SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Post-Effective Amendment No. 8 (File No. 33-52567) [X]
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and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 9 (File No. 811-3500) [X]
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IDS LIFE OF NEW YORK ACCOUNT 4
IDS LIFE OF NEW YORK ACCOUNT 5
IDS LIFE OF NEW YORK ACCOUNT 6
IDS LIFE OF NEW YORK ACCOUNT 9
IDS LIFE OF NEW YORK ACCOUNT 10
IDS LIFE OF NEW YORK ACCOUNT 11
IDS LIFE OF NEW YORK ACCOUNT 12
IDS LIFE OF NEW YORK ACCOUNT 13
IDS LIFE OF NEW YORK ACCOUNT 14
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(Exact Name of Registrant)
IDS Life Insurance Company of New York
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(Name of Depositor)
20 Madison Avenue Extension, Albany, NY 12203
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(Address of Depositor's Principal Executive Offices) (Zip Code)
Depositor's Telephone Number, including Area Code (612) 671-4085
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Mary Ellyn Minenko, 200 AXP Financial Center, Minneapolis, MN 55474
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(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check appropriate box)
[ ] immediately upon filing pursuant to paragraph (b) of Rule 485
[X] on May 1, 2000 pursuant to paragraph (b) of Rule 485
[ ] 60 days after filing pursuant to paragraph (a)(i) of Rule 485
[ ] on (date) pursuant to paragraph (a)(i) of Rule 485
If appropriate, check the following box:
[ ] this post-effective amendment designates a new effective date for
previously filed post-effective amendment.
<PAGE>
<PAGE>
PROSPECTUS
MAY 1, 2000
EMPLOYEE BENEFIT ANNUITY
GROUP FLEXIBLE PREMIUM DEFERRED COMBINATION FIXED/VARIABLE ANNUITY
IDS LIFE OF NEW YORK ACCOUNTS 4, 5, 6, 9, 10, 11, 12, 13 AND 14
ISSUED BY: IDS LIFE INSURANCE COMPANY OF NEW YORK (IDS LIFE OF NEW YORK)
20 Madison Avenue Extension
Albany, NY 12203
800-541-2251
This prospectus contains information that you should know before investing. You
also will receive the American Express-Registered Trademark- Variable Portfolio
Funds prospectus. Please read the prospectuses carefully and keep them for
future reference. This contract is available for salary-reduction plans that
meet the requirements of Section 403(b) of the Internal Revenue Code of 1986, as
amended ("the Code").
THE SECURITIES AND EXCHANGE COMMISSION (SEC) HAS NOT APPROVED OR DISAPPROVED
THESE SECURITIES OR PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
AN INVESTMENT IN THIS CONTRACT IS NOT A DEPOSIT OF A BANK OR FINANCIAL
INSTITUTION AND IS NOT INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION OR ANY OTHER GOVERNMENT AGENCY. AN INVESTMENT IN THIS CONTRACT
INVOLVES INVESTMENT RISK INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
A Statement of Additional Information (SAI), dated the same date as this
prospectus, is incorporated by reference into this prospectus. It is filed with
the SEC, and is available without charge by contacting IDS Life of New York at
the telephone number above or by completing and sending the order form on the
last page of this prospectus. The table of contents of the SAI is on the last
page of this prospectus.
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PROSPECTUS -- MAY 1, 2000 1
<PAGE>
TABLE OF CONTENTS
KEY TERMS.................................... 3
THE CONTRACT AND CERTIFICATE IN BRIEF........ 4
EXPENSE SUMMARY.............................. 5
CONDENSED FINANCIAL INFORMATION
(UNAUDITED)................................ 7
FINANCIAL STATEMENTS......................... 8
PERFORMANCE INFORMATION...................... 9
THE VARIABLE ACCOUNTS AND THE FUNDS.......... 10
THE FIXED ACCOUNT............................ 11
BUYING THE CONTRACT AND CERTIFICATE.......... 12
CHARGES...................................... 13
VALUING YOUR INVESTMENT...................... 15
MAKING THE MOST OF YOUR CERTIFICATE.......... 17
SURRENDERS................................... 19
TSA-SPECIAL SURRENDER PROVISIONS............. 20
CHANGING OWNERSHIP........................... 20
BENEFITS IN CASE OF DEATH.................... 20
THE ANNUITY PAYOUT PERIOD.................... 21
TAXES........................................ 23
VOTING RIGHTS................................ 25
ABOUT THE SERVICE PROVIDERS.................. 25
YEAR 2000.................................... 26
TABLE OF CONTENTS OF THE STATEMENT OF
ADDITIONAL INFORMATION..................... 27
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2 IDS LIFE OF NEW YORK EMPLOYEE BENEFIT ANNUITY
<PAGE>
KEY TERMS
THESE TERMS CAN HELP YOU UNDERSTAND DETAILS ABOUT THE CONTRACT AND CERTIFICATE.
ACCUMULATION UNIT: A measure of the value of each variable account before
annuity payouts begin.
ANNUITANT: The person on whose life or life expectancy the annuity payouts are
based.
ANNUITY PAYOUTS: An amount paid at regular intervals under one of several plans.
BENEFICIARY: The person you designate to receive benefits in case of a
participant's death while the contract is in force and before annuity payouts
begin.
CERTIFICATE: The document we deliver to you that represents your participation
in the contract.
CERTIFICATE VALUE: The total value of your certificate before we deduct any
applicable charges.
CERTIFICATE YEAR: A period of 12 months, starting on the effective date of your
certificate and on each anniversary of the effective date.
CLOSE OF BUSINESS: When the New York Stock Exchange (NYSE) closes, normally 4
p.m. Eastern time.
CONTRACT OWNER (OWNER): The person or party entitled to ownership rights stated
in the contract and in whose name the contract is issued.
FIXED ACCOUNT: An account to which you may allocate purchase payments. Amounts
you allocate to this account earn interest at rates that we declare
periodically.
FUNDS: Investment options under your certificate. You may allocate purchase
payments into variable accounts investing in shares of any or all of these
funds.
PARTICIPANT (YOU, YOUR): The person named in the certificate who has all rights
under the certificate, except as reserved by the owner.
RETIREMENT DATE: The date when annuity payouts are scheduled to begin.
SURRENDER VALUE: The amount you are entitled to receive if you make a full
surrender from your certificate. It is the certificate value minus any
applicable charges.
VALUATION DATE: Any normal business day, Monday through Friday, that the NYSE is
open. Each valuation date ends at the close of business. We calculate the value
of each variable account at the close of business on each valuation date.
VARIABLE ACCOUNTS: Separate accounts to which you may allocate purchase
payments; each invests in shares of one fund. The value of your investment in
each variable account changes with the performance of the particular fund.
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PROSPECTUS -- MAY 1, 2000 3
<PAGE>
THE CONTRACT AND CERTIFICATE IN BRIEF
PURPOSE: The purpose of the certificate is to allow you to accumulate money for
retirement. You do this by making one or more investments (purchase payments)
that may earn returns that increase the value of your certificate. The contract
and related certificate provide lifetime or other forms of payouts beginning at
a specified date (the retirement date). As in the case of other annuities, it
may not be advantageous for you to purchase this certificate as a replacement
for, or in addition to, an existing annuity.
FREE LOOK PERIOD: You may return your certificate to your sales representative
or to our office within the time stated on the first page of your certificate
and receive a full refund of your purchase payments.
ACCOUNTS: Currently, you may allocate your purchase payments among any or all
of:
- - the variable accounts, each of which invests in a fund with a particular
investment objective. The value of each variable account varies with the
performance of the particular fund in which it invests. We cannot guarantee
that the value at the retirement date will equal or exceed the total purchase
payments you allocate to the variable accounts. (p. 10)
- - the fixed account, which earns interest at a rate that we adjust periodically.
(p. 11)
BUYING THE CONTRACT AND CERTIFICATE: A sales representative will help the owner
complete and submit an application for a contract and help you complete and
submit an enrollment form for the certificate. Applications and enrollment forms
are subject to acceptance at our office. After your initial purchase payment,
you have the option of making additional purchase payments in the future. The
maximum amount of purchase payments is determined by any restrictions imposed by
the Internal Revenue Code of 1986, as amended (the Code). (p. 12)
- - Minimum purchase payment -- $1,000 unless you pay in installments under a
group billing arrangement such as a payroll deduction.
- - Minimum installment purchase payment -- $25 monthly or $300 annually.
- - Maximum first-year purchase payment(s) -- $50,000 to $1,000,000 depending on
your age.
- - Maximum purchase payment for each subsequent year -- $50,000.
TRANSFERS: Subject to certain restrictions you currently may redistribute money
among the accounts without charge at any time until annuity payouts begin, and
once per year among the variable accounts after annuity payouts begin. You may
establish automated transfers among the accounts. Fixed account transfers are
subject to special restrictions. (p. 17)
SURRENDERS: You may surrender all or part of your certificate value at any time
before the retirement date subject to certain restrictions imposed by the Code.
Surrenders may be subject to charges and tax penalties (including a 10% IRS
penalty if you surrender prior to your reaching age 59 1/2) and may have other
tax consequences. (p. 19)
CHANGING OWNERSHIP: Restrictions apply concerning change of ownership of rights
under a contract or certificate. (p. 20)
BENEFITS IN CASE OF DEATH: If the participant dies before annuity payouts begin,
we will pay the beneficiary an amount at least equal to the certificate value.
(p. 20)
ANNUITY PAYOUTS: You can apply your certificate value to an annuity payout plan
that begins on the retirement date. You may choose from a variety of plans to
make sure that payouts continue as long as you like. We can make payouts on a
fixed or variable
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4 IDS LIFE OF NEW YORK EMPLOYEE BENEFIT ANNUITY
<PAGE>
basis, or both. Total monthly payouts include amounts from each variable account
and the fixed account. During the annuity payout period, you cannot be invested
in more than five variable accounts at any one time unless we agree otherwise.
(p. 21)
TAXES: Generally, your certificate value grows tax-deferred until you surrender
it or begin to receive payouts. (Under certain circumstances, IRS penalty taxes
may apply). Even if you direct payouts to someone else, you will still be taxed
on the distribution. (p. 23)
CHARGES: We assess certain charges in connection with your contract or
certificate.
- - $30 annual administrative charge;
- - 1.00% mortality and expense risk fee (if you allocate money to one or more
variable accounts);
- - surrender charge; and
- - the operating expenses of the funds in which the variable accounts invest.
EXPENSE SUMMARY
The purpose of the following information is to help the owner and participant
understand the various costs and expenses associated with the contract and
related certificates.
There is no sales charge when purchasing the contract or certificate. We show
all costs that we deduct directly from the contract or certificate or indirectly
from the variable accounts and funds below. Some expenses may vary as we explain
under "Charges." Please see fund prospectuses for more information on the
operating expenses for each fund.
ANNUAL CONTRACT OWNERS EXPENSES
SURRENDER CHARGE* (contingent deferred sales charge as a percentage of amount
surrendered)
<TABLE>
<CAPTION>
CERTIFICATE SURRENDER CHARGE
YEAR PERCENTAGE
<S> <C>
1 8%
2 8
3 8
4 8
5 7
6 6
7 5
8 4
9 3
10 2
11 1
12 and later 0
</TABLE>
ADMINISTRATIVE CHARGE $30
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PROSPECTUS -- MAY 1, 2000 5
<PAGE>
ANNUAL VARIABLE ACCOUNT EXPENSES
(as a percentage of average variable account value):
MORTALITY AND EXPENSE RISK FEE 1%
*The surrender charge is further limited so that it will never exceed 8.5% of
aggregate purchase payments made to the certificate.
SURRENDER CHARGE UNDER ANNUITY PAYOUT PLAN E -- PAYOUTS FOR A SPECIFIED
PERIOD: The amount equal to the difference in the present value of remaining
payments using the assumed investment rate and such present value using the
assumed investment rate plus 1.55%. The surrender charge is further limited so
that it will never exceed 8.5% of aggregate purchase payments made to the
certificate.
ANNUAL OPERATING EXPENSES OF THE FUNDS (AFTER FEE WAIVERS AND/OR EXPENSE
REIMBURSEMENTS, IF APPLICABLE, AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS)
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<TABLE>
<CAPTION>
MANAGEMENT 12B-1 OTHER
FEES FEES EXPENSES TOTAL(1)
<S> <C> <C> <C> <C>
AXP(SM) Variable Portfolio -
Bond Fund .60% .13 .08 .81%
Capital Resource Fund .60% .13 .06 .79%
Cash Management Fund .51% .13 .05 .69%
Extra Income Fund .62% .13 .08 .83%
Global Bond Fund .84% .13 .12 1.09%
International Fund .83% .13 .11 1.07%
Managed Fund .59% .13 .04 .76%
New Dimensions
Fund-Registered Trademark- .61% .13 .07 .81%
Strategy Aggressive Fund .60% .13 .07 .80%
</TABLE>
(1) The fund's expense figures are based on actual expenses for the fiscal year
ended Aug. 31, 1999 restated to include a Rule 12b-1 distribution fee of
.125% that went into effect Sept. 21, 1999.
EXAMPLE:*
You would pay the following expenses on a $1,000 investment, assuming a 5%
annual return and....
<TABLE>
<CAPTION>
NO SURRENDER OR SELECTION
FULL SURRENDER AT THE OF AN ANNUITY PAYOUT PLAN AT THE
END OF EACH TIME PERIOD END OF EACH TIME PERIOD
1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C> <C> <C> <C> <C>
AXP(SM) Variable
Portfolio -
Bond Fund $101.78 $147.38 $184.18 $249.35 $19.33 $59.79 $102.77 $222.30
Capital Resource Fund 101.60 146.81 183.22 247.26 19.13 59.17 101.72 220.15
Cash Management Fund 100.65 143.96 178.37 236.71 18.10 56.06 96.47 209.34
Extra Income Fund 101.97 147.95 185.15 251.44 19.54 60.41 103.82 224.44
Global Bond Fund 104.43 155.33 197.64 278.26 22.20 68.47 117.35 251.95
International Fund 104.24 154.77 196.68 276.22 22.00 67.85 116.32 249.86
Managed Fund 101.31 145.95 181.76 244.10 18.82 58.24 100.15 216.92
New Dimensions
Fund-Registered Trademark- 101.78 147.38 184.18 249.35 19.33 59.79 102.77 222.30
Strategy Aggressive Fund 101.69 147.09 183.70 248.30 19.23 59.48 102.25 221.22
</TABLE>
* In this example, the $30 administrative charge is approximated as a 0.076%
charge based on our average certificate size.
