocated to the Variable Accounts, the Fixed Account or to both
Variable and Fixed Accounts in accordance with the allocations
specified by the Owner in the application or as subsequently
changed.
The allocation instructions for new purchase payments between the
Variable Accounts and the Fixed Account may be changed by the Owner
in accordance with any telephone procedures in effect at the time
or by written request. Any change will take effect with the first
purchase payment received with or after receipt of notice of the
change by the Company and will continue in effect until
subsequently changed.
Contract Value
The contract value at any time is the sum of the Fixed Account
contract value and the Variable Account contract value.
Fixed Account Contract Value - The Fixed Account contract value is
the sum of all amounts under the Contract resulting from purchase
payments allocated or transferred to the Fixed Account less any
amounts deducted for charges or withdrawals. The Company
guarantees that, at any time, the Fixed Account contract value will
not be less than the amount of purchase payments allocated to the
Fixed Account, plus interest at the rate of no less than a
compounded yield of 4 percent per year, plus any additional
interest that the Company may credit to the Fixed Account, less the
sum of all applicable Contract charges, any amounts previously
withdrawn, and the effect of any market value adjustment imposed on
the Fixed Account due to a total withdrawal or to Contract transfer
or termination. See "Market Value Adjustment."
Variable Account Contract Value - The Variable Account contract
value is the sum of the value of all accumulation units under the
Contract resulting from purchase payments allocated or transferred
to the Variable Accounts less any units deducted for charges or
withdrawals.
<PAGE>
PAGE 20
Accumulation Units - Upon receipt of a purchase payment by the
Company, all or that portion, if any, of the purchase payment to be
allocated to any Variable Account will be converted into
accumulation units. The number of accumulation units to be
credited to the Account is determined by dividing the dollar amount
allocated to the particular Account by the accumulation unit value
for that Account for the valuation period during which the purchase
payment is received by the Company.
Accumulation Unit Value - The accumulation unit value for each
Variable Account was originally set at $1. The accumulation unit
value for the particular Account for any subsequent valuation
period is determined by methodology which is the mathematical
equivalent of multiplying the accumulation unit value for the
Account for the last valuation period by the net investment factor
for the Account for such subsequent valuation period. The
accumulation unit value for each Variable Account for any valuation
period is the value determined as of the end of the particular
valuation period and may increase, decrease or remain constant from
one period to the next. The Owner bears this investment risk.
Net Investment Factor - The net investment factor is an index
applied to measure the investment performance of a Variable Account
from one valuation period to the next. The net investment factor
may be greater or less than one; therefore the value of an
accumulation unit may increase or decrease.
The net investment factor for any Variable Account for any
valuation period is determined by: dividing (1) by (2) and
subtracting (3) from the result. This is done where:
(1) is the "adjusted net asset value" per share of the Mutual Fund
held in the Variable Account determined at the end of the current
valuation period;
(2) is the "adjusted net asset value" per share of the Mutual Fund
held in the Variable Account determined at the end of the last
prior valuation period;
(3) is a factor representing the mortality and expense risk charge.
"Adjusted net asset value" for any Mutual Fund held in the Variable
Account is the net asset value per share plus a per share amount of
any dividend or capital gain distribution made by such fund.
Transfers of Contract Values
While the Contract is in force, the Owner may transfer contract
values according to methods established by the Company as outlined
below:
1. The Owner may transfer all or a part of the values held in one
or more of the Variable Accounts to another one or more of the
Variable Accounts. Subject to item 2, the Owner also may transfer
values held in one or more of the Variable Accounts to the Fixed
Account.
<PAGE>
PAGE 21
2. Within the 60 days after:
o the anniversary of each Plan year; and
o the first day of the seventh month in each Plan year,
the Owner may transfer values from the Fixed Account to one or more
of the Variable Accounts. Only one such transfer is allowed during
each transfer period. If such a transfer is made, no transfers
from a Variable Account to the Fixed Account may be made until the
next eligible transfer period.
The Owner may make a transfer by written request or by any other
method acceptable to the Company. There is no fee or charge for
these transfers. This transfer privilege may be suspended or
modified by the Company at any time.
Cash Withdrawals, Loans and Conversions
Cash Withdrawals - At any time while the Contract is in force, the
Owner may make a request in writing or by any other method
acceptable to the Company to make a total or partial withdrawal of
the contract value. Any withdrawal request must specify the amount
of the withdrawal and will be effective on the date that it is
received by the Company.
Total Withdrawals - The Owner may request a total withdrawal of the
contract value. A total withdrawal will result in a cash
withdrawal payment equal to the total contract value less the
contract administrative charge, any applicable premium tax and any
applicable withdrawal charge. See "Contract Charges - Charges
Against the Accounts." In addition, a market value adjustment may
apply to the withdrawal of the Fixed Account value. See "Contract
Transfer, Termination and Market Value Adjustment." The Company
will compute the contract value at the close of business, currently
the same as the close of the New York Stock Exchange, after receipt
of the request for a total withdrawal. Upon a total withdrawal,
the Contract will terminate. The Company may require the Owner to
return the Contract before payment of the total withdrawal.
Partial Withdrawals - The Owner may request a partial withdrawal of
the contract value. At the time of the request, the Owner or
recordkeeper must state the reason for the partial withdrawal and
must specify from which Accounts the withdrawal should be made.
Otherwise the Company will withdraw money from all of the Accounts
in the same proportion as the Owner's interest in each Account
bears to the contract value. A withdrawal charge may apply to a
partial surrender.
Loans - The Owner may request withdrawals for the purpose of
funding loans for Participants. At the time of the loan request,
the Owner must specify from which Accounts the withdrawal for the
loan should be made. The amount and terms of the loan must be in
accordance with the applicable requirements of the Plan and the
<PAGE>
PAGE 22
Code. The Company assumes no responsibility for the validity of
the loan or whether the loan complies with such applicable
requirements.
Withdrawals for the purpose of funding a loan under the Plan will
not be subject to withdrawal charges when the loan is made.
However, the Company reserves the right to deduct any such
withdrawal charges from the remaining contract value to the extent
of any unpaid loans at the time of a total withdrawal of the
contract value or at Contract transfer or termination. See
"Contract Charges - Charges Against the Accounts."
Receiving Payment - The Company will mail payment within seven days
after receipt of the Owner's request for a withdrawal and
completion of all required documentation and information. However,
the Company may postpone payment if:
o the contract value includes a purchase payment check that has
not cleared;
o the New York Stock Exchange is closed, except for normal holiday
and weekend closings;
o trading on the New York Stock Exchange is restricted according
to the rules of the SEC;
o an emergency, as defined by the rules of the SEC, makes it
impracticable to sell securities or to value the Accounts' net
assets; or
o the SEC permits the Company to delay payment for the protection
of security holders.
The Company reserves the right to defer the payment of amounts
withdrawn from the Fixed Account for a period not to exceed six
months from the date the Company receives the request for
withdrawal.
Since Contracts offered will be issued in connection with Plans
that meet the requirements of Code Sections 401 (including 401(k))
and 457, reference should be made to the terms of the particular
Plan for any further limitations or restrictions on cash
withdrawals.
A withdrawal charge will be deducted from the amount withdrawn
subject to certain limitations and exceptions. See "Contract
Charges - Charges Against the Accounts." A cash withdrawal also is
subject to federal income taxes and may incur federal tax
penalties. The tax consequences of a cash withdrawal payment
should be carefully considered. See "Federal Tax Status."
Conversion - In the event of a Participant's termination of
employment or for other reasons that meet the requirements of the
Plan and the Code and which are acceptable to the Company, the
Owner may elect to transfer, on the Participant's behalf, part of
the contract value to an individual deferred annuity contract then
<PAGE>
PAGE 23
offered by the Company. This individual contract will be qualified
as an individual retirement annuity under Section 408 or will
qualify under other applicable sections of the Code. Such contract
will be in a form then customarily issued by the Company for
business under such qualified plans. No withdrawal charges will
apply at the time of such conversion.
Contract Transfer, Termination and Market Value Adjustment
Withdrawals by Owner for Transfer of Funds - The Owner may direct
the Company to withdraw the total contract value and transfer that
value to another funding agent. All applicable contract charges
including withdrawal charges will be payable by the Owner and will
be deducted from the first withdrawal payment unless the total
contract value is transferred to a plan then offered by the Company
or its affiliates. See "Contract Charges - Charges Against the
Accounts."
The Owner must provide the Company with a written request to make
such a withdrawal. This written request must be sent to the
Company's corporate office and must specify the initial withdrawal
date and payee to whom the withdrawal payments are to be made.
At the Owner's option, the Company will pay the contract value less
any applicable charges in annual installments or in a lump sum as
follows:
1. The contract value may be paid in five annual installments
beginning on the initial withdrawal date and then on each of the
next four anniversaries of such date as follows:
_________________________________________________________________
% of Then Remaining
Installment Payment Contract Value Balance
_________________________________________________________________
1 20%
2 25
3 33
4 50
5 100
_________________________________________________________________
No additional withdrawals for benefits or other transfers of
contract values will be allowed and no additional purchase payments
will be accepted after the first withdrawal payment is made. The
Company will continue to credit interest to any contract value
balance remaining after an installment payment at the interest
crediting rate then in effect for the Fixed Account.
2. The contract value may be paid in a lump sum. Any amount
attributable to the Fixed Account value will be based on the market
value of such balance. The market value will be determined by the
Company by applying the formula described below under "Market Value
Adjustment." The Company will make lump sum payments according to
the provisions of the above section titled "Cash Withdrawals, Loans
and Conversions - Receiving Payment."
<PAGE>
PAGE 24
Market Value Adjustment (MVA) - A market value adjustment applies
only when the Company pays out the Fixed Account value in a lump
sum when:
o the Owner withdraws the total contract value to transfer that
value to another funding vehicle;
o the Owner makes a total withdrawal of the Fixed Account contract
value; or
o the Company terminates the contract as described below. See
"Contract Termination by the Company."
The MVA will be applied to the amount being withdrawn from the
Fixed Account after deduction of any applicable contract
administrative charge and withdrawal charge. See "Contract Charges
- - Charges Against the Accounts."
The MVA will reflect the relationship between the current interest
rate being credited to new purchase payments allocated to the Fixed
Account and the rate being credited to all prior purchase payments.
The MVA is calculated as follows:
MVA = Fixed Account Value x (A - B) x C
Where:
A = the weighted average interest rate (in decimal form) being
credited to all Fixed Account purchase payments made by the Owner
at the time of termination, rounded to 4 decimal places;
B = the interest rate (in decimal form) being credited to new
purchase payments to the Contract at the time of termination or
total withdrawal, rounded to 4 decimal places; and
C = the annuity factor, which represents the relationship between
the contract year and the average duration of underlying
investments from the following table:
_________________________________________________________________
Contract Year Annuity Factor
_________________________________________________________________
1 - 3 6.0
4 - 6 5.0
7+ 4.0
_________________________________________________________________
For an example showing an upward and downward MVA, please see
Appendix.
No MVA applies if:
o the Owner makes a partial withdrawal of the Fixed Account
contract value;
o installment payments are made when the Owner withdraws the total
contract value to transfer that value to another funding vehicle or
the Company terminates the Contract; or<PAGE>
PAGE 25
o the Owner transfers contract values from the Fixed Account to
the Variable Accounts as described above under "Transfers of
Contract Values."
Contract Termination by the Company - The Company reserves the
right upon 30 days' written notice to the Owner to declare a
contract termination date that will be any date on or after the
expiration of the 30-day notification period.
A contract termination date may be declared if:
o The Owner adopts an amendment to the Plan that causes the Plan
to be materially different from the Plan originally in existence
when the Contract was purchased. To be "materially different," the
amendment must cause a substantial change in the level of the
dollar amounts of purchase payments or Contract benefits to be paid
by the Company;
o The Plan fails to qualify or becomes disqualified under the
appropriate sections of the Code;
o The Owner offers under the Plan as a funding vehicle to which
future contributions may be made a guaranteed investment contract,
bank investment contract, annuity contract or funding vehicle
providing a guarantee of principal. See "Prohibited Investments";
or
o The Owner changes to a recordkeeper that is not approved by the
Company.
If the Company waives its right to terminate the Contract under any
provision of this section at any time, such waiver will not be
considered a precedent and will not prohibit the Company from
exercising the right to terminate this Contract, for the reasons
noted above, at any future time.
Procedures at Contract Termination - On the contract termination
date, the Company will withdraw any outstanding charges, including
any contract administrative charges, from the accumulation account.
A withdrawal charge may apply and be payable by the Owner on
account of any termination under this provision and will be
deducted from the first termination payment. See "Contract Charges
- - Charges Against the Accounts."
At the Owner's option, the Company will pay the accumulation
account balance in a lump sum or in annual installment payments
according to the table under "Withdrawals by Owner for Transfer of
Funds" above. A lump sum payment will be subject to an applicable
Market Value Adjustment to the Fixed Account value. If the Owner
does not select an option, the Company will pay the accumulation
account balance to the Owner under the installment option.
Contract Charges - Charges Against the Accounts
Contract Administrative Charge - The Company charges the Contract
an administrative charge of $500 per year ($125 per quarter). The
Company reserves the right to increase this contract administrative
<PAGE>
PAGE 26
charge in the future, but guarantees that it will never exceed
$1,000 per year ($250 per quarter). This charge is for
establishing and maintaining records and for normal administrative
expenses and services for this Contract. The Company deducts this
charge on a pro-rata basis from the Fixed Account and each Variable
Account at the end of each three-month period measured from the
contract date or, if earlier, when the contract value is totally
withdrawn or the Contract is transferred or terminated. The
Company does not expect to profit from the contract administrative
charge.
Mortality and Expense Risk Charge - This charge is applied daily to
the Variable Accounts and equals 1 percent of the average daily net
assets of the Variable Accounts on an annual basis. It covers the
Company's annuity mortality risk and expense risk. The Company
estimates that approximately two-thirds of this charge is for
assumption of the mortality risk, and one-third is for assumption
of the expense risk. The mortality and expense risk charge does
not apply to values allocated to the Fixed Account.
The mortality risk is the Company's guarantee to make retirement
payments according to the terms of the Contract, no matter how long
a specific Participant lives and no matter how long the entire
group of the Company's annuitants live. If, as a group, the
Company's annuitants outlive the life expectancy the Company has
assumed in its actuarial tables, then the Company must take money
from its general assets to meet its obligations. If, as a group,
the Company's annuitants do not live as long as expected, the
Company could profit from the mortality risk charge.
The expense risk is the risk that the contract administrative
charge, which cannot be increased above $1,000 per year, will not
cover the Company's expenses. Any deficit would have to be made up
from the Company's general assets. The Company could profit from
the expense risk charge if the annual contract administrative
charge is more than sufficient to meet expenses.
The Company does not plan to profit from the contract
administrative charge. However, the Company hopes to profit from
the mortality and expense risk charge. Any profits realized by the
Company from this fee would be available to it for any proper
corporate purpose, including, among other things, payment of
distribution (selling) expenses. The Company does not expect that
the withdrawal charge, which is discussed in the following
paragraphs, will cover sales and distribution expenses incurred by
the Company in connection with the Contract.
Withdrawal Charge - If the Owner makes a total or partial
withdrawal or if the Contract is transferred or terminated, a
withdrawal charge may apply. This withdrawal charge represents a
percentage of the amount withdrawn as follows:
<PAGE>
PAGE 27
_________________________________________________________________
Amount Withdrawn in
Contract Year Withdrawal Charge
_________________________________________________________________
1 6%
2 6
3 5
4 4
5 3
6 2
7 1
8 and later 0
_________________________________________________________________
In the case of a partial withdrawal, the withdrawal charge is
deducted from the contract value remaining after the Owner is paid
the partial withdrawal amount requested. For example, if the Owner
requested a partial withdrawal net check amount of $1,000 and the
withdrawal charge rate that applied to that amount was 5 percent,
the Owner would receive the $1,000 requested and the withdrawal
charge amount would be $52.63 for a total withdrawal of $1,052.63.
No withdrawal charge is imposed upon amounts withdrawn from the
Contract because a Participant:
o attains age 59 1/2;
o purchases an immediate annuity under the annuity settlement
provisions of this Contract after separation from service;
o retires under the Plan after age 55;
o becomes disabled (as defined in the Code);
o dies;
o encounters financial hardship as permitted under the Plan and
the Code;
o receives a loan as requested by the Owner; or
o converts contract value to an individual retirement annuity or
other qualified annuity then offered by the Company as requested
by the Owner.
In no event will withdrawal charges exceed 8.5 percent of aggregate
purchase payments made.
Reduction in Contract Charges - In some cases, the Company expects
to incur lower sales and administrative expenses or perform fewer
services. Therefore, the Company may be able to reduce or
eliminate certain contract charges for some purchases. The Company
expects this to occur infrequently.
<PAGE>
PAGE 28
Premium Taxes - A charge will be made by the Company against the
contract value for any state premium taxes to the extent the taxes
are payable in connection with the purchase of an annuity contract
under the annuity settlement provisions.
Annuity Settlement Provisions
When a Plan Participant reaches his or her retirement date, the
Owner can select one of the five annuity payout options outlined
below, or the Owner and the Company can mutually agree on other
payment arrangements. Since the Contract is issued in connection
with Plans that meet the requirements of Code Sections 401
(including 401(k)) and 457, the payment schedule must meet the
applicable requirements of the particular Plan and of the Code,
including the distribution and incidental death benefit
requirements. In general, the annuity payout option must provide
for retirement payments:
o over the life of the Participant;
o over the joint lives of the Participant and a designated
beneficiary;
o for a period not exceeding the life expectancy of the
Participant; or
o for a period not exceeding the joint life expectancies of the
Participant and a designated beneficiary.
Retirement payments will be made on a fixed basis. The Company
will make these retirement payments under a supplemental fixed
immediate annuity in the form customarily offered by the Company at
the time of purchase.
Retirement Payout Options - The Owner may choose any one of these
annuity payout options by giving the Company written instructions
at least 30 days before contract values are to be withdrawn to
purchase the immediate annuity:
o Plan A - Life Annuity - No Refund - Monthly payments are made
until the annuitant's death. Payments end with the last monthly
payment before the annuitant's death; no further payments will be
made. This means that if the annuitant dies after only one monthly
payment has been made, no more payments will be made.
o Plan B - Life Annuity with Five, 10 or 15 Years Certain -
Monthly payments are made until the annuitant's death. However,
payments are guaranteed for five, 10 or 15 years, as elected,
whether or not the annuitant is living.
o Plan C - Life Annuity - Installment Refund - Monthly payments
are made until the annuitant's death, with the Company's guarantee
that payments will continue for at least the number of months
determined by dividing the amount applied under this Option by the
first monthly payment, whether or not the annuitant is living.
<PAGE>
PAGE 29
o Plan D - Joint and Last Survivor Life Annuity - No Refund -
Monthly payments are made to the annuitant and a joint annuitant
while both are living. If either annuitant dies, monthly payments
continue at the full amount until the death of the surviving
annuitant. Payments end with the death of the second annuitant.
o Plan E - Payments for a Specified Period - Monthly payments are
made for a specified period of years. The period may be no less
than 10 years and no more than 30 years. Payments are guaranteed
for the period of years selected, whether or not the annuitant is
living.
If Monthly Payments Would be Less Than $20 - The Company will
calculate the amount of monthly payments at the time the immediate
annuity is purchased to provide retirement payments. If the
calculations show that monthly payments would be less than $20, the
Company has the right to pay the contract value to the Owner in a
lump sum.
Other Contractual Provisions
Nontransferability
Ownership of the Contract may not be transferred except to: (1) a
trustee or successor trustee of a pension or profit sharing trust
that is qualified under the Code; or (2) as otherwise permitted by
laws and regulations governing the Plans under which the Contract
is issued. Subject to the foregoing, the Contract may not be sold,
assigned, transferred, discounted or pledged as collateral for a
loan or as security for the performance of an obligation or for any
other purpose to any person other than the Company.
Voting of Fund Shares
The Company will vote the shares of each Fund held by the Variable
Accounts at meetings of shareholders of the Funds in accordance
with instructions received from the Owner or other authorized
party. Fund shares held in each Variable Account for which no
timely voting instructions are received, and Fund shares that are
not otherwise attributable to Owners, will be voted by the Company
in the same proportion as the shares for which instructions are
received.
Neither the Variable Accounts nor the Company is under any duty to
inquire as to the instructions received on the voting of Fund
shares. Except as a Variable Account or the Company has actual
knowledge to the contrary, the instructions given by the persons
entitled to vote will be valid as they affect the Variable Account,
the Company and any others having voting instruction rights with
respect to the Variable Account.
All Fund proxy materials, together with voting instructions, will
be provided to each person having the right to give voting
instructions at least 10 days prior to each meeting of the
shareholders of the particular Fund. The number of Fund shares to
which each person is entitled will be determined by the Company on
<PAGE>
PAGE 30
a date not more than 60 days prior to each such meeting. The
number of votes a person has is determined by applying that
person's percentage interest in the Variable Account to the total
number of votes allowed to the Account.
Periodic Reports
The Company will send the Owner quarterly, or more frequently as
the Code may require, a statement showing the number, type and
value of accumulation units credited to the Contract. This
statement will be accurate as of a date not more than two months
prior to the date of mailing. In addition, every person having
voting rights will receive any required reports or prospectuses.
The Company also will send any statements that may be required by
applicable laws, rules and regulations showing Contract
transactions.
Substitution
Shares of any of the underlying Funds may not always be available
for purchase by the Variable Accounts, or the Company may decide
that further investment in any such Fund's shares is no longer
appropriate in view of the purposes of the Variable Account. In
either event, shares of another registered open-end management
investment company may be substituted both for Fund shares already
purchased by the Variable Account and for purchases to be made in
the future. In the event of any substitution pursuant to this
provision, the Company may make appropriate endorsement to the
Contract to reflect the substitution.
The Company reserves the right to split or combine the value of
accumulation units. In effecting such change of unit values,
strict equity will be preserved and no change will have a material
effect on the benefits or other provisions of the Contract.
Modification
Upon notice to the Owner, the Contract may be modified by the
Company if such modification:
o is necessary to make the Contract or the Variable Accounts
comply with any law or regulation issued by a governmental agency
to which the Company or the Variable Accounts are subject;
o is necessary to assure continued qualification of the Contract
under the Code or other federal or state laws relating to
retirement annuities or annuity contracts;
o is necessary to reflect a change in the Variable Accounts; or
o provides additional accumulation options for the Variable
Accounts.
In the event of any such modification, the Company may make
appropriate endorsement to the Contract to reflect such
modification.
<PAGE>
PAGE 31
Prohibited Investments
While the Contract is in force, and prior to any withdrawal or
contract termination, the Owner will not offer under the Plan as a
funding vehicle to which future contributions may be made any of
the following:
o guaranteed investment contracts;
o bank investment contracts;
o annuity contracts with fixed and/or variable accounts; or
o funding vehicles providing a guarantee of principal.
The Company reserves the right to terminate the Contract if one or
more of these prohibited investments is offered. See "Contract
Transfer, Termination and Market Value Adjustment."
Proof of Condition or Event
Where any payments under the Contract depend on the recipient being
alive and/or being a certain age on a given date, or depend on the
occurrence of a specific event, the Company may require proof
satisfactory to it that such a condition has been met prior to
making the payment.
Distribution of Contracts
The Company is the principal underwriter for the Contracts. The
Company is registered with the SEC under the Securities and
Exchange Act of 1934 (1934 Act) as a broker-dealer and is a member
of the National Association of Securities Dealers, Inc.
The Company may enter into Distribution Agreements with certain
broker-dealers registered under the 1934 Act. The Company will pay
a maximum commission of 5 percent for the sale of a Contract. In
addition, the Company may pay a service commission when the Owner
maintains the Contract in force.
Federal Tax Status
Introduction
The Contracts described in this prospectus are designed for use by
Plans that meet the requirements of Code Sections 401 (including
401(k)) and 457. The ultimate effect of federal income taxes on
the increase in contract value, on annuity payments and on the
economic benefit to the Owner, the Participant, the annuitant, or
any payee or beneficiary may depend upon a number of different
factors. The discussion contained herein is general in nature, is
based upon the Company's understanding of current federal income
tax laws and is not intended as tax advice. Before purchasing a
Contract, the prospective Owner should consult a qualified tax
adviser. The Company does not make any guarantee regarding the tax
status, federal, state or local, of any Contract or any transaction
involving the Contracts.
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PAGE 32
Tax Treatment of the Company and the Variable Account
The Company is taxed as a life insurance company under the Code.
Although the operations of the Variable Accounts are accounted for
separately from other operations of the Company for purposes of
federal income taxation, the Variable Accounts are not taxable as
entities separate from the Company. Under existing federal income
tax laws, the income and capital gains of the Variable Accounts, to
the extent applied to increase reserves under the Contracts, are
not taxable to the Company.
Taxation of Annuities in General
Generally, there is no tax to the Participants on contributions
made by the Owner to the Contract or on any increases in the value
of the Contract. However, when distribution to a Participant
occurs, the distribution will be subject to taxation (except
contributions that were made with after-tax dollars).
Distributions made prior to age 59 1/2 generally are subject to a
10 percent IRS penalty tax on any amount includible in ordinary
income. This penalty will not apply if the distribution was made
because the Participant:
o attains age 59 1/2;
o purchases a life annuity under the annuity settlement provisions
of this Contract that provides for a series of substantially equal
periodic payments made at least annually over the life or life
expectancy of the annuitant (or joint life expectancies of the
annuitant and designated beneficiary);
o retires under the Plan after age 55;
o becomes disabled (as defined in the Code); or
o dies.
These are the major exceptions to the 10 percent IRS penalty tax.
Additional exceptions and other penalties also may apply.