YOU SHOULD NOT CONSIDER THIS EXAMPLE AS A REPRESENTATION OF PAST OR FUTURE
EXPENSES. ACTUAL EXPENSES MAY BE MORE OR LESS THAN THOSE SHOWN.
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6 IDS LIFE OF NEW YORK EMPLOYEE BENEFIT ANNUITY
<PAGE>
CONDENSED FINANCIAL INFORMATION
(UNAUDITED)
The following tables give per-unit information about the financial history of
each variable account.
<TABLE>
<CAPTION>
YEAR ENDED DEC. 31, 1999 1998 1997 1996 1995 1994 1993 1992 1991 1990
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<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ACCOUNT 5 (INVESTING IN SHARES OF AXP(SM) VARIABLE PORTFOLIO -- BOND FUND)
Accumulation unit
value at
beginning of
period $4.03 $4.01 $3.73 $3.53 $2.91 $3.06 $2.67 $2.46 $2.12 $2.05
Accumulation unit
value at end of
period $4.06 $4.03 $4.01 $3.73 $3.53 $2.91 $3.06 $2.67 $2.46 $2.12
Number of
accumulation
units outstanding
at end of period
(000 omitted) 16,987 20,262 21,882 24,424 23,903 21,936 23,259 16,710 12,228 10,315
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%
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ACCOUNT 4 (INVESTING IN SHARES OF AXP(SM) VARIABLE PORTFOLIO -- CAPITAL RESOURCE FUND)
Accumulation unit
value at
beginning of
period $7.02 $5.71 $4.64 $4.35 $3.43 $3.43 $3.35 $3.25 $2.24 $2.25
Accumulation unit
value at end of
period $8.60 $7.02 $5.71 $4.64 $4.35 $3.43 $3.43 $3.35 $3.25 $2.24
Number of
accumulation
units outstanding
at end of period
(000 omitted) 33,850 37,947 41,666 47,283 44,849 38,283 30,089 21,677 13,591 10,058
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%
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ACCOUNT 6 (INVESTING IN SHARES OF AXP(SM) VARIABLE PORTFOLIO -- CASH MANAGEMENT FUND)
Accumulation unit
value at
beginning of
period $2.26 $2.17 $2.07 $1.99 $1.91 $1.86 $1.83 $1.80 $1.71 $1.61
Accumulation unit
value at end of
period $2.34 $2.26 $2.17 $2.07 $1.99 $1.91 $1.86 $1.83 $1.80 $1.71
Number of
accumulation
units outstanding
at end of period
(000 omitted) 5,999 6,515 4,651 5,927 5,445 3,794 4,113 5,378 7,253 6,487
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 yield(1) 5.01% 3.71% 4.11% 3.78% 4.00% 4.23% 1.90% 1.77% 3.24% 6.20%
Compound yield(1) 5.13% 3.78% 4.19% 3.85% 4.08% 4.32% 1.92% 1.79% 3.29% 6.39%
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ACCOUNT 13(2) (INVESTING IN SHARES OF AXP(SM) VARIABLE PORTFOLIO -- EXTRA INCOME FUND)
Accumulation unit
value at
beginning of
period $1.12 $1.18 $1.05 $1.00 -- -- -- -- -- --
Accumulation unit
value at end of
period $1.17 $1.12 $1.18 $1.05 -- -- -- -- -- --
Number of
accumulation
units outstanding
at end of period
(000 omitted) 17,003 17,820 12,894 4,671 -- -- -- -- -- --
Ratio of operating
expense to
average net
assets 1.00% 1.00% 1.00% 1.00% -- -- -- -- -- --
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ACCOUNT 12(2) (INVESTING IN SHARES OF AXP(SM) VARIABLE PORTFOLIO -- GLOBAL BOND FUND)
Accumulation unit
value at
beginning of
period $1.18 $1.10 $1.07 $1.00 -- -- -- -- -- --
Accumulation unit
value at end of
period $1.12 $1.18 $1.10 $1.07 -- -- -- -- -- --
Number of
accumulation
units outstanding
at end of period
(000 omitted) 5,735 6,220 5,578 2,311 -- -- -- -- -- --
Ratio of operating
expense to
average net
assets 1.00% 1.00% 1.00% 1.00% -- -- -- -- -- --
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ACCOUNT 10(3) (INVESTING IN SHARES OF AXP(SM) VARIABLE PORTFOLIO -- INTERNATIONAL FUND)
Accumulation unit
value at
beginning of
period $1.74 $1.52 $1.50 $1.38 $1.25 $1.29 $0.98 $1.00 -- --
Accumulation unit
value at end of
period $2.51 $1.74 $1.52 $1.50 $1.38 $1.25 $1.29 $0.98 -- --
Number of
accumulation
units outstanding
at end of period
(000 omitted) 59,132 67,198 75,831 77,830 63,576 51,480 21,650 3,421 -- --
Ratio of operating
expense to
average net
assets 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% -- --
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</TABLE>
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PROSPECTUS -- MAY 1, 2000 7
<PAGE>
<TABLE>
<CAPTION>
YEAR ENDED DEC. 31, 1999 1998 1997 1996 1995 1994 1993 1992 1991 1990
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<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ACCOUNT 9 (INVESTING IN SHARES OF AXP(SM) VARIABLE PORTFOLIO -- MANAGED FUND)
Accumulation unit
value at
beginning of
period $4.03 $3.51 $2.96 $2.57 $2.09 $2.21 $1.98 $1.86 $1.45 $1.42
Accumulation unit
value at end of
period $4.58 $4.03 $3.51 $2.96 $2.57 $2.09 $2.21 $1.98 $1.86 $1.45
Number of
accumulation
units outstanding
at end of period
(000 omitted) 59,965 67,428 73,557 75,219 72,999 66,800 50,761 31,828 20,105 15,292
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%
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ACCOUNT 14(2) (INVESTING IN SHARES OF AXP(SM) VARIABLE PORTFOLIO -- NEW DIMENSIONS FUND-REGISTERED TRADEMARK-)
Accumulation unit
value at
beginning of
period $1.74 $1.37 $1.11 $1.00 -- -- -- -- -- --
Accumulation unit
value at end of
period $2.27 $1.74 $1.37 $1.11 -- -- -- -- -- --
Number of
accumulation
units outstanding
at end of period
(000 omitted) 88,673 75,581 64,613 27,817 -- -- -- -- -- --
Ratio of operating
expense to
average net
assets 1.00% 1.00% 1.00% 1.00% -- -- -- -- -- --
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ACCOUNT 11(3) (INVESTING IN SHARES OF AXP(SM) VARIABLE PORTFOLIO -- STRATEGY AGGRESSIVE FUND)
Accumulation unit
value at
beginning of
period $1.91 $1.88 $1.69 $1.47 $1.12 $1.21 $1.08 $1.00 -- --
Accumulation unit
value at end of
period $3.24 $1.91 $1.88 $1.69 $1.47 $1.12 $1.21 $1.08 -- --
Number of
accumulation
units outstanding
at end of period
(000 omitted) 61,638 73,610 79,813 77,673 62,233 45,347 19,430 5,961 -- --
Ratio of operating
expense to
average net
assets 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% -- --
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</TABLE>
(1) Net of annual contract administrative charge and mortality and expense risk
fee.
(2) Operations commenced on May 1, 1996.
(3) Operations commenced on Jan. 13, 1992.
FINANCIAL STATEMENTS
You can find our audited financial statements and the audited financial
statements of the variable accounts in the SAI.
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8 IDS LIFE OF NEW YORK EMPLOYEE BENEFIT ANNUITY
<PAGE>
PERFORMANCE INFORMATION
Performance information for the variable accounts may appear from time to time
in advertisements or sales literature. This information reflects the performance
of a hypothetical investment in a particular variable account during a specified
time period. Although we base performance figures on historical earnings, past
performance does not guarantee future results.
We include non-recurring charges (such as surrender charges) in total return
figures, but not in yield quotations. Excluding non-recurring charges in yield
calculations increases the reported value.
Total return figures reflect deduction of all applicable charges, including:
- - administrative charge,
- - mortality and expense risk fee, and
- - surrender charge (assuming a surrender at the end of the illustrated period).
We also show optional total return quotations that do not reflect a surrender
charge deduction (assuming no surrender). We may show total return quotations by
means of schedules, charts or graphs.
AVERAGE ANNUAL TOTAL RETURN is the average annual compounded rate of return of
the investment over a period of one, five and ten years (or up to the life of
the variable account if it is less than ten years old).
CUMULATIVE TOTAL RETURN is the cumulative change in the value of an investment
over a specified time period. We assume that income earned by the investment is
reinvested. Cumulative total return will generally be higher than average annual
total return.
ANNUALIZED SIMPLE YIELD (FOR VARIABLE ACCOUNTS INVESTING IN MONEY MARKET
FUNDS) "annualizes" the income generated by the investment over a given
seven-day period. That is, we assume the amount of income generated by the
investment during the period will be generated each seven-day period for a year.
We show this as a percentage of the investment.
ANNUALIZED COMPOUND YIELD (FOR VARIABLE ACCOUNTS INVESTING IN MONEY MARKET
FUNDS) is calculated like simple yield except that we assume the income is
reinvested when we annualize it. Compound yield will be higher than the simple
yield because of the compounding effect of the assumed reinvestment.
ANNUALIZED YIELD (FOR VARIABLE ACCOUNTS INVESTING IN INCOME FUNDS) divides the
net investment income (income less expenses) for each accumulation unit during a
given 30-day period by the value of the unit on the last day of the period. We
then convert the result to an annual percentage.
You should consider performance information in light of the investment
objectives, policies, characteristics and quality of the fund in which the
variable account invests and the market conditions during the specified time
period. Advertised yields and total return figures include charges that reduce
advertised performance. Therefore, you should not compare variable account
performance to that of mutual funds that sell their shares directly to the
public. (See the SAI for a further description of methods used to determine
total return and yield.)
If you would like additional information about actual performance, please
contact us at the address or telephone number on the first page of this
prospectus.
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PROSPECTUS -- MAY 1, 2000 9
<PAGE>
THE VARIABLE ACCOUNTS AND THE FUNDS
You may allocate payments to any or all of the variable accounts that invest in
shares of the following funds:
<TABLE>
<CAPTION>
IDS LIFE
OF NEW
YORK
ACCOUNT ESTABLISHED INVESTING IN INVESTMENT OBJECTIVES AND POLICIES
<C> <S> <C> <C>
5 11/12/81 AXP(SM) Variable Portfolio - Bond Objective: high level of current income
Fund while conserving the value of the
investment and continuing a high level
of income for the longest time period.
Invests primarily in bonds and other
debt obligations.
4 11/12/81 AXP(SM) Variable Portfolio - Objective: capital appreciation. Invests
Capital Resource Fund primarily in U.S. common stocks and
other securities convertible into common
stocks.
6 11/12/81 AXP(SM) Variable Portfolio - Cash Objective: maximum current income
Management Fund consistent with liquidity and
conservation of capital. Invests
primarily in money market securities.
13 04/17/96 AXP(SM) Variable Portfolio - Extra Objective: high current income, with
Income Fund capital growth as a secondary objective.
Invests primarily in high-yielding,
high-risk corporate bonds issued by U.S.
and foreign companies and governments.
12 04/17/96 AXP(SM) Variable Portfolio - Global Objective: high total return through
Bond Fund income and growth of capital.
Non-diversified mutual fund that invests
primarily in debt obligations of U.S.
and foreign issuers.
10 10/08/91 AXP(SM) Variable Portfolio - Objective: capital appreciation. Invests
International Fund primarily in common stocks or
convertible securities of foreign
issuers that offer growth potential.
9 02/12/96 AXP(SM) Variable Portfolio - Objective: maximum total investment
Managed Fund return through a combination of capital
growth and current income. Invests
primarily in a combination of common and
preferred stocks, convertible
securities, bonds and other debt
securities.
14 04/17/96 AXP(SM) Variable Portfolio - New Objective: long-term growth of capital.
Dimensions Invests primarily in common stocks of
Fund-Registered Trademark- U.S. and foreign companies showing
potential for significant growth.
11 10/08/91 AXP(SM) Variable Portfolio - Objective: capital appreciation. Invests
Strategy Aggressive Fund primarily in common stocks of small-and
medium- sized companies.
<CAPTION>
IDS LIFE
OF NEW
YORK INVESTMENT ADVISOR
ACCOUNT OR MANAGER
<C> <C>
5 IDS Life Insurance Company (IDS Life),
investment manager; American Express
Financial Corporation (AEFC), investment
advisor.
4 IDS Life, investment manager; AEFC
investment advisor.
6 IDS Life, investment manager; AEFC
investment advisor.
13 IDS Life, investment manager; AEFC
investment advisor.
12 IDS Life, investment manager; AEFC
investment advisor.
10 IDS Life, investment manager; AEFC
investment advisor. American Express
Asset Management International, Inc., a
wholly-owned subsidiary of AEFC, is the
sub-investment advisor.
9 IDS Life, investment manager; AEFC
investment advisor.
14 IDS Life, investment manager; AEFC
investment advisor.
11 IDS Life, investment manager; AEFC
investment advisor.
</TABLE>
The investment objectives and policies of some of the funds are similar to the
investment objectives and policies of other mutual funds that the investment
advisor or its affiliates manage. Although the objectives and policies may be
similar, each fund will have its own portfolio holdings and its own fees and
expenses. Accordingly, each fund will have its own investment results and those
results may differ significantly from other funds with similar objectives and
policies.
- --------------------------------------------------------------------------------
10 IDS LIFE OF NEW YORK EMPLOYEE BENEFIT ANNUITY
<PAGE>
The investment manager and advisor cannot guarantee that the funds will meet
their investment objectives. Please read the fund prospectus for facts you
should know before investing. The fund prospectuses are also available by
contacting us at the address or telephone number on the first page of this
prospectus.
The Internal Revenue Service (IRS) issued final regulations relating to the
diversification requirements under Section 817(h) of the Code. Each fund intends
to comply with these requirements.
All variable accounts were established under New York law and are registered
together as a single unit investment trust under the Investment Company Act of
1940 (the 1940 Act). This registration does not involve any supervision of our
management or investment practices and policies by the SEC. All obligations
arising under the contracts are general obligations of IDS Life of New York.
Each variable account meets the definition of a separate account under federal
securities laws. We credit or charge income, capital gains and capital losses of
each variable account only to that variable account. State insurance law
prohibits us from charging a variable account with liabilities of any other
variable account or of our general business. Each variable account's net assets
are held in relation to the contracts described in this prospectus as well as
other contracts that we issue that are not described in this prospectus.
The U.S. Treasury and the IRS indicated that they may provide additional
guidance on investment control. This concerns how many variable accounts an
insurance company may offer and how many exchanges among variable accounts it
may allow before the participant would be currently taxed on income earned
within variable account assets. At this time, we do not know what the additional
guidance will be or when action will be taken. We reserve the right to modify
the contract/certificate, as necessary, so that the participant will not be
subject to current taxation as the owner of the variable account assets.
We intend to comply with all federal tax laws so that the contract/certificate
continues to qualify as an annuity for federal income tax purposes. We reserve
the right to modify the contract/certificate as necessary to comply with any new
tax laws.
THE FIXED ACCOUNT
You also may allocate purchase payments to the fixed account. We back the
principal and interest guarantees relating to the fixed account. The value of
the fixed account increases as we credit interest to the account. Purchase
payments and transfers to the fixed account become part of our general account.
We credit and compound interest daily. We will change the interest rates from
time to time at our discretion. These rates will be based on various factors
including, but not limited to the interest rate environment, returns earned or
investments backing these annuities, the rates currently in effect for new and
existing company annuities, product design, competition, and the company's
revenues and expenses.
Interests in the fixed account are not required to be registered with the SEC.
The SEC staff does not review the disclosures in this prospectus on the fixed
account. Disclosures regarding the fixed account, however, may be subject to
certain generally applicable provisions of the federal securities laws relating
to the accuracy and completeness of statements made in prospectuses. (See
"Making the Most of Your Contract -- Transfer policies" for restrictions on
transfers involving the fixed account.)
- --------------------------------------------------------------------------------
PROSPECTUS -- MAY 1, 2000 11
<PAGE>
BUYING THE CONTRACT AND CERTIFICATE
A sales representative will help the owner prepare and submit an application.
The sales representative will also help each participant prepare and submit an
enrollment form. These forms will be sent to our office. Unless otherwise
provided in the contract, the owner has all rights under the contract. Your
interest under the contract, as evidenced by your certificate, is subject to the
terms of the owner's contract.
When you enroll in the certificate, you may select:
- - the accounts in which you want to invest;
- - the date you want to start receiving annuity payouts (the retirement date);
and
- - a beneficiary.
The owner selects the frequency with which to make purchase payments.
If the application and enrollment forms are complete, we will process them
within two business days after we receive them at our office. If we accept the
application, we will send the owner a contract. If we accept your enrollment
form, we will send you a certificate. If we cannot accept an application or
enrollment form within five business days, we will decline it and return any
payment. We will credit additional purchase payments to the accounts on the
valuation date we receive them. We will value additional payments at the next
accumulation unit value calculated after we receive payment at our office.
THE RETIREMENT DATE
Annuity payouts are scheduled to begin on the retirement date. When we process
your application, we will establish the retirement date to the maximum age or
date described below. You can also select a date within the maximum limits. You
can align this date with your actual retirement from a job, or it can be a
different future date, depending on your needs and goals and on certain
restrictions. You also can change the date, provided you send us written
instructions at least 30 days before annuity payouts begin.
TO AVOID IRS PENALTY TAXES, the retirement date generally must be:
- - on or after the date you reach age 59 1/2; and
- - by April 1 of the year following the calendar year when the annuitant reaches
age 70 1/2 or, if later, retires (except that 5% business owners may not
select a retirement date that is later than April 1 of the year following the
calendar year when they reach age 70 1/2).
If you take the minimum 403(b) plan distributions as required by the Code from
another tax-qualified investment, or in the form of partial surrenders under the
certificate, retirement payments can start as late as your 85th birthday or the
tenth contract anniversary, if later.
BENEFICIARY
If death benefits become payable before the retirement date while the contract
and certificate are in force and before annuity payouts begin, we will pay your
named beneficiary all or part of the certificate value. If there is no named
beneficiary, then your estate will be the beneficiary. (See "Benefits in Case of
Death" for more about beneficiaries.)
- --------------------------------------------------------------------------------
12 IDS LIFE OF NEW YORK EMPLOYEE BENEFIT ANNUITY
<PAGE>
PURCHASE PAYMENTS
MINIMUM ALLOWABLE PURCHASE PAYMENTS*
<TABLE>
<S> <C>
If paying by installments under a
scheduled If paying by any other method:
payment plan: $1,000 initial payment
$25 per month $50 for any additional payments
</TABLE>
Installments must total at least $300 per year.
* If no purchase payments have been made on a participant's behalf for 36
months and previous payments total $600 or less, we have the right to pay the
participant the total value of the certificate in a lump sum.
MAXIMUM ALLOWABLE PURCHASE PAYMENTS**
For the first year, this is based on the participant's age on the effective date
of the certificate.
<TABLE>
<S> <C>
For the first year: For each subsequent year:
$1,000,000 up to age 75 $50,000
$500,000 for ages 76 to 85
$50,000 for ages 86 to 90
</TABLE>
** These limits apply in total to all IDS Life of New York annuities you own. We
reserve the right to increase maximum limits or reduce age limits. The Code's
limits on annual contribution also apply.
HOW TO MAKE PURCHASE PAYMENTS
BY SCHEDULED PAYMENT PLAN:
A sales representative can help the owner set up an automatic salary reduction
arrangement.
CHARGES
ADMINISTRATIVE CHARGE
We charge this fee for establishing and maintaining records for each certificate
under the contract. We deduct $30 from the certificate value at the end of each
certificate year. We prorate this charge among the variable accounts and the
fixed account in the same proportion your interest in each account bears to your
total certificate value. If you surrender a certificate, we will deduct the
annual charge at the time of surrender. We cannot increase the annual
administrative charge and it does not apply after annuity payouts begin or when
we pay death benefits.
MORTALITY AND EXPENSE RISK FEE
We charge this fee daily to your variable accounts. The unit values of your
variable accounts reflect this fee and it totals 1% of the variable accounts'
average daily net assets on an annual basis. This fee covers the mortality risk
and expense risk that we assume. Approximately two-thirds of this amount is for
our assumption of mortality risk, and one-third is for our assumption of expense
risk. This fee does not apply to the fixed account.
Mortality risk arises because of our guarantee to pay a death benefit and our
guarantee to make annuity payouts according to the terms of the contract, no
matter how long a specific annuitant lives and no matter how long our entire
group of annuitants live. If, as a group, annuitants outlive the life expectancy
we assumed in our actuarial tables, then we must take money from our general
assets to meet our obligations. If, as a group, annuitants do not live as long
as expected, we could profit from the mortality risk fee.
- --------------------------------------------------------------------------------
PROSPECTUS -- MAY 1, 2000 13
<PAGE>
Expense risk arises because we cannot increase the administrative charge and
this charge may not cover our expenses. We would have to make up any deficit
from our general assets. We could profit from the expense risk fee if future
expenses are less than expected.
The variable accounts pay us the mortality and expense risk fee they accrued as
follows:
- - First, to the extent possible, the variable accounts pay this fee from any
dividends distributed from the funds in which they invest.
- - Then, if necessary, the funds redeem shares to cover any remaining fees
payable.
We may use any profits we realize from the variable accounts' payment to us of
the mortality and expense risk fee for any proper corporate purpose, including,
among others, payment of distribution (selling) expenses. We do not expect that
the surrender charge, discussed in the following paragraphs, will cover sales
and distribution expenses.
SURRENDER CHARGE
If part or all of a certificate is surrendered within the first 11 certificate
years, the following surrender charge applies:
<TABLE>
<CAPTION>
SURRENDER CHARGE AS A
PERCENTAGE OF
SURRENDER YEAR AMOUNT SURRENDERED
<S> <C>
1 8%
2 8
3 8
4 8
5 7
6 6
7 5
8 4
9 3
10 2
11 1
12 and later 0
</TABLE>
The surrender charge is further limited so that it will never exceed 8.5% of
aggregated purchase payments made to the certificate. We reserve the right to
reduce or eliminate the surrender charge.
For a partial surrender that is subject to a surrender charge, the amount
deducted for the surrender charge will be a percentage of the total amount
surrendered. We will deduct the charge from the value remaining after we pay you
the amount you requested. Example: Assume you request a surrender of $1,000 and
there is a 7% surrender charge. The surrender charge is $75.26 for a total
surrender amount of $1,075.26. This charge represents 7% of the total amount
surrendered and we deduct it from the certificate value remaining after we pay
you the $1,000 you requested. If you make a full surrender of your certificate,
we also will deduct the applicable certificate administrative charge.
SURRENDER CHARGE UNDER ANNUITY PAYOUT PLAN E -- PAYOUTS FOR A SPECIFIED PERIOD:
Under this payout plan, you can choose to take a surrender. The amount that you
can surrender is the present value of any remaining variable payouts. The
discount rate we use in the calculation will be 5.05% if the assumed investment
rate is 3.5% and
- --------------------------------------------------------------------------------
14 IDS LIFE OF NEW YORK EMPLOYEE BENEFIT ANNUITY
<PAGE>
6.55% if the assumed investment rate is 5%. The surrender charge is equal to the
difference in discount values using the above discount rates and the assumed
investment rate. The surrender charge is further limited so that it will never
exceed 8.5% of aggregate purchase payments made to the contract. We reserve the
right to reduce or eliminate the surrender charge.
SURRENDER CHARGE CALCULATION EXAMPLE:
Owner requests a $1,000 partial surrender and the surrender charge is 5%:
<TABLE>
<S> <C>
$1,000 partial surrender/.95 = $1,052.63
Total amount surrendered $1,052.63
X 0.05
---------
Total surrender charge $ 52.63
</TABLE>
WAIVER OF SURRENDER CHARGE We do not assess surrender charges:
- - for amounts surrendered after the 11th certificate year;
- - for amounts surrendered due to a participant's retirement under the plan on or
after age 55;
- - for amounts surrendered due to the death of the participant; or
- - upon settlement of the certificate under an annuity payout plan
POSSIBLE GROUP REDUCTIONS: In some cases we may incur lower sales and
administrative expenses due to the size of the group, the average contribution
and the use of group enrollment procedures. In such cases, we may be able to
reduce or eliminate the administrative and surrender charges. However, we expect
this to occur infrequently.
VALUING YOUR INVESTMENT
We value your accounts as follows:
FIXED ACCOUNT
We value the amounts you allocated to the fixed account directly in dollars. The
fixed account value equals:
- - the sum of your purchase payments and transfer amounts allocated to the fixed
account;
- - plus interest credited;
- - minus the sum of amounts surrendered (including and applicable surrender
charges) and amounts transferred out; and
- - minus any prorated administrative charge.
VARIABLE ACCOUNTS
We convert amounts you allocated to the variable accounts into accumulation
units. Each time you make a purchase payment or transfer amounts into one of the
variable accounts, we credit a certain number of accumulation units to your
certificate for that account. Conversely, each time you take a partial
surrender, transfer amounts out of a variable account or we assess an
administrative charge, we subtract a certain number of accumulation units from
your certificate.
The accumulation units are the true measure of investment value in each account
during the accumulation period. They are related to, but not the same as, the
net asset value of the fund in which the account invests. The dollar value of
each accumulation unit can
- --------------------------------------------------------------------------------
PROSPECTUS -- MAY 1, 2000 15
<PAGE>
rise or fall daily depending on the variable account expenses, performance of
the fund and on certain fund expenses. Here is how we calculate accumulation
unit values:
NUMBER OF UNITS: To calculate the number of accumulation units for a particular
account we divide your investment by the current accumulation unit value.
ACCUMULATION UNIT VALUE: The current accumulation unit value for each variable
account equals the last value times the account's current net investment factor.
WE DETERMINE THE NET INVESTMENT FACTOR BY:
- - adding the fund's current net asset value per share, plus the per share amount
of any accrued income or capital gain dividends to obtain a current adjusted
net asset value per share; then
- - dividing that sum by the previous adjusted net asset value per share; and
- - subtracting the percentage factor representing the mortality and expense risk
fee from the result.
Because the net asset value of the fund may fluctuate, the accumulation unit
value may increase or decrease. You bear all the investment risk in a variable
account.
FACTORS THAT AFFECT VARIABLE ACCOUNT ACCUMULATION UNITS: accumulation units may
change in two ways -- in number and in value.
The number of accumulation units you own may fluctuate due to:
- - additional purchase payments you allocate to the variable accounts;
- - transfers into or out of the variable accounts;
- - partial surrenders;
- - surrender charges; and/or
- - prorated portions of the certificate administrative charge.
Accumulation unit values will fluctuate due to:
- - changes in funds' net asset value;
- - dividends distributed to the variable accounts;
- - capital gains or losses of funds;
- - fund operating expenses; and/or
- - mortality and expense risk fees.