Beginning Jan. 1, 1993, in general, if a Participant receives a
distribution, mandatory 20 percent income tax withholding will be
imposed at the time the payment is made. In addition, federal
income tax and the 10 percent IRS penalty tax for early withdrawals
may apply to amounts properly includible in income. This mandatory
20 percent income tax withholding will not be imposed if:
o instead of receiving the payment, the Participant elects to have
the payment rolled over directly to an IRA or another eligible
plan;
o the payment is one of a series of substantially equal periodic
payments, made at least annually, over the life or life expectancy
of the annuitant (or joint lives or life expectancies of the
annuitant and a designated beneficiary) or made over a period of 10
years or more; or
<PAGE>
PAGE 33
o the payment is a minimum distribution required under the Code.
These are the major exceptions to the mandatory 20 percent income
tax withholding. For taxable distributions that are not subject to
the mandatory 20 percent withholding, federal income tax will be
withheld from the taxable part of the distribution unless otherwise
elected. State withholding also may be imposed on taxable
distributions.
The rights of any person to any benefits under the Plans under
which these Contracts are issued will be subject to the terms and
conditions of the Plans themselves, regardless of the terms and
conditions of the Contracts issued in connection with the plans.
Recordkeeper
The Company provides a Contract to fund Plans that meet the
requirements of Code Sections 401 (including 401(k)) and 457. The
Company does not provide any administrative or recordkeeping
services in connection with the Plan. The Company will rely on
information and/or instructions provided by the Plan administrator
and/or recordkeeper in order to properly administer the Contract.
For this reason, any person or entity authorized by the Owner to
administer recordkeeping services for the Plan and Participants
must be approved by the Company.
Additional Information About the Company
Selected Financial Data
The following selected financial data for the Company and its
subsidiaries should be read in conjunction with the consolidated
financial statements and notes.
<TABLE>
<CAPTION>
Years ended Dec. 31, (Thousands)
1993 1992 1991 1990 1989
<S> <C> <C> <C> <C> <C>
Premiums $ 127,245 $ 114,379 $ 102,338 $ 89,749 $ 135,700
Net investment income 1,783,219 1,616,821 1,422,866 1,204,934 1,030,232
Net gain (loss) on investments (6,737) (3,710) (5,837) 1,022 17,668
Other 304,344 240,959 198,344 165,742 136,809
Total revenues 2,208,071 1,968,449 1,717,711 1,461,447 1,320,409
Income before income taxes 412,726 315,821 259,467 227,742 214,639
Net income 270,079 211,170 182,037 157,748 144,019
Total assets 33,057,753 27,295,773 22,558,809 18,088,351 15,119,628
</TABLE>
Management's Discussion and Analysis of Consolidated Financial
Condition and Results of Operations
Results of Operations
1993 Compared to 1992: Consolidated income before income taxes
totaled $413 million in 1993, compared with $316 million in 1992.
In 1993, $104 million was from the life, disability income, health
and long-term care insurance segment, compared with $96 million in
1992. In 1993, $315 million was from the annuity segment, compared
<PAGE>
PAGE 34
with $223 million in 1992. The remaining $6.7 million loss in 1993
was a net loss on investments, compared with a net loss on
investments of $3.7 million in 1992.
Total premiums received increased to $5.3 billion in 1993, compared
with $4.4 billion in 1992. This increase is primarily due to
strong sales of variable annuities due to the low interest rate
environment. In addition, the Company reported small increases in
its fixed single premium deferred annuity line. Universal
life-type insurance and variable universal life insurance premiums
received also increased from the prior year.
Total revenues increased to $2.2 billion in 1993, compared with
$2.0 billion in 1992. Of this, net investment income was $1.8
billion in 1993, compared with $1.6 billion in 1992, reflecting an
increase in invested assets. Total invested assets grew 14 percent
to $21.9 billion at Dec. 31, 1993, from $19.2 billion at Dec. 31,
1992.
Policyholder and contractholder charges, which consist primarily of
cost of insurance charges on universal life-type policies,
increased 18 percent to $184 million in 1993, compared with $156
million in 1992. This increase reflects higher total life
insurance in force which grew 13 percent to $46.1 billion at
Dec. 31, 1993.
Management and other fees increased 41 percent to $120 million in
1993, compared with $85 million in 1992. This is primarily due to
an increase in assets held in segregated asset accounts, which grew
45 percent to $9.0 billion at Dec. 31, 1993, resulting from strong
sales of variable products. The Company provides investment
management services for the mutual funds used as investment options
for variable annuities and variable life insurance. The Company
also receives a mortality and expense risk fee from the segregated
asset accounts.
In 1993, the Company reported a net loss on investments of $6.7
million, compared with a net loss on investments of $3.7 million in
1992. During 1993, net realized losses from the sale of
investments amounted to $12.5 million. This was offset by a net
decrease in allowance for losses of $5.8 million, including an
increase of $9.3 million for mortgage investments and real estate,
offset by a decrease of $15.1 million for below investment grade
bonds (those rated below BBB).
Total benefits and expenses increased to $1.8 billion in 1993,
compared with $1.7 billion in 1992. The largest component of
expenses, interest credited to policyholder accounts for universal
life-type insurance and investment contracts aggregated $1.2
billion and was essentially unchanged from the prior year. This
reflected interest credited to higher accumulation values offset by
lower interest credited rates.
Amortization of deferred policy acquisition costs increased to $212
million in 1993, compared with $140 million in 1992, reflecting
prior years' growth of life insurance and annuity business and a
cumulative adjustment driven by the long-term decrease in accrual
rates on fixed annuities.
<PAGE>
PAGE 35
Other insurance and operating expenses, which include non-
capitalized commissions and indirect selling expenses, direct and
indirect operating expenses, premium taxes and guaranty association
expenses increased to $242 million in 1993, compared with $216
million in 1992.
In May 1993, the Financial Accounting Standards Board issued SFAS
No. 115, "Accounting for Certain Investments in Debt and Equity
Securities," which the Company will implement, effective Jan. 1,
1994. Under the new rules, debt securities that the Company has
both the positive intent and ability to hold to maturity will be
carried at amortized cost. Debt securities that the Company does
not have the positive intent and ability to hold to maturity and
all marketable equity securities will be classified as
available-for-sale and carried at fair value. Unrealized gains and
losses on securities classified as available-for-sale will be
carried as a separate component of stockholder's equity. The
effect of the new rules will be to increase stockholder's equity by
approximately $181 million, net of taxes, as of Jan. 1, 1994, but
the new rules will have no material impact on the Company's results
of operations.
SFAS No. 114, "Accounting by Creditors for Impairment of a Loan,"
and FASB Interpretation No. 39, "Offsetting of Amounts Related to
Certain Contracts," are expected to have no material impact on the
Company's results of operations or financial condition.
1992 Compared to 1991: Consolidated income before income taxes
totaled $316 million in 1992, compared with $259 million in 1991.
In 1992, $96 million was from the life, disability income, health
and long-term care insurance segment, compared with $90 million in
1991. In 1992, $223 million was from the annuity segment, compared
with $175 million in 1991. The remaining $3.7 million loss in 1992
was a net loss on investments, compared with a net loss on
investments of $5.8 million in 1991.
Total premiums received increased to $4.4 billion in 1992, compared
with $3.3 billion in 1991. This increase is primarily due to
strong sales of annuities with equity investment options as
investors were attracted to the stock market due to the low
interest rate environment. In addition, the Company reported
increases in its fixed single premium deferred annuity line.
Universal life-type insurance and variable universal life
insurance premiums increased from the prior year. Traditional
life insurance premiums were essentially unchanged from the prior
year, while long-term care sales increased.
Total revenues increased to $2.0 billion in 1992, compared with
$1.7 billion in 1991. Of this, net investment income was $1.6
billion in 1992, compared with $1.4 billion in 1991, reflecting an
increase in invested assets, partially offset by lower yields.
Total invested assets grew 20 percent to $19.2 billion at Dec. 31,
1992, from $16.0 billion at Dec. 31, 1991.
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PAGE 36
Policyholder and contractholder charges, which consist primarily
of cost of insurance charges on universal life-type policies,
increased to $156 million in 1992, compared with $137 million in
1991. This increase reflects higher total life insurance in force
which grew 12 percent to $40.9 billion at Dec. 31, 1992.
Management and other fees increased to $85 million in 1992,
compared with $61 million in 1991. This is primarily due to an
increase in assets held in segregated asset accounts, which grew 33
percent to $6.2 billion at Dec. 31, 1992, resulting from strong
sales of variable products and market appreciation. The Company
provides investment management services for the mutual funds used
as investment options for variable annuities and variable life
insurance. The Company also receives a mortality and expense risk
fee from the segregated asset accounts.
In 1992, the Company reported a net loss on investments of $3.7
million, compared with a net loss on investments of $5.8 million
in 1991. During 1992, net realized gains from the sale of
investments amounted to $1.2 million. This was offset by a net
increase in allowance for losses of $4.9 million, including an
increase of $12.5 million for mortgage investments and real estate,
offset by a decrease of $7.6 million for below investment grade
bonds (those rated below BBB).
During 1991, net realized gains from the sale of investments of
$16.0 million were offset by an increase in allowance for losses
of $21.8 million, resulting in a net loss of $5.8 million.
Total benefits and expenses increased to $1.7 billion in 1992,
compared with $1.5 billion in 1991. The largest component of
expenses, interest credited to policyholder accounts for universal
life-type insurance and investment contracts, increased to $1.2
billion in 1992, compared with $1.1 billion in 1991. This reflects
an increase in liabilities for future policy benefits for universal
life-type insurance, which grew 8.8 percent to $2.6 billion at Dec.
31, 1992, and an increase in liabilities for future policy benefits
for fixed annuities, which grew 20 percent to $16 billion at Dec.
31, 1992.
Amortization of deferred policy acquisition costs increased to $140
million in 1992, compared with $116 million in 1991, reflecting
prior years' growth of life insurance and annuity business.
Other insurance and operating expenses, which include non-
capitalized commissions and indirect selling expenses, direct and
indirect operating expenses, premium taxes and guaranty association
expenses increased to $216 million in 1992, compared with $154
million in 1991. The increase is primarily due to an increased
provision for assessments by state guaranty associations. The
assessments are used to fund claims of policyholders of insolvent
insurance companies.
<PAGE>
PAGE 37
Liquidity and Capital Resources
The liquidity requirements of the Company are met by funds provided
from operations and investment activity. The components of the
funds provided are premiums, investment income, proceeds from sales
of investments as well as maturities and periodic repayments of
investment principal.
The primary uses of funds are policy benefits, commissions and
operating expenses, policy loans and new investment purchases.
The Company has available lines of credit with two banks
aggregating $75 million, which are used strictly as short-term
sources of funds. Borrowings outstanding under the agreements were
$1.5 million at Dec. 31, 1993. The Company also uses reverse
repurchase agreements for short-term liquidity needs. Reverse
repurchase agreements aggregated $30 million at Dec. 31, 1993.
At Dec. 31, 1993, investments in fixed maturities comprised 89
percent of the Company's total invested assets. Of the fixed
maturity portfolio, approximately 51 percent is invested in GNMA,
FNMA and FHLMC mortgage-backed securities which are considered
AAA/Aaa quality.
At Dec. 31, 1993, approximately 8.8 percent of the Company's
investments in fixed maturities were below investment grade bonds.
These investments may be subject to a higher degree of risk than
the more "traditional" issues because of the borrower's generally
greater sensitivity to adverse economic conditions, such as
recession or increasing interest rates, and in certain instances,
the lack of an active secondary market. Expected returns on below
investment grade bonds reflect consideration of such factors. The
Company has established an allowance for losses for below
investment grade bonds totaling $23 million at Dec. 31, 1993.
Management believes that the allowance for losses is adequate,
however, future economic factors could impact the ratings of
securities owned and additional reserves for losses may be
required.
At Dec. 31, 1993, net unrealized appreciation on fixed maturities
included $1.1 billion of gross unrealized appreciation and $82
million of gross unrealized depreciation.
At Dec. 31, 1993, the Company had an allowance for losses for
mortgage loans totaling $35 million and for real estate totaling
$11 million.
The economy and other factors have caused an increase in the number
of insurance companies that are under regulatory supervision. This
circumstance has resulted in an increase in assessments by state
guaranty associations to cover losses to policyholders of insolvent
or rehabilitated companies. Some assessments can be partially
recovered through a reduction in future premium taxes in certain
states. The Company established an asset for guaranty association
assessments from those states allowing a reduction in future
premium taxes over a reasonable period of time. The asset will be
amortized as future premium taxes are reduced. The Company has
<PAGE>
PAGE 38
also estimated the potential effect of future assessments on the
Company's financial position and results of operations and has
established a reserve for such potential assessments.
In the first quarter of 1994, the Company paid a $40 million
dividend to its parent. In 1993, dividends paid to its parent were
$25 million.
Segment Information
The Company's operations consist of two business segments:
Individual and group life, disability income, long-term care and
health insurance; and fixed and variable annuity products designed
for individuals, pension plans,small businesses and
employer-sponsored groups. The Company is not dependent upon any
single customer and no single customer accounted for more than 10
percent of revenue in 1993, 1992 or 1991. (See Note 8, Segment
information, in the "Notes to Consolidated Financial Statements.")
Reinsurance
Reinsurance arrangements are used to reduce exposure to large
losses. The maximum amount of risk retained by the Company on any
one life is $750,000 of life and waiver of premium benefits plus
$50,000 of accidental death benefits. The excesses are reinsured
with other life insurance companies. At Dec. 31, 1993, traditional
life and universal life-type insurance in force aggregated $46.1
billion, of which $3.0 billion was reinsured.
The Company has a reinsurance agreement with an affiliated company,
whereby the Company assumed 100 percent of a block of single
premium life insurance business. Reserves related to this
agreement were $760 million at Dec. 31, 1993. The Company also has
a reinsurance agreement to cede 50 percent of its long-term care
insurance business to an affiliated company. Reserves and
reinsurance receivables related to this agreement both amounted to
$44.1 million at Dec. 31, 1993.
Reserves
In accordance with the insurance laws and regulations under which
the Company operates, it is obligated to carry on its books, as
liabilities, actuarially determined reserves to meet its
obligations on its outstanding life and health insurance policies
and annuity contracts. Reserves for policies and contracts are
based on mortality and morbidity tables in general use in the
United States. These reserves are computed amounts that, with
additions from premiums to be received, and with interest on such
reserves compounded annually at assumed rates, will be sufficient
to meet the Company's policy obligations at their maturities or in
the event of an insured's death. In the accompanying financial
statements these reserves are determined in accordance with
generally accepted accounting principles. (See Note 1, Liabilities
for future policy benefits, in the "Notes to Consolidated Financial
Statements," page 38).
<PAGE>
PAGE 39
Investments
Of the Company's consolidated total investments of $21.9 billion at
Dec. 31, 1993, 46 percent was invested in mortgage-backed
securities, 43 percent in corporate and other bonds, 9.4 percent
in primary mortgage loans on real estate, 1.6 percent in policy
loans and the remaining 0.5 percent in other investments.
Competition
The Company is engaged in a business that is highly competitive due
to the large number of stock and mutual life insurance companies
and other entities marketing insurance products. There are over
2,600 stock, mutual and other types of insurers in the life
insurance business. In Fortune magazine's May 1993 listing of the
50 largest life insurance companies as ranked by assets, the
Company ranked fourteenth. Best's Insurance Reports, Life-Health
edition, 1993, assigned the Company one of its highest
classifications, A+ (Superior).
Employees
As of Dec. 31, 1993, the Company and its subsidiaries had 764
employees; including 711 employed at the corporate office in
Minneapolis, MN, and 53 employed at IDS Life Insurance Company of
New York, located in Albany, NY.
Properties
The Company occupies office space in Minneapolis, MN, which is
rented by its parent, IDS Financial Corporation. The Company
reimburses IDS Financial Corporation for rent based on direct and
indirect allocation methods. Facilities occupied by the Company
and its subsidiaries are believed to be adequate for the purposes
for which they are used and are well maintained.
State Regulation
The Company is subject to the laws of the State of Minnesota
governing insurance companies and to the regulations of the
Minnesota Department of Commerce. An annual statement in the
prescribed form is filed with the Minnesota Department of Commerce
each year covering the Company's operation for the preceding year
and its financial condition at the end of such year. Regulation by
the Minnesota Department of Commerce includes periodic examination
to determine the Company's contract liabilities and reserves so
that the Minnesota Department of Commerce may certify that these
items are correct. The Company's books and accounts are subject to
review by the Minnesota Department of Commerce at all times. Such
regulation does not, however, involve any supervision of the
account's management or the company's investment practices or
policies. In addition, the Company is subject to regulation under
the insurance laws of other jurisdictions in which it operates. A
full examination of the Company's operations is conducted
periodically by the National Association of Insurance
Commissioners.
<PAGE>
PAGE 40
Under insurance guaranty fund laws, in most states, insurers doing
business therein can be assessed up to prescribed limits for
policyholder losses incurred by insolvent companies. Most of these
laws do provide however, that an assessment may be excused or
deferred if it would threaten an insurer's own financial strength.
Directors and Executive Officers*
The directors and principal executive officers of the Company and
the principal occupation of each during the last five years is as
follows:
Directors
Louis C. Fornetti, 44
Director since March 1994; Senior Vice President, and Director,
IDS, since February 1985.
David R. Hubers, 51
Director since September 1989; President and Chief Executive
Officer, IDS, since August 1993, and Director, IDS, since January
1984. Senior Vice President, Finance and Chief Financial Officer,
IDS, from January 1984 to August 1993.
Richard W. Kling, 53
Director since February 1984; President since March 1994.
Executive Vice President, Marketing and Products from January 1988
to March 1994. Vice President, IDS, since January 1988. Director
of IDS Life Series Fund, Inc. and Manager of IDS Life Variable
Annuity Funds A & B.
Paul F. Kolkman, 47
Director since May 1984; Executive Vice President since March 1994;
Vice President, Finance from May 1984 to March 1994; Vice
President, IDS, since January 1987.
Peter A. Lefferts, 52
Director and Executive Vice President, Marketing since March 1994;
Senior Vice President and Director, IDS, since February 1986.
Janis E. Miller, 42
Director and Executive Vice President, Variable Assets since March
1994; Vice President, IDS, since June 1990. Director, Mutual Funds
Product Development and Marketing, IDS, from May 1987 to May 1990.
Director of IDS Life Series Fund, Inc. and Manager of IDS Life
Variable Annuity Funds A & B.
James A. Mitchell, 52
Chairman of the Board since March 1994; Director since July 1984;
Chief Executive Officer since November 1986; President from July
1984 to March 1994; Executive Vice President, IDS, since March
1994; Director, IDS, since July 1984; Senior Vice President, IDS,
from July 1984 to March 1994.
<PAGE>
PAGE 41
Barry J. Murphy, 43
Director and Executive Vice President, Client Service since March
1994; Senior Vice President, Operations, Travel Related Services
(TRS), a subsidiary of American Express Company, since July 1992;
Vice President, TRS, from November 1989 to July 1992; Chief
Operating Officer, TRS, from March 1988 to November 1989.
Stuart A. Sedlacek, 36
Director and Executive Vice President, Assured Assets since March
1994; Vice President, IDS, since September 1988.
Melinda S. Urion, 40
Director and Controller since September 1991; Executive Vice
President since March 1994; Vice President and Treasurer from
September 1991 to March 1994; Vice President, IDS, since September
1991; Chief Accounting Officer, IDS, from July 1988 to September
1991.
Officers Other Than Directors
Morris Goodwin Jr., 42
Vice President and Treasurer since March 1994; Vice President and
Corporate Treasurer, IDS, since July 1989; Chief Financial Officer
and Treasurer, IDS Bank & Trust, from January 1988 to July 1989.
William A. Stoltzmann, 45
Vice President, General Counsel and Secretary since 1985.
*The address for all of the directors and principal officers is:
IDS Tower 10, Minneapolis, MN 55440-0010.
Executive Compensation
Executive officers of the Company also may serve one or more
affiliated companies. The following table reflects cash
compensation paid to the five most highly compensated executive
officers as a group for services rendered in 1993 to the Company
and its affiliates. The table also shows the total cash
compensation paid to all executive officers of the Company, as a
group, who were executive officers at any time during 1993.
Name of individual Cash
or number in group Position held compensation
Five most highly $1,929,713
compensated executive
officers as a group:
James A. Mitchell President
Richard W. Kling Exec. Vice President,
Marketing and Products
ReBecca K. Roloff Exec. Vice President,
Operations
<PAGE>
PAGE 42
Alan R. Dakay Vice President,
Institutional
Insurance Marketing
Paul F. Kolkman Vice President,
Finance
All executive officers
as a group (12) $2,811,894
___________________________________________________________________
Security Ownership of Management
The Company's directors and officers do not beneficially own any
outstanding shares of stock of the Company. All of the outstanding
shares of stock of the Company are beneficially owned by its
parent, IDS Financial Corporation. The percentage of shares of IDS
Financial Corporation owned by any director, and by all directors
and officers of the Company as a group, does not exceed 1 percent
of the class outstanding.
Legal Proceedings and Opinion
Legal matters in connection with federal laws and regulations
affecting the issue and sale of the Contracts described in this
prospectus and the organization of the Company, its authority to
issue Contracts under Minnesota law and the validity of the forms
of the Contracts under Minnesota law have been passed on by the
General Counsel of the Company.
Experts
The consolidated financial statements of IDS Life Insurance Company
at Dec. 31, 1993 and 1992, and for each of the three years in the
period ended Dec. 31, 1993, appearing in this prospectus and
registration statement have been audited by Ernst & Young,
independent auditors, as set forth in their reports thereon
appearing elsewhere herein and in the registration statement, and
are included in reliance upon such reports given upon the authority
of such firm as experts in accounting and auditing.
Appendix
1. Assume: contract effective date of October 1, 1993
contract termination date of July 1, 1998
contract year at termination is 5
Purchase Initial Current Accumulation
Year Payments Rate Rate Account Value
_________________________________________________________________
1 $10,000 6.50% 6.25% $12,560
2 8,000 6.00 6.25 9,870
3 12,000 6.25 6.25 13,960
4 15,000 7.50 6.75 16,660
5 20,000 6.50 6.50 20,640
_________________________________________________________________
<PAGE>
PAGE 43
Total Accumulation Account Value = $73,690
Withdrawal Charge = .03 x 73,690 = 2,211
Fixed Account Value = 73,690 - 2,211 = 71,479
Weighted Average Interest Rate = 6.433%
Interest Rate on New Purchase Payments = 6.750
MVA = $71,479 x (.06433 - .06750) x 5.0 = $-1,132.94
Market Value = 71,479 - 1,132.94 = 70,346.06
2. Assume: contract effective date of January 15, 1994
contract termination date of September 20, 1996
contract year at termination is 3
Purchase Initial Current Accumulation
Year Payments Rate Rate Account Value
_________________________________________________________________
1 $15,000 7.00% 6.25% $17,710
2 20,000 6.50 6.00 22,140
3 25,000 5.50 5.50 25,910
_________________________________________________________________
Total Accumulation Account Value = $65,760
Withdrawal Charge = .05 x 65,760 = 3,288
Fixed Account Value = 65,760 - 3,288 = 62,472
Weighted Average Interest Rate = 5.870%
Interest Rate on New Purchase Payments = 5.250
MVA = $62,472 x (.05870 - .05250) x 6 = $+2,323.96
Market Value = 62,472 + 2,323.96 = 64,795.96
<PAGE>
PAGE 44
IDS Life Financial Information
The financial statements shown below are those of the insurance
company and not those of the Fund. They are included in the
prospectus for the purpose of informing investors as to the
financial condition of the insurance company and its ability to
carry out its obligations under the variable annuity contracts.
IDS Life Insurance Company
<TABLE>
<CAPTION>
Consolidated Balance Sheets Dec. 31, 1993 Dec. 31, 1992
Assets (Thousands)
______________________________________________________________________________________________________________________________
<S> <C> <C>
Investments
Fixed maturities (Fair value: 1993, $20,425,979; 1992, $17,896,374) $19,392,424 $17,185,879
Mortgage loans on real estate (Fair value: 1993, $2,125,686; 1992, $1,785,970) 2,055,450 1,688,490
Policy loans 350,501 320,016
Other investments 56,307 51,955
______________________________________________________________________________________________________________________________
Total investments 21,854,682 19,246,340
______________________________________________________________________________________________________________________________
Cash and cash equivalents 146,281 73,563
Receivables:
Reinsurance 55,298 -
Amounts due from brokers 5,719 20,202
Other accounts receivable 21,459 20,095
Premiums due 1,329 1,361
______________________________________________________________________________________________________________________________
Total receivables 83,805 41,658
______________________________________________________________________________________________________________________________
Accrued investment income 307,177 285,120
Deferred policy acquisition costs 1,652,384 1,440,875
Other assets 21,730 18,672
Assets held in segregated asset accounts, primarily common stocks at market 8,991,694 6,189,545
______________________________________________________________________________________________________________________________
Total assets $33,057,753 $27,295,773
______________________________________________________________________________________________________________________________
Liabilities and Stockholder's Equity
______________________________________________________________________________________________________________________________
Liabilities:
Fixed annuities - future policy benefits $18,492,135 $16,342,419
Universal life-type insurance - future policy benefits 2,753,455 2,567,687
Traditional life-type insurance - future policy benefits 210,205 210,886
Disability income, health and long-term care insurance - future policy benefits 185,272 104,896
Policy claims and other policyholders' funds 44,516 49,899
Deferred federal income taxes 43,620 87,913
Amounts due to brokers 351,486 258,654
Other liabilities 292,024 235,509
Liabilities related to segregated asset accounts 8,991,694 6,189,545
______________________________________________________________________________________________________________________________
Total liabilities 31,364,407 26,047,408
______________________________________________________________________________________________________________________________
Stockholder's equity:
Capital stock, $30 per value per share; 100,000 shares authorized, issued and outstanding 3,000 3,000
Additional paid-in capital 222,000 22,000
Net unrealized appreciation on equity securities 114 214
Retained earnings 1,468,232 1,223,151
______________________________________________________________________________________________________________________________
Total stockholder's equity 1,693,346 1,248,365
______________________________________________________________________________________________________________________________
Total liabilities and stockholder's equity $33,057,753 $27,295,773
Commitments and contingencies (Note 6)
______________________________________________________________________________________________________________________________
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
PAGE 45
<TABLE>
<CAPTION>
Consolidated Statements of Income Years ended Dec. 31,
1993 1992 1991
(Thousands)
__________________________________________________________________________________________________________________________________
<S> <C> <C> <C>
Revenues:
Premiums
Traditional life insurance $ 48,137 $ 49,719 $ 49,706
Disability income and long-term care insurance 79,108 64,660 52,632
__________________________________________________________________________________________________________________________________
127,245 114,379 102,338
Policyholder and contractholder charges 184,205 156,368 137,202
Management and other fees 120,139 84,591 61,142
Net investment income 1,783,219 1,616,821 1,422,866
Net loss on investments (6,737) (3,710) (5,837)
__________________________________________________________________________________________________________________________________
Total revenues 2,208,071 1,968,449 1,717,711
__________________________________________________________________________________________________________________________________
Benefits and expenses:
Death and other benefits - traditional life insurance 32,136 34,139 30,170
Death and other benefits - universal life-type insurance
and investment contracts 49,692 42,174 38,529
Death and other benefits - disability income, health and
long-term care insurance 13,148 10,701 8,242
Decrease in liabilities for future policy benefits -
traditional life insurance (4,513) (5,788) (6,425)
Increase in liabilities for future policy benefits -
disability income, health and long-term care insurance 32,528 27,172 19,700
Interest credited on universal life-type insurance and investment contracts 1,218,647 1,188,379 1,098,281
Amortization of deferred policy acquisition costs 211,733 140,159 116,078
Other insurance and operating expenses 241,974 215,692 153,669
__________________________________________________________________________________________________________________________________
Total benefits and expenses 1,795,345 1,652,628 1,458,244
__________________________________________________________________________________________________________________________________
Income before income taxes 412,726 315,821 259,467
Income taxes 142,647 104,651 77,430
__________________________________________________________________________________________________________________________________
Net income $ 270,079 $ 211,170 $ 182,037
__________________________________________________________________________________________________________________________________
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
PAGE 46
<TABLE>
<CAPTION>
Consolidated Statements of Cash Flows Years ended Dec. 31,
1993 1992 1991
(Thousands)
__________________________________________________________________________________________________________________________________
<S> <C> <C> <C>
Cash flows from operating activities:
Net income $ 270,079 $ 211,170 $ 182,037
Adjustments to reconcile net income to net cash provided by operating activities:
Issuance - policy loans, excluding universal life-type insurance (35,886) (32,881) (29,309)
Repayment - policy loans, excluding universal life-type insurance 29,557 26,750 19,928
Change in reinsurance receivable (55,298) - -
Change in other accounts receivable (1,364) (4,772) (1,558)
Change in accrued investment income (22,057) (15,853) (26,022)
Change in deferred policy acquisition costs, net (211,509) (229,252) (175,442)
Change in liabilities for future policy benefits for traditional life, disability
income, health and long-term care insurance 79,695 21,384 13,275
Change in policy claims and other policyholders' funds (5,383) (1,347) 11,801
Change in deferred federal income taxes (44,237) (30,385) (29,207)
Change in other liabilities 56,515 88,997 45,323
Amortization of premium (accretion of discount), net (27,438) (4,289) 19,726
Net loss on investments 6,737 3,710 5,837
Premiums related to universal life-type insurance 397,883 312,621 264,504
Surrenders and death benefits related to universal life-type insurance (255,133) (166,162) (109,307)
Interest credited to account balances related to universal life-type insurance 156,885 161,873 160,585
Policyholder and contractholder charges, non-cash (115,140) (100,975) (96,211)
Other, net (1,907) (10,647) 2,258
__________________________________________________________________________________________________________________________________
Net cash provided by operating activities $ 221,999 $ 229,942 $ 258,218
__________________________________________________________________________________________________________________________________
Cash flows from investing activities:
Acquisition of investments, excluding policy loans $(7,102,546) $(7,001,348) $(5,518,481)
Maturities, sinking fund payments and calls of investments, excluding policy loans 3,931,819 2,700,479 838,589
Sale of investments, excluding policy loans 613,571 1,073,950 2,274,401
Change in amounts due from brokers 14,483 289,335 (134,312)
Change in amounts due to brokers 92,832 42,182 72,382
__________________________________________________________________________________________________________________________________
Net cash used in investing activities (2,449,841) (2,895,402) (2,467,421)
__________________________________________________________________________________________________________________________________
Cash flows from financing activities:
Considerations received related to investment contracts 2,843,668 2,821,069 2,316,333
Surrenders and death benefits related to investment contracts (1,765,869) (1,168,633) (871,808)
Interest credited to account balances related to investment contracts 1,071,917 1,026,506 937,696
Issuance - universal life-type insurance policy loans (70,304) (72,007) (76,010)
Repayment - universal life-type insurance policy loans 46,148 40,351 31,860
Capital contribution from parent 200,000 - -
Cash dividend to parent (25,000) (20,000) (20,000)
__________________________________________________________________________________________________________________________________
Net cash provided by financing activities 2,300,560 2,627,286 2,318,071
__________________________________________________________________________________________________________________________________
Net increase (decrease) in cash and cash equivalents 72,718 (38,174) 108,868
Cash and cash equivalents at beginning of year 73,563 111,737 2,869
__________________________________________________________________________________________________________________________________
Cash and cash equivalents at end of year $ 146,281 $ 73,563 $ 111,737
__________________________________________________________________________________________________________________________________
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
PAGE 47
Notes to Consolidated Financial Statements ($ Thousands)
Dec. 31, 1993, 1992, 1991
1. Summary of significant accounting policies
Nature of business
IDS Life Insurance Company (the Company) is engaged in the
insurance and annuity business. The Company sells various forms of
fixed and variable individual life insurance, group life insurance,
individual and group disability income insurance, long-term care
insurance, and single and installment premium fixed and variable
annuities.
Basis of presentation
The Company is a wholly owned subsidiary of IDS Financial
Corporation (IDS), which is a wholly owned subsidiary of American
Express Company. The accompanying consolidated financial
statements include the accounts of the Company and its wholly owned
subsidiaries, IDS Life Insurance Company of New York and American
Enterprise Life Insurance Company. All material intercompany
accounts and transactions have been eliminated in consolidation.
The accompanying consolidated financial statements have been
prepared in conformity with generally accepted accounting
principles which vary in certain respects from reporting practices
prescribed or permitted by state insurance regulatory authorities.
Also, the consolidated financial statements are presented on a
historical cost basis without adjustment of the net assets
attributable to the 1984 acquisition of IDS by American Express
Company.
Investments
Investments in fixed maturities are carried at cost, adjusted where
appropriate for amortization of premiums and accretion of
discounts. Mortgage loans on real estate are carried principally
at the unpaid principal balances of the related loans. Policy
loans are carried at the aggregate of the unpaid loan balances
which do not exceed the cash surrender values of the related
policies. Other investments include interest rate caps, real
estate and equity securities. 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 estimated realizable value by a charge to income. Equity
securities are carried at market value and the related net
unrealized appreciation or depreciation is reported as a credit or
charge to stockholder's equity.
The Company has the ability and the intent to recover the costs of
these investments by holding them for the forseeable future. The
ability to hold investments to scheduled maturity dates is
dependent on, among other things, annuity contract owners
maintaining their annuity contracts in force.
The Company will implement, effective January 1, 1994, Statement of
Financial Accounting Standards No. 115, "Accounting for Certain
Investments in Debt and Equity Securities." Under the new rules,
debt securities that the Company has both the positive intent and
ability to hold to maturity will be carried at amortized cost.
<PAGE>
PAGE 48
1. Summary of significant accounting policies (continued)
Debt securities that the Company does not have the positive intent
and ability to hold to maturity and all marketable equity
securities will be classified as available-for-sale and carried at
fair value. Unrealized gains and losses on securites classified as
available-for-sale will be carried as a separate component of
stockholder's equity. The effect of the new rules will be to
increase stockholder's equity by approximately $181 million, net of
taxes, as of January 1, 1994, but the new rules will have no
material impact on the Company's results of operations.
Realized investment gain or loss is determined on an identified
cost basis.
Interest rate cap contracts are purchased to reduce the Company's
exposure to rising interest rates which would increase the cost of
future policy benefits for interest sensitive products. Costs
are amortized over the lives of the agreements and benefits are
recognized when realized.
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.
Statement 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 consolidated statement of cash
flows for the years ended Dec. 31 is summarized as follows:
1993 1992 1991
___________________________________________________________________
Cash paid during the year for:
Income taxes $188,204 $140,445 $111,809
Interest on borrowings 2,661 1,265 108
___________________________________________________________________
Recognition of profits on annuity contracts and insurance policies
The Company issues single premium deferred annuity contracts that
provide for a service fee (surrender charge) at annually decreasing
rates upon withdrawal of the annuity accumulation value by the
contract owner. No sales fee is deducted from the contract
considerations received on these contracts ("no load" annuities).
Single premium deferred annuities issued prior to 1980 had a sales
fee and no surrender charge. All of the Company's single premium
deferred annuity contracts provide for crediting the contract
owners' accumulations at specified rates of interest. Such rates
are revised by the Company from time to time based on changes in
the market investment yield rates for fixed-income securities.
<PAGE>
PAGE 49
1. Summary of significant accounting policies (continued)
Profits on single premium deferred annuities and installment
annuities are recognized by the Company over the lives of the
contracts and represent the excess of investment income earned
from investment of contract considerations over interest credited
to contract owners and other expenses.
The retrospective deposit method is used in accounting for
universal life-type insurance. This method recognizes profits over
the lives of the policies in proportion to the estimated gross
profits expected to be realized.
Premiums on traditional life, disability income, health and
long-term care insurance policies are recognized as revenue when
collected or due, and related benefits and expenses are associated
with premium revenue in a manner that results in recognition of
profits over the lives of the insurance policies. This association
is accomplished by means of the provision for future policy
benefits and the deferral and subsequent amortization of policy
acquisition costs.
Deferred policy acquisition costs
The costs of acquiring new business, principally sales
compensation, policy issue costs, underwriting and certain sales
expenses, have been deferred on insurance and annuity contracts.
The deferred acquisition costs for single premium deferred
annuities and installment annuities are amortized based upon
surrender charge revenue and a portion of the excess of investment
income earned from investment of the contract considerations over
the interest credited to contract owners. The costs for universal
life-type insurance are amortized over the lives of the policies as
a percentage of the estimated gross profits expected to be
realized on the policies. For traditional life, disability income,
health and long-term care insurance policies, the costs are
amortized over an appropriate period in proportion to premium
revenue.
Liabilities for future policy benefits
Liabilities for universal life-type insurance, single premium
deferred annuities and installment annuities are accumulation
values.
Liabilities for fixed annuities in a benefit status are based on
the Progressive Annuity Table with interest at 5 percent, the 1971
Individual Annuity Table with interest at 7 percent or 8.25
percent, or the 1983a Table with various interest rates ranging
from 5.5 percent to 9.5 percent, depending on year of issue.
Liabilities for future benefits on traditional life insurance have
been computed principally by the net level premium method, based on
anticipated rates of mortality (approximating the 1965-1970 Select
and Ultimate Basic Table for policies issued after 1980 and the
1955-1960 Select and Ultimate Basic Table for policies issued prior
to 1981), policy persistency derived from Company experience data
(first year rates ranging from approximately 70 percent to 90
percent and increasing rates thereafter), and estimated future
investment yields of 4 percent for policies issued before 1974 and
<PAGE>
PAGE 50
1. Summary of significant accounting policies (continued)
5.25 percent for policies issued from 1974 to 1980. Cash value
plans issued in 1980 and later assume future investment rates that
grade from 9.5 percent to 5 percent over 20 years. Term insurance
issued from 1981 to 1984 assumes an 8 percent level investment rate
and term insurance issued after 1984 assumes investment rates that
grade from 10 percent to 6 percent over 20 years.
Liabilities for future disability income policy benefits have been
computed principally by the net level premium method, based on the
1964 Commissioners Disability Table with the 1958 Commissioners
Standard Ordinary Mortality Table at 3 percent interest for 1980
and prior, 8 percent interest for persons disabled from 1981 to
1991 and 6 percent interest for persons disabled after 1991.
Liabilities for future benefits on long-term care insurance have
been computed principally by the net level premium method, using
morbidity rates based on the 1985 National Nursing Home Survey and
mortality rates based on the 1983a Table. The interest rate basis
is 9.5 percent grading to 7 percent over ten years for policies
issued from 1989 to 1992, 7.75 percent grading to 7 percent over
four years for policies issued after 1992, 8 percent for claims
incurred in 1989 to 1991 and 6 percent for claims incurred after
1991.
At Dec. 31, 1993 and 1992, the carrying amount and fair value of
fixed annuities future policy benefits, after excluding life
insurance-related contracts carried at $913,127 and $834,909, were
$17,579,008 and $15,507,510, and $16,881,747 and $14,867,066,
respectively. The fair value is net of policy loans of $59,132 and
$51,394 at Dec. 31, 1993 and 1992, respectively. The fair value of
these benefits is based on the status of the annuities at Dec. 31,
1993 and 1992. 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 the rate appropriate for contracts issued in 1993 and
1992.
Reinsurance
The maximum amount of life insurance risk retained by the Company
on any one life is $750 of life and waiver of premium benefits plus
$50 of accidental death benefits. The maximum amount of disability
income risk retained by the Company on any one life is $6 of
monthly benefit for benefit periods longer than three years. The
excesses are reinsured with other life insurance companies on a
yearly renewable term basis. Graded premium whole life policies
and long term care are primarily reinsured on a coinsurance basis.
In 1993 the Company adopted Statement of Financial Accounting
Standards (SFAS) No. 113, "Accounting and Reporting for Reinsurance
of Short-Duration and Long-Duration Contracts." Under SFAS No.
113, amounts paid or deemed to have been paid for reinsurance
contracts are recorded as reinsurance receivables. Prior to 1993,
these amounts were recorded as a reduction of the liability for
future insurance policy benefits. The cost of reinsurance is
accounted for over the period covered by the reinsurance contract.
<PAGE>
PAGE 51
1. Summary of significant accounting policies (continued)
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 IDS and American Express Company, tax
benefit is recognized for losses to the extent they can be used on
the consolidated tax return. It is the policy of IDS and its
subsidiaries that IDS will reimburse a subsidiary for any tax
benefit.
Included in other liabilities at Dec. 31, 1993 and 1992 are $14,709
and $18,181, respectively, payable to IDS for federal income taxes.
Segregated asset account business
The segregated asset account assets and liabilities represent funds
held for the exclusive benefit of the variable annuity and variable
life insurance contract owners. The Company receives investment
management and mortality and expense assurance fees from the
variable annuity and variable life insurance mutual funds and
segregated asset accounts. The Company also deducts a monthly cost
of insurance charge and receives a minimum death benefit guarantee
fee and issue and administrative fee from the variable life
insurance segregated asset accounts.
The Company makes contractual mortality assurances to the variable
annuity contract owners that the net assets of the segregated asset
accounts will not be affected by future variations in the actual
life expectancy experience of the annuitants and the beneficiaries
from the mortality assumptions implicit in the annuity contracts.
The Company makes periodic fund transfers to, or withdrawals from,
the segregated asset accounts for such actuarial adjustments for
variable annuities that are in the benefit payment period. The
Company guarantees, for the variable life insurance policyholders,
the cost of the contractual insurance rate and that the death
benefit will never be less than the death benefit at the date of
issuance.
At Dec. 31, 1993 and 1992 the fair value of liabilities related to
segregated asset accounts was $8,305,209 and $5,727,402,
respectively. The fair value of these liabilities at Dec. 31, 1993
and 1992 is estimated as the carrying amount less variable
insurance contracts carried at $346,276 and $226,946, respectively,
and surrender charges, if applicable.
Reclassification
Certain 1992 and 1991 amounts have been reclassified to conform to
the 1993 presentation.
2. Investments
Market values of investments in fixed maturities represent quoted
market prices and estimated fair values when quoted prices are not
available. Estimated fair values are determined by established
procedures involving, among other things, review of market indices,
<PAGE>
PAGE 52
2. Investments (continued)
price levels of current offerings of comparable issues, price
estimates and market data from independent brokers and financial
files.
Net gain (loss) on investments for the years ended Dec. 31 is
summarized as follows:
<TABLE>
<CAPTION>
1993 1992 1991
<S> <C> <C> <C>
Fixed maturities $ 5,460 $ 14,474 $ 22,750
Mortgage loans (11,422) (5,004) (1,064)
Other investments (6,606) (8,265) (5,695)
(12,568) 1,205 15,991
Net (increase) decrease in allowance for losses 5,831 (4,915) (21,828)
$ (6,737) $ (3,710) $ (5,837)
Changes in net unrealized appreciation
(depreciation) of investments for the years
ended Dec. 31 are summarized as follows:
1993 1992 1991
Fixed maturities $323,060 $(128,683) $861,355
Equity securities (156) 300 418
</TABLE>
<TABLE>
<CAPTION>
Fair values of and gross unrealized gains
and losses on investments in fixed maturities
carried at amortized cost at Dec. 31 are as follows:
Gross Gross
Amortized Unrealized Unrealized Fair
1993 Cost Gains Losses Value
<S> <C> <C> <C> <C>
U.S. Government agency obligations $ 63,532 $ 3,546 $ 1,377 $ 65,701
State and municipal obligations 11,072 2,380 - 13,452
Corporate bonds and obligations 9,362,074 768,747 45,706 10,085,115
Mortgage-backed securities 9,978,523 341,067 57,879 10,261,711
19,415,201 1,115,740 104,962 20,425,979
Less allowance for losses 22,777 - 22,777 -
$19,392,424 $1,115,740 $ 82,185 $20,425,979
Gross Gross
Amortized Unrealized Unrealized Fair
1992 Cost Gains Losses Value
U.S. Government agency obligations $ 36,753 $ 3,658 $ 4 $ 40,407
State and municipal obligations 11,234 1,542 - 12,776
Corporate bonds and obligations 7,688,190 431,781 104,707 8,015,264
Mortgage-backed securities 9,487,601 377,539 37,213 9,827,927
17,223,778 814,520 141,924 17,896,374
Less allowance for losses 37,899 - 37,899 -
$17,185,879 $ 814,520 $104,025 $17,896,374
The amortized cost and fair value of investments in fixed maturities at Dec. 31, 1993 by
contractual maturity are shown below. Expected maturities will differ from contractual
maturities because borrowers may have the right to call or prepay obligations with or without
call or prepayment penalties.
Amortized Fair
Cost Value
Due in one year or less $ 89,160 $ 90,928
Due from one to five years 1,430,756 1,532,298
Due from five to ten years 5,488,955 5,924,580
Due in more than ten years 2,427,807 2,616,462
Mortgage-backed securities 9,978,523 10,261,711
$19,415,201 $20,425,979
</TABLE>
<PAGE>
PAGE 53
2. Investments (continued)
Proceeds from sales of investments in fixed maturities during 1993
and 1992 were $482,523 and $996,619, respectively. During 1993 and
1992, gross gains of $48,499 and $94,915, respectively, and gross
losses of $43,039 and $80,441, respectively, were realized on those
sales.
At Dec. 31, 1993, the amount of net unrealized appreciation on
equity securities included $160 of gross unrealized appreciation,
$nil of gross unrealized depreciation and deferred tax credits of
$46. At Dec. 31, 1992, the amount of net unrealized appreciation
on equity securities included $328 of gross unrealized
appreciation, $12 of gross unrealized depreciation and deferred tax
credits of $102. The fair value of equity securities was $1,900
and $2,005 at Dec. 31, 1993 and 1992, respectively.
Included in other investments at Dec. 31, 1993 are interest rate
caps at amortized cost of $26,923 with a fair value of $14,201.
These interest rate caps carry a notional amount of $4,400,000 and
expire on various dates from 1994 to 1998.
At Dec. 31, 1993, bonds carried at $4,184 were on deposit with
various states as required by law.
Net investment income for the years ended Dec. 31 is summarized as
follows:
<TABLE>
<CAPTION>
1993 1992 1991
______________________________________________________________________________________
<S> <C> <C> <C>
Interest on fixed maturities $1,589,802 $1,449,234 $1,279,317
Interest on mortgage loans 175,063 148,693 122,723
Other investment income 29,345 24,281 20,005
Interest on cash equivalents 2,137 5,363 8,729
1,796,347 1,627,571 1,430,774
Less investment expenses 13,128 10,750 7,908
______________________________________________________________________________________
$1,783,219 $1,616,821 $1,422,866
______________________________________________________________________________________
At Dec. 31, 1993, investments in fixed maturities comprised 89
percent of the Company's total invested assets. These securities
are rated by Moody's and Standard & Poor's (S&P), except for
approximately $2.1 billion which is rated by IDS internal analysts
using criteria similar to Moody's and S&P. A summary of
investments in fixed maturities by rating on Dec. 31 is as follows:
Dec. 31, Dec. 31,
Rating 1993 1992
________________________________________________________________________
Aaa/AAA $ 9,959,884 $ 9,480,345
Aa/AA 258,659 219,370
Aa/A 160,638 109,806
A/A 2,021,177 1,735,750
A/BBB 654,949 447,592
Baa/BBB 3,936,366 3,352,192
Baa/BB 717,606 392,361
Below investment grade 1,705,922 1,486,362
________________________________________________________________________
$19,415,201 $17,223,778
________________________________________________________________________
</TABLE>
<PAGE>
PAGE 54
2. Investments (continued)
At Dec. 31, 1993, 99 percent of the securities rated Aaa/AAA are
GNMA, FNMA and FHLMC mortgage-backed securities. No holdings of
any other issuer are greater than 1 percent of the Company's total
investments in fixed maturities.
At Dec. 31, 1993, approximately 9.4 percent of the Company's
invested assets were mortgage loans on real estate. Summaries of
mortgage loans by region of the United States and by type of real
estate at Dec. 31, 1993 and 1992 are as follows:
<TABLE>
<CAPTION>
Dec. 31, 1993 Dec. 31, 1992
On Balance Commitments On Balance Commitments
Region Sheet to Purchase Sheet to Purchase
______________________________________________________________________________________
<S> <C> <C> <C> <C>
East North Central $ 552,150 $ 20,933 $ 484,808 $ 21,728
West North Central 361,704 16,746 357,388 14,327
South Atlantic 452,679 52,440 320,593 32,022
Middle Atlantic 260,239 41,090 188,294 56,816
New England 155,214 17,620 114,170 24,677
Pacific 120,378 15,492 89,636 5,148
West South Central 43,948 525 46,296 716
East South Central 73,748 - 83,994 10,085
Mountain 70,410 14,594 26,906 8,882
______________________________________________________________________________________
2,090,470 179,440 1,712,085 174,401
Less allowance for losses 35,020 - 23,595 -
______________________________________________________________________________________
$2,055,450 $179,440 $1,688,490 $174,401
______________________________________________________________________________________
Dec. 31, 1993 Dec. 31, 1992
On Balance Commitments On Balance Commitments
Property type Sheet to Purchase Sheet to Purchase
______________________________________________________________________________________
Apartments $ 744,788 $ 79,153 $ 541,855 $ 70,198
Department/retail stores 624,651 65,402 504,331 74,671
Office buildings 234,042 15,583 327,216 12,950
Industrial buildings 217,648 9,279 203,361 15,150
Nursing/retirement homes 83,768 917 56,431 716
Hotels/motels 33,138 - 34,631 716
Medical buildings 30,429 5,954 23,006 -
Residential 78 - 6,618 -
Other 121,928 3,152 14,636 -
______________________________________________________________________________________
2,090,470 179,440 1,712,085 174,401
Less allowance for losses 35,020 - 23,595 -
______________________________________________________________________________________
$2,055,450 $179,440 $1,688,490 $174,401
______________________________________________________________________________________
</TABLE>
Mortgage loan fundings are restricted by state insurance regulatory
authorities to 80 percent or less of the market value of the real
estate at the time of origination of the loan. The Company holds
the mortgage document, which gives the right to take possession of
the property if the borrower fails to perform according to the
terms of the agreement. The fair value of the mortgage loans is
determined by a discounted cash flow analysis using mortgage
interest rates currently offered for mortgages of similar
maturities. Commitments to purchase mortgages are made in the
ordinary course of business. The fair value of the mortgage
commitments is $nil.
<PAGE>
PAGE 55
3. Income taxes
The Company qualifies as a life insurance company for federal
income tax purposes. As such, the Company is subject to the
Internal Revenue Code provisions applicable to life insurance
companies.
Income tax expense consists of the following:
<TABLE>
<CAPTION>
1993 1992 1991
<S> <C> <C> <C>
Federal income taxes:
Current $180,558 $130,998 $104,292
Deferred (44,237) (30,385) (29,207)
136,321 100,613 75,085
State income taxes-Current 6,326 4,038 2,345
Income tax expense $142,647 $104,651 $ 77,430
</TABLE>
Increases (decreases) to the federal tax provision applicable to
pretax income based on the statutory rate are attributable to:
<TABLE>
<CAPTION>
1993 1992 1991
Provision Rate Provision Rate Provision Rate
<S> <C> <C> <C> <C> <C> <C>
Federal income taxes based on
the statutory rate $144,454 35.0% $107,379 34.0% $88,219 34.0%
Increases (decreases) are attributable to:
Tax-excluded interest and dividend income (11,002) (2.7) (8,209) (2.6) (9,496) (3.7)
Other, net 2,869 0.7 1,443 0.4 (3,638) (1.4)
Federal income taxes $136,321 33.0% $100,613 31.8% $75,085 28.9%
</TABLE>
A portion of life insurance company income earned prior to 1984 was
not subject to current taxation but was accumulated, for tax
purposes, in a "policyholders' surplus account." At Dec. 31, 1993,
the Company had a policyholders' surplus account balance of
$19,032. 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
$6,661 have not been established because no distributions of such
amounts are contemplated.