- --------------------------------------------------------------------------------
16 IDS LIFE OF NEW YORK EMPLOYEE BENEFIT ANNUITY
<PAGE>
MAKING THE MOST OF YOUR CERTIFICATE
AUTOMATED DOLLAR-COST AVERAGING
Currently, you can use automated transfers to take advantage of dollar-cost
averaging (investing a fixed amount at regular intervals). For example, you
might transfer a set amount monthly from a relatively conservative variable
account to a more aggressive one, or to several others, or from the fixed
account to one or more variable accounts. There is no charge for dollar-cost
averaging.
This systematic approach can help you benefit from fluctuations in accumulation
unit values caused by fluctuations in the market values of the funds. Since you
invest the same amount each period, you automatically acquire more units when
the market value falls and fewer units when it rises. The potential effect is to
lower your average cost per unit.
HOW DOLLAR-COST AVERAGING WORKS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AMOUNT ACCUMULATION NUMBER OF UNITS
MONTH INVESTED UNIT VALUE PURCHASED
<S> <C> <C> <C>
By investing an Jan $100 $20 5.00
equal number of Feb 100 18 5.56
dollars each month... Mar 100 17 5.88
you automatically Apr 100 15 6.67
buy more units May 100 16 6.25
when the per unit Jun 100 18 5.56
market price is low... Jul 100 17 5.88
and fewer units Aug 100 19 5.26
when the per unit Sept 100 21 4.76
market price is high. Oct 100 20 5.00
</TABLE>
You paid an average price of only $17.91 per unit over the 10 months, while the
average market price actually was $18.10.
Dollar-cost averaging does not guarantee that any variable account will gain in
value nor will it protect against a decline in value if market prices fall.
Because dollar-cost averaging involves continuous investing, your success will
depend upon your willingness to continue to invest regularly through periods of
low price levels. Dollar-cost averaging can be an effective way to help meet
your long-term goals. For specific features contact your sales representative.
TRANSFERRING MONEY BETWEEN ACCOUNTS
You may transfer money from any one variable account, or the fixed account, to
another account before annuity payouts begin. (Certain restrictions apply to
transfers involving the fixed account.) We will process your transfer on the
valuation date we receive your request. We will value your transfer at the next
accumulation unit value calculated after we receive your request. There is no
charge for transfers. Before making a transfer, you should consider the risks
involved in switching investments.
- --------------------------------------------------------------------------------
PROSPECTUS -- MAY 1, 2000 17
<PAGE>
TRANSFER POLICIES
- - You may transfer certificate values between the variable accounts, or from the
variable accounts to the fixed account at any time. However, if you made a
transfer from the fixed account to the variable accounts, you may not make a
transfer from any variable account back to the fixed account until the next
eligible transfer period (if any) as defined in the plan, or until the next
certificate anniversary.
- - You may transfer certificate values from the fixed account to the variable
accounts once per certificate year (except for automated transfers, which can
be set up at any time for certain transfer periods subject to certain
minimums).
- - Once annuity payouts begin, you may not make transfers to or from the fixed
account, but you may make transfers once per certificate year among the
variable accounts.
HOW TO REQUEST A TRANSFER OR SURRENDER
1 BY LETTER
- --------------------------------------------------------------------------------
Send your name, certificate number, Social Security Number or Taxpayer
Identification Number and signed request for a transfer or surrender to:
REGULAR MAIL:
IDS LIFE INSURANCE COMPANY OF NEW YORK
BOX 5144
ALBANY, NY 12205
EXPRESS MAIL:
IDS LIFE INSURANCE COMPANY OF NEW YORK
20 MADISON AVENUE EXTENSION
ALBANY, NY 12203
MINIMUM AMOUNT
Transfers or surrenders: $250 or entire account balance
MAXIMUM AMOUNT
Transfers or surrenders: Certificate value
2 BY AUTOMATED TRANSFERS
- --------------------------------------------------------------------------------
Your sales representative can help you set up automated transfers among your
variable accounts or fixed account.
You can start or stop this service by written request or other method acceptable
to us. You must allow 30 days for us to change any instructions that are
currently in place.
- - Automated transfers from the fixed account to the variable accounts may not
exceed an amount that, if continued, would deplete the fixed account within 12
months.
- - Automated transfers are subject to all of the contract provisions and terms,
including transfer of certificate values between accounts.
MINIMUM AMOUNT
Transfers: $50
- --------------------------------------------------------------------------------
18 IDS LIFE OF NEW YORK EMPLOYEE BENEFIT ANNUITY
<PAGE>
SURRENDERS
Subject to certain restrictions imposed by the Code, you may surrender all or
part of your certificate at any time before annuity payouts begin by sending us
a written request or calling us. We will process your surrender request on the
valuation date we receive it. For total surrenders, we will compute the value of
the certificate at the next accumulation unit value calculated after we receive
your request. We may ask you to return the certificate. You may have to pay
surrender charges (see "Charges -- Surrender charge") and IRS taxes and
penalties (see "Taxes"). You cannot make surrenders after annuity payouts begin
except under Plan E (see "The Annuity Payout Period -- Annuity payout plans").
SURRENDER POLICIES
If you have a balance in more than one account and you request a partial
surrender, we will withdraw money from all of your variable accounts and/or the
fixed account in the same proportion as your value in each account correlates to
the total contract value, unless requested otherwise.
RECEIVING PAYMENT
By regular or express mail:
- - payable to you;
- - mailed to address of record.
NOTE: We will charge you a fee if you request express mail delivery.
By wire:
- - request that payment be wired to your bank;
- - bank account must be in the same ownership as your certificate; and
- - pre-authorization required.
For instructions, contact your sales representative.
Normally, we will send the payment within seven days after receiving your
request. However, we may postpone the payment if:
-- the surrender amount includes a purchase payment check that has not
cleared;
-- the NYSE is closed, except for normal holiday and weekend closings;
-- trading on the NYSE is restricted, according to SEC rules;
-- an emergency, as defined by SEC rules, makes it impractical to sell
securities or value the net assets of the accounts; or
-- the SEC permits us to delay payment for the protection of security holders.
- --------------------------------------------------------------------------------
PROSPECTUS -- MAY 1, 2000 19
<PAGE>
TSA-SPECIAL SURRENDER PROVISIONS
PARTICIPANTS IN TAX-SHELTERED ANNUITIES
The Code imposes certain restrictions on your right to receive early
distributions from a TSA:
- - Distributions attributable to salary reduction contributions (plus earnings)
made after Dec. 31, 1988, or to transfers or rollovers from other contracts,
may be made from the TSA only if:
-- you are at least age 59 1/2;
-- you are disabled as defined in the Code;
-- you separated from the service of the employer who purchased the contract;
or
-- the distribution is because of your death.
- - If you encounter a financial hardship (as defined by the Code), you may
receive a distribution of all certificate values attributable to salary
reduction contributions made after Dec. 31, 1988, but not the earnings on
them.
- - Even though a distribution may be permitted under the above rules, it may be
subject to IRS taxes and penalties (see "Taxes").
- - The employer must comply with certain nondiscrimination requirements for
certain types of contributions under a TSA contract to be excluded from
taxable income. You should consult your employer to determine whether the
nondiscrimination rules apply to you.
- - The above restrictions on distributions do not affect the availability of the
amount transferred or rolled over to the certificate as of Dec. 31, 1988. The
restrictions also do not apply to transfers or exchanges of certificate values
within the certificate, or to another registered variable annuity contract or
investment vehicle available through the employer.
- - If the contract/certificate has a loan provision, the right to receive a loan
from your fixed account is described in detail in your contract/certificate.
You may borrow from the certificate value allocated to the fixed account.
CHANGING OWNERSHIP
The contract and related certificates cannot 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
us. Your vested rights under the certificate are nonforfeitable.
BENEFITS IN CASE OF DEATH
If you die before annuity payouts begin while this certifcate is in force, we
will pay your beneficiary as follows:
If death occurs before the annuitant's 75th birthday, the beneficiary receives
the greater of:
- - the certificate value; or
- - purchase payments made to the certificate, minus any surrenders.
If death occurs on or after the annuitant's 75th birthday, the beneficiary
receives the certificate value.
- --------------------------------------------------------------------------------
20 IDS LIFE OF NEW YORK EMPLOYEE BENEFIT ANNUITY
<PAGE>
IF YOUR SPOUSE IS SOLE BENEFICIARY and you die before the retirement date, your
spouse may keep the certificate in force. To do this your spouse must, within 60
days after we receive proof of death, give us written instructions to keep the
certificate in force. If you die before the retirement date, your spouse may
keep the certificate in force until the date on which you would have reached age
70 1/2 or any other date permitted by the Code.
PAYMENTS: We will pay the beneficiary in a single sum unless you give us other
written instructions. However, the beneficiary may receive payouts under any
annuity payout plan available under this certificate if:
- - the beneficiary asks us in writing within 60 days after we receive proof of
death; and
- - payouts begin no later than one year after your death, or other date as
permitted by the Code; and
- - the payout period does not extend beyond the beneficiary's life or life
expectancy.
When paying the beneficiary, we will process the death claim on the valuation
date our death claim requirements are fulfilled. We will determine the
certificate's value at the next accumulation unit value calculated after our
death claim requirements are fulfilled. We pay interest, if any, from the date
of death at a rate no less than required by law. We will mail payment to the
beneficiary within seven days after our death claim requirements are fulfilled.
(See "Taxes.")
THE ANNUITY PAYOUT PERIOD
As the participant, you have the right to decide how and to whom annuity payouts
will be made starting at the retirement date. You may select one of the annuity
payout plans outlined below, or we may mutually agree on other payout
arrangements. We do not deduct any surrender charges under the payout plans
listed below.
The contract and related certificates allow you to determine whether we will
make payouts on a fixed or variable basis, or a combination of fixed and
variable. The amounts available to purchase payouts under the plan you select is
the certificate value on your retirement date. You may reallocate this
certificate value to the fixed account to provide fixed dollar payouts and/or
among the variable accounts to provide variable annuity payouts. During the
annuity payout period, you cannot invest in more than five variable accounts at
any one time unless we agree otherwise.
Amounts of fixed and variable payouts depend on:
- - the annuity payout plan you select;
- - your age;
- - the annuity table in the contract and related certificates; and
- - the amounts allocated to the accounts at settlement on the retirement date.
In addition, for variable payouts only, amounts depend on the investment
performance of the account you select. These payouts will vary from month to
month because the performance of the funds will fluctuate. (In the case of fixed
annuities, payouts remain the same from month to month.) For information with
respect to transfers between accounts after annuity payouts begin, see "Making
the Most of Your Certificate -- Transfer policies."
ANNUITY TABLE
The annuity table in your certificate shows the amount of the first monthly
payment for each $1,000 of certificate value according to the age and, when
applicable, the sex of the annuitant. (Where required by law, we will use a
unisex table of settlement rates.) The
- --------------------------------------------------------------------------------
PROSPECTUS -- MAY 1, 2000 21
<PAGE>
table assumes that the certificate value is invested at the beginning of the
annuity payout period and earns a 3.5% rate of return, which is reinvested and
helps to support future payouts.
ANNUITY PAYOUT PLANS
You may choose any one of these annuity payout plans by giving us written
instructions at least 30 days before certificate values are used to purchase the
payout plan:
PLAN A -- LIFE ANNUITY -- NO REFUND: We make monthly payouts until the
annuitant's death. Payouts end with the last payout before the annuitant's
death. We will not make any further payouts. This means that if the annuitant
dies after we have made only one monthly payout, we will not make any more
payouts.
PLAN B -- LIFE ANNUITY WITH FIVE, TEN OR 15 YEARS CERTAIN: We make monthly
payouts for a guaranteed payout period of five, ten or 15 years that you elect.
This election will determine the length of the payout period to the beneficiary
if the annuitant should die before the elected period expires. We calculate the
guaranteed payout period from the retirement date. If the annuitant outlives the
elected guaranteed payout period, we will continue to make payouts until the
annuitant's death.
PLAN C -- LIFE ANNUITY -- INSTALLMENT REFUND: We make monthly payouts until the
annuitant's death, with our guarantee that payouts will continue for some period
of time. We will make payouts for at least the number of months determined by
dividing the amount applied under this option by the first monthly payout,
whether or not the annuitant is living.
PLAN D -- JOINT AND LAST SURVIVOR LIFE ANNUITY -- NO REFUND: We make monthly
payouts while both the annuitant and a joint annuitant are living. If either
annuitant dies, we will continue to make monthly payouts at the full amount
until the death of the surviving annuitant. Payouts end with the death of the
second annuitant.
PLAN E -- PAYOUTS FOR A SPECIFIED PERIOD: We make monthly payouts for a specific
payout period of ten to 30 years that you elect. We will make payouts only for
the number of years specified whether the annuitant is living or not. Depending
on the selected time period, it is foreseeable that an annuitant can outlive the
payout period selected. During the payout period, you can elect to have us
determine the present value of any remaining variable payouts and pay it to you
in a lump sum. We determine the present value of the remaining annuity payouts
which are assumed to remain level at the initial payment. The discount rate we
use in the calculation will vary between 5.05% and 6.55% depending on the
applicable assumed investment rate. (See "Charges -- Surrender charge under
Annuity Payout Plan E.") You can also take a portion of the discounted value
once a year. If you do so, your monthly payouts will be reduced by the
proportion of your surrender to the full discounted value. A 10% IRS penalty tax
could apply if you take a withdrawal. (See "Taxes.")
RESTRICTIONS ON PAYOUT OPTIONS: You may be required to select a payout plan that
provides for payouts:
- - over the life of the annuitant;
- - over the joint lives of the annuitant and a designated beneficiary;
- - for a period not exceeding the life expectancy of the annuitant; or
- - for a period not exceeding the joint life expectancies of the annuitant and a
designated beneficiary.
You have the responsibility for electing a payout option that complies with your
certificate and with applicable law.