Significant components of the Company's deferred tax assets and
liabilities as of Dec. 31 are as follows:
<TABLE>
<CAPTION>
Deferred tax assets: 1993 1992
<S> <C> <C>
Policy reserves $453,436 $356,712
Life insurance guarantee fund assessment reserve 35,000 21,794
Total deferred tax assets 488,436 378,506
Deferred tax liabilities:
Deferred policy acquisition costs 509,868 446,579
Investments 10,105 2,435
Other 12,083 17,405
Total deferred tax liabilities 532,056 466,419
Net deferred tax liabilities $ 43,620 $ 87,913
</TABLE>
<PAGE>
PAGE 56
4. Stockholder's equity
Retained earnings available for distribution as dividends to parent
are limited to the Company's surplus as determined in accordance
with accounting practices prescribed by state insurance regulatory
authorities. Statutory unassigned surplus aggregated $922,246 as
of Dec. 31, 1993 and $685,103 as of Dec. 31, 1992 (see Note 3 with
respect to the income tax effect of certain distributions). In
addition, any dividend distributions in 1994 in excess of
approximately $259,063 would require approval of the Department of
Commerce of the State of Minnesota.
Statutory net income for 1993, 1992 and 1991 and stockholder's
equity as of Dec. 31, 1993, 1992 and 1991 are summarized as
follows:
<TABLE>
<CAPTION>
1993 1992 1991
___________________________________________________________________________________
<S> <C> <C> <C>
Statutory net income $ 275,015 $180,296 $200,704
Statutory stockholder's equity 1,157,022 714,942 551,939
___________________________________________________________________________________
</TABLE>
Dividends paid to IDS were $25,000 in 1993, $20,000 in 1992 and
$20,000 in 1991.
5. Related party transactions
The Company has loaned funds or agreed to loan funds to IDS under
two separate loan agreements. The balance of the first loan was
$75,000 and $nil at Dec. 31, 1993 and 1992, respectively. This
loan can be increased to a maximum of $100,000 and pays interest at
a rate equal to the preceding month's effective new money rate for
the Company's permanent investments. It is collateralized by
equities valued at $96,790 at Dec. 31, 1993. The second loan was
used to fund the construction of the IDS Operations Center. This
loan had an outstanding balance of $84,588 and $85,278 at Dec. 31,
1993 and 1992, respectively. The loan is secured by a first lien
on the IDS Operations Center property and has an interest rate of
9.89 percent. The Company also has a loan to an affiliate which
was used to fund construction of the IDS Learning Center. At Dec.
31, 1993 and 1992, the balance outstanding was $22,573 and $22,755,
respectively. The loan is secured by a first lien on the IDS
Learning Center property and has an interest rate of 9.82 percent.
Interest income on the above loans totaled $11,116, $10,711 and
$14,783 in 1993, 1992 and 1991, respectively.
The Company purchased a five year secured note from an affiliated
company which had an outstanding balance of $27,222 and $31,111 at
Dec. 31, 1993 and 1992, respectively. The note bears a market
interest rate, revised semi-annually, which at Dec. 31, 1993 was
8.42 percent.
The Company has a reinsurance agreement whereby it assumed 100
percent of a block of single premium life insurance business from
an affiliated company. The accompanying consolidated balance sheet
at Dec. 31, 1993 and 1992 includes $759,714 and $746,060,
respectively, of future policy benefits related to this agreement. <PAGE>
PAGE 57
5. Related party transactions (continued)
The accompanying consolidated statement of income includes revenue
from policyholder charges of $21, $109 and $243, and expenses of
$4,931, $5,897 and $6,445 related to this agreement for 1993, 1992
and 1991, respectively.
The Company has a reinsurance agreement to cede 50 percent of its
long-term care insurance business to an affiliated company. The
accompanying consolidated balance sheet at Dec. 31, 1993 includes
$44,086 of reinsurance receivables related to this agreement.
Liabilities for future policy benefits were reduced by $27,028 at
Dec. 31, 1992 for the effect of this agreement. Premiums ceded
amounted to $16,230, $12,499 and $6,365 and reinsurance recovered
from reinsurers amounted to $404, $250 and $187 for the years ended
Dec. 31, 1993, 1992 and 1991, respectively.
The Company participates in the retirement plan of IDS which covers
all permanent employees age 21 and over who have met certain
employment requirements. The benefits are based on the number of
years the employee participates in the plan, their final average
monthly salary, the level of social security benefits the employee
is eligible for and the level of vesting the employee has earned in
the plan. IDS' policy is to fund retirement plan costs accrued
subject to ERISA and federal income tax considerations. The
Company's share of the total net periodic pension cost was $nil in
1993, 1992 and 1991.
The Company also participates in defined contribution pension plans
of IDS 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 1993,
1992 and 1991 were $2,008, $1,826 and $1,682, respectively.
The Company participates in defined benefit health care plans of
IDS that provide health care and life insurance benefits to retired
employees and retired financial planners. The plans include
participant contributions and service-related eligibility
requirements. Upon retirement, such employees are considered to
have been employees of IDS. IDS expenses these benefits and
allocates the expenses to its subsidiaries. Accordingly, costs of
such benefits to the Company are included in employee compensation
and benefits and cannot be identified on a separate company basis.
Charges by IDS for use of joint facilities and other services
aggregated $243,346, $204,675 and $174,500 for 1993, 1992 and 1991,
respectively. Certain of these costs are included in deferred
policy acquisition costs. In addition, the Company rents its home
office space from IDS on an annual renewable basis. Such rentals
aggregated $4,513, $4,074 and $3,469 for 1993, 1992 and 1991,
respectively.
Certain commission and marketing services expenses are allocated to
the Company by its affiliates. The expenses for 1993, 1992 and
1991 were $127,000, $110,064 and $95,367, respectively. Certain of
the costs assessed to the Company are included in deferred policy
acquisition costs.
<PAGE>
PAGE 58
6. Commitments and contingencies
At Dec. 31, 1993 and 1992, traditional life insurance and universal
life-type insurance in force aggregated $46,125,515 and
$40,904,345, respectively, of which $3,038,426 and $2,937,590 were
reinsured at the respective year ends. The Company also reinsures
a portion of the risks assumed under disability income policies.
Under the agreements, premiums ceded to reinsurers amounted to
$28,276, $24,222 and $16,908 and reinsurance recovered from
reinsurers amounted to $3,345, $6,766 and $6,447 for the years
ended Dec. 31, 1993, 1992 and 1991.
Reinsurance contracts do not relieve the Company from its primary
obligation to policyholders.
The Company is a defendant in various lawsuits, none of which, in
the opinion of the Company counsel, will result in a material
liability.
The Company received the revenue agent's report for the tax years
1984 through 1986 in February 1992, and has settled on all agreed
audit issues. The Company will protest the remaining open issues
and, while the outcome of the appeal is not known at this time,
management does not believe there will be any material impact as a
result of this audit.
7. Lines of credit
The Company has available lines of credit with two banks
aggregating $75,000 at 45 to 80 basis points over the banks' cost
of funds or equal to the prime rate, depending on which line of
credit agreement is used. Borrowings outstanding under these
agreements were $1,519 and $nil at Dec. 31, 1993 and 1992,
respectively.
8. Segment information
The Company's operations consist of two business segments; first,
individual and group life insurance, disability income, health and
long-term care insurance, and second, annuity products designed for
individuals, pension plans, small businesses and employer-sponsored
groups. The consolidated statement of income for the years ended
Dec. 31, 1993, 1992 and 1991 and total assets at Dec. 31, 1993,
1992 and 1991 by segment are summarized as follows:
<PAGE>
PAGE 59
8. Segment information (continued)
<TABLE>
<CAPTION>
1993 1992 1991
___________________________________________________________________________________________________________
<S> <C> <C> <C>
Net investment income:
Life, disability income, health and long-term care insurance $ 250,224 $ 246,676 $ 233,828
Annuities 1,532,995 1,370,145 1,189,038
___________________________________________________________________________________________________________
$ 1,783,219 $ 1,616,821 $ 1,422,866
___________________________________________________________________________________________________________
Premiums and other considerations:
Life, disability income and long-term care insurance $ 281,284 $ 250,386 $ 220,754
Annuities 143,876 104,952 79,928
___________________________________________________________________________________________________________
$ 425,160 $ 355,338 $ 300,682
___________________________________________________________________________________________________________
Income before income taxes:
Life, disability income, health and long-term care insurance $ 104,127 $ 96,215 $ 90,050
Annuities 315,336 223,316 175,254
Net loss on investments (6,737) (3,710) (5,837)
___________________________________________________________________________________________________________
$ 412,726 $ 315,821 $ 259,467
___________________________________________________________________________________________________________
Total assets:
Life, disability income, health and long-term care insurance $ 4,810,145 $ 4,093,778 $ 3,670,197
Annuities 28,247,608 23,201,995 18,888,612
___________________________________________________________________________________________________________
$33,057,753 $27,295,773 $22,558,809
___________________________________________________________________________________________________________
</TABLE>
Allocations of net investment income and certain general expenses
are based on various assumptions and estimates.
Assets are not individually identifiable by segment and have been
allocated principally based on the amount of future policy benefits
by segment.
Capital expenditures and depreciation expense are not material, and
consequently, are not reported.
<PAGE>
PAGE 60
Annual Financial Information
Report of Independent Auditors
The Board of Directors
IDS Life Insurance Company
We have audited the accompanying consolidated balance sheets of IDS
Life Insurance Company (a wholly owned subsidiary of IDS Financial
Corporation) as of December 31, 1993 and 1992, and the related
consolidated statements of income and cash flows for each of the
three years in the period ended December 31, 1993. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the consolidated financial
position of IDS Life Insurance Company at December 31, 1993 and
1992, and the consolidated results of its operations and its cash
flows for each of the three years in the period ended December 31,
1993, in conformity with generally accepted accounting principles.
ERNST & YOUNG
February 3, 1994
Minneapolis, Minnesota
<PAGE>
PAGE 61
Table of Contents of the
Statement of Additional Information
Performance Information.............................. p. 3
Rating Agencies...................................... p. 6
Principal Underwriter................................ p. 7
Independent Auditors................................. p. 7
Mortality and Expense Risk Charge.................... p. 7
Prospectus........................................... p. 7
Financial Statements -
- IDS Life Accounts F, IZ, JZ, G, H and N.......... p. 8
_________________________________________________________________
Please check the appropriate box to receive a copy of the Statement
of Additional Information for:
________ IDS Life Group Variable Annuity Contract
________ IDS Life Retirement Annuity Mutual Funds
Please return this request to:
IDS Life Annuity Service
IDS Life Insurance Company
P.O. Box 499
Minneapolis, MN 55440-0499
Your name _____________________________________________
Address _______________________________________________
City ____________________ State ________ Zip __________
<PAGE>
PAGE 62
STATEMENT OF ADDITIONAL INFORMATION
for
GROUP, UNALLOCATED FIXED/VARIABLE ANNUITY CONTRACTS
IDS LIFE ACCOUNTS F, IZ, JZ, G, H and N
April 29, 1994
IDS Life Accounts F, IZ, JZ, G, H and N are separate accounts
established and maintained by IDS Life Insurance Company (IDS
Life).
This Statement of Additional Information dated April 29, 1994, is
not a prospectus. It should be read together with the accounts'
prospectus, dated April 29, 1994, which may be obtained from your
IDS financial planner, or by writing or calling IDS Life at the
address or telephone number below.
IDS Life Insurance Company
P10/199
P.O. Box 74
Minneapolis, MN 55440-0074
(612) 671-3131
<PAGE>
PAGE 63
TABLE OF CONTENTS
Performance Information........................................p. 3
Rating Agencies................................................p. 5
Principal Underwriter..........................................p. 6
Independent Auditors...........................................p. 6
Mortality and Expense Risk Charge..............................p. 6
Prospectus.....................................................p. 7
Financial Statements
- IDS Life Accounts F, IZ, JZ, G, H, and N.........p. 8
<PAGE>
PAGE 64
PERFORMANCE INFORMATION
Calculation of yield for Account H
IDS Life Account H, which invests in IDS Life Moneyshare Fund,
Inc., calculates an annualized simple yield and a compound yield
based on a seven-day period.
The simple yield is calculated by determining the net change in the
value of a hypothetical account having the balance of one
accumulation unit at the beginning of the seven-day period. (The
net change does not include capital change, but does include a pro
rata share of the annual contract charges, including the annual
contract administrative charge and the mortality and expense risk
fee.) The net change in the account value is divided by the value
of the account at the beginning of the period to obtain the return
for the period. That return is then multiplied by 365/7 to obtain
an annualized figure. The value of the hypothetical account
includes the amount of any declared dividends, the value of any
shares purchased with any dividend paid during the period and any
dividends declared for such shares. The account's yield does not
include any realized or unrealized gains or losses, nor does it
include the effect of any applicable withdrawal charge.
The account calculates its compound yield according to the
following formula:
365/7
Compound Yield = [return for seven-day period +1) ] - 1
On Dec. 31, 1993, the account's annualized yield was 1.48% and its
compound yield was 1.49%.
The rate of return, or yield, on the account's accumulation unit
may fluctuate daily and does not provide a basis for determining
future yields. Investors must consider, when comparing an
investment in Account H with fixed annuities, that fixed annuities
often provide an agreed-to or guaranteed fixed yield for a stated
period of time, whereas the variable account's yield fluctuates.
In comparing the yield of Account H to a money market fund, you
should consider the different services that the annuity provides.
Calculation of yield for non-money market accounts
For an account other than the Money Market Account, quotations of
yield will be based on all investment income earned during a
particular 30-day period, less expenses accrued during the period
(net investment income) and will be computed by dividing net
investment income per accumulation unit by the value of an
accumulation unit on the last day of the period, according to the
following formula:
YIELD = 2[(a-b + 1)6 - 1]
cd
<PAGE>
PAGE 65
where: a = dividends and investment income earned during the
period
b = expenses accrued for the period (net of
reimbursements)
c = the average daily number of accumulation units
outstanding during the period that were entitled to
receive dividends
d = the maximum offering price per accumulation unit on
the last day of the period
Yield on the account is earned from the increase in the net asset
value of shares of the fund in which the account invests and from
dividends declared and paid by the fund, which are automatically
invested in shares of the fund.
Calculation of average annual total return
Quotations of average annual total return for an account will be
expressed in terms of the average annual compounded rate of return
of a hypothetical investment in the annuity contract over a period
of one, five and 10 years (or, if less, up to the life of the
account), calculated according to the following formula:
P(1+T)n = ERV
where: P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = Ending Redeemable Value of a hypothetical $1,000
payment made at the beginning of the one, five
or ten year (or other) period at the end of the
one, five or ten year (or other) period (or
fractional portion thereof)
Account total return figures reflect the deduction of the contract
administrative charge and mortality and expense risk fee.
Performance figures will be shown with the deduction of the
applicable surrender charge; in addition, performance figures may
be shown without the deduction of a surrender charge. The
Securities and Exchange Commission requires that an assumption be
made that the contract owner surrenders the entire contract at the
end of the one, five and ten year periods (or, if less, up to the
life of the account) for which performance is required to be
calculated.
Aggregate total return
Aggregate total return represents the cumulative change in the net
asset value of shares of the Fund in which the subaccount invests
over a specified period of time and is computed by the following
formula:
ERV - P
P
<PAGE>
PAGE 66
where: P = a hypothetical initial payment of $1,000
ERV = Ending Redeemable Value of a hypothetical $1,000
payment made at the beginning of the one, five, or
ten year (or other) period at the end of the one,
five, or ten year (or other) period (or fractional
portion thereof)
Performance of the accounts may be quoted or compared to rankings,
yields, or returns as published or prepared by independent rating
or statistical services or publishers or publications such as The
Bank Rate Monitor National Index, Barron's, Business Week,
Donoghue's Money Market Fund Report, Financial Services Week,
Financial Times, Financial World, Forbes, Fortune, Global Investor,
Institutional Investor, Investor's Daily, Kiplinger's Personal
Finance, Lipper Analytical Services, Money, Mutual Fund Forecaster,
Newsweek, The New York Times, Personal Investor, Stanger Report,
Sylvia Porter's Personal Finance, USA Today, U.S. News and World
Report, The Wall Street Journal and Wiesenberger Investment
Companies Service.
RATING AGENCIES
The following chart provides information on the relevance of
ratings* given to IDS Life Insurance Company by independent rating
agencies that evaluate the financial soundness of insurance
companies. IDS Life has one of the most liquid and highest quality
balance sheets of the largest insurance companies in the
industry.**
Rating Agency Rating Relevance of Rating
A.M. Best A+ Reflects A.M. Best's opinion
(Superior) regarding IDS Life's strong
distribution network, favorable
overall balance sheet profile,
consistently improving
profitability, adequate level of
capitalization and asset liability
management expertise.
Duff & Phelps AAA Reflects Duff & Phelps' opinion
regarding IDS Life's consistently
excellent profitability record,
stable operating leverage,
leadership position in chosen
markets and effective use of
asset/liability management
techniques.
<PAGE>
PAGE 67
Moody's Aa2 Reflects Moody's opinion regarding
IDS Life's leadership position in
financial planning, strong
asset/liability management and
good capitalization. IDS Life has
a strong market focus, and it
greatly emphasizes quality
service.
A.M. Best rates over 1,600 insurance companies on a 15 level scale
with letters ranging from A++ to F to "NA" ratings based on a
company's financial strength and claims paying ability.
Duff & Phelps rates over 125 companies for claims-paying ability
with 19 rating categories from AAA to CCC-.
Moody's rates over 80 companies for financial strength with 19
rating categories ranging from Aaa to C.
* Ratings relate to IDS Life's ability to fulfill its obligations
under its contracts and not to the management or performance of the
separate accounts.
** Measured by comparing the 15 largest life insurance companies'
investments in below investment grade (junk) bonds, mortgages and
real estate as a percentage of those companies' total assets.
PRINCIPAL UNDERWRITER
The principal underwriter for the accounts is IDS Life which offers
the variable annuities on a continuous basis.
Surrender charges received by IDS Life for 1993, 1992 and 1991,
aggregated $4,408,562, $3,649,836 and $3,264,084, respectively.
Commissions paid to IDS Life for 1993, 1992 and 1991, aggregated
$16,783,495, $10,334,092 and $5,205,239, respectively. The
surrender charges were applied toward payment of commissions.
INDEPENDENT AUDITORS
The Financial Statements of the Accounts (F, IZ, JZ, G, H and N)
appearing in this Statement of Additional Information have been
audited by Ernst & Young, independent auditors, 1400 Pillsbury
Center, Minneapolis, MN 55402, to the extent indicated in their
reports. Ernst & Young are experts in accounting and auditing.
MORTALITY AND EXPENSE RISK CHARGE
IDS Life has represented to the SEC that:
IDS Life has reviewed publicly available information regarding
products of other companies. Based upon this review, IDS Life has
concluded that the mortality and expense risk charge is within the
range of charges determined by industry practice. IDS Life will
<PAGE>
PAGE 68
maintain at its principal office, and make available on request of
the SEC or its staff, a memorandum setting forth in detail the
variable products analyzed and the methodology, and results of, its
comparative review.
IDS Life has concluded that there is a reasonable likelihood that
the proposed distribution financing arrangements made with respect
to the annuities will benefit the variable account and investors in
the annuities. The basis for such conclusion is set forth in a
memorandum which will be made available to the SEC or its staff on
request.
PROSPECTUS
The prospectus dated April 29, 1994, is hereby incorporated in this
Statement of Additional Information by reference.
<PAGE>
PAGE 69
Annual Financial Information
Report of Independent Auditors
The Board of Directors IDS Life Insurance Company
We have audited the accompanying individual and combined statements
of net assets of IDS Life Accounts F, IZ, JZ, G, H and N as of
December 31, 1993, and the related statements of operations for the
year then ended, and the statements of changes in net assets for
each of the two years in the period then ended except for IDS Life
Accounts IZ and JZ which are for the period January 13, 1992
(commencement of operations) to December 31, 1993. These financial
statements are the responsibility of the management of IDS Life
Insurance Company. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. Our
procedures included confirmation by the underlying affiliated
mutual funds of securities owned at December 31, 1993. An audit
also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the individual and combined
financial position of IDS Life Accounts F, IZ, JZ, G, H and N at
December 31, 1993, and the individual and combined results of their
operations and changes in their net assets for the periods
described in the first paragraph, in conformity with generally
accepted accounting principles.
ERNST & YOUNG
Minneapolis, Minnesota
March 18, 1994
<PAGE>
PAGE 70
<TABLE>
<CAPTION>
Statements of Net Assets Dec. 31, 1993
Combined
Segregated Asset Account Retirement
Assets F IZ JZ G H N Annuity
<S> <C> <C> <C> <C> <C> <C> <C>
Investments in shares of mutual funds, at market value:
IDS Life Capital
Resource Fund --
94,837,426 shares at
net asset value of
$25.43 per share (cost
$1,991,400,812)........$2,411,267,719 $ -- $ -- $ -- $ -- $ -- $2,411,267,719
IDS Life International
Equity Fund --
41,509,370 shares at
net asset value of
$12.57 per share (cost
$461,031,235).......... -- 521,910,962 -- -- -- -- 521,910,962
IDS Life Aggressive
Growth Fund, --
34,278,328 shares at
net asset value of
$12.29 per share (cost
$368,702,502).......... -- -- 421,606,329 -- -- -- 421,606,329
IDS Life Special Income
Fund, -- 135,075,730
shares at net asset
value of $11.99 per share
(cost $1,523,131,704).. -- -- -- 1,619,234,023 -- -- 1,619,234,023
IDS Life Moneyshare
Fund, Inc. --
158,870,219 shares at
net asset value of
$1.00 per share
(cost $158,857,627).... -- -- -- -- 158,857,816 -- 158,857,816
IDS Life Managed Fund,
Inc. -- 138,944,946
shares at net asset
value of $14.46 per
share (cost
$1,754,012,931)........ -- -- -- -- -- 2,009,505,150 2,009,505,150
2,411,267,719 521,910,962 421,606,329 1,619,234,023 158,857,816 2,009,505,150 7,142,381,999
Dividends receivable... -- -- -- 9,126,110 366,846 -- 9,492,956
Accounts receivable
from IDS Life for
contract purchase
payments............... 1,521,330 2,089,111 1,456,511 2,879,798 482,090 2,241,108 10,669,948
Receivable from mutual
funds for share
redemptions............ 136,660 9,372 4,216 286,798 294,805 290 732,141
Total assets........... 2,412,925,709 524,009,445 423,067,056 1,631,526,729 160,001,557 2,011,746,548 7,163,277,044
Liabilities
Payable to IDS Life for:
Mortality and expense
risk fee............... 2,033,249 417,035 341,862 1,358,210 133,998 1,679,007 5,963,361
Contract terminations.. 136,660 9,372 4,216 286,798 294,805 290 732,141
Payable to mutual funds
for investments
purchased.............. 1,521,330 2,089,111 1,456,511 10,647,698 714,938 2,241,108 18,670,696
Total liabilities...... 3,691,239 2,515,518 1,802,589 12,292,706 1,143,741 3,920,405 25,366,198
Net assets applicable to
contracts in
accumulation period.... 2,406,633,155 521,347,188 420,534,021 1,618,401,149 158,648,082 2,007,151,790 7,132,715,385
Net assets applicable
to contracts in payment
period (Note 5)........ 2,601,315 146,739 730,446 832,874 209,734 674,353 5,195,461
Total net assets.......$2,409,234,470 $521,493,927 $421,264,467 $1,619,234,023 $158,857,816 $2,007,826,143 $7,137,910,846
Accumulation units
outstanding............ 488,632,295 405,535,877 347,336,270 405,428,501 74,934,517 910,254,254
Net asset value per
accumulation unit...... $4.93 $1.29 $1.21 $3.99 $2.12 $2.21
See accompanying notes to financial statements.
</TABLE>
<PAGE>
PAGE 71
<TABLE>
<CAPTION>
Statements of Operations Year ended Dec. 31, 1993
Combined
Segregated Asset Account Retirement
Investment income: F IZ JZ G H N Annuity
<S> <C> <C> <C> <C> <C> <C> <C>
Dividend income from
mutual funds............ $126,032,695 $ 7,728,149 $ 461,885 $ 99,351,189 $ 4,794,084 $ 99,239,239 $337,607,241
Mortality and expense
risk fee (Note 3)....... 21,195,575 2,231,776 2,497,382 13,940,846 1,817,471 16,469,332 58,152,382
Investment income
(loss) -- net........... 104,837,120 5,496,373 (2,035,497) 85,410,343 2,976,613 82,769,907 279,454,859
Realized and Unrealized Gain (Loss) on Investments -- net
Realized gain (loss)
on sales of investments
in mutual funds:
Proceeds from sales..... 10,418,477 173,462 73,718 33,166,404 70,623,484 -- 114,455,545
Cost of investments
sold.................... 8,691,756 173,891 64,577 31,429,796 70,623,127 -- 110,983,147
Net realized gain (loss)
on investments.......... 1,726,721 (429) 9,141 1,736,608 357 -- 3,472,398
Net change in unrealized
appreciation or
depreciation of
investments............. (37,650,583) 61,178,701 39,404,999 95,406,120 (1,023) 87,484,868 245,823,082
Net gain (loss) on
investments............. (35,923,862) 61,178,272 39,414,140 97,142,728 (666) 87,484,868 249,295,480
Net increase from
operations.............. $ 68,913,258 $66,674,645 $37,378,643 $182,553,071 $ 2,975,947 $170,254,775 $528,750,339
See accompanying notes to financial statements.
</TABLE>
<PAGE>
PAGE 72
<TABLE>
<CAPTION>
Statements of Changes in Net Assets Year ended Dec.31, 1993
Combined
Segregated Asset Account Retirement
Operations F IZ JZ G H N Annuity
<S> <C> <C> <C> <C> <C> <C> <C>
Investment income
(loss) -- net...........$ 104,837,120 $ 5,496,373 ($ 2,035,497) $ 85,410,343 $ 2,976,613 $ 82,769,907 $ 279,454,859
Net realized gain
(loss) on investments... 1,726,721 (429) 9,141 1,736,608 357 -- 3,472,398
Net change in unrealized
appreciation or
depreciation of
investments............. (37,650,583) 61,178,701 39,404,999 95,406,120 (1,023) 87,484,868 245,823,082
Net increase from
operations.............. 68,913,258 66,674,645 37,378,643 182,553,071 2,975,947 170,254,775 528,750,339
Contract Transactions
Variable annuity
contract purchase
payments................ 330,981,853 160,547,955 124,277,716 466,011,798 70,267,853 382,661,419 1,534,748,594
Net transfers*.......... 134,056,694 229,679,989 139,206,625 (129,912,208) (116,421,311) 210,725,612 467,335,401
Loan repayments......... 4,553,364 434,912 549,319 1,585,070 340,014 2,550,478 10,013,157
Annuity payments........ (125,502) (2,998) (26,439) (49,683) (15,350) (57,871) (277,843)
Contract charges
(Note 3)................ (3,519,430) (315,610) (441,927) (1,727,247) (232,943) (2,388,727) (8,625,884)
Contract terminations:
Surrender benefits...... (58,637,955) (3,483,175) (4,541,055) (39,415,894) (10,201,392) (39,703,861) (155,983,332)
Death benefits.......... (7,598,094) (382,391) (510,497) (7,426,206) (1,132,267) (6,836,999) (23,886,454)
Increase (decrease) from
contract transactions... 399,710,930 386,478,682 258,513,742 289,065,630 (57,395,396) 546,950,051 1,823,323,639
Net assets at beginning
of year................. 1,940,610,282 68,340,600 125,372,082 1,147,615,322 213,277,265 1,290,621,317 4,785,836,868
Net assets at end of
year....................$2,409,234,470 $521,493,927 $421,264,467 $1,619,234,023 $158,857,816 $2,007,826,143 $7,137,910,846
Accumulation Unit Activity
Units outstanding at
beginning of year....... 402,977,447 69,874,129 115,574,391 330,000,476 102,276,956 650,797,089
Contract purchase
payments................ 71,151,021 139,260,645 111,983,807 122,331,094 33,585,205 182,420,082
Net transfers*.......... 28,700,204 200,006,390 124,582,489 (34,086,653) (55,447,607) 100,014,180
Transfers for policy
loans................... 974,940 383,588 495,860 417,082 161,745 1,213,283
Contract charges........ (762,431) (278,873) (401,877) (460,280) (112,836) (1,148,105)
Contract terminations:
Surrender benefits...... (12,665,962) (3,361,172) (4,418,007) (10,711,698) (4,976,299) (19,632,960)
Death benefits.......... (1,742,924) (348,830) (480,393) (2,061,520) (552,647) (3,409,315)
Units outstanding at end
of year................. 488,632,295 405,535,877 347,336,270 405,428,501 74,934,517 910,254,254
*Includes transfer activity from (to) other Accounts and transfers (from) to IDS Life for conversion from (to) Fixed Account.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
PAGE 73
<TABLE>
<CAPTION>
Statements of Changes in Net Assets Year ended Dec. 31, 1992
Combined
Segregated Asset Account Retirement
Operations F IZ** JZ** G H N Annuity
<S> <C> <C> <C> <C> <C> <C> <C>
Investment income
(loss) -- net...........$ 62,121,933 $ 363,607 $ (404,603) $ 71,053,958 $ 5,419,237 $ 70,542,812 $ 209,096,944
Net realized gain (loss)
on investments.......... 820,127 (1,614) 15,318 13,778 319 51,381 899,309
Net change in unrealized
appreciation or
depreciation of
investments............. 8,102,003 (298,974) 13,498,828 9,615,183 (320) 6,686,625 37,603,345
Net increase from
operations.............. 71,044,063 63,019 13,109,543 80,682,919 5,419,236 77,280,818 247,599,598
Contract Transactions
Variable annuity
contract purchase
payments................ 301,729,494 32,417,536 52,979,790 300,743,943 94,833,237 228,843,086 1,011,547,086
Net transfers*.......... 165,276,623 36,140,728 59,837,347 (70,686,134) (132,238,987) 90,701,414 149,030,991
Loan repayments......... 3,643,321 127,993 181,808 1,412,858 310,334 1,951,613 7,627,927
Annuity payments........ (83,723) (667) (9,057) (34,133) (16,308) (29,245) (173,133)
Contract charges
(Note 3)................ (2,983,949) (49,441) (99,259) (1,503,657) (323,814) (1,837,345) (6,797,465)
Contract terminations:
Surrender benefits...... (41,098,551) (316,740) (536,353) (26,626,047) (11,245,662) (26,555,646) (106,378,999)
Death benefits.......... (5,237,503) (41,828) (91,737) (6,755,704) (1,434,225) (4,665,355) (18,226,352)
Increase (decrease) from
contract transactions... 421,245,712 68,277,581 112,262,539 196,551,126 (50,115,425) 288,408,522 1,036,630,055
Net assets at beginning
of period............... 1,448,320,507 -- -- 870,381,277 257,973,454 924,931,977 3,501,607,215
Net assets at end of
period..................$1,940,610,282 $68,340,600 $125,372,082 $1,147,615,322 $213,277,265 $1,290,621,317 $4,785,836,868
Accumulation Unit Activity
Units outstanding at
beginning of period..... 309,984,128 -- -- 270,858,142 126,489,114 496,554,222
Contract purchase
payments................ 66,980,300 33,247,637 54,874,829 90,369,007 46,320,252 123,004,274
Net transfers*.......... 36,426,995 36,980,682 61,605,435 (20,790,672) (64,055,536) 48,304,655
Transfers for policy
loans................... 808,337 131,312 192,301 422,608 150,122 1,044,642
Contract charges........ (669,013) (51,414) (105,232) (456,724) (159,690) (995,835)
Contract terminations:
Surrender benefits...... (9,296,411) (390,634) (899,463) (8,320,218) (5,695,771) (14,383,004)
Death benefits.......... (1,256,889) (43,454) (93,479) (2,081,667) (771,535) (2,731,865)
Units outstanding at end
of period............... 402,977,447 69,874,129 115,574,391 330,000,476 102,276,956 650,797,089
*Includes transfer activity from (to) other Accounts and transfers (from) to IDS Life for conversion from (to) Fixed Account.
**For the period from Jan. 13, 1992 (commencement of operations) to Dec. 31, 1992.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
PAGE 74
Notes to Financial Statements
___________________________________________________________________
1. Organization
IDS Life Accounts F, G, H and N were established as segregated
asset accounts of IDS Life Insurance Company (IDS Life) under
Minnesota law and are registered collectively as a single unit
investment trust under the Investment Company Act of 1940.
Accounts F, G and H were established on May 13, 1981. Account N
was established on April 22, 1985 and commenced operations on April
30, 1986. Accounts IZ and JZ were established as segregated asset
accounts on Sept. 20, 1991 and commenced operations on Jan. 13,
1992. IDS Life Accounts F, IZ, JZ, G, H and N are collectively
referred to as "the Accounts."
The assets of each Account are held for the exclusive benefit of
the Retirement Annuity contract owners and are not chargeable with
liabilities arising out of the business conducted by any other
Account or by IDS Life. Contract owners allocate their variable
purchase payments to one or more of the six segregated asset
accounts. Such funds are then invested in shares of six mutual
funds organized by IDS Life as the investment vehicles for variable
annuity contracts issued by IDS Life and by IDS Life Insurance
Company of New York.
IDS Life Capital Resource Fund, Inc., IDS Life Special Income Fund,
Inc. and IDS Life Moneyshare Fund, Inc. commenced operations Oct.
13, 1981. IDS Life Managed Fund, Inc. commenced operations April
30, 1986. These mutual funds are registered under the Investment
Company Act of 1940 as diversified, open-end management investment
companies. Funds allocated to IDS Life Account F are invested in
the shares of IDS Life Capital Resource Fund; IDS Life Account IZ
invests in the shares of IDS Life International Equity Fund; IDS
Life Account JZ invests in the shares of IDS Life Aggressive Growth
Fund; IDS Life Account G invests in the shares of IDS Life Special
Income Fund, Inc.; IDS Life Account H invests in the shares of IDS
Life Moneyshare Fund, Inc. and IDS Life Account N invests in the
shares of IDS Life Managed Fund, Inc.
IDS Life serves as manager, investment adviser and distributor for
the Accounts and the underlying six mutual funds.
___________________________________________________________________
2. Summary of Significant Accounting Policies
Investments in Mutual Funds
Investments in shares of the mutual funds are stated at market
value, which is the net asset value per share as determined by the
respective funds. Investment transactions are accounted for on the
date the shares are purchased and sold. The cost of investments
sold and redeemed is determined on the average cost method.
Dividend distributions received from the mutual funds are
<PAGE>
PAGE 75
___________________________________________________________________
2. Summary of Significant Accounting Policies (continued)
reinvested, net of any expenses payable to IDS Life, in additional
shares of the mutual funds and are recorded as income by the
Accounts on the ex-dividend date.
Unrealized appreciation or depreciation of investments in the
accompanying financial statements represents the Accounts' share of
the mutual funds' undistributed net investment income,
undistributed realized gain or loss and the unrealized appreciation
or depreciation on their investment securities.
Federal Income Taxes
IDS Life is taxed as a life insurance company. The Accounts are
treated as part of IDS Life for federal income tax purposes. Under
existing tax law, no income taxes are payable with respect to any
income of the Accounts.
___________________________________________________________________
3. Mortality and Expense Risk Fee and Contract Charges
IDS Life makes contractual assurances to the Accounts that possible
future adverse changes in administrative expenses and mortality
experience of the annuitants and beneficiaries will not affect the
Accounts. The mortality and expense risk fee paid to IDS Life is
computed daily and is equal, on an annual basis, to 1 percent of
the average daily net assets of the Accounts.
An annual charge of $20 is deducted from the contract value of each
Variable Retirement Annuity contract. An annual charge of $30 is
deducted from the contract value of each Combination Retirement
Annuity contract. An annual charge of $500 is deducted from the
contract value of each Group Variable Annuity contract. An annual
charge of $30 is deducted from the certificate value of each
Employee Benefit Annuity certificate. A quarterly charge of $6 is
deducted from the contract value of each Flexible Annuity contract.
The annual charges are deducted at contract year end and the
quarterly charges are deducted at contract quarter end, during the
accumulation period, for administrative services provided to the
Accounts by IDS Life.
A contingent deferred sales charge (surrender charge or withdrawal
charge) will be imposed upon:
a) certain Variable Retirement Annuity contract surrenders during
the first seven years,
b) Combination Retirement Annuity contract surrenders during the
first seven, eight or eleven years, depending on type of
contract,
c) Group Variable Annuity contract withdrawals during the first
seven years,
d) Employee Benefit Annuity certificate surrenders during the first
eleven years, and
<PAGE>
PAGE 76
___________________________________________________________________
3. Mortality and Expense Risk Fee and Contract Charges (continued)
e) Flexible Annuity contract surrenders of amounts other than those
representing earnings or those representing purchase payments
more than six years old.
Charges by IDS Life for surrenders are not available on an
individual segregated asset account basis. Charges for all
segregated asset accounts amounted to $4,408,562 in 1993 and
$3,649,836 in 1992. Such charges are not an expense of the
Accounts. They are deducted from contract surrender benefits paid
by IDS Life.
___________________________________________________________________
4. Investment Transactions
The Accounts' purchases of mutual fund shares (net of charges),
including reinvestment of dividend distributions, were as follows:
<TABLE>
<CAPTION>
Year Ended Dec. 31,
Account Investment 1993 1992
<C> <C> <C> <C>
F IDS Life Capital Resource Fund..................... $ 515,379,012 $ 487,014,194
IZ IDS Life International Equity Fund................. 392,511,644 68,879,537
JZ IDS Life Aggressive Growth Fund.................... 256,797,588 112,268,445
G IDS Life Special Income Fund....................... 407,642,377 291,204,744
H IDS Life Moneyshare Fund, Inc...................... 16,204,701 38,649,028
N IDS Life Managed Fund, Inc......................... 630,321,175 359,605,519
$2,218,856,497 $1,357,621,467
</TABLE>
___________________________________________________________________
5. Annuity Contracts in Payment Period
Net assets and annuity units relating to contracts in the payment
period as of Dec. 31, 1993, are as follows:
<TABLE>
<CAPTION>
F IZ JZ G H N
<S> <C> <C> <C> <C> <C> <C>
Net assets applicable to contracts
in payment period................... $2,601,315 $146,739 $730,446 $832,874 $209,734 $674,353
Annuity units in payment period..... 7,448 225 1,880 3,943 1,106 3,856
</TABLE>
<PAGE>
PAGE 77
PART C.
Item 24. Financial Statements and Exhibits
(a) Financial Statements included in Part B of this Post-
Effective Amendment:
IDS Life Accounts F,IZ,JZ,G,H & N:
Report of Independent Auditors dated March 18, 1994.
Statements of Net Assets at Dec. 31, 1993.
Statements of Operations for the year ended Dec. 31, 1993.
Statements of Changes in Net Assets for the years ended
Dec. 31, 1993 and Dec. 31, 1992.
Notes to Financial Statements.
IDS Life Insurance Company:
Report of Independent Auditors dated February 3, 1994.
Consolidated Balance Sheets at Dec. 31, 1993 and 1992;
Consolidated Statements of Income for the years ended
Dec. 31, 1993, 1992, and 1991;
Consolidated Statements of Cash Flows for the years ended
Dec. 31, 1993, 1992, and 1991;
Notes to Consolidated Financial Statements.
Exhibits to Financial Statements included in Part B:
Report of Independent Auditors dated February 3, 1994.
Financial Statement Schedules I, V, VI, VIII and IX as
required by Regulation S-X:
Schedule I - Consolidated Summary of Investments Other
than Investments in Related Parties
Schedule V - Supplementary Insurance Information
Schedule VI - Reinsurance
Schedule VIII - Valuation and Qualifying Accounts
Schedule IX - Short-Term Borrowings
All other schedules to the consolidated financial statements
required by Article 7 of Regulation S-X are not required
under the related instructions or are inapplicable and,
therefore have been omitted.
(b) Exhibits:
1.1 Resolution of the Executive Committee of the Board of
Directors of IDS Life adopted May 13, 1981, filed
electronically herewith.
1.2 Resolution of the Executive Committee of the Board of
Directors of IDS Life establishing Account N on April 17,
1985, filed electronically herewith.
<PAGE>
PAGE 78
1.3 Resolution of the Board of Directors of IDS Life establishing
Accounts IZ and JZ on September 20, 1991, filed
electronically herewith.
2. Not applicable.
3. Not applicable.
4. Form of Group Deferred Variable Annuity Contract (form 34660)
dated April, 1992, filed electronically herewith.
5. Copy of Variable Group Deferred Annuity Contract Application
(form 34661) dated May, 1992, filed electronically herewith.
6.1 Copy of Certificate of Incorporation of IDS Life, filed
electronically herewith.
6.2 Copy of Amended By-Laws of IDS Life, filed electronically
herewith.
7. Not applicable.
8. Not applicable.
9. Opinion of counsel and consent to its use as to the legality
of the securities registered was filed with Registrant's 24f-
2 Notice on or about Feb. 25, 1994.
10. Consent of Independent Auditors, filed electronically
herewith.
11. Financial Statement Schedules and Report of Independent
Auditors, filed electronically herewith.
12. Not applicable.
13. Copy of Schedule for computation of each performance
quotation filed in Registration Statement in response to item
24, filed electronically herewith.
14.1 Not applicable.
14.2 Power of Attorney dated March 31, 1994, filed electronically
herewith.
<PAGE>
PAGE 79
Item 25. Directors and Officers of the Depositor
<TABLE>
<CAPTION>
Positions and
Name Principal Business Address Offices with Depositor
<S> <C> <C>
Timothy V. Bechtold IDS Tower 10 Vice President-Insurance
Minneapolis, MN 55440 Product Development
David J. Berry IDS Tower 10 Vice President
Minneapolis, MN 55440
Alan R. Dakay IDS Tower 10 Vice President-
Minneapolis, MN 55440 Institutional Insurance
Marketing
Louis C. Fornetti IDS Tower 10 Director
Minneapolis, MN 55440
Morris Goodwin Jr. IDS Tower 10 Vice President and Treasurer
Minneapolis, MN 55440
Lorraine R. Hart IDS Tower 10 Vice President-Investments
Minneapolis, MN 55440
David R. Hubers IDS Tower 10 Director
Minneapolis, MN 55440
Roger P. Husemoller IDS Tower 10 Vice President-
Minneapolis, MN 55440 Intercorporate Insurance
Operations
Richard W. Kling IDS Tower 10 Director and President
Minneapolis, MN 55440
Paul F. Kolkman IDS Tower 10 Director and Executive
Minneapolis, MN 55440 Vice President
Ryan R. Larson IDS Tower 10 Vice President-
Minneapolis, MN 55440 Annuity Product
Development
Peter A. Lefferts IDS Tower 10 Director and Executive
Minneapolis, MN 55440 Vice President-
Marketing
Janis E. Miller IDS Tower 10 Director and Executive
Minneapolis, MN 55440 Vice President-
Variable Assets
James A. Mitchell IDS Tower 10 Director, Chairman of
Minneapolis, MN 55440 the Board and Chief
Executive Officer
Barry J. Murphy IDS Tower 10 Director and Executive
Minneapolis, MN 55440 Vice President-
Client Service
<PAGE>
PAGE 80
Item 25. Directors and Officers of the Depositor (cont'd)
Mary O. Neal IDS Tower 10 Vice President-
Minneapolis, MN 55440 Sales Support
James R. Palmer IDS Tower 10 Vice President-Taxes
Minneapolis, MN 55440
F. Dale Simmons IDS Tower 10 Vice President-
Minneapolis, MN 55440 Real Estate
Loan Management
William A. Stoltzmann IDS Tower 10 Vice President, General
Minneapolis, MN 55440 Counsel and Secretary
Melinda S. Urion IDS Tower 10 Director, Executive
Minneapolis, MN 55440 Vice President and
Controller
</TABLE>
Item 26. Persons Controlled by or Under Common Control with the
Depositor or Registrant
IDS Life Insurance Company is a wholly owned subsidiary
of IDS Financial Corporation. IDS 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.
Jurisdiction
Name of Subsidiary of Incorporation
I. Travel Related Services
American Express Travel Related
Services Company, Inc. New York
II. International Banking Services
American Express Bank Ltd. Connecticut
III. Investment Services
Lehman Brothers Inc. Delaware
IV. Companies engaged in Investors
Diversified Financial Services
American Enterprise Investment Services Inc. Minnesota
American Enterprise Life Insurance Company Indiana
American Express Minnesota Foundation Minnesota
American Express Service Corporation Delaware
American Partners Life Insurance Company Minnesota
<PAGE>
PAGE 81
Item 26. Persons Controlled by or Under Common Control with the
Depositor or Registrant (Continued)
Jurisdiction
Name of Subsidiary of Incorporation
IDS Advisory Group Inc. Minnesota
IDS Aircraft Services Corporation Minnesota
IDS Cable Corporation Minnesota
IDS Cable II Corporation Minnesota
IDS Capital Holdings Inc. Minnesota
IDS Certificate Company Delaware
IDS Deposit Corp. Utah
IDS Financial Corporation Delaware
IDS Financial Services Inc. Delaware
IDS Fund Management Limited U.K.
IDS Futures Corporation Minnesota
IDS Futures III 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 Inc. Mississippi
IDS Insurance Agency of Nevada Inc. Nevada
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 International, Inc. Delaware
IDS Life Insurance Company Minnesota
IDS Life Insurance Company of New York New York
IDS Management Corporation Minnesota
IDS Partnership Services Corporation Minnesota
IDS Plan Services of California, Inc. Minnesota
IDS Property Casualty Insurance Company Wisconsin
IDS Real Estate Services, Inc. Delaware
IDS Realty Corporation Minnesota
IDS Sales Support Inc. Minnesota
IDS Securities Corporation Delaware
IDS Trust Company Minnesota
Investors Syndicate Development Corp. Nevada
Item 27. Number of Contractowners
As of March 31, 1994, 177 (qualified) contracts have been
issued.
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,
<PAGE>
PAGE 82
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) IDS Life is the principal underwriter for IDS Life
Accounts F, IZ, JZ, G, H and N, IDS Life Variable
Annuity Fund A, IDS Life Variable Annuity Fund B,
IDS Life Account RE, IDS Life Account MGA and IDS
Life Account SLB.
(b) This table is the same as our response to Item 25 of
this Registration Statement.
(c)
<TABLE>
<CAPTION>
Name of Net Underwriting
Principal Discounts and Compensation on Brokerage
Underwriter Commissions Redemption Commissions Compensation
<S> <C> <C> <C> <C>
IDS Life None $4,408,562 None None
</TABLE>
Item 30. Location of Accounts and Records
IDS Life Insurance Company
IDS Tower 10
Minneapolis, MN
<PAGE>
PAGE 83
Item 31. Management Services
Not applicable.
Item 32. Undertakings
(a) Registrant undertakes that it will 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 that it will 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 to IDS Life
Contract Owner Service at the address or phone
number listed in the prospectus.
(d) Registrant represents that it is relying upon the
no-action assurance given to the American Council of
Life Insurance (pub. avail. Nov. 28, 1989).
Further, Registrant represents that it has complied
with the provisions of paragraphs (1)-(4) of that
no-action letter.
<PAGE>
PAGE 84
SIGNATURES
As required by the Securities Act of 1933 and the Investment
Company Act of 1940, IDS Life Insurance Company, on behalf of the
Registrant, certifies that it meets the requirements of Securities
Act Rule 486(b) for effectiveness of this Registration Statement
and has duly caused this Registration Statement to be signed on its
behalf in the City of Minneapolis, and State of Minnesota, on this
27th day of April, 1994.
IDS LIFE ACCOUNT F
IDS LIFE ACCOUNT IZ
IDS LIFE ACCOUNT JZ
IDS LIFE ACCOUNT G
IDS LIFE ACCOUNT H
IDS LIFE ACCOUNT N
(Registrant)
By IDS Life Insurance Company
(Sponsor)
By /s/ Richard W. Kling*
Richard W. Kling
President
As required by the Securities Act of 1933, this Registration
Statement has been signed by the following persons in the
capacities indicated on this 27th day of April, 1994.
Signature Title
/s/ James A. Mitchell* Chairman of the Board
James A. Mitchell and Chief Executive
Officer
/s/ Richard W. Kling* Director and President
Richard W. Kling
/s/ Louis C. Fornetti* Director
Louis C. Fornetti
/s/ David R. Hubers* Director
David R. Hubers
/s/ Paul F. Kolkman* Director and Executive Vice
Paul F. Kolkman President
/s/ Peter A. Lefferts* Director and Executive Vice
Peter A. Lefferts President, Marketing
/s/ Janis E. Miller* Director and Executive Vice
Janis E. Miller President, Variable Assets
/s/ Barry J. Murphy* Director and Executive Vice
Barry J. Murphy President, Client Service
<PAGE>
PAGE 85
Signature Title
/s/ Stuart A. Sedlacek* Director and Executive Vice
Stuart A. Sedlacek President, Assured Assets
/s/ Melinda S. Urion* Director, Exective Vice
Melinda S. Urion President and Controller
*Signed pursuant to Power of Attorney dated March 31, 1994, filed
electronically herewith.
_____________________________
Mary Ellyn Minenko
<PAGE>
PAGE 86
CONTENTS OF POST-EFFECTIVE AMENDMENT NO. 2
This Amendment is comprised of the following papers and documents:
The Cover Page.
Cross-reference sheet.
Part A.
The prospectus.
Part B.
Statement of Additional Information.
Financial Statements.
Part C.
Other Information.
The signatures.
Exhibits.
<PAGE>
PAGE 1
EXHIBIT INDEX
1.1 Resolution of the Executive Committee of the Board of
Directors of IDS Life adopted May 13, 1981.
1.2 Resolution of the Executive Committee of the Board of
Directors of IDS Life establishing Account N on April 17,
1985.
1.3 Resolution of the Board of Directors of IDS Life establishing
Accounts IZ and JZ on September 20, 1991.
4 Form of Group Deferred Variable Annuity Contract (form 34660)
dated April, 1992.
5 Copy of Variable Group Deferred Annuity Contract Application
(form 34661) dated May, 1992.
6.1 Copy of Certificate of Incorporation of IDS Life.
6.2 Copy of Amended By-Laws of IDS Life.
10 Consent of Independent Auditors.
11 Financial Statement Schedules and Report of Independent
Auditors.
13 Copy of Schedule for computation of each performance quotation
filed in Registration Statement in response to item 24.
14.2 Power of Attorney dated March 31, 1994.
<PAGE>
PAGE 1
IDS LIFE INSURANCE COMPANY
MINUTES OF THE ANNUAL MEETING OF THE BOARD OF DIRECTORS
MAY 13, 1981
The Annual Meeting of the Board of Directors of IDS
Life Insurance Company, a Minnesota corporation, was held at 10:45
a.m., Wednesday, May 13, 1981, at the offices of the Corporation,
IDS Tower, Minneapolis, Minnesota, immediately following
adjournment of the Annual Meeting of Stockholders of the
Corporation, pursuant to written notice duly given.
Mr. W.D. Scott, Chairman of the Board, called the
meeting to order and presided as Chairman. Mr. D.H. Bruer,
Assistant Secretary of the Corporation, acted as Secretary of the
meeting. All members of the Board elected at said Annual Meeting
of Stockholders were present, except Messrs. Ceithaml and Haase,
together with Messrs. R.N. Latzer, Vice President, Investments, and
R.J. O'Brien, Vice President, General Counsel and Secretary, of the
Corporation.
The Chairman stated that the first item to consider was
approval of minutes of the meeting of the Board held February 11,
1981, copies of which had been distributed to all members of the
Board, and the following resolution was duly adopted:
RESOLVED, That the minutes of the regular meeting of
the Board held February 11, 1981, as presented to this
meeting, are approved.
The Chairman stated that the next item to consider was
the designation of an Executive Committee. Thereupon, after
discussion, the following resolutions were duly adopted:
RESOLVED, That an Executive Committee of the Board is
created to consist of four members which Committee
shall, subject at all times to the control and
direction of the Board, have and exercise the authority
of the Board in the management of the business of the
Corporation in the interval between meetings of the
Board; further
RESOLVED, That Messrs. George F. Ceithaml, Charles R.