- --------------------------------------------------------------------------------
22 IDS LIFE OF NEW YORK EMPLOYEE BENEFIT ANNUITY
<PAGE>
IF WE DO NOT RECEIVE INSTRUCTIONS: You must give us written instructions for the
annuity payouts at least 30 days before your retirement date. If you do not, we
will make payouts under Plan B, with 120 monthly payouts guaranteed, unless this
option is contrary to applicable provisions of the Code. Certificate values that
you allocated to the fixed account will provide fixed dollar payouts and
certificate values that you allocated among variable accounts will provide
variable annuity payouts.
IF MONTHLY PAYOUTS WOULD BE LESS THAN $20: We will calculate the amount of
monthly payouts at the time the certificate value is used to purchase a payout
plan. If the calculations show that monthly payouts would be less than $20, we
have the right to pay the certificate value to the participant in a lump sum.
DEATH AFTER ANNUITY PAYOUTS BEGIN
If the annuitant dies after annuity payouts begin, we will pay any amount
payable to the beneficiary as provided in the annuity payout plan in effect.
TAXES
Generally, under current law, your certificate has a tax-deferral feature. This
means any increase in the value of the fixed account and/or variable accounts in
which you invest is taxable to you only when you receive a payout or surrender
except to the extent that contributions were made with after-tax dollars.
(However, see detailed discussion below.) Any portion of the annuity payouts and
any surrenders requested that represent ordinary income are normally taxable. We
will send you a tax information reporting form for any year in which we made a
taxable distribution according to our records.
QUALIFIED ANNUITIES: Your contract may be used to fund a tax-deferred retirement
plan that is already tax-deferred under the Code. The contract will not provide
any necessary or additional tax deferral if it is used to fund a retirement plan
that is tax-deferred. Special rules apply to these retirement plans. Your rights
to benefits may be subject to the terms and conditions of these retirement plans
regardless of the terms of the contract.
Adverse tax consequences may result if you do not ensure that contributions,
distributions and other transactions under the contract comply with the law.
Qualified annuities have minimum distribution rules that govern the timing and
amount of distributions during your life (except for Roth IRAs) and after your
death. You should refer to your retirement plan or adoption agreement, or
consult a tax advisor for more information about these distribution rules.
ANNUITY PAYOUTS: The entire payout generally is includable as ordinary income
and subject to tax to the extent that contributions were made with after-tax
dollars. If you or your employer invested in the certificate with deductible or
pre-tax dollars, such amounts are not considered to be part of your investment
in the certificate and will be taxed when paid to you.
SURRENDERS: If you surrender part or all of the certificate before your annuity
payouts begin, your surrender payment will be taxed. You also may have to pay a
10% IRS penalty for surrenders before reaching age 59 1/2, unless certain
exceptions apply. Other penalties may apply.
DEATH BENEFITS TO BENEFICIARIES: The death benefit under a certificate is not
tax-exempt. Any amount your beneficiary receives that represents previously
deferred earnings within the certificate is taxable as ordinary income to the
beneficiary in the years he or she receives the payments.
- --------------------------------------------------------------------------------
PROSPECTUS -- MAY 1, 2000 23
<PAGE>
PENALTIES: If you receive amounts from the certificate before reaching age
59 1/2, you may have to pay a 10% IRS penalty on the amount includable in your
ordinary income. However, this penalty will not apply to any amount received by
you or your beneficiary:
- - because of your death;
- - because you become disabled (as defined in the Code);
- - if the distribution is part of a series of substantially equal periodic
payments, after separation from service, made at least annually, over your
life or life expectancy (or joint lives or life expectancies of you and your
designated beneficiary); or
- - after you separate from service during or after the year you attain age 55.
Other penalties or exceptions may apply if you surrender your certificate before
your plan specifies that payments can be made.
MANDATORY WITHHOLDING: If you receive directly all or part of the certificate
value, mandatory 20% Federal income tax withholding generally (and possibly
state income tax withholding) will be imposed at the time the payment is made.
Any withholding that is done represents a prepayment of your tax due for the
year and you would take credit for such amounts on the annual tax return you
file. This mandatory withholding will not be imposed if:
- - instead of receiving the distribution check, you elect to have the
distribution rolled over directly to an IRA or another eligible plan;
- - the payment is one in a series of substantially equal periodic payments, made
at least annually, over your life or life expectancy (or the joint lives or
life expectancies of you and your designated beneficiary) or over a specified
period of ten years or more; or
- - the payment is a minimum distribution required under the Code.
Payments made to a surviving spouse instead of being directly rolled over to an
IRA may also be subject to mandatory 20% income tax withholding.
ELECTIVE WITHHOLDING: If the distribution is not subject to mandatory
withholding as described above, you can elect not to have any withholding occur.
To do this you must provide us with a valid Social Security Number or Taxpayer
Identification Number.
If you do not make this election and if the payout is part of an annuity payout
plan, the amount of withholding generally is computed using payroll tables. You
can provide us with a statement of how many exemptions to use in calculating the
withholding. If the distribution is any other type of payment (such as a partial
or full surrender), withholding is computed using 10% of the taxable portion.
Some states also impose withholding requirements similar to the federal
withholding described above. If this should be the case, we may deduct state
withholding from any payment from which we deduct federal withholding. The
withholding requirements may differ if we are making payment to a non-U.S.
citizen or if we deliver the payment outside the United States.
IMPORTANT: Our discussion of federal tax laws is based upon our understanding of
these laws as they are currently interpreted. Federal tax laws or current
interpretations of them may change. For this reason and because tax consequences
are complex and highly individual and cannot always be anticipated, you should
consult a tax advisor if you have any questions about taxation of the contract
and/or related certificates.
TAX QUALIFICATION: We intend that the contract (and your certificate) qualify as
an annuity for Federal income tax purposes. To that end, the provisions of the
contract and your certificate are to be interpreted to ensure or maintain such
tax qualification, in spite of any other provisions to the contrary. We reserve
the right to amend the contract and/or related certificates to reflect any
- --------------------------------------------------------------------------------
24 IDS LIFE OF NEW YORK EMPLOYEE BENEFIT ANNUITY
<PAGE>
clarifications that may be needed or are appropriate to maintain such
qualification or to conform the contract and/or certificates to any applicable
changes in the tax qualification requirements. We will send you a copy of any
such amendment.
VOTING RIGHTS
The certificate holder with investments in the variable accounts may vote on
important fund policies until annuity payouts begin. Once they begin, the person
receiving them has voting rights. We will vote fund shares according to the
instructions of the person with voting rights.
Before annuity payouts begin, the number of votes is determined by applying the
percentage interest in each variable account to the total number of votes
allowed to the account.
After annuity payouts begin, the number of votes is equal to:
- - the reserve held in each account for your certificate, divided by
- - the net asset value of one share of the applicable fund.
As we make annuity payouts, the reserve for the annuity decreases; therefore,
the number of votes also will decrease.
We calculate votes separately for each account. We will send notice of these
meetings, proxy materials and a statement of the number of votes to which the
voter is entitled.
We will vote shares for which we have not received instructions in the same
proportion as the votes for which we received instructions. We also will vote
the shares for which we have voting rights in the same proportion as the votes
for which we received instructions.
ABOUT THE SERVICE PROVIDERS
PRINCIPAL UNDERWRITER
American Express Financial Advisors Inc. (AEFA) serves as the principal
underwriter for the contracts and certificates. Its offices are located at 200
AXP Financial Center, Minneapolis, MN 55474. AEFA is a wholly-owned subsidiary
of American Express Financial Corporation (AEFC) which is a wholly-owned
subsidiary of American Express Company, financial services company headquartered
in New York City.
The AEFC family of companies offers not only insurance and annuities, but also
mutual funds, investment certificates, and a broad range of financial management
services. AEFA serves individuals and businesses through its nationwide network
of more than 600 supervisory offices, more than 3,800 branch offices and 9,480
financial advisors.
ISSUER
IDS Life of New York issues the contracts and certificates. IDS Life of New York
is a wholly-owned subsidiary of IDS Life, which is a wholly-owned subsidiary of
AEFC.
IDS Life of New York is a stock life insurance company organized in 1972 under
the laws of the State of New York and is located at 20 Madison Avenue Extension,
Albany, New York 12203. Its mailing address is P.O. Box 5144, Albany, NY 12205.
IDS Life of New York conducts a conventional life insurance business in New
York.
- --------------------------------------------------------------------------------
PROSPECTUS -- MAY 1, 2000 25
<PAGE>
IDS Life of New York pays total commissions of up to 7% of the total purchase
payments on the certificates. IDS Life of New York pays a portion of this total
commission to district managers and field vice presidents of the selling
representative.
LEGAL PROCEEDINGS
A number of lawsuits have been filed against life and health insurers in
jurisdictions in which IDS Life of New York and its affiliates do business
involving insurers' sales practices, alleged agent misconduct, failure to
properly supervise agents and other matters. IDS Life is a defendant in three
class action lawsuits of this nature. IDS Life of New York is a named defendant
in one of these suits, RICHARD W. AND ELIZABETH J. THORESEN VS. AMERICAN EXPRESS
FINANCIAL CORPORATION, AMERICAN CENTURION LIFE ASSURANCE COMPANY, AMERICAN
ENTERPRISE LIFE INSURANCE COMPANY, AMERICAN PARTNERS LIFE INSURANCE COMPANY, IDS
LIFE INSURANCE COMPANY AND IDS LIFE INSURANCE COMPANY OF NEW YORK which was
commenced in Minnesota State Court in October 1998. The action was brought by
individuals who purchased an annuity in a qualified plan. The plaintiffs allege
that the sale of annuities in tax-deferred contributory retirement investment
plans (E.G., IRAs) is never appropriate. The plaintiffs purported to represent a
class consisting of all persons who made similar purchases. The plaintiffs seek
damages in an unspecified amount.
IDS Life of New York is included as a party to preliminary settlement of all
three class action lawsuits. We believe this approach will put these cases
behind us and provide a fair outcome for our clients. Our decision to settle
does not include any admission of wrongdoing. We do not anticipate that this
proposed settlement, or any other lawsuits in which IDS Life of New York is a
defendant, will have a material adverse effect on our financial condition.
YEAR 2000
The Year 2000 issue is the result of computer programs having been written using
two digits rather than four to define a year. Any programs that have
time-sensitive software may recognize a date using "00" as the year 1900 rather
than 2000. This could result in the failure of major systems or miscalculations,
which could have a material impact on the operations of IDS Life of New York and
the variable accounts. All of the major systems used by IDS Life of New York and
the variable accounts are maintained by AEFC and are utilized by multiple
subsidiaries and affiliates of AEFC. IDS Life of New York's and the variable
accounts' businesses are heavily dependent upon AEFC's computer systems and have
significant interaction with systems of third parties.
A comprehensive review of AEFC's computer systems and business processes,
including those specific to IDS Life of New York and the variable accounts, was
conducted to identify the major systems that could be affected by the Year 2000
issue. Steps were taken to resolve potential problems including modification to
existing software and the purchase of new software. As of Dec. 31, 1999, AEFC
had completed its program of corrective measures on its internal systems and
applications, including Year 2000 compliance testing. As of Dec. 31, 1999, AEFC
had also completed an evaluation of the Year 2000 readiness of other third
parties whose system failures could have an impact on IDS Life of New York's and
the variable accounts' operations.
AEFC's Year 2000 project also included establishing Year 2000 contingency plans
for all key business units. Business continuation plans, which address business
continuation in the event of a system disruption, are in place for all key
business units. As of Dec. 31, 1999, these plans had been amended to include
specific Year 2000 considerations.
In assessing its Year 2000 initiatives and the results of actual production
since Jan. 1, 2000, management believes no material adverse consequences were
experienced, and there was no material effect on IDS Life of New York's and the
variable accounts' business, results of operations, or financial condition as a
result of the Year 2000 issue.
- --------------------------------------------------------------------------------
26 IDS LIFE OF NEW YORK EMPLOYEE BENEFIT ANNUITY
<PAGE>
TABLE OF CONTENTS OF THE STATEMENT OF
ADDITIONAL INFORMATION
Performance Information.......... ........... 3
Calculating Annuity Payouts.................. 5
Rating Agencies.............................. 7
Principal Underwriter........................ 7
Independent Auditors......................... 7
Financial Statements
- --------------------------------------------------------------------------------
PROSPECTUS -- MAY 1, 2000 27
<PAGE>
Please check the appropriate box to receive a copy of the Statement of
Additional Information for:
/ / IDS Life of New York Employee Benefit Annuity
/ / American Express Variable Portfolio Funds
MAIL YOUR REQUEST TO:
IDS LIFE OF NEW YORK ANNUITY SERVICE
IDS LIFE INSURANCE COMPANY OF NEW YORK
BOX 5144
ALBANY, NY 12205
WE WILL MAIL YOUR REQUEST TO:
Your name _____________________________________________________________________
Address _______________________________________________________________________
City _________________________ State ___________ Zip ________________________
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
for
EMPLOYEE BENEFIT ANNUITY
IDS LIFE OF NEW YORK ACCOUNTS 4, 5, 6, 9, 10, 11, 12, 13 and 14
May 1, 2000
IDS Life of New York Accounts 4, 5, 6, 9, 10, 11, 12, 13 and 14 are separate
accounts established and maintained by IDS Life Insurance Company of New York
(IDS Life of New York).
This Statement of Additional Information (SAI) is not a prospectus. It should be
read together with the prospectus dated the same date as this SAI, which may be
obtained from your financial advisor, or by writing or calling us at the address
and telephone number below. The prospectus is incorporated in this SAI by
reference.