Orem, Joseph R. Pickering and Walter D. Scott are
designated members of said Executive Committee, to
serve at the pleasure of the Board, and that Joseph R.
Pickering is designated Presiding Officer of such
Executive Committee: further
RESOLVED, That such Committee may meet upon call of the
Presiding Officer or any two members on annuities", and
asked Mr. Pickering to comment thereon. Mr. Pickering
directed the Board to a memorandum dated May 1, 1981,
and, after discussion, the following resolutions were
duly adopted:
<PAGE>
PAGE 2
WHEREAS, This Board of Directors has determined that it
is desirable for the Corporation to issue variable
annuity contracts, the values and benefits of which
will vary with the investment performance of certain
mutual funds (the Funds") which the Corporation has
caused to be established, now, therefore, be it
RESOLVED, That the six separate accounts set forth
below are hereby established in accordance with Section
61A.14, Minnesota Statutes:
IDS Life Account C, to invest in shares of
IDS Life Capital Resource Fund I, Inc.
IDS Life Account D, to invest in shares of
IDS Life Special Income Fund I, Inc.
IDS Life Account E, to invest in the shares of
IDS Life Moneyshare Fund, Inc.
IDS Life Account F, to invest in the shares of
IDS Life Capital Resource Fund II, Inc.
IDS Life Account G, to invest in the shares of
IDS Life Special Income Fund II, Inc.
IDS Life Account H, to invest in the shares of
IDS Life Moneyshare Fund, Inc.
RESOLVED FURTHER, That the President of the Corporation
is hereby authorized to cause the transfer of One
Hundred Thousand Dollars ($100,000) of the
Corporation's funds from its general account to each of
IDS Life Accounts C, D, and E, all in accordance with
the provisions of Section 61A.14, Subd. 8, Minnesota
Statutes, to be held therein until this Board of
Directors authorizes its retransfer to the general
account; and
FURTHER RESOLVED, That the proper officers of the
Corporation are hereby authorized to enter into an
Investment Management and Services Agreement with each
of the Funds in the form presented to this meeting.
RESOLVED FURTHER, That the proper officers of the
Corporation are hereby authorized to enter into an
Agreement with Investors Diversified Services, Inc., in
the form presented to this meeting, for investment
ESTABLISHING ACCOUNT N
<PAGE>
PAGE 1
CONSENT IN WRITING IN LIEU
OF MEETING OF BOARD OF DIRECTORS
Pursuant to Section 300.20
of the Minnesota Statutes
TO THE SECRETARY OF
IDS LIFE INSURANCE COMPANY
As a member of the Board of Directors of IDS Life Insurance
Company, a Minnesota corporation I hereby consent to and authorize
the adopition of the following resolutions by the Board of
Directors of said Corporation, to become effective at the time of
your receipt of executed counterparts hereof from all other members
of said Board of Directors:
WHEREAS, This Board of Directors has determined that it
is desirable for the Corporation to provide for the
acquisition of shares of IDS Life Managed Fund under
its variable annuity contracts, now, therefore, be it
RESOLVED, That the two separate accounts set forth
below are hereby established in accordance with Section
61A.14, Minnesota Statutes:
IDS Life Account M, to invest in shares of IDS
Life Managed Fund Inc.
IDS Life Account N, to invest in shares of IDS
Life Managed Fund Inc.
RESOLVED FURTHER, That the Unit Investment Trust
comprised of IDS Life Accounts C, D, and E is hereby
reconstituted as IDS Life Accounts C, D, E, and M; and
the Unit Investment Trust comprised of IDS Life
Accounts F, G, and H is hereby reconstituted as IDS
Life Accounts F, G, H and N.
RESOLVED FURTHER, That the proper officers of the
Corporation are hereby authorized and directed to
accomplosh all filings and registrations necessary to
carry the foregoing into effect.
Executed this 17th day of April, 1985.
/s/ Harvey Golub /s/ Earlon L. Milbrath
Harvey Golub Earlon L. Milbrath
/s/ R. W. Kling /s/ Paul Kolkman
Richard W. Kling Paul F. Kolkman
/s/ James A. Mitchell
James A. Mitchell
<PAGE>
PAGE 2
Received by the Secretary
April 17 , 1985
/s/ Richard J. O'Brien
Secretary
Effective: April 17 , 1985
ACCOUNTS IZ AND JZ
<PAGE>
PAGE 1
CONSENT IN WRITING IN LIEU
OF MEETING OF BOARD OF DIRECTORS
TO THE SECRETARY OF
IDS LIFE INSURANCE COMPANY
By this consent in writing in lieu of a meeting of the Board of
Directors of IDS Life Insurance Company, a Minnesota corporation,
we the Directors of said Corporation do hereby consent to and
authorize the adoption of the following resolution to be effective
immediately upon receipt by the Secretary of the Corporation:
WHEREAS, This Board of Directors has determined that it
is desirable for the Corporation to provide for the
acquisition of shares of IDS Life International Equity
Fund and IDS Life Aggressive Growth Fund under its
variable annuity contracts. Now, therefore, be it
RESOLVED, That the two separate accounts set forth
below are hereby established in accordance with Section
61A.14 of the Minnesota Statutes:
IDS Life Account IZ, to invest in shares of IDS
Life International Equity Fund; and
IDS Life Account JZ, to invest in shares of IDS
Life Aggressive Growth Fund.
RESOLVED FURTHER, That the proper officers of the
Corporation are hereby authorized to accomplish all
filings, registrations, and applications for exemptive
relief necessary to carry the foregoing into effect.
/s/ D. R. Hubers /s/ R. W. Kling
David R. Hubers Richard W. Kling
/s/ Paul F. Kolkman /s/ Christopher R. Kudrna
Paul F. Kolkman Christopher R. Kudrna
/s/ James A. Mitchell /s/ Rebecca K. Roloff
James A. Mitchell Rebecca K. Roloff
/s/ Jeffrey E. Stiefler
Jeffrey E. Stiefler
Received by the Secretary
September 20 , 1991
/s/ William A. Stoltzmann
William A. Stoltzmann
<PAGE>
PAGE 2
CONSENT IN WRITING IN LIEU
OF MEETING OF BOARD OF DIRECTORS
TO THE SECRETARY OF
IDS LIFE INSURANCE COMPANY
By this consent in writing in lieu of a meeting of the Board of
Directors of IDS Life Insurance Company, a Minnesota corporation,
we the Directors of said Corporation do hereby consent to and
authorize the adoption of the following resolution to be effective
immediately upon receipt by the Secretary of the Corporation:
WHEREAS, This Board of Directors has determined that it
is desirable for the Corporation to provide for the
acquisition of shares of IDS Life International Equity
Fund and IDS Life Aggressive Growth Fund under its
variable annuity contracts. Now, therefore, be it
RESOLVED, That the two separate accounts set forth
below are hereby established in accordance with Section
61A.14 of the Minnesota Statutes:
IDS Life Account IZ, to invest in shares of IDS
Life International Equity Fund; and
IDS Life Account JZ, to invest in shares of IDS
Life Aggressive Growth Fund.
RESOLVED FURTHER, That the proper officers of the
Corporation are hereby authorized to accomplish all
filings, registrations, and applications for exemptive
relief necessary to carry the foregoing into effect.
/s/ William A. Smith
William A. Smith
Received by the Secretary
April 10 , 1992
/s/ William A. Stoltzmann
William A. Stoltzmann
<PAGE>
PAGE 1
IDS Life Insurance Company
IDS Tower 10
Minneapolis, Minnesota
GROUP DEFERRED VARIABLE ANNUITY CONTRACT
- - GROUP DEFERRED VARIABLE ANNUITY - UNALLOCATED - NONPARTICIPATING
- - OPTIONAL FIXED DOLLAR OR VARIABLE ACCUMULATION VALUES
- - FIXED DOLLAR ANNUITY PAYMENTS
IDS Life Insurance Company, herein called the Company, agrees to
pay the benefits herein provided in accordance with and subject to
the provisions of this Contract.
This Contract is issued in consideration of the application
therefor and of payment of purchase payments as provided herein.
The provisions set forth on the following pages are a part of this
Contract.
EXECUTED by the Company at its Home Office in Minneapolis,
Minnesota as of the Contract Date.
President
/s/ James A. Mitchell
Secretary
/s/ William A. Stoltzmann
- - ACCUMULATION VALUES, WHEN BASED ON THE INVESTMENT RESULTS OF THE
VARIABLE ACCOUNTS, ARE VARIABLE AND NOT GUARANTEED AS TO FIXED
DOLLAR AMOUNT.
- - FIXED DOLLAR ACCOUNT VALUES MAY BE SUBJECT TO MARKET VALUE
ADJUSTMENT AT CONTRACT TERMINATION.
<PAGE>
PAGE 2
GUIDE TO CONTRACT PROVISIONS
DEFINITIONS Important words and meanings/Page 5
GENERAL PROVISIONS Entire contract; Incontestability;
Reliance on Information;
Misstatement/Modification; Prohibited
Investments; Currency/Page 6
Proof of Condition or Event;
Ownership; Limitation of Payment;
Facility of Payment; Disclaimer of
Responsibility; Assignment -
Protection of Proceeds;
Nonparticipating; Changes in
Plan/Page 7
Notices and Directions; Not
Transferable; Payments by Company;
Ownership and Control of Assets,
State Laws; Voting Rights; Periodic
Reports; Beneficiary/Page 8
PURCHASE PAYMENTS Payments; Purchase Payment
Allocation/Page 9
CONTRACT VALUES Describes the fixed and variable
account contract values; Interest to
be credited; Contract administrative
charge; Premium taxes, Transfers of
contract values/Page 10
FIXED AND VARIABLE ACCOUNTS Describes the variable accounts,
accumulation units and values; Net
investment factor; Mortality and
expense risk charge/Page 11
WITHDRAWALS Withdrawals; Withdrawal Charge; Rules
for Withdrawals/Page 12
CONTRACT TRANSFER, Withdrawals for Contract Owner
TERMINATION Transfer of Funds; Market Value
Adjustment/Page 14
ANNUITY SETTLEMENT Withdrawals for Annuity Purchases/
PROVISIONS Page 16 Annuity Purchase Rates/Page
17
<PAGE>
PAGE 3
CONTRACT DATA
Contract Owner/Plan Sponsor: ABC Company
Trustee: XYZ Bank and Trust Company
Plan Name: ABC Company 401(x) Plan
Contract Number: 9310-1234567
Contract Effective Date: May 1, 1992
Accounts Initially Available For Investment:
Variable Account Mutual Fund
F IDS Life Capital Resource Fund
G IDS Life Special Income Fund
H IDS Life Moneyshare Fund
N IDS Life Managed Fund
IZ IDS Life International Equity Fund
JZ IDS Life Aggressive Growth Fund
Fixed Account
Guaranteed Interest Rate: 4% per year compounded annually
Contract Administrative Charge: $125 deducted from the contract
value on a quarterly basis each
contract year. This charge may
be increased as described on
page 10.
Withdrawal Charge: A withdrawal charge as
described on page 12 may apply
to certain withdrawals.
<PAGE>
PAGE 4
DEFINITIONS
The following words are used often in this Contract. With respect
to this Contract, the words have these meanings:
Variable Accounts - Those assets of the Company in segregated
investment accounts established by the Company under Minnesota law
to provide variable benefits. Each Variable Account invests in
shares of a specific Mutual Fund.
Fixed Account - All assets of the Company other than those in any
separate account.
Accumulation Period - The period before the Annuity Commencement
Date with respect to and during the lifetime of a Participant.
Annuitant - A Participant or other person for whom annuity benefit
payments are provided under the contract.
Application - The document signed by the Owner that serves as the
Owner's application to the Company for the Contract.
Contract Anniversary - An anniversary of the effective date of this
Contract.
Contract Year - Any period of one year commencing with the
effective date of this Contract or with any Contract Anniversary.
Owner - The trustee of the Plan.
Participant - An eligible employee or other person who is entitled
to benefits under the Plan as determined and reported to the
Company by the Owner.
Plan - The retirement plan under which the Contract is issued and
which meets the requirements of Section 401 of the Internal Revenue
Code of 1986 as amended ("Code").
Purchase Payment (Payment) - An amount paid to the Company as
consideration for the benefits provided by the Contract.
Receipt - Receipt by the Company at its Home Office Mailing Address
shown on the cover of this Contract.
Valuation Date - A Valuation Date is each day the New York Stock
Exchange is open for trading.
Valuation Period - A Valuation Period is the interval of time
commencing at the close of business on each Valuation Date and
ending at the close of business on the next Valuation Date. Close
of Business is normally 3:00 p.m. Central Time.
Written request - A request in writing signed by the Owner
delivered to the Company's Home Office.
<PAGE>
PAGE 5
GENERAL PROVISIONS
Entire Contract
This Contract is issued in consideration of the application and the
payment of the first Purchase Payment.The entire Contract consists
of this Contract form, the Application of the Owner, a copy of
which is attached hereto and made part hereof, and any endorsements
issued in conjunction with this Contract. The Company is not a
party to nor bound by the Plan or any other document or agreement
issued in connection with such Plan.
No one except one of the Company's corporate officers (President,
Vice President, Secretary, or Assistant Secretary) can change or
waive any of the Company's requirements under this Contract. That
person must do so in writing. No representative or other person
has the authority to change or waive any of the Company's rights or
requirements under this Contract. All statements made by the Owner
or on behalf of a Participant are, in the absence of fraud,
considered representations and not warranties, and no such
statement will void the Contract unless it is contained in a
written Application.
Incontestable
The Contract is incontestable from the date of issue.
Reliance on Information
The Company is not a party to the Plan, and its obligations and
liabilities are limited to those arising from this Contract. In
any transaction under this Contract, the Company may rely
exclusively on the information furnished by the Owner, any person
authorized by the Owner, or any person with authority to act under
the Plan. The Company reserves the right to inquire into the
accuracy and completeness of any such information and to inspect
the relevant records of the owner. However, the Company is under
no obligation to make any such inquiry or inspection and will be
fully protected in any transaction made under the Contract in
reliance upon information furnished by the Owner, any person
authorized by the Owner, or any person with authority to act under
the Plan.
Misstatement
If the birthday or any other relevant fact relating to any
Participant or person receiving annuity payments is found to be
misstated, the amount of the annuity payments will be such as would
have been provided on the basis of the correct information, without
changing the Annuity Commencement Date, unless other adjustment
satisfactory to the Owner and the Company is made. Any adjustment
made in accordance with this Section shall be conclusive upon any
person affected thereby. The dollar amount of any overpayment made
by the Company shall be deducted from the next payment or payments
due.
<PAGE>
PAGE 6
GENERAL PROVISIONS
(Continued)
Modification
Upon notice to the Owner, the Contract may be modified by the
Company, but only if such modification:
(i) is necessary to make the Contract or any Variable
Account comply with any law or regulation issued by a
governmental agency to which the Company or the
Variable Account is subject; or,
(ii) is necessary to assure continued qualification of the
Contract under the Code or other federal or state laws
relating to retirement annuities or annuity contracts;
or
(iii) is necessary to reflect a change in any Variable
Account; or
(iv) provides additional Variable Account and/or Fixed
Account accumulation options. In the event of any such
modification, the Company may make appropriate
endorsement in this Contract to reflect the
modification.
Prohibited Investments
While this Contract is in force, and prior to any withdrawal or
contract termination, the Owner agrees that it will not offer under
the Plan as a funding vehicle accepting future contributions any of
the following:
a. Guaranteed Investment Contracts; or
b. Bank Investment Contracts; or
c. Annuity contracts with fixed and/or variable accounts;
or
d. Funding vehicles providing a guarantee of principal.
Currency
All sums payable to the Company under this Contract shall be
payable in the lawful currency of the United States of America, to
the Company at its Home Office or to its authorized agent.
Proof of Survival and Age
Where any payments under this Contract depend on the recipient
being alive and/or being a certain age on a given date, the Company
may require proof satisfactory to it that such a condition has been
met prior to making the payment.
Ownership
The Contract Owner is the Owner of this Contract and has all rights
of ownership unless otherwise provided herein.
<PAGE>
PAGE 7
GENERAL PROVISIONS
(Continued)
Limitation of Payment
If the monthly installment payable under any benefit is less than
$20, the Company may change the frequency of payment or pay the
actuarial value of the benefit to the payee in a single sum. If
payment is made in a lump sum, such payment will be in full
settlement of all liability of the Company to the payee for the
benefit.
Facility of Payment
If any payee under this Contract is a minor or is, in the judgment
of the Company, otherwise legally incompetent or incapable of
executing a valid receipt and discharge for any payment due him or
her under this Contract, the Company may, unless and until a claim
has been made by a duly appointed guardian of such payee, make such
payment, or any part of it to any person or institution then in
judgment of the Company contributing toward, or providing for, the
care and maintenance of such payee. Any such payment shall
completely discharge the liability of the Company with respect to
the amount so paid, and the Company will not be obligated to see to
the application of the money so paid.
Disclaimer of Responsibility
The Company is not responsible for the sufficiency of the funds
under the Contract to provide the benefits specified in the Plan.
The Company has no liability except as provided in the Contract.
Assignment - Protection of Proceeds
[illegible] assignment of the Contract or of any payment or
privilege herein will be valid, [illegible] that this Contract may,
with the consent of the Company, be assigned to a successor trustee
of the Plan. No assignment of the Contract will be binding upon
the Company unless it is in writing and filed at the Company's Home
Office. The Company assumes no responsibility for the validity of
any assignment. To the extent allowed by law, payments under this
Contract are not subject to the claims of creditors or to legal
process.
Nonparticipating
The Contract will not participate in the profits or surplus of the
Company.
Changes in Plan
The Company may request evidence satisfactory to it that the Plan
meets the requirements of qualification under Section 401 of the
Code. The Owner agrees to notify the Company immediately if, at
any time, the Plan fails to meet the requirements of that Section
of the Code.
<PAGE>
PAGE 8
GENERAL PROVISIONS
(Continued)
Notices and Directions
Unless the Company agrees otherwise, it will not be bound by any
authorization, direction, election, or notice which is not given in
writing and received at its Home Office. Any notice to be given to
the Owner by the Company will be in writing and addressed to the
Owner at the address shown on the Company's records.
Not Transferable
No benefit or privilege under this Contract may be sold, assigned,
discounted, or pledged as collateral for a loan or as security for
the performance of an obligation or for any other purpose, to any
person other than the Company.
Payments by Company
All sums payable by the Company are payable at its Home Office.
Any withdrawal or distribution based on the variable accumulation
value shall be payable only from the Variable Accounts. Any
withdrawal or distribution based on the fixed account value shall
be payable only from the Fixed Account.
Ownership and Control of Assets
The Company shall have exclusive and absolute ownership and control
of its assets, including all assets in the Variable Accounts, and
shall meet the requirements of any applicable State law. That
portion of the assets of the Variable Accounts equal to reserves
and other contract liabilities with respect to the Variable
Accounts shall be held and applied exclusively for the benefit of
the Owner of and Participants in contracts based upon the Variable
Accounts.
State Laws
This Contract shall be construed according to the laws of the
jurisdiction of delivery.
Voting Rights
The Company will vote mutual fund shares held by the Variable
Accounts at meetings of shareholders of the fund(s), but will
follow voting instructions received at least one day prior to each
such meeting from persons having the right to give voting
instructions. Such voting rights will be given to the Owner in a
manner required by the Investment Company Act of 1940, as amended.
Notice will be given to each Owner who may be entitled to vote on
any matter. Such notice will specify the matters upon which an
Owner may be entitled to vote and the method of determining the
number of votes which may be cast at any such meeting. If those
having the right to vote do not provide voting instructions, the
Company will vote those shares in the same proportion as for voting
instructions actually received.
<PAGE>
PAGE 9
GENERAL PROVISIONS
(Continued)
Periodic Reports
The Company will send the Owner quarterly, or more frequently as
the Code may require, a statement showing the number, type and
value of Accumulation Units credited to the Contract. The
statement shall be accurate as of a date not more than two (2)
months prior to the date of mailing. The Company shall also send
such statements reflecting transactions in the Contract as may be
required by applicable laws, rules and regulations.
Beneficiary
Beneficiary designations will be made under and maintained by the
Plan and will not be the responsibility of the Company unless
otherwise agreed to by the Owner and the Company.
<PAGE>
PAGE 10
PURCHASE PAYMENTS
Payments
All Purchase Payments are to be paid to the Company at its Home
Office or to its authorized agent.
Purchase Payment Allocation
Each Purchase Payment will be allocated to the Contract upon
receipt by the Company, either to the Variable Accounts or to the
Fixed Account or to both the Variable Accounts and the Fixed
Account in accordance with the allocation factors specified in the
application or as subsequently changed. The allocation factors for
new Payments between the Fixed Account and the Variable Accounts
may be changed at any time by written request. Allocation change
requests may also be made according to telephone procedures that
are then currently in effect, if any. Any change will take effect
with the first Purchase Payment received with or after receipt of
written or telephone notification of the change by the Company and
will continue in effect until subsequently changed.
<PAGE>
PAGE 11
CONTRACT VALUE
Contract Value
The contract value at any time is the sum of: (1) the Fixed Account
Contract Value; and (2) the Variable Account Contract Value.
If: (1) part or all of the contract value is surrendered; or (2)
charges described herein are made against the contract value; then
a number of accumulation units from the variable accounts and an
amount from the fixed account will be deducted to equal such
amount. For surrenders, deductions will be made from the fixed or
variable accounts that you specify. Otherwise, the number of units
from the variable accounts and the amount from the fixed account
will be deducted in the same proportion that the Owner's interest
in each bears to the total contract value.
Fixed Account Contract Value
The fixed account contract value at any time will be: (1) the sum
of all amounts credited to the fixed account under this contract,
less (2) any amounts deducted for charges or surrenders.
Interest to be Credited
We will credit interest to the fixed account contract value.
Interest will begin to accrue on the date the purchase payments
which are received in our home office become available to us for
use. Such interest will be credited at rates that we determine
from time to time. However, we guarantee that the rate will not be
less than the Guaranteed Interest Rate shown under Contract Data.
Variable Account Contract Value
The variable account contract value at any time will be: (1) the
sum of the value of all variable account accumulation units under
this contract resulting from purchase payments so allocated, or
transfers among the variable and fixed accounts; less (2) any units
deducted for charges or surrenders.
Contract Administrative Charge
The Company charges a fee for establishing and maintaining its
records and for normal administrative expenses and services for
this contract. The charge is shown under Contract Data and is
deducted from the contract value at the end of each three-month
period measured from the contract date or, if earlier, when the
contract is surrendered. The charge may be increased on any
contract anniversary but in no event will the charge exceed $250 on
a quarterly basis.
Premium Tax Charges
A charge will be made by us against the contract value of this
contract at any time that any premium taxes not previously deducted
are determined to apply to this contract.
<PAGE>
PAGE 12
CONTRACT VALUE
(Continued)
Transfers of Contract Values
While this contract is in force, transfer of contract values may be
made as outlined below:
1. The Owner may transfer all or a part of the values held
in one or more of the variable accounts to another one
or more of the variable accounts. Subject to item 2,
the Owner may also transfer values held in one or more
of the variable accounts to the fixed account.
2. Within the 30 days after:
a. each contract anniversary; and
b. the first day of the seventh month in each
contract year,
the owner may transfer values from the fixed account to
one or more of the variable accounts. Only one such
transfer is allowed during this period each year. If
such a transfer is made, no transfers from a variable
account to the fixed account may be made until the next
eligible transfer period.
The owner may make a transfer by written request. Transfer
requests may also be made according to telephone procedures that
are then currently in effect, if any. There is no fee or charge
for these transfers. This transfer privilege may be suspended or
modified by the Company at any time.
<PAGE>
PAGE 13
FIXED AND VARIABLE ACCOUNTS
The Fixed Account
The fixed account is the Company's general account. It is made up
of all the Company's assets other than: (1) those in the variable
accounts; and (2) those in any other segregated asset account.
The Variable Accounts
The variable accounts are separate investment accounts. They are
named under Contract Data. The Company has allocated a part of its
assets for this and certain other contracts to the variable
accounts. Such assets remain the Company's property. However,
they may not be charged with the liabilities from any other
business in which the Company may take part.
Investments of the Variable Accounts
Purchase payments applied to the variable accounts will be
allocated as specified by the owner. Each variable account will
buy, at net asset value, shares of the fund shown for that account
under Contract Data or as later added or changed.
Valuation of Assets
Mutual fund shares in the variable accounts will be valued at their
net asset value.
Variable Account Accumulation Units
The number of accumulation units for each of the variable accounts
is found by dividing: (1) the net amount allocated to the account;
by (2) the accumulation unit value for the account for the
valuation period during which the Company received the purchase
payment.
Variable Account Accumulation Unit Value
The value of an accumulation unit for each of the variable accounts
was arbitrarily set at $1 when the first mutual fund shares were
bought. The value for any later valuation period is found as
follows:
The accumulation unit value for each variable account
for the last prior valuation period is multiplied by
the net investment factor for the same account for the
next following valuation period. The result is the
accumulation unit value. The value of an accumulation
unit may increase or decrease from one valuation period
to the next.
<PAGE>
PAGE 14
FIXED AND VARIABLE ACCOUNTS
(Continued)
Net Investment Factor
The next investment factor is an index applied to measure the
investment performance of a variable account from one valuation
period to the next. The net investment factor may be greater or
less than one; therefore, the value of an accumulation unit may
increase or decrease.
The next investment factor for any such account for any valuation
period is determined by: dividing (1) by (2) and subtracting (3)
from the result. This is done where:
(1) is the "adjusted net asset value" per share of the
mutual fund held in the variable account determined at
the end of the current valuation period;
(2) is the "adjusted net asset value" per share of the
mutual fund held in the variable account, determined at
the end of the last prior valuation period.
(3) is a factor representing the mortality and expense risk
charge.