IDS Life Insurance Company of New York
20 Madison Avenue Extension
Albany, NY 12203
800-541-2251
<PAGE>
TABLE OF CONTENTS
Performance Information...................................................p. 3
Calculating Annuity Payouts...............................................p. 5
Rating Agencies...........................................................p. 7
Principal Underwriter.....................................................p. 7
Independent Auditors......................................................p. 7
Financial Statements
<PAGE>
PERFORMANCE INFORMATION
- --------------------------------------------------------------------------------
The variable accounts may quote various performance figures to illustrate past
performance. We base total return and current yield quotations (if applicable)
on standardized methods of computing performance as required by the Securities
and Exchange Commission (SEC). An explanation of the methods used to compute
performance follows below.
Average Annual Total Return
We will express quotations of average annual total return for the variable
accounts in terms of the average annual compounded rate of return of a
hypothetical investment in the contract and certificate over a period of one,
five and ten years (or, if less, up to the life of the variable accounts),
calculated according to the following formula:
P(1+T)n = ERV
where: P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV= Ending Redeemable Value of a hypothetical $1,000 payment
made at the beginning of the period, at the end of the
period (or fractional portion thereof)
We calculated the following performance figures on the basis of historical
performance of each fund. Although we base performance on historical earnings,
past performance does not guarantee future results.
Average Annual Total Return With Surrender For Periods Ending Dec. 31, 1999
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Variable Account Investing In: 1 Year 5 Years 10 Years Since
Inception
AXPSM Variable Portfolio
5 Bond Fund (10/81)* -7.45% 5.24% 6.78% --%
4 Capital Resource Fund (10/81) 12.63 18.35 14.07 --
6 Cash Management Fund (10/81) -4.69 2.48 3.57 --
13 Extra Income Fund (5/96) -3.32 -- -- 2.02
12 Global Bond Fund (5/96) -13.02 -- -- 0.63
10 International Fund (1/92) 32.55 13.25 -- 11.62
9 Managed Fund (4/86) 4.51 15.29 12.12 --
14 New Dimensions Fund (5/96) 20.14 -- -- 22.20
11 Strategy Aggressive Fund 55.69 21.70 -- 15.22
(1/92)
* (Commencement dates of the Funds)
Average Annual Total Return Without Surrender For Periods Ending Dec. 31, 1999
Variable Account Investing In: 1 Year 5 Years 10 Years Since Inception
AXPSM Variable Portfolio
5 Bond Fund (10/81)* 0.59% 6.78% 6.99% --%
4 Capital Resource Fund (10/81) 22.42 20.08 14.30 --
6 Cash Management Fund (10/81) 3.60 3.98 3.78 --
13 Extra Income Fund (5/96) 5.08 -- -- 4.37
12 Global Bond Fund (5/96) -5.46 -- -- 2.94
10 International Fund (1/92) 44.08 14.90 -- 12.19
9 Managed Fund (4/86) 13.60 16.97 12.35 --
14 New Dimensions Fund (5/96) 30.59 -- -- 25.01
11 Strategy Aggressive Fund 69.23 23.48 -- 15.81
(1/92)
</TABLE>
* (Commencement dates of the Funds)
<PAGE>
Cumulative Total Return
Cumulative total return represents the cumulative change in the value of an
investment for a given period (reflecting change in a variable account's
accumulation unit value). We compute cumulative total return by using the
following formula:
ERV - P
P
where: P = a hypothetical initial payment of $1,000
ERV = Ending Redeemable Value of a hypothetical $1,000
payment made at the beginning of the period, at the
end of the period (or fractional portion thereof).
Total return figures reflect the deduction of the surrender charge which assumes
you surrender the entire contract value at the end of the one, five and ten year
periods (or, if less, up to the life of the variable account). We also may show
performance figures without the deduction of a surrender charge. In addition,
total return figures reflect the deduction of all other applicable charges
including the contract administrative charge, and the mortality and expense risk
fee.
Calculation of Yield for Variable Accounts Investing in Money Market Fund
Annualized Simple Yield:
For the variable account investing in the money market fund, we base quotations
of simple yield on:
(a) the change in the value of a hypothetical variable account (exclusive of
capital changes and income other than investment income) at the beginning
of a particular seven-day period;
(b) less a pro rata share of the variable account expenses accrued over the
period;
(c) dividing this difference by the value of the variable account at the
beginning of the period to obtain the base period return; and
(d) multiplying the base period return by 365/7.
The variable account's value includes:
o any declared dividends,
o the value of any shares purchased with dividends paid during the period,
and o any dividends declared for such shares.
It does not include:
o the effect of any applicable surrender charge, or o any realized or
unrealized gains or losses.
Annualized Compound Yield:
We calculate compound yield using the base period return described above, which
we then compound according to the following formula:
Compound Yield = [(Base Period Return + 1)365/7] -1
Annualized Yields Based on the Seven-Day Period Ending Dec. 31, 1999
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Variable Account Investing In: Simple Yield Compound Yield
6 AXPSM Variable Portfolio - Cash Management Fund 5.01% 5.13%
</TABLE>
<PAGE>
You must consider (when comparing an investment in variable accounts investing
in money market funds with fixed annuities) that fixed annuities often provide
an agreed-to or guaranteed yield for a stated period of time, whereas the
variable account's yield fluctuates. In comparing the yield of the variable
account to a money market fund, you should consider the different services that
the contract provides.
Annualized Yield for Variable Accounts Investing in Income Funds
For the variable accounts investing in income funds, we base quotations of yield
on all investment income earned during a particular 30-day period, less expenses
accrued during the period (net investment income) and compute it by dividing net
investment income per accumulation unit by the value of an accumulation unit on
the last day of the period, according to the following formula:
YIELD = 2[( a-b + 1)6 - 1]
cd
where: a = dividends and investment income earned during the period
b = expenses accrued for the period (net of reimbursements)
c = the average daily number of accumulation units outstanding
during the period that were entitled to receive dividends
d = the maximum offering price per accumulation unit on the last
day of the period
The variable account earns yield from the increase in the net asset value of
shares of the fund in which it invests and from dividends declared and paid by
the fund, which are automatically invested in shares of the fund.
Annualized Yield Based on the 30-Day Period Ended Dec. 31, 1999
Variable Account Investing In: Yield
- ---------------- ------------- -----
5 AXPSM Variable Portfolio - Bond Fund 7.51%
13 AXPSM Variable Portfolio - Extra Income Fund 11.14
12 AXPSM Variable Portfolio - Global Bond Fund 5.65
The yield on the variable account's accumulation unit may fluctuate daily and
does not provide a basis for determining future yields.
Independent rating or statistical services or publishers or publications such as
those listed below may quote variable account performance, compare it to
rankings, yields or returns, or use it in variable annuity accumulation or
settlement illustrations they publish or prepare.
The Bank Rate Monitor National Index, Barron's, Business Week, CDA Technologies,
Donoghue's Money Market Fund Report, Financial Services Week, Financial Times,
Financial World, Forbes, Fortune, Global Investor, Institutional Investor,
Investor's Business Daily, Kiplinger's Personal Finance, Lipper Analytical
Services, Money, Morningstar, Mutual Fund Forecaster, Newsweek, The New York
Times, Personal Investor, Stanger Report, Sylvia Porter's Personal Finance, USA
Today, U.S. News & World Report, The Wall Street Journal and Wiesenberger
Investment Companies Service.
CALCULATING ANNUITY PAYOUTS
The Variable Accounts
We do the following calculations separately for each of the variable accounts.
The separate monthly payouts, added together, make up your total variable
annuity payout.
<PAGE>
Initial Payout: To compute your first monthly payment, we:
o determine the dollar value of your certificate on the valuation date; then
o apply the result to the annuity table contained in the certificate or
another table at least as favorable.
The annuity table shows the amount of the first monthly payment for each $1,000
of value which depends on factors built into the table, as described below.
Annuity Units: We then convert the value of your variable account to annuity
units. To compute the number of units credited to you, we divide the first
monthly payment by the annuity unit value (see below) on the valuation date. The
number of units in your variable account is fixed. The value of units fluctuates
with the performance of the underlying fund.
Subsequent Payouts: To compute later payouts, we multiply:
o the annuity unit value on the valuation date; by o the fixed number of
annuity units credited to you.
Annuity Unit Values: We originally set this value at $1 for each variable
account. To calculate later values we multiply the last annuity value by the
product of:
o the net investment factor; and
o the neutralizing factor.
The purpose of the neutralizing factor is to offset the effect of the assumed
investment rate built into the annuity table. With an assumed investment rate of
3.5%, the neutralizing factor is 0.999906 for a one day valuation period.
Net Investment Factor: We determine the net investment factor by:
o adding the fund's current net asset value per share plus the per share
amount of any accrued income or capital gain dividends to obtain a current
adjusted net asset value per share; then
o dividing that sum by the previous adjusted net asset value per share; and
o subtracting the percentage factor representing the mortality and expense
risk fee from the result.
Because the net asset value of the fund may fluctuate, the net investment factor
my be greater or less than one, and the annuity unit value may increase or
decrease. You bear this investment risk in a variable account.
The Fixed Account
We guarantee your fixed annuity payout amounts. Once calculated, your payout
will remain the same and never change. To calculate your annuity payouts we:
o take the value of your fixed account at the retirement date or the date you
have selected to begin receiving your annuity payouts; then
o using an annuity table, we apply the value according to the annuity payout
plan you select.
The annuity payout table we use will be the one in effect at the time you choose
to begin your annuity payouts. The values in the table will be equal to or
greater than the table in your certificate.
<PAGE>
RATING AGENCIES
The following chart reflects the ratings given to us by independent rating
agencies. These agencies evaluate the financial soundness and claims-paying
ability of insurance companies based on a number of different factors. This
information does not relate to the management or performance of the variable
accounts of the contract. This information relates only to the fixed account and
reflects our ability to make annuity payouts and to pay death benefits and other
distributions from the contract.
Rating Agency Rating
A.M. Best A+
(Superior)
- -----------------------
Duff & Phelps AAA
- -----------------------
Moody's Aa2
A.M. Best's superior rating reflects our strong distribution network, favorable
overall balance sheet, consistently improving profitability, adequate level of
capitalization and asset/liability management expertise.
Duff & Phelps rating reflects our consistently excellent profitability record,
leadership position in chosen markets, stable operating leverage and effective
use of asset/liability management techniques.
Moody's excellent rating reflects our leadership position in financial planning,
strong asset, liability management and good capitalization. IDS Life has a
strong market focus and greatly emphasizes quality service. This information
applies only to fixed products invested in IDS Life's General Account and
reflects IDS Life's ability to fulfill its obligations under its contracts. This
information does not relate to the management and performance of the separate
account assets associated with IDS Life's variable products.
PRINCIPAL UNDERWRITER
The principal underwriter for the contract is American Express Financial
Advisors Inc. (AEFA) which offers the contract on a continuous basis.
Surrender charges received by IDS Life of New York for the last three years
aggregated total $993,347, $886,431, and $688,445, respectively.
Commissions paid by IDS Life of New York for the last three years aggregated
total $957,659, $1,115,312, and $1,067,783, respectively.
INDEPENDENT AUDITORS
The financial statements appearing in this SAI have been audited by Ernst &
Young LLP (1400 Pillsbury Center, 200 South Sixth Street, Minneapolis, MN 55402)
independent auditors, as stated in their report appearing herein.
FINANCIAL STATEMENTS
<PAGE>
IDS Life of New York Accounts 5, 4, 6, 13, 12, 10, 9, 14, and 11
Annual Financial Information
Report of Independent Auditors
The Board of Directors
IDS Life Insurance Company of New York
We have audited the accompanying individual and combined statements of net
assets of IDS Life of New York Accounts 5, 4, 6, 13, 12, 10, 9, 14, and 11 as of
December 31, 1999, 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. These financial statements are the responsibility of the
management of IDS Life Insurance Company of New York. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. Our
procedures included confirmation of securities owned at December 31, 1999 with
the affiliated mutual fund managers. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the individual and combined financial position of IDS
Life of New York Accounts 5, 4, 6, 13, 12, 10, 9, 14, and 11 at December 31,
1999, and the individual and combined results of their operations and changes in
their net assets for the periods described above, in conformity with accounting
principles generally accepted in the United States.