Mortality and Expense Risk Charge
In calculating accumulation unit values the Company will deduct a
mortality and expense risk charge from the variable accounts equal,
on an annual basis, to 1.00% of the daily net asset value. This
deduction is made to compensate the Company for assuming the
mortality and expense risks under contracts of this type. The
deduction is: (1) made from each variable account; and (2)
computed on a daily basis.
<PAGE>
PAGE 15
WITHDRAWALS
Withdrawals
Subject to the other terms and conditions of this Contract, the
contract value may be withdrawn in full or in part by written
request.
Withdrawal Charge
A withdrawal charge will be deducted from the amount withdrawn
unless such withdrawal is due to a Participant's:
1. purchase of an immediate annuity under the Annuity
Settlement Provisions of this contract after separation
from service;
2. retirement under the Plan after age 55;
3. disability;
4. death;
5. financial hardship as permitted under the Plan;
6. loan request as permitted under the Plan;
7. conversion to an Individual Retirement Annuity then
offered by the Company (see Conversion Provision);
8. attainment of age 59 1/2.
Any amounts withdrawn for a purpose other than shown above will be
subject to a withdrawal charge as follows:
Amount Withdrawn
in Contract Year Withdrawal Charge
1 6%
2 6%
3 5%
4 4%
5 3%
6 2%
7 1%
8 and later 0%
In no event shall withdrawal charges exceed 8 1/2% of purchase
payments paid.
Rules for Withdrawals
All withdrawals will have the following conditions:
1. The Owner must apply by written request or other method
agreed to by the Company while this Contract is in
force; and
2. The amount withdrawn with respect to a Participant must
be at least $250 or the contract value, if less.
<PAGE>
PAGE 16
WITHDRAWALS
(Continued)
3. The amount withdrawn, less any charges, will normally
be paid within seven business days of the receipt of
the written request. For surrenders from the fixed
account, the Company has the right to defer payment for
up to 6 months from the date of the request.
4. For partial withdrawals, the Owner may specify from
which accounts the withdrawal is to be made.
Otherwise, the withdrawal will be made from the
Variable Accounts and Fixed Account in the same
proportion as the Owner's interest in each bears to the
contract value.
5. Any amounts withdrawn and charges which may apply
cannot be repaid.
Upon a full withdrawal, the Company may require return of the
contract before payment of the full withdrawal value.
Suspension or Delay in Payment of Withdrawal
The Company has the right to suspend or delay the date of any
withdrawal payment from the Variable Accounts for any period:
1. When the New York Stock Exchange is closed; or
2. When trading on the New York Stock Exchange is
restricted; or
3. When an emergency exists as result of which:
a. disposal of securities held in the Variable
Accounts is not reasonably practicable; or
b. it is not reasonably practicable to fairly
determine the value of the net assets of the
Variable Accounts; or
4. During any other period when the Securities and
Exchange Commission, by order, so permits for the
protection of security holders.
Rules and regulations of the Securities and Exchange Commission
will govern as to whether the conditions set forth in 2 and 3
exist.
Conversion Provision
In the event of a Participant's termination of employment, the
Owner may direct the Company to withdraw a part of the contract
value in order for the Participant to purchase an individual or
group deferred annuity contract then offered by the Company and
qualified under Section 408 or other applicable Sections of the
Code. Such contract shall be in a form then customarily issued by
the Company for business under such qualified plans. No withdrawal
charges will apply at the time of such withdrawal for conversion.
<PAGE>
PAGE 17
WITHDRAWALS
(Continued)
Participant Loans
The Owner may, on behalf of a Participant, request withdrawal of a
Participant's vested interest in the Plan for the purpose of
funding a loan for such Participant.
The amount and terms of the loan must be in accordance with the
applicable requirements of the underlying Plan and the Code. The
Company assumes no responsibility for the validity of the loan or
whether the loan complies with such applicable requirements.
Withdrawals for the purpose of funding a loan under the Plan shall
not be subject to withdrawal charges described in the Contract.
However, such withdrawal charges unpaid shall be deducted from the
remaining contract value to the extent of any unpaid loan balance
including loan interest at the time of contract termination,
distribution to the Participant under the terms of the Plan, or if
the loan is in default under the terms of the applicable Plan or
the Code.
<PAGE>
PAGE 18
CONTRACT TRANSFER, TERMINATION
Withdrawals for Contract Owner Transfer of Funds
The Owner may direct the Company to withdraw the contract value to
transfer to another funding agent. Applicable withdrawal charges
and administrative charges described in this Contract shall be
deducted from the first withdrawal payment unless the contract
value is transferred to another product or similar plan then
offered by the Company or its affiliates.
The Owner must provide the Company at least 30 days prior written
notice of its intent to make such a withdrawal. This written
notice shall be sent to the Company's Home Office and shall specify
the initial withdrawal date and payee to whom the withdrawal
payments are to be made.
The Company shall pay the contract value less any applicable
charges in a lump sum or installments at the Owner's option,
subject to the following:
a. A lump sum payment from the Fixed Account values will
be based on a Market Value of the Fixed Account value
and will be paid within 30 days after the Owner's
request is mailed to the Company. The Market Value
will be determined by the Company in accordance with
its established procedure for contracts in the same
class of business as this Contract. (See Market Value
Adjustment provision following.)
b. The contract value balance may be paid in five annual
installments beginning on the initial withdrawal date
and then on each of the next four anniversaries of such
date as follows:
Installment % of Then-Remaining
Payment Contract Value Balance
1 20%
2 25%
3 33%
4 50%
5 100%
No additional withdrawals for benefits or other transfers of funds
will be allowed and no additional Purchase Payments will be
accepted after the first withdrawal payment is made.
Market Value Adjustment
Withdrawal of the Fixed Account Value under the Contract
Transfer/Termination provision will be subject to a market value
adjustment (MVA). The MVA will be applied to the amount being
withdrawn from the Fixed Account after deduction of any applicable
contract administrative and withdrawal charge.
<PAGE>
PAGE 19
CONTRACT TRANSFER, TERMINATION
(Continued)
The MVA will reflect the relationship between the current interest
rate being credited to new Purchase Payments allocated to the Fixed
Account and the rates being credited to all prior Purchase
Payments. The MVA is calculated as follows:
MVA = Fixed Account Value x (A - B) x C
Where: A = the weighted average interest rate (in decimal
form) being credited to all Fixed Account Purchase
Payments at the time of termination, rounded to 4
decimal places.
B = the interest rate (in decimal form) being credited
on new Purchase Payments to the contract at the
time of termination, rounded to 4 decimal places.
C = the annuity factor, based on contract year, from
the following table.
Contract Year Annuity Factor
1-3 6.0
4-6 5.0
7+ 4.0
Contract Termination
by the Company
Contract Termination Date
The Company reserves the right upon thirty (30) days' written
notice to the Owner to declare a "Contract Termination Date", which
shall be any date on or after the expiration of the thirty (30) day
notification period.
A Contract Termination Date may be declared if:
a. The Owner adopts an amendment to the Plan that causes
the Plan to be materially different from the Plan
originally underwritten by the Company. To be
"materially different", the amendment must cause a
substantial change in the level of the dollar amounts
of Purchase Payments or contract benefits to be paid by
the Company, or
b. The Plan fails to qualify or becomes disqualified under
the appropriate Sections of the Code.
If the Company waives its right to terminate the Contract under any
provision of this Section at any time, such waiver shall not be
considered a precedent and shall not prohibit the Company from
exercising the right to terminate this contract for the reasons
noted above, at any future time.
<PAGE>
PAGE 20
CONTRACT TRANSFER, TERMINATION
(Continued)
Procedures at Contract Termination Date
If a Contract Termination Date has been declared, the Company
shall, on the Contract Termination Date, withdraw any contract
administrative charge from the contract value. A Withdrawal
Charge, described further in the Withdrawal section of this
Contract, will be payable by the Owner on account of any
termination under this section and shall be deducted from the first
termination payment.
At the Owner's option, and as specified in the Contract Transfer
section, the Company shall pay the remaining Contract Value balance
in a lump sum or installments. A lump sum payment will be subject
to an applicable Market Value Adjustment to the Fixed Account
Value. If the Owner does not select an option, the Company will
pay the remaining contract value balance to the Contract Owner
under the installment option.
<PAGE>
PAGE 21
ANNUITY SETTLEMENT PROVISIONS
Withdrawals for Annuity Purchases
Subject to other terms and conditions of this Contract, the Owner
may direct the Company to withdraw all or part of the Contract
Value to purchase immediate annuities from the Company to provide
Contract Benefits to payees specified by the Owner. If the amount
to be applied to purchase an immediate annuity would not provide a
monthly payment of at least $20.00, the Company has the right to
pay the withdrawal amount in a lump sum. Withdrawals under this
Section will not be subject to the Withdrawal Charge.
The immediate annuities which may be purchased by the Owner shall
be in the form then customarily offered by the Company for business
in this class. The Owner must provide the Company at least 30 days
prior written notice of its intent to make a withdrawal to purchase
an annuity. This written notice shall be sent to the Company's
Home Office and shall contain such information as the Company shall
require to effect such a purchase, including satisfactory evidence
of the annuitant's age.
The price of the immediate annuities which may be purchased under
this Section shall be determined by the applicable Annuity Purchase
Rates described below. Where applicable, state premium tax is
payable by the Owner on the account of the purchase of an annuity
under this Section. The Company will withdraw an amount specified
by the Contract Owner from the contract value, deduct the state
premium tax, if any, from the amount and apply the balance as the
annuity purchase payment. The Company guarantees payment of the
annuity benefits to each payee for whom an annuity is purchased
under this Contract and will send to the Owner for delivery to the
payee a nontransferable supplemental annuity contract describing
the amount of the annuity benefit and the terms governing its
payment.
Annuity Purchase Rates
The single premium to provide annuity benefits in accordance with
this Section shall be based on the Company's published annuity
purchase rates in effect for contracts in this class of business on
the date the single premium is withdrawn from the contract value to
purchase the annuity benefit payments. With respect to annuity
benefit payments purchased prior to the 20th Contract Anniversary,
the annuity purchase rates shall not exceed the rates specified in
Table I of this Article.
<PAGE>
PAGE 22
ANNUITY SETTLEMENT PROVISIONS
(Continued)
Table I
Premium to Purchase $10 of Monthly Annuity Benefit Payments*
Participant's Life with
Adjusted Age** Life Annuity*** 10 Year Certain***
55 $2066.12 $2083.33
56 2032.52 2053.39
57 2000.00 2020.20
58 1964.64 1988.07
59 1926.78 1953.13
60 1890.36 1915.71
61 1851.85 1879.70
62 1811.59 1845.02
63 1769.91 1808.32
64 1730.10 1769.91
65 1689.19 1733.10
66 1644.74 1694.92
67 1602.56 1655.63
68 1557.63 1615.51
69 1512.86 1577.29
70 1468.43 1538.46
* Annuity purchase rates not shown above will be
calculated on the same basis as those rates shown
above.
** Adjusted age is the age nearest birthday when annuity
benefit payments are purchased minus the following
adjustment for the participant's calendar year of
birth:
Calendar Year Calendar Year
of Birth Adjustment of Birth Adjustment
Before 1920 0 1945 to 1949 - 6
1920 to 1924 - 1 1950 to 1959 - 7
1925 to 1929 - 2 1960 to 1969 - 8
1930 to 1934 - 3 1970 to 1979 - 9
1935 to 1939 - 4 1980 to 1989 -10
1940 to 1944 - 5 After 1989 -11
*** The annuity purchase rates contained herein are
exclusive of state premium tax. The applicable state
premium tax is payable upon any annuity purchase as
specified above.
<PAGE>
PAGE 23
GROUP DEFERRED ANNUITY CONTRACT
- - Group Deferred Variable Annuity - Unallocated - Nonparticipating
- - Optional Fixed Dollar or Variable Accumulation Values
- - Fixed Dollar Annuity Payments
IDS Life Insurance Company
IDS Tower 10
Minneapolis, MN 55440
APPLICATION
<PAGE>
PAGE 1
Application for Group Deferred Variable Annuity Contract as a
Funding Vehicle for a Qualified Retirement Plan.
Application is hereby made to IDS Life Insurance Company of
Minneapolis, Minnesota (the Company) for issuance of a Group
Deferred Annuity Contract (the Contract) containing the following
specifications:
Trustee ___________________________________________
Employer/Plan Sponsor ___________________________________________
Address ___________________________________________
___________________________________________
Investment Election
Indicate which of the following variable accounts/mutual funds are
initially authorized as investments by the Applicant.
Note: The Fixed Account and Moneyshare Fund shall always be
authorized.
Fixed Account ____ Managed Fund ____
Moneyshare Fund ____ International Equity Fund ____
Capital Resource Fund ____ Aggressive Growth Fund ____
Special Income Fund ____ _________________________ ____
The Applicant understands that the contract issued from this
application contains certain fees and charges including, but not
limited to, withdrawal charges and mortality and expense risk fees.
Upon request by the Company, the Applicant agrees to obtain from
the Employer/Plan Sponsor, certification that the above-named plan
is qualified under the applicable Section(s) of the United States
Internal Revenue Code.
The Applicant acknowledges receipt of a copy of the Retirement
Annuity Mutual Fund prospectuses for the applicable funds listed
above.
For Ohio residents only: Any person who, with intent to defraud or
knowing that he or she is facilitating a fraud against an insurer,
submits an application or files a claim containing a false or
deceptive statement is guilty of insurance fraud.
Dated At: _______________________________ Date:____________
Applicant: _________________________________________________
Name of Trustees
By: _________________________________________________
Authorized Signatures (Trustees)
<PAGE>
PAGE 2
By: _________________________________________________
Authorized Signatures (Trustees)
Countersigned: _________________________________________________
Agent Signature
Plan Recordkeeper: ________________________________________________
________________________________________________
Name and Address: ________________________________________________
________________________________________________
<PAGE>
PAGE 1
CERTIFICATE OF INCORPORATION
OF
IDS LIFE INSURANCE COMPANY
We, the undersigned, for the purpose of forming an
insurance corporation under and pursuant to the provisions of the
Minnesota Statutes, Chapter 300 relating thereto, and of any
amendments thereof, do hereby associate ourselves as a body
corporate and do hereby adopt the following Articles of
Incorporation:
ARTICLE I
The name of this Corporation shall be IDS Life
Insurance Company.
ARTICLE II
The purposes of and general nature of its business
shall be:
(a) To engage in the general business of a life
insurance company, and to effect all forms, types,
variations and combinations of life insurance,
endowment or annuity contracts or policies, on a
group or individual basis, for the payment of
money in a single sum or in installments upon the
contingencies of death, disability or
survivorship. To provide in such policies or
contracts supplemental thereto, for additional
benefits in the event of the death of the insured
by accidental means, total and permenent [sic]
disability of the insured, or specific
dismemberment or disablement suffered by the
insured.
(b) To engage in the general business of an accident
and health insurance company, for the purpose of
effecting insurance against loss or damage by the
sickness, bodily injury or death by accident of
the assured or his dependents, on a group or
individual basis; to effect all forms, types,
variations and combinations of policies or
contracts of insurance providing for indemnities
in the event of death, sickness or disability.
(c) To effect contracts of reinsurance or co-insurance
of any individual or group risk underwritten by
this Corporation, to reinsure risks of this
Corporation or any part thereof with any other
company or to reinsure the whole of or any portion
of the risks of any other company.
(d) To effect all other contracts of insurance
authorized by clauses (4) and (5)(a) of
subdivision 1 of Section 60.29 of Minnesota
Statutes.
<PAGE>
PAGE 2
(e) To have one or more offices and to conduct
business in this state or elsewhere.
(f) To acquire, hold and dispose of shares of stock,
notes, bonds or other evidences of indebtedness or
securities of any other corporation or
corporations.
(g) To transact all business and to do all other
things necessary or incidental to the foregoing
purposes.
ARTICLE III
The duration of this Corporation shall be perpetual.
ARTICLE IV
The principal place of transacting the business of this
Corporation shall be the City of Minneapolis, State of Minnesota.
ARTICLE V
2/9/72
10/18/85
The capital stock of this Corporation shall consist of
One Hundred Thousand (100,000) shares of stock with a par value of
Thirty Dollars ($30.00) per share. The amount of stated capital of
this Corporation shall be Three Million Dollars ($3,000,000).
ARTICLE VI
(1) The general management of this Corporation shall
be vested in a Board of Directors.
(2) The names and post office addresses of the members
of the first Board of Directors are respectively as follows:
Joseph M. Fitzsimmons 800 Investors Building
Minneapolis 2, Minnesota
John W. McCartin 800 Investors Building
Minneapolis 2, Minnesota
Virgil C. Sullivan 800 Investors Building
Minneapolis 2, Minnesota
A. Edward Archibald 800 Investors Building
Minneapolis 2, Minnesota
Harold E. Miller, M.D. 1531 Medical Arts Building
Minneapolis 2, Minnesota
Said named Directors shall serve as such until the
first annual meeting of the shareholders of the Corporation and
until their successors have been duly elected and qualified.
<PAGE>
PAGE 3
ARTICLE VII
The first Board of Directors of this Corporation shall
have full power and authority to make and adopt By-Laws for the
government of this Corporation and its affairs as they may deem
advisable or necessary and as shall not be inconsistent with the
provisions of these Articles. The By-Laws may be amended or
altered by the shareholders at any regular or special meeting
called therefor.
ARTICLE VIII
These Articles of Incorporation may be amended by the
affirmative vote of the holders of a majority of the voting power
of the capital stock.
ARTICLE IX
The first meeting of the Corporation shall be a meeting
of the Incorporators and Subscribers to the capital stock of the
Corporation. Three days' written notice of such meeting shall be
given unless there is a written Waiver of Notice.
ARTICLE X
The names and post office addresses of the
Incorporators are as follows:
Lloyd J. Muehlberg 800 Investors Building
Minneapolis 2, Minnesota
Joseph F. Grinnell 800 Investors Building
Minneapolis 2, Minnesota
Edward M. Burke 800 Investors Building
Minneapolis 2, Minnesota
IN TESTIMONY WHEREOF we have set our hands this 23rd day of July,
1957.
IN PRESENCE OF: Lloyd J. Muehlberg
M. Gould Joseph F. Grinnell
D. Fairchild Edward M. Burke
State of Minnesota )
) SS.
County of Hennepin )
On this 23rd day of July, 1957, before me, a Notary
Public, personally appeared Lloyd J. Muehlberg, Joseph F. Grinnell,
and Edward M. Burke, to me known to be the persons named in and who
executed the foregoing instrument, and they acknowledged to me that
they executed the same as their free act and deed and for the uses
and purposes therein expressed.
<PAGE>
PAGE 4
(Notarial seal) Helen M. Bochnak
Helen M. Bochnak
Notary Public, Hennepin County, Minn.
My Commission Expired Nov. 12, 1958
APPROVAL OF COMMISSIONER OF INSURANCE
The foregoing Certificate of Incorporation of Investors
Syndicate Life Insurance and Annuity Company is hereby approved
this 24th day of July, 1957.
Cyril C. Sheehan
Commissioner of Insurance
State of Minnesota
J.O.M.
<PAGE>
PAGE 1
AMENDED BY-LAWS OF
IDS LIFE INSURANCE COMPANY
ARTICLE I
OFFICES
Section 1. The principal place of transacting the
business of this Corporation shall be in the City of Minneapolis,
State of Minnesota.
Section 2. The Corporation may also have offices at
such other places, within or without the State, as the Board of
Directors may from time to time determine or the business of the
Corporation may require.
ARTICLE II
STOCKHOLDERS' MEETINGS
Section 1. All meetings of stockholders for the
election of Directors shall be held at the principal office of the
Corporation in the City of Minneapolis, Minnesota. Meetings of
stockholders for any other purpose may be held at such place,
within or without the State of Minnesota, and at such time as may
be designated in the call and notice thereof.
Section 2. The annual meeting of stockholders for the
election of Directors and the transaction of such other business as
may properly come before the meeting shall be held on the Wednesday
following the first Tuesday on or after the nineteenth day of April
in each year, at 10:30 o'clock A.M. Election of Directors shall be
by plurality vote.
Section 3. In the event the stockholders shall fail to
hold an annual meeting at the time specified therefor in Section 2
of this Article, or the Directors are not elected thereat,
Directors may be elected at a special meeting held for that purpose
upon call and notice as hereinafter provided for a special meeting
of stockholders.
Section 4. Special meetings of stockholders may be
called for any purpose or purposes at any time by the President,
the Secretary, the Board of Directors, any two or more members of
the Board of Directors or in the manner hereinafter provided by one
or more stockholders holding not less than one-tenth of the issued
and outstanding stock entitled to vote. Upon request in writing by
registered mail or delivered in person to the President, any Vice
President, or Secretary, by any person or persons entitled to call
a meeting of stockholders, such officer shall forthwith cause
notice to be given to the stockholders entitled to vote at a
special meeting of stockholders to be held at such time and place
as such officer shall fix, not less than ten pr more than sixty
days after the receipt of such request. Any such request shall
state the purpose or purposes of the proposed meeting.
<PAGE>
PAGE 2
Section 5. Written notice of each meeting of
stockholders, stating the time and place, and in case of a special
meeting the purpose thereof, shall be served upon or mailed to each
stockholder of record entitled to vote thereat at such address as
appears on the stock register of the Corporation, at least ten days
before such meeting.
Section 6. Notice of the time, place and purpose of
any meeting of shareholders, whether required by statute, by the
Articles of Incorporation or by these By-Laws, may be waived in
writing by any stockholder. Such waiver may be given before or
after the meeting, and shall be filed with the Secretary or entered
upon the records of the meeting.
Section 7. Business transacted at all special meetings
shall be confined to the objects stated in the call.
Section 8. The presence, at any meeting of
stockholders, in person or by proxy of the holders of a majority of
the stock entitled to vote thereat shall constitute a quorum for
the transaction of business, except as otherwise provided by
statute. If, however, a quorum shall not be present at any meeting
of the stockholders, the stockholders present in person or by proxy
shall have power to adjourn the meeting from time to time, until a
quorum shall be present. If any meeting of stockholders be
adjourned to another time or place, whether for lack of quorum or
otherwise, no notice as to such adjourned meeting need be given
other than by an announcement, giving the time and place thereof,
at the meeting at which the adjournment is taken. At such
adjourned meeting at which a quorum shall be present, any business
may be transacted which might have been transacted at the meeting
as originally noticed. The stockholders present at a duly called
or held meeting at which a quorum is present may continue to
transact business until final adjournment, notwithstanding the
withdrawal of enough stockholders to leave less than a quorum.
Section 9. At each meeting of the stockholders, every
stockholder of record at the date fixed by the Board of Directors
as the record date for the determination of the persons entitled to
vote at a meeting of stockholders, or, of not date has been fixed,
then at the date of the meeting, shall be entitled at such meeting
to one vote for each share having voting power standing in his name
on the books of the Corporation. A stockholder may cast his vote
or votes in person or by proxy. The appointment of a proxy shall
be in writing filed with the Secretary at or before the meeting.
ARTICLE III
BOARD OF DIRECTORS
Section 1. The number of directors which shall
constitute the whole Board shall not be less than three nor more
than fourteen, as the stockholders may from time to time determine.
The President of the Corporation shall be a Director. Directors
shall be elected at the annual meeting of the stockholders of the
Corporation, except that if the number of directors is increased at
any time other than at an annual meeting of stockholders, an
<PAGE>
PAGE 3
additional Director or Directors to fill the places on the Board
created by any such increase may be elected at a special meeting of
stockholders called for that purpose. Each Director shall be
elected to serve until the next annual meeting of the stockholders
and until his successor shall be elected and shall quality.
Section 2. Vacancies in the Board of Directors, not to
exceed one-third of the members of the Board in any one year, shall
be filled by the remaining members of the Board, though less than a
quorum, and each person so elected shall be a Director until his
successor is elected by the stockholders who may make such election
at their next annual meeting or at any special meeting called for
that purpose. A vacancy in the Board of Directors, which cannot be
filled by the remaining members of the Board, shall be filled by
the stockholders at any special meeting called for that purpose.
Section 3. The Board of Directors shall have the
general management, control and supervision of all business and
affairs of the Corporation, and shall fix and change, as it may
from time to time determine, by majority vote, the compensation to
be paid Directors, officers and agents of the Corporation, and do
all such lawful acts and things as are not by statue [sic] or by
the Articles of Incorporation or by the By-Laws directed or
required to be exercised or done by the stockholders.
ARTICLE IV
EXECUTIVE COMMITTEE
Section 1. The Board of Directors may, by affirmative
action of the entire Board, designate two or more of their number,
one of which shall be the President, to constitute an Executive
Committee, which, to the extent determined by affirmative action of
the entire Board, shall have and exercise the authority of the
Board in the management of the business or the Corporation. Any
such Executive Committee shall act only in the interval between
meetings of the Board, and shall be subject at all times to the
control and direction of the Board. The Executive Committee shall
keep regular minutes of its proceedings and report the same to the
Board.
ARTICLE V
MEETINGS OF THE BOARD OF DIRECTORS
Section 1. The annual meeting of the Board of
Directors of the Corporation shall be held at its principal office
in the City of Minneapolis, Minnesota, as soon as practicable after
the final adjournment of the annual meeting of the stockholders in
each year, and no notice of such meeting shall be necessary to the
newly elected Directors in order to legally constitute the meeting
provided a quorum shall be present; except, however, that such
meeting may be held at such other place, whether in this state or
elsewhere, as a majority of the Board of Directors may have
previously determined.
<PAGE>
PAGE 4
Section 2. Regular meetings of the Board of Directors
may be held without notice at such time and place either within or
without the State of Minnesota, as shall from time to time have
been previously determined by the Board.
Section 3. Special meetings of the Board may be called
by the President on two days notice to each Director, either
personally or by mail or telegram; special meetings shall be called
by the President or Secretary in like manner and on like notice on
the written request of two Directors. Any Directors may, in
writing, either before or after the meeting, waive notice thereof;
and, without notice, any Director by his attendance at and
participation in the action taken at the meeting shall be deemed to
have waived notice.
Section 4. At all meetings of the Board of Directors,
a majority of the Directors shall be necessary and sufficient to
constitute a quorum for the transaction of business; and the acts
of a majority of the Directors present at a meeting at which a
quorum is present shall be the acts of the Board of Directors. If
a quorum shall not be present at any meeting of Directors, the
Directors present thereat may adjourn the meeting from time to
time, until a quorum shall be present. No notice of an adjourned
meeting, whether for lack of quorum or otherwise, need be given
other than by announcement, giving the time and place thereof, at
the meeting at which the adjournment is taken.
Section 5. Any action, which might be taken at a
meeting of the Board of Directors, may be taken without a meeting
if done in writing signed by all of the Directors.
ARTICLE VI
NOTICES
Section 1. Whenever under the provisions of statutes
or of the Articles of Incorporation or of the By-Laws, notice is
required to be given to any Directors or stockholder, it shall not
be construed to mean personal notice, but such notice may be given
in writing by depositing the same in a post office or letter box,
in a postpaid sealed wrapper, addressed to such Director or
stockholder at such address as appears on the stock register or
books of this Corporation, or, in default of address appearing in
the stock register of the Corporation or any known address, to such
Director or stockholder at the Main Post Office in the City of
Minneapolis, Minnesota, and such notice shall be deemed to be given
at the time when the same shall thus be mailed.
ARTICLE VII
OFFICERS
Section 1. The officers of the Corporation shall be a
Chairman of the Board, a President, one or more Vice Presidents
(the number thereof to be determined by the Board of Directors), a
Treasurer, a Secretary, a Medical Director, and such Assistant
Treasurers, Assistant Secretaries, and such other officers as the
<PAGE>
PAGE 5
Board of Directors may deem necessary. All officers of the
Corporation shall exercise such powers and perform such duties and
shall be set forth in these By-Laws and as shall be determined from
time to time by the Board of Directors or by the President. Any
two of the offices, except those of President and Vice President,
Treasurer and Assistant Treasurer, and Secretary and Assistant
Secretary may be held by the same person.
Section 2. The Board of Directors, at its annual
meeting, shall elect a Chairman of the Board, a President, a
Secretary, a Treasurer, a Medical Director and such Executive Vice
Presidents or Senior Vice Presidents as the Board shall determine.
Only the Chairman of the Board and the President need be a member
of the Board. The President, or his designee, may appoint any
other officers permitted by Section 1 of this Article.
Section 3. The officers of the Corporation shall,
except in the event of death, resignation, or removal by the Board
of Directors, hold office until their successors are chosen and
quality in their stead. Any officer elected by the Board of
Directors may be removed at any time by the Board of Directors with
or without cause; such removal, however, shall be without prejudice
to the contract rights, if any, of the person so removed. When a
vacancy for any reason occurs among the officers, the Board of
Directors shall have the power to elect a successor to fill such
vacancy for the unexpired term.
Section 4. Chairman of the Board. The Chairman of the
Board shall preside at all meetings of the stockholders and of the
Board of Directors, and will perform such other duties as are
assigned to him by the Board of Directors.
Section 5. President. The President shall be the
chief executive officer of the Corporation. He shall have general
and active supervision and direction over the business affairs of
the Corporation and over its several officers, subject to the
control of the Board of Directors whose policies he shall execute.
He shall see that all lawful orders and resolutions of the Board of
Directors and of the Executive Committee are carried into effect
and he shall make or cause to be made timely and appropriate
reports to the Board of Directors of all matters which in the
interest of the Corporation are required to be brought to their
notice. He shall be a member of the Executive Committee and shall
preside at its meetings and he shall ex officio be a member of all
standing committees or other committees as may be from time to time
constituted or appointed by the Board of Directors.
Section 6. Secretary. The Secretary shall attend all
meetings of the Board of Directors and of the stockholders and
record their proceedings in a book to be kept for that purpose, and
shall perform like duties for the Executive Committee when
required. In case the Secretary shall be absent from any meeting,
the Chairman of the meeting may appoint a temporary secretary to
act at such meeting. The Secretary shall give, or cause to be
given, notice of all meetings of the stockholders and special
meetings of the Board of Directors. He shall have the custody of
the stock register, minute books and the seal of the Corporation,
<PAGE>
PAGE 6
and shall make such reports and perform such other duties as are
incident to this office or are properly required of him by the
Board of Directors.
Section 7. Treasurer. The Treasurer, unless otherwise
ordered by the Board of Directors, shall have the custody of all
the funds and securities of the Corporation, and shall deposit all
monies and valuables in the name of and to the credit of the
Corporation in such banks or depositories as the Board of Directors
may designate, and shall keep regular books of account, and shall
have custody of the books and records incident to his office and
such as the Board of Directors may direct, and he shall have such
other powers and shall perform such other duties as are incident to
his office or which are properly required of him by the Board of
Directors.
Section 8. Medical Director. The Medical Director
shall, under the direction of the Board of Directors, appoint all
medical examiners for this Corporation and shall have such other
powers and shall perform such other duties as are incident to his
office or which are properly required of him by the Board of
Directors. In his absence or inability to act, an assistant,
designated by the Executive Committee, may act for and in his
stead.
Section 9. The powers and duties of all other officers
shall be such as are usual in like corporations under the direction
and control of the Board of Directors.
ARTICLE VIII
CLOSING OF TRANSFER BOOKS
AND FIXING OF RECORD DATE
Section 1. The Board of Directors may fix a time, not
less than twenty nor more than forty days preceding the date of any
meeting of stockholders, as a record date for the determination of
the stockholders entitled to notice of any to vote at such meeting,
and in such case by stockholders of record on the date so fixed, or
their legal representatives, shall be entitled to notice of and to
vote at such meeting, notwithstanding any transfer of any shares on
the books of the Corporation after any record date so fixed. The
Board of Directors may close the books of the Corporation against
transfers of shares during the whole or any part of such period.
Section 2. The Board of Directors may fix a time not
exceeding forty days preceding the date fixed for the payment of
any dividend or distribution, or the date for the allotment of
rights, or, subject to contract rights with respect thereto, the
date when any change or conversion or exchange of shares shall be
made or go into effect, as a record date for the determination of
the stockholders entitled to receive payment of any such dividend,
distribution or allotment of rights or to exercise rights in
respect to any such change, conversion or exchange of shares, and
in such case only stockholders of record on the date so fixed shall
be entitled to receive payment of such dividend, distribution or
allotment of rights or to exercise such rights of change,
conversion or exchange of shares, as the case may be, <PAGE>
PAGE 7
notwithstanding any transfer of any shares on the books of the
Corporation after any record date fixed as aforesaid. The Board of
Directors may close the books of the Corporation against the
transfer of shares during the whole or any part of such period.
ARTICLE IX
MISCELLANEOUS
Section 1. The Corporation shall be entitled to treat
the holder of record of any share or shares of stock as the holder
in fact thereof, and, accordingly, shall not be found to recognize
any equitable or other claim to or interest in such share on the
part of any other person, whether or not it shall have express or
other notice thereof, except as expressly provided by the laws of
the State of Minnesota.
Section 2. The Corporation 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 Manager of Variable Annuity
Funds A and B, director, officer, employee or agent of this
Corporation, or is or was serving at the direction of the
Corporation as a Manager of Variable Annuity Finds A and B,
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
Manager of Variable Annuity Funds A and B, 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.
ARTICLE X
LOST STOCK CERTIFICATES
Section 1. The Board of Directors may direct a new
certificate or certificates to be issued in place of any
certificate or certificates theretofore issued by the Corporation
alleged to have been destroyed or lost upon the making of an
affidavit of that fact by the person claiming the certificate of
stock to be lost or destroyed, and the Board of Directors, when
authorizing such issue of a new certificate or certificates, may,
in its discretion and as a condition precedent to the issuance
thereof, require the owner of such lost or destroyed certificate or
certificates, or his legal representative, to advertise the same in
such manner as it shall require and/or give the Corporation a bond
in such sum as it may direct, to indemnify the Corporation against
any claim arising from the issues of such new certificate.
<PAGE>
PAGE 8
ARTICLE XI
POLICIES, CONTRACTS AND CONVEYANCES
Section 1. Subject to the provisions of Section 2 of
the Article, the President or any Vice President may with the
Secretary or any Assistant Secretary, sign, cause the corporate
seal to be affixed thereto when necessary, acknowledge and deliver
all conveyances, contracts, deeds, notes, mortgages, satisfactions,
leases, assignments, licenses, transfers, powers of attorney,
certificates for shares of stock, and all other similar and
dissimilar instruments.
The Board of Directors may by resolution authorize any officer or
officers alone or with another officer or officers, to sign, or
counter-sign, cause the corporate seal to be affixed thereto when
necessary, acknowledge and deliver any written instrument, or class
of written instruments, for and on behalf of this Corporation.
Section 2. All insurance, annuity or endowment
policies or contracts issued by this Corporation and all
reinsurance agreements of this Corporation shall be signed by the
President or a Vice President and the Secretary or an Assistant
Secretary. The signature of any of said officers, on the foregoing
or any other instrument may be a facsimile signature, if the same
is countersigned by an officer or employee duly authorized by the
Board of Directors or Executive Committee of this Corporation to
counter-sign the same.
Section 3. All checks, demands for money, and notes of
the Corporation shall be signed by such officer or officers or such
other person or persons as may from time to time be authorized by
the Board of Directors.
ARTICLE XII
AMENDMENTS OF BY-LAWS
Section 1. These By-Laws may be altered at any regular
meeting of the stockholders, or at any special meeting of the
stockholders at which a quorum is present or represented, provided
notice of the proposed alternation is contained in the notice of
such meeting, by the affirmative vote of the holders of a majority
of the shares issued and outstanding and entitled to vote at such
meeting and present or represented thereat.
<PAGE>
PAGE 1
Consent of Independent Auditors
We consent to the reference to our firm under the captions
"Experts" and "Independent Auditors" and to the use of our reports
dated February 3, 1994 on the consolidated financial statements and
financial statement schedules of IDS Life Insurance Company and our
report dated March 18, 1994 on the financial statements of IDS Life
Accounts F, IZ, JZ, G, H and N for the Group Variable Annuity
Contract to be offered by IDS Life Insurance Company, in Post-
Effective Amendment No. 2 to the Registration Statement (Form N-4
No. 33-47302) being filed under the Securities Act of 1933 and the
Investment Company Act of 1940.
Ernst & Young
Minneapolis, Minnesota
April 27, 1994
INDEPENDENT AUDITORS
<PAGE>
PAGE 1
Report of Independent Auditors
The Board of Directors
IDS Life Insurance Company
We have audited the consolidated financial statements of IDS Life
Insurance Company as of December 31, 1993 and 1992, and for each of
the three years in the period ended December 31, 1993, and have
issued our report thereon dated February 3, 1994 (included
elsewhere in this Registration Statement).
Our audits also included the financial statement schedules I, V,
VI, VIII and IX included elsewhere in this Registration Statement.
These schedules are the responsibility of the Company's management.
Our responsibility is to express an opinion based on our audits.
In our opinion, the financial statement schedules referred to
above, when considered in relation to the basic financial
statements taken as a whole, present fairly, in all material
respects, the information set forth therein.
Ernst & Young
Minneapolis, Minnesota
February 3, 1994
<PAGE>
PAGE 2
IDS LIFE INSURANCE COMPANY
SCHEDULE I - CONSOLIDATED SUMMARY OF INVESTMENTS
OTHER THAN INVESTMENTS IN RELATED PARTIES ($ thousands)
AS OF DECEMBER 31, 1993
<TABLE>
<CAPTION>
________________________________________________________________________________________
Column A Column B Column C Column D
Type of Investment Cost Value Amount at which
shown in the
balance sheet
________________________________________________________________________________________
<S> <C> <C> <C>
Fixed maturities:
Bonds:
United States Government and
government agencies and
authorities (a) $ 5,591,309 $ 5,737,439 $ 5,591,309
States, municipalities and
polictical subdivisions 11,072 13,452 11,072
All other corporate bonds 13,790,043 14,675,088 13,790,043
____________ _____________ ______________
Total fixed maturities 19,392,424 20,425,979 19,392,424
Mortgage loans on real estate 2,055,450 XXXXXXXXX 2,055,450
Policy loans 350,501 XXXXXXXXX 350,501
Other investments 56,307 XXXXXXXXX 56,307
____________ ______________ ______________
Total investment $ 21,854,682 $ XXXXXXXXX $ 21,854,682
____________ ______________ ______________
(a) - Includes mortgage-backed securities with a cost and market value of $5,527,777 and $5,671,783 respectively.
</TABLE>
<PAGE>
PAGE 3
IDS LIFE INSURANCE COMPANY
SCHEDULE V - SUPPLEMENTARY INSURANCE INFORMATION ($ thousands)
FOR THE YEAR ENDED DECEMBER 31, 1991
<TABLE>
<CAPTION>
Column A Column B Column C Column D Column E Column F
Segment Deferred Future Unearned Other policy Premium
policy policy premiums claims and revenue
acquisition benefits benefits
cost losses, payable
claims and
loss expenses
<S> <C> <C> <C> <C> <C>
Annuities $ 693,184 $13,663,477 $ - $ 30,041 $ -
Life, DI,
Long-Term Care and
Health Insurance 518,439 2,654,915 - 21,205 102,338
Total $1,211,623 $16,318,392 $ - $ 51,246 $102,338
</TABLE>
<TABLE>
<CAPTION>
Column A Column G Column H Column I Column J Column K
Segment Net Benefits, Amortization Other Premiums
investment claims, of deferred operating written
income losses and policy expenses
settlement acquisition
expenses costs
<S> <C> <C> <C> <C> <C>
Annuities $1,189,038 $ 1,639 $ 63,821 $ 66,068 $ N/A
Life, DI,
Long-Term Care and
Health Insurance 233,828 88,577 52,257 87,601 N/A
Total $1,422,866 $90,216 $116,078 $ 153,669 N/A
</TABLE>
IDS LIFE INSURANCE COMPANY
SCHEDULE V - SUPPLEMENTARY INSURANCE INFORMATION ($ thousands)
FOR THE YEAR ENDED DECEMBER 31, 1992
<TABLE>
<CAPTION>
Column A Column B Column C Column D Column E Column F
Segment Deferred Future Unearned Other policy Premium
policy policy premiums claims and revenue
acquisition benefits benefits
cost losses, payable
claims and
loss expenses
<S> <C> <C> <C> <C> <C>
Annuities $ 860,027 $16,342,419 $ - $ 28,705 $ -
Life, DI,
Long-Term Care and
Health Insurance 580,848 2,883,469 - 21,194 114,379
Total $1,440,875 $19,225,888 $ - $ 49,899 $114,379
</TABLE>
<TABLE>
<CAPTION>
Column A Column G Column H Column I Column J Column K
Segment Net Benefits, Amortization Other Premiums
investment claims, of deferred operating written
income losses and policy expenses
settlement acquisition
expenses costs
<S> <C> <C> <C> <C> <C>
Annuities $1,370,145 $ 1,870 $ 81,706 $ 100,928 $ N/A
Life, DI,
Long-Term Care and
Health Insurance 246,676 106,528 58,453 114,764 N/A
Total $1,616,821 $108.398 $140,159 $ 215,692 N/A
</TABLE>
<PAGE>
PAGE 4
IDS LIFE INSURANCE COMPANY
SCHEDULE V - SUPPLEMENTARY INSURANCE INFORMATION ($ thousands)
FOR THE YEAR ENDED DECEMBER 31, 1993
<TABLE>
<CAPTION>
Column A Column B Column C Column D Column E Column F
Segment Deferred Future Unearned Other policy Premium
policy policy premiums claims and revenue
acquisition benefits benefits
cost losses, payable
claims and
loss expenses
<S> <C> <C> <C> <C> <C>
Annuities $1,008,378 $18,492,135 $ - $ 21,508 $ -
Life, DI,
Long-Term Care and
Health Insurance 644,006 3,148,932 - 23,008 127,245
Total $1,652,384 $21,641,067 $ - $ 44,516 $127,245
</TABLE>
<TABLE>
<CAPTION>
Column A Column G Column H Column I Column J Column K
Segment Net Benefits, Amortization Other Premiums
investment claims, of deferred operating written
income losses and policy expenses
settlement acquisition
expenses costs
<S> <C> <C> <C> <C> <C>
Annuities $1,532,995 $ 3,656 $139,602 $ 122,999 $ N/A
Life, DI,
Long-Term Care and
Health Insurance 250,224 119,335 72,131 118,975 N/A
Total $1,783,219 $122,991 $211,733 $ 241,974 N/A
</TABLE>
<PAGE>
PAGE 5
IDS LIFE INSURANCE COMPANY
SCHEDULE VI - REINSURANCE ($ thousands)
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
<TABLE>
<CAPTION>
____________________________________________________________________________________________________________________
Column A Column B Column C Column D Column E Column F
Gross amount Ceded to other Assumed from Net % of amount
companies other companies Amount assumed to net
____________________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C>
For the year ended
December 31, 1993
Life insurance in force $ 44,188,493 $ 3,038,426 $ 2,015,382 $ 43,165,449 4.67%
____________________________________________________________________________________________________________________
Premiums:
Life insurance $ 51,764 $ 3,627 $ -- $ 48,137 0.00%
DI & health insurance 96,250 17,142 -- 79,108 0.00%
____________________________________________________________________________________________________________________
Total premiums $ 148,014 $ 20,769 $ -- $ 127,245 0.00%
____________________________________________________________________________________________________________________
For the year ended
December 31, 1992
Life insurance in force $ 38,888,963 $ 2,937,590 $ 2,015,382 $ 37,966,755 5.31%
____________________________________________________________________________________________________________________
Premiums:
Life insurance $ 53,238 $ 3,849 $ 330 $ 49,719 0.66%
DI & health insurance 78,347 13,687 -- 64,660 0.00%
____________________________________________________________________________________________________________________
Total premiums $ 131,585 $ 17,536 $ 330 $ 114,379 0.29%
____________________________________________________________________________________________________________________
For the year ended
December 31, 1991
Life insurance in force $ 34,596,113 $ 2,902,381 $ 2,020,900 $ 33,714,632 5.99%
_____________________________________________________________________________________________________________________
Premiums:
Life insurance $ 53,223 $ 3,902 $ 385 $ 49,706 0.77%
DI & health insurance 59,844 7,212 -- 52,632 0.00%
____________________________________________________________________________________________________________________
Total premiums $ 113,067 $ 11,114 $ 385 $ 102,338 0.38%
____________________________________________________________________________________________________________________
</TABLE>
<PAGE>
PAGE 6
IDS LIFE INSURANCE COMPANY
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS ($ thousands)
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
<TABLE>
<CAPTION>
____________________________________________________________________________________________________________________
Column A Column B Column C Column D Column E
Additions
--------------
Balance at Charged to
Description Beginning Charged to Other Accounts- Deductions- Balance at End
of Period Costs & Expenses Describe * Describe ** of Period
____________________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C>
For the year ended
December 31, 1993
- ------------------------------
Reserve for Mortgage Loans $23,595 $13,635 $0 $2,210 $35,020
Reserve for Fixed Maturities $37,899 ($15,122) $0 $22,777
Reserve for Other Investments $12,834 ($4,344) $0 ($2,210) $10,700
For the year ended
December 31, 1992
- -------------------------------
Reserve for Mortgage Loans $16,131 $8,440 $0 $976 $23,595
Reserve for Fixed Maturities $45,100 ($7,601) $400 $0 $37,899
Reserve for Other Investments $7,782 $4,076 $0 ($976) $12,834
For the year ended
December 31, 1991
- ------------------------------
Reserve for Mortgage Loans $12,655 $6,860 $0 $3,384 $16,131
Reserve for Fixed Maturities $26,096 $19,004 $0 $0 $45,100
Reserve for Other Investments $8,434 ($4,036) $0 ($3,384) $7,782
____________________________________________________________________________________________________________________
* Cash received on bond previously written down
** Transfer between reserve accounts
</TABLE>
<PAGE>
PAGE 7
IDS LIFE INSURANCE COMPANY
SCHEDULE IX - SHORT-TERM BORROWINGS ($ thousands)
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
<TABLE>
<CAPTION>
_______________________________________________________________________________________________________
Column A Column B Column C Column D Column E Column F
Maximum Average Weighted
Weighted amount amount average
Category of aggregate Balance average outstanding outstanding interest rate
short-term borrowing at end interest during the during the during the
of period rate period period period
_______________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C>
1993
Line of Credit $1,519 N/A $22,700 $1,297 3.70%
1992
Line of Credit $ 0 N/A $20,000 $ 825 5.45%
1991
Line of Credit $ 0 N/A $32,725 $1,483 7.28%
_______________________________________________________________________________________________________
</TABLE>
QUOTATION IN RESPONSE TO ITEM 24
<PAGE>
PAGE 1
IDS Life Group Variable Annuity Contract
Performance Calculations
NON-MONEY MARKET SUBACCOUNTS
TOTAL RETURN
The total return is the percentage change between the initial
investment at the beginning of the period and the total value of
the investment at the end of the period.
Total Return = Ending Total Value - Initial Investment
Initial Investment
The ending total value includes income and capital gains
distributions treated as reinvested. It also reflects deductions
for the contract administrative charge, variable account
administrative charge and the mortality and expense risk charge.
AVERAGE ANNUAL TOTAL RETURN
The average annual total return of a subaccount reflects the
average annual compounded rate of return of a hypothetical
investment over a period of one, five and ten years (or, if less,
up to the life of the subaccount), calculated according to the
following formula:
P(1+T)n = ERV
where: P = a hypothetical initial payment of $1000.
T = average annual total return.
n = number of years.
ERV = ending redeemable value of a hypothetical $1,000
payment made at the beginning of the one, five
or ten year periods (or fractional portion
thereof).
The average annual total return without withdrawal charge reflects
the deduction of the contract administrative charge, variable
account administrative charge and mortality and expense risk
charge.
The average annual total return with withdrawal charge reflects the
above deductions and assumes the contract owner surrenders the
entire contract at the end of the one, five and ten year periods.
YIELD
Yield quotations will be based on all investment income earned
during a particular 30-day period, less expenses accrued during the
period (net investment income) and will be computed by dividing net
investment income per share by the value of a share on the last day
of the period, according to the following formula:
YIELD = 2 [( a - b + 1)6 - 1]
cd
<PAGE>
PAGE 2
a = dividends and interest earned during the period.
b = expenses accrued for the period (net of reimbursements).
c = the average daily number of shares outstanding during the
period that were entitled to receive dividends.
d = the maximum offering price per share on the last day of
the period.
MONEY MARKET SUBACCOUNT
YIELD
Yield for the money market subaccount will be based on the net
change in the value of a hypothetical investment (exclusive of
capital changes) from the beginning of a seven day period for which
the return will be quoted. A prorata share of fund expenses
accrued over the seven day period is subtracted. The difference is
divided by the value of the subaccount at the beginning of the
period to obtain the base period return. The base period return is
annualized by multiplying by 365/7.
EFFECTIVE YIELD
Calculation of effective yield begins with the same base period
return used in the calculation of yield, which is then annualized
to reflect compounding according to the following formula:
Effective Yield = [(Base Period Return = 1)365/7] - 1
<PAGE>
PAGE 1
IDS LIFE INSURANCE COMPANY
DIRECTORS POWER OF ATTORNEY
City of Minneapolis
State of Minnesota
Each of the undersigned, as directors of the below
listed unit investment trusts that previously have filed
registration statements and amendments thereto pursuant to the
requirements of the Securities Act of 1933 and the Investment
Company Act of 1940 with the Securities and Exchange Commission:
<TABLE>
<CAPTION>
1933 Act 1940 Act
Reg. Number Reg. Number
<S> <C> <C>
IDS Life Accounts F, IZ, JZ, G, H and N
IDS Life Flexible Annuity 33-4173 811-3217
IDS Life Accounts F, IZ, JZ, G, H and N
IDS Life Variable and Combination
Retirement Annuities 2-73114 811-3217
IDS Life Accounts F, IZ, JZ, G, H and N
IDS Life Employee Benefit Annuity 33-52518 811-3217
IDS Life Accounts F, IZ, JZ, G, H and N
IDS Life Group Variable Annuity Contract 33-47302 811-3217
IDS Life Insurance Company
IDS Life Group Variable Annuity Contract
(Fixed Account) 33-48701 N/A
IDS Life Insurance Company
IDS Life Market Value Annuity 33-28976 N/A
IDS Life Insurance Company
IDS Life Preferred Choice Annuity 33-50968 N/A
IDS Life Variable Life Separate Account
Flexible Premium Variable Life Insurance Policy 33-11165 811-4298
IDS Life Variable Life Separate Account
IDS Life Single Premium Variable Life 2-97637 811-4298
IDS Life Variable Account for Smith Barney Shearson
LifeVest Single Premium Variable Life 33-5210 811-4652
IDS Life Account SBS
IDS Life Symphony Annuity 33-40779 812-7731
IDS Life Account RE
IDS Life Real Estate Variable Annuity 33-13375 N/A
IDS Life Variable Annuity Fund A 2-29081 811-1653
IDS Life Variable Annuity Fund B 2-47430 811-1674
</TABLE>
hereby constitutes and appoints William A. Stoltzmann, Mary Ellyn
Minenko and Colleen Curran or either one of them, as her or his
attorney-in-fact and agent, to sign for her or him in her or his
name, place and stead any and all filings, applications (including
applications for exemptive relief), periodic reports, registration
statements (with all exhibits and other documents required or
desirable in connection therewith) other documents, and amendments
thereto and to file such filings, applications, periodic reports,
registration statements other documents, and amendments thereto
with the Securities and Exchange Commission, and any necessary
states, and grants to any or all of them the full power and
authority to do and perform each and every act required or
necessary in connection therewith.<PAGE>
PAGE 2
Dated the 31st day of March, 1994.
Louis C. Fornetti Janis E. Miller
David R. Hubers James A. Mitchell
Richard W. Kling Barry J. Murphy
Paul F. Kolkman Stuart A. Sedlacek
Peter A. Lefferts Melinda S. Urion