ERNST & YOUNG LLP
Minneapolis, Minnesota
March 17, 2000
<PAGE>
<TABLE>
<CAPTION>
IDS Life of New York Accounts 5, 4, 6, 13, 12, 10, 9, 14 and 11 Statements of
Net Assets
December 31, 1999
Segregated Asset Account
Assets 5 4 6 13 12
Investments in shares of mutual funds:
<S> <C> <C> <C> <C> <C>
at cost $ 74,484,500 $205,528,285 $ 14,051,792 $ 23,018,716 $ 6,785,649
------------ ------------ ------------ ------------ -----------
at market value $ 69,000,549 $292,003,410 $ 14,051,629 $ 19,981,229 $ 6,401,002
Dividends receivable 428,370 -- 62,888 182,186 30,041
Accounts receivable from IDS Life of New York
for contract purchase payments -- 29,718 14,149 -- --
------ ------ ------- ------- ------
Total assets 69,428,919 292,033,128 14,128,666 20,163,415 6,431,043
========== =========== ========== ========== =========
Liabilities
Payable to IDS Life of New York for:
Mortality and expense risk fee 59,277 248,346 11,997 17,230 5,498
Contract terminations 126,423 -- -- 12,918 5,197
------- ------- ------ ------ -----
Total liabilities 185,700 248,346 11,997 30,148 10,695
------- ------- ------ ------ ------
Net assets applicable to
contracts in accumulation period $ 68,975,287 $290,992,967 $ 14,066,686 $ 19,956,913 $ 6,401,771
Net assets applicable to
contracts in payment period 267,932 791,815 49,983 176,354 18,577
======= ======= ====== ======= ======
Total net assets $ 69,243,219 $291,784,782 $ 14,116,669 $ 20,133,267 $ 6,420,348
============ ============ ============ ============ ===========
Accumulation units outstanding 16,986,924 33,850,085 5,998,881 17,002,767 5,735,295
========== ========== ========= ========== =========
Net asset value per accumulation unit $ 4.06 $ 8.60 $ 2.34 $ 1.17 $ 1.12
====== ====== ====== ====== ======
Combined
Variable
Assets 10 9 14 11 Accounts
Investments in shares of mutual funds:
at cost $101,703,473 $209,196,835 $118,480,630 $117,053,694 $ 870,303,574
------------ ------------ ------------ ------------ -------------
at market value $149,190,875 $277,014,371 $202,348,852 $200,205,582 $1,230,197,499
Dividends receivable -- -- -- -- 703,485
Accounts receivable from IDS Life of New York
for contract purchase payments -- -- 83,261 -- 127,128
------- ------ ----------- -------- -------------
Total assets 149,190,875 277,014,371 202,432,113 200,205,582 1,231,028,112
=========== =========== =========== =========== =============
Liabilities
Payable to IDS Life of New York for:
Mortality and expense risk fee 126,892 236,895 171,393 169,907 1,047,435
Contract terminations 33,590 12,409 -- 23,120 213,657
------ ------ ------- ------ -------
Total liabilities 160,482 249,304 171,393 193,027 1,261,092
------- ------- ------- ------- ---------
Net assets applicable to
contracts in accumulation period $148,707,273 $274,572,162 $201,590,160 $199,470,851 $1,224,734,070
Net assets applicable to
contracts in payment period 323,120 2,192,905 670,560 541,704 5,032,950
======= ========= ======= ======= =========
Total net assets $149,030,393 $276,765,067 $202,260,720 $200,012,555 $1,229,767,020
============ ============ ============ ============ ==============
Accumulation units outstanding 59,132,396 59,964,826 88,672,565 61,637,882
========== ========== ========== ==========
Net asset value per accumulation unit $ 2.51 $ 4.58 $ 2.27 $ 3.24
====== ====== ====== ======
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
IDS Life of New York Accounts 5, 4, 6, 13, 12, 10, 9, 14 and 11
Statements of Operations
Year ended December 31, 1999
Segregated Asset Account
Investment income 5 4 6 13 12
<S> <C> <C> <C> <C> <C>
Dividend income from mutual funds $ 5,235,740 $ 26,642,461 $ 672,940 $ 2,054,441 $ 324,670
Mortality and expense risk fee 761,772 2,706,006 145,877 208,366 69,286
------- --------- ------- ------- ------
Investment income (loss) - net 4,473,968 23,936,455 527,063 1,846,075 255,384
========= ========== ======= ========= =======
Realized and unrealized gain (loss)
on investments - net
Realized gain (loss) on
sales of investments in mutual funds:
Proceeds from sales 14,394,838 34,832,786 11,899,735 3,308,942 1,451,114
Cost of investments sold 15,296,176 24,901,663 11,899,920 3,732,898 1,489,266
---------- ---------- ---------- --------- ---------
Net realized gain (loss) on investments (901,338) 9,931,123 (185) (423,956) (38,152)
Net change in unrealized appreciation
or depreciation of investments (3,116,811) 21,788,236 (1,006) (380,950) (602,887)
---------- ---------- ------ -------- --------
Net gain (loss) on investments (4,018,149) 31,719,359 (1,191) (804,906) (641,039)
---------- ---------- ------ -------- --------
Net increase (decrease) in net assets
resulting from operations $ 455,819 $ 55,655,814 $ 525,872 $ 1,041,169 $ (385,655)
========= ============ ========= =========== ==========
Combined
Variable
Investment income 10 9 14 11 Accounts
Dividend income from mutual funds $ 19,445,419 $ 18,406,974 $ 2,019,047 $ 14,301,822 $ 89,103,514
Mortality and expense risk fee 1,235,996 2,713,021 1,607,311 1,438,995 10,886,630
--------- --------- --------- --------- ----------
Investment income (loss) - net 18,209,423 15,693,953 411,736 12,862,827 78,216,884
========== ========== ======= ========== ==========
Realized and unrealized gain (loss)
on investments - net
Realized gain (loss) on
sales of investments in mutual funds:
Proceeds from sales 17,845,574 34,878,806 5,076,717 27,674,091 151,362,603
Cost of investments sold 13,133,420 26,768,538 3,352,079 22,504,320 123,078,280
---------- ---------- --------- ---------- -----------
Net realized gain (loss) on investments 4,712,154 8,110,268 1,724,638 5,169,771 28,284,323
Net change in unrealized appreciation
or depreciation of investments 24,260,423 11,152,522 43,605,464 65,530,442 162,235,433
---------- ---------- ---------- ---------- -----------
Net gain (loss) on investments 28,972,577 19,262,790 45,330,102 70,700,213 190,519,756
---------- ---------- ---------- ---------- -----------
Net increase (decrease) in net assets
resulting from operations $ 47,182,000 $ 34,956,743 $ 45,741,838 $ 83,563,040 $ 268,736,640
============ ============ ============ ============ =============
See accompanying notes to financial state
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
IDS Life of New York Accounts 5, 4, 6, 13, 12, 10, 9, 14 and 11
Statements of Changes in Net Assets
Year ended December 31, 1998
Segregated Asset Account
Operations 5 4 6 13 12
<S> <C> <C> <C> <C> <C>
Investment income (loss) - net $ 5,539,046 $ 17,055,041 $ 458,514 $ 1,847,957 $ 312,912
Net realized gain (loss) on investments 117,539 5,119,077 (182) (61,843) 12,567
Net change in unrealized appreciation or
depreciation of investments (5,140,132) 29,118,857 181 (3,028,865) 137,901
---------- ---------- --- ---------- -------
Net increase (decrease) in net assets
resulting from operations 516,453 51,292,975 458,513 (1,242,751) 463,380
======= ========== ======= ========== =======
Contract transactions
Contract purchase payments 1,840,758 5,806,702 956,679 726,812 184,571
Net transfers* (375,040) (6,960,384) 6,084,219 6,954,351 1,374,494
Transfers for policy loans 66,124 335,008 18,595 45,712 4,720
Annuity payments (24,593) (33,467) (7,793) (6,630) (957)
Contract charges (55,442) (183,200) (6,179) (9,699) (3,626)
Contract terminations:
Surrender benefits (7,601,592) (20,902,820) (2,732,124) (1,696,921) (801,371)
Death benefits (474,110) (890,715) (178,740) (52,222) (35,368)
-------- -------- -------- ------- -------
Increase (decrease) from contract transactions (6,623,895) (22,828,876) 4,134,657 5,961,403 722,463
---------- ----------- --------- --------- -------
Net assets at beginning of year 88,078,813 238,225,632 10,189,274 15,253,010 6,156,778
---------- ----------- ---------- ---------- ---------
Net assets at end of year $ 81,971,371 $ 266,689,731 $ 14,782,444 $ 19,971,662 $ 7,342,621
============ ============= ============ ============ ===========
Accumulation unit activity
Units outstanding at beginning of year 21,881,898 41,665,709 4,651,207 12,893,865 5,577,842
Contracts purchase payments 454,462 941,002 431,786 615,020 162,582
Net transfers* (69,146) (1,145,728) 2,739,126 5,799,100 1,212,905
Transfers for policy loans 16,310 54,236 8,363 40,113 4,142
Contract charges (13,768) (30,078) (2,864) (8,294) (3,201)
Contract terminations:
Surrender benefits (1,891,374) (3,392,227) (1,231,612) (1,477,128) (703,177)
Death benefits (116,578) (145,535) (80,803) (42,590) (30,914)
-------- -------- ------- ------- -------
Units outstanding at end of year 20,261,804 37,947,379 6,515,203 17,820,086 6,220,179
========== ========== ========= ========== =========
Combined
Variable
Operations 10 9 14 11 Accounts
Investment income (loss) - net $ 375,175 $ 27,743,425 $ (406,327) $ 7,655,955 $ 35,681,140
Net realized gain (loss) on investments 2,492,427 5,604,108 663,624 2,115,562 10,888,288
Net change in unrealized appreciation or
depreciation of investments 13,306,339 2,865,218 26,290,819 (7,859,696) 34,740,581
---------- --------- ---------- ---------- ----------
Net increase (decrease) in net assets
resulting from operations 16,173,941 36,212,751 26,548,116 1,911,821 81,310,009
========== ========== ========== ========= ==========
Contract transactions
Contract purchase payments 3,454,091 5,851,798 5,409,816 4,421,131 19,321,407
Net transfers* (6,922,424) (2,948,412) 19,608,356 (3,672,384) 7,439,630
Transfers for policy loans 132,624 334,952 167,119 184,854 824,269
Annuity payments (8,688) (129,461) (19,486) (10,778) (169,370)
Contract charges (86,302) (188,565) (71,125) (103,367) (452,985)
Contract terminations:
Surrender benefits (10,283,583) (24,128,680) (7,845,925) (11,661,490) (54,721,049)
Death benefits (530,518) (1,575,260) (424,337) (429,170) (2,994,653)
-------- ---------- -------- -------- ----------
Increase (decrease) from contract transactions (14,244,800) (22,783,628) 16,824,418 (11,271,204) (30,752,751)
----------- ----------- ---------- ----------- -----------
Net assets at beginning of year 115,384,995 259,797,518 88,379,097 150,224,851 619,943,239
----------- ----------- ---------- ----------- -----------
Net assets at end of year $ 117,314,136 $ 273,226,641 $ 131,751,631 $ 140,865,468 $ 670,500,497
============= ============= ============= ============= =============
Accumulation unit activity
Units outstanding at beginning of year 75,831,387 73,556,872 64,612,620 79,813,154
Contracts purchase payments 2,051,106 1,682,384 3,607,051 2,347,838
Net transfers* (4,297,233) (792,578) 12,837,578 (2,150,607)
Transfers for policy loans 78,001 89,491 110,016 97,253
Contract charges (51,807) (51,081) (47,826) (55,790)
Contract terminations:
Surrender benefits (6,103,008) (6,626,757) (5,260,281) (6,207,104)
Death benefits (310,270) (430,489) (278,134) (235,211)
-------- -------- -------- --------
Units outstanding at end of year 67,198,176 67,427,842 75,581,024 73,609,533
========== ========== ========== ==========
*Includes transfer activity from (to) other accounts and transfers from (to) IDS
Life of New York's fixed account.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
IDS Life of New York Accounts 5, 4, 6, 13, 12, 10, 9, 14, and 11
Notes to Financial Statements
1. ORGANIZATION
IDS Life of New York Accounts 5, 4, 6, 13, 12, 10, 9, 14, and 11 (collectively,
the Accounts) were established under New York law as segregated asset accounts
of IDS Life Insurance Company of New York (IDS Life of New York). The Accounts
are registered together as a single unit investment trust under the Investment
Company Act of 1940, as amended (the 1940 Act). Accounts 5, 4 and 6 were
established on Nov. 12, 1981 and commenced operations on Oct. 25, 1982. Account
9 was established on Feb. 12, 1986 and commenced operations on April 30, 1986.
Accounts 10 and 11 were established on Oct. 8, 1991 and commenced operations on
Jan. 13, 1992. Accounts 13, 12 and 14 were established on April 17, 1996 and
commenced operations on April 30, 1996.
Each Account invests exclusively in shares of the following funds (collectively,
the Funds), which are registered under the 1940 Act as diversified
(non-diversified for Global Bond) open-end management investment companies and
have the following investment managers.
Account Invests exclusively in shares of Investment Manager
<S> <C> <C>
5 AXPSM Variable Portfolio-- Bond Fund IDS Life Insurance Company 1
4 AXPSM Variable Portfolio-- Capital Resource Fund IDS Life Insurance Company 1
6 AXPSM Variable Portfolio-- Cash Management Fund IDS Life Insurance Company 1
13 AXPSM Variable Portfolio-- Extra Income Fund IDS Life Insurance Company 1
12 AXPSM Variable Portfolio-- Global Bond Fund IDS Life Insurance Company 1
10 AXPSM Variable Portfolio-- International Fund IDS Life Insurance Company 2
9 AXPSM Variable Portfolio-- Managed Fund IDS Life Insurance Company 1
14 AXPSM Variable Portfolio-- New Dimensions Fund(R) IDS Life Insurance Company 1
11 AXPSM Variable Portfolio-- Strategy Aggressive Fund IDS Life Insurance Company 1
1 American Express Financial Corporation (AEFC) is the investment advisor.
2 AEFC is the investment advisor. American Express Asset Management
International Inc. is the sub-investment advisor.
The assets of the Accounts are not chargeable with liabilities arising out of
the business conducted by any other segregated asset account or by IDS Life of
New York.
IDS Life of New York serves as issuer of the contracts.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Investments in the Funds
Investments in shares of the 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 Funds are reinvested in
additional shares of the 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 Funds' undistributed
net investment income, undistributed realized gain or loss and the unrealized
appreciation or depreciation on their investment securities.
Use of Estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the financial
statements and the reported amounts of increase and decrease in net assets from
operations during the period. Actual results could differ from those estimates.
Federal Income Taxes
IDS Life of New York is taxed as a life insurance company. The Accounts are
treated as part of IDS Life of New York for federal income tax purposes. Under
existing tax law, no income taxes are payable with respect to any investment
income of the Accounts.
3. MORTALITY AND EXPENSE RISK FEE
IDS Life of New York makes contractual assurances to the Accounts that possible
future adverse changes in administrative expenses and mortality experience of
the contract owners and annuitants will not affect the Accounts. The mortality
and expense risk fee paid to IDS Life of New York is computed daily and is
equal, on an annual basis, to 1% of the average daily net assets of the
Accounts.
4. CONTRACT ADMINISTRATIVE CHARGES
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 $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 or
certificate 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 of New York.
A contingent deferred sales charge (surrender 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 eleven
years,
c) Employee Benefit Annuity Certificate surrenders during the first eleven
years, and
d) Flexible Annuity contract surrenders of amounts other than those representing
earnings or those representing purchase payments six contract years old or
more.
Charges by IDS Life of New York for surrenders are not identified on an
individual segregated asset account basis. Charges for all segregated asset
accounts amounted to $993,347 in 1999 and $886,431 in 1998. Such charges are not
treated as a separate expense of the Accounts. They are ultimately deducted from
contract surrender benefits paid by IDS Life of New York.
5. INVESTMENT IN SHARES
The Accounts' investment in shares of the Funds as of Dec. 31, 1999 were as
follows:
Account Investment Shares NAV
<C> <C> <C> <C>
5 AXPSM Variable Portfolio-- Bond Fund 6,543,971 $10.54
4 AXPSM Variable Portfolio-- Capital Resource Fund 8,022,991 36.40
6 AXPSM Variable Portfolio-- Cash Management Fund 14,052,990 1.00
13 AXPSM Variable Portfolio-- Extra Income Fund 2,329,902 8.58
12 AXPSM Variable Portfolio-- Global Bond Fund 660,542 9.69
10 AXPSM Variable Portfolio-- International Fund 7,697,185 19.38
9 AXPSM Variable Portfolio-- Managed Fund 13,979,262 19.82
14 AXPSM Variable Portfolio-- New Dimensions Fund(R) 8,852,824 22.86
11 AXPSM Variable Portfolio-- Strategy Aggressive Fund 8,371,240 23.92
6. INVESTMENT TRANSACTIONS
The Accounts' purchases of Funds' shares, including reinvestment of dividend
distributions, were as follows:
Year ended Dec. 31,
Account Investment 1999 1998
<C> <C> <C> <C>
5 AXPSM Variable Portfolio-- Bond Fund $ 5,442,164 $ 7,811,731
4 AXPSM Variable Portfolio-- Capital Resource Fund 28,427,106 18,946,281
6 AXPSM Variable Portfolio-- Cash Management Fund 11,218,582 12,279,652
13 AXPSM Variable Portfolio-- Extra Income Fund 4,123,415 8,557,305
12 AXPSM Variable Portfolio-- Global Bond Fund 1,150,534 1,863,251
10 AXPSM Variable Portfolio-- International Fund 20,749,736 1,364,968
9 AXPSM Variable Portfolio-- Managed Fund 19,403,746 28,913,799
14 AXPSM Variable Portfolio-- New Dimensions Fund(R) 30,343,836 20,674,399
11 AXPSM Variable Portfolio-- Strategy Aggressive Fund 16,314,514 10,432,973
Combined Variable Accounts $137,173,633 $110,844,359
7. YEAR 2000 (UNAUDITED)
The Year 2000 issue is the result of computer programs having been written using
two digits rather than four to define a year. Any programs that have
time-sensitive software may recognize a date using "00" as the year 1900 rather
than 2000. This could result in the failure of major systems or miscalculations,
which could have a material impact on the operations of IDS Life of New York and
the Accounts. All of the major systems used by IDS Life of New York and the
Accounts are maintained by AEFC and are utilized by multiple subsidiaries and
affiliates of AEFC. IDS Life of New York's and the Accounts' businesses are
heavily dependent upon AEFC's computer systems and have significant interaction
with systems of third parties.
A comprehensive review of AEFC's computer systems and business processes,
including those specific to IDS Life of New York and the Accounts, was conducted
to identify the major systems that could be affected by the Year 2000 issue.
Steps were taken to resolve any potential problems including modification to
existing software and the purchase of new software. As of Dec. 31, 1999, AEFC
had completed its program of corrective measures on its internal systems and
applications, including Year 2000 compliance testing. As of Dec. 31, 1999, AEFC
had also completed an evaluation of the Year 2000 readiness of third parties
whose system failures could have an impact on IDS Life of New York's and the
Accounts' operations.
AEFC's Year 2000 project also included establishing Year 2000 contingency plans
for all key business units. Business continuation plans, which address business
continuation in the event of a system disruption, are in place for all key
business units. As of Dec. 31, 1999, these plans had been amended to include
specific Year 2000 considerations.
In assessing its Year 2000 initiatives and the results of actual production
since Jan. 1, 2000, management believes no material adverse consequences were
experienced, and there was no material effect on IDS Life of New York's and the
Accounts' business, results of operations, or financial condition as a result of
the Year 2000 issue.
</TABLE>
<PAGE>
<PAGE>
IDS LIFE INSURANCE COMPANY OF NEW YORK
FINANCIAL INFORMATION
REPORT OF INDEPENDENT AUDITORS
THE BOARD OF DIRECTORS
IDS LIFE INSURANCE COMPANY OF NEW YORK
We have audited the accompanying balance sheets of IDS Life Insurance Company of
New York (a wholly-owned subsidiary of IDS Life Insurance Company) as of
December 31, 1999 and 1998, and the related statements of income, stockholder's
equity and cash flows for each of the three years in the period ended December
31, 1999. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of IDS Life Insurance Company of
New York at December 31, 1999 and 1998, and the results of its operations and
its cash flows for each of the three years in the period ended December 31,
1999, in conformity with accounting principles generally accepted in the
United States.
ERNST & YOUNG LLP
February 3, 2000
Minneapolis, Minnesota
- --------------------------------------------------------------------------------
IDS LIFE INSURANCE COMPANY OF NEW YORK F-1
<PAGE>
IDS LIFE INSURANCE COMPANY OF NEW YORK
BALANCE SHEETS
<TABLE>
<CAPTION>
DECEMBER 31, ($ THOUSANDS) 1999 1998
<S> <C> <C>
ASSETS
- -----------------------------------------------------------------
Investments:
Fixed maturities:
Held to maturity, at amortized cost
(fair value:
1999, $432,004; 1998, $503,909) $ 434,343 $ 473,592
Available for sale, at fair value
(amortized cost:
1999, $579,014; 1998, $561,325) 555,574 578,591
- -----------------------------------------------------------------
989,917 1,052,183
Mortgage loans on real estate 154,062 166,835
Policy loans 27,528 25,421
Other investments -- 566
- -----------------------------------------------------------------
Total investments 1,171,507 1,245,005
Cash and cash equivalents 8,131 3,007
Amounts recoverable from reinsurers 6,914 4,077
Accounts receivable 567 842
Premiums due 199 204
Accrued investment income 18,365 19,893
Deferred policy acquisition costs 136,229 129,477
Deferred income taxes 3,881 --
Other assets 723 1,042
Separate account assets 1,957,703 1,491,679
- -----------------------------------------------------------------
Total assets $3,304,219 $2,895,226
- -----------------------------------------------------------------
LIABILITIES AND STOCKHOLDER'S EQUITY
- -----------------------------------------------------------------
Liabilities:
Future policy benefits:
Fixed annuities $ 821,992 $ 875,507
Universal life-type insurance 156,420 152,195
Traditional life, disability income and
long-term care insurance 64,278 55,910
Policy claims and other policyholders'
funds 2,584 3,105
Deferred income taxes -- 7,912
Amounts due to brokers -- 4,507
Other liabilities 21,432 24,945
Separate account liabilities 1,957,703 1,491,679
- -----------------------------------------------------------------
Total liabilities 3,024,409 2,615,760
- -----------------------------------------------------------------
Stockholder's equity:
Capital stock, $10 par value per
share;
200,000 shares authorized, issued and
outstanding 2,000 2,000
Additional paid-in capital 49,000 49,000
Accumulated other comprehensive (loss)
income:
Net unrealized securities (losses) gains (14,966) 11,014
- -----------------------------------------------------------------
Retained earnings 243,776 217,452
- -----------------------------------------------------------------
Total stockholder's equity 279,810 279,466
- -----------------------------------------------------------------
Total liabilities and stockholder's
equity $3,304,219 $2,895,226
=================================================================
</TABLE>
See accompanying notes.
- --------------------------------------------------------------------------------
F-2 IDS LIFE INSURANCE COMPANY OF NEW YORK
<PAGE>
IDS LIFE INSURANCE COMPANY OF NEW YORK
STATEMENTS OF INCOME
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31, ($ THOUSANDS) 1999 1998 1997
<S> <C> <C> <C>
REVENUES:
- --------------------------------------------------------------------------------------------
Traditional life, disability income and long-term care
insurance premiums $ 15,613 $ 13,852 $ 12,376
Policyholder and contractholder charges 22,502 20,467 18,319
Mortality and expense risk fees 17,019 13,980 11,312
Net investment income 95,514 100,871 106,274
Net realized gains on investments 1,386 2,163 547
- --------------------------------------------------------------------------------------------
Total revenues 152,034 151,333 148,828
- --------------------------------------------------------------------------------------------
BENEFITS AND EXPENSE:
- --------------------------------------------------------------------------------------------
Death and other benefits:
Traditional life, disability income and long-term care
insurance 5,579 5,553 3,633
Universal life-type insurance and investment contracts 6,313 4,320 3,852
Increase in liabilities for future policy benefits for for
traditional life, disability income and long-term care
insurance 6,098 3,662 3,979
Interest credited on universal life-type insurance and
investment contracts 50,767 55,073 62,294
Amortization of deferred policy acquisition costs 15,787 18,362 17,201
Other insurance and operating expenses 9,925 8,917 10,220
- --------------------------------------------------------------------------------------------
Total benefits and expenses 94,469 95,887 101,179
- --------------------------------------------------------------------------------------------
Income before income taxes 57,565 55,446 47,649
Income taxes 19,241 19,098 16,471
- --------------------------------------------------------------------------------------------
Net income $ 38,324 $ 36,348 $ 31,178
============================================================================================
</TABLE>
See accompanying notes.
- --------------------------------------------------------------------------------
IDS LIFE INSURANCE COMPANY OF NEW YORK F-3
<PAGE>
IDS LIFE INSURANCE COMPANY OF NEW YORK
STATEMENTS OF STOCKHOLDER'S EQUITY
<TABLE>
<CAPTION>
ACCUMULATED
OTHER
TOTAL ADDITIONAL COMPREHENSIVE
STOCKHOLDER'S CAPITAL PAID-IN (LOSS) INCOME, RETAINED
THREE YEARS ENDED DECEMBER 31, 1999 ($ THOUSANDS) EQUITY STOCK CAPITAL NET OF TAX EARNINGS
<S> <C> <C> <C> <C> <C>
COMPREHENSIVE INCOME:
- ---------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1996 $ 229,863 $ 2,000 $ 49,000 $ 6,937 $171,926
Net income 31,178 -- -- -- 31,178
Unrealized holding gains arising during the year,
net of deferred policy acquisition costs of ($1)
and taxes of ($3,412) 6,337 -- -- 6,337 --
Reclassification adjustment for gains included in
net income, net of tax of $54 (99) -- -- (99) --
Other comprehensive income 6,238 -- -- 6,238 --
- ---------------------------------------------------------------------------------------------------------------------
Comprehensive income 37,416 -- --
Cash dividends to parent (10,000) -- -- -- (10,000)
- ---------------------------------------------------------------------------------------------------------------------
COMPREHENSIVE INCOME:
- ---------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1997 257,279 2,000 49,000 13,175 193,104
Net income 36,348 -- -- -- 36,348
Unrealized holding losses arising during the year,
net of deferred policy acquisition costs of $22
and taxes of $1,415 (2,628) -- -- (2,628) --
Reclassification adjustment for losses included in
net income, net of tax of ($252) 467 -- -- 467 --
- ---------------------------------------------------------------------------------------------------------------------
Other comprehensive loss (2,161) -- -- (2,161) --
Comprehensive income 34,187 -- --
- ---------------------------------------------------------------------------------------------------------------------
Cash dividends to parent (12,000) -- -- -- (12,000)
- ---------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1998 279,466 2,000 49,000 11,014 217,452
COMPREHENSIVE INCOME:
- ---------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1998 279,466 2,000 49,000 11,014 217,452
Net income 38,324 -- -- -- 38,324
Unrealized holding losses arising during the year,
net of deferred policy acquisition costs of $737
and of taxes of $13,537 (25,140) -- -- (25,140) --
Reclassification adjustment for gains included in
net income, net of tax of $452 (840) -- -- (840) --
- ---------------------------------------------------------------------------------------------------------------------
Other comprehensive loss (25,980) -- -- (25,980) --
Comprehensive income 12,344 -- --
- ---------------------------------------------------------------------------------------------------------------------
Cash dividends to parent (12,000) -- -- -- (12,000)
- ---------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1999 $ 279,810 $ 2,000 $ 49,000 $(14,966) $243,776
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes.
- --------------------------------------------------------------------------------
F-4 IDS LIFE INSURANCE COMPANY OF NEW YORK
<PAGE>
IDS LIFE INSURANCE COMPANY OF NEW YORK
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31, ($ THOUSANDS) 1999 1998 1997
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
- -----------------------------------------------------------------------------------------------
Net income $ 38,324 $ 36,348 $ 31,178
Adjustments to reconcile net income to net cash provided by
operating activities:
Policy loans, excluding universal life-type insurance:
Issuance (3,063) (3,110) (3,073)
Repayment 2,826 2,660 1,897
Change in accrued investment income 1,528 312 863
Change in amounts recoverable from reinsurer (2,837) (1,760) (1,345)
Change in premiums due 5 (12) (50)
Change in accounts receivable 275 (119) 218
Change in other assets 319 (47) (95)
Change in deferred policy acquisition costs, net (6,015) (2,841) (7,431)
Change in liabilities for future policy benefits for
traditional life, disability income and long-term care
insurance 8,368 5,441 5,131
Change in policy claims and other policyholders' funds (522) (908) 858
Deferred income tax provision (benefit) 2,196 (2,369) (960)
Change in other liabilities (3,513) (3,986) 3,468
Accretion of discount, net (1,794) (342) (352)
Net realized gain on investments (1,386) (2,163) (547)
Policyholder and contractholder charges, non-cash (9,875) (9,661) (8,772)
Other, net 1,859 118 715
- -----------------------------------------------------------------------------------------------
Net cash provided by operating activities $ 26,695 $ 17,561 $ 21,703
CASH FLOWS FROM INVESTING ACTIVITIES:
- -----------------------------------------------------------------------------------------------
Fixed maturities held to maturity:
Maturities, sinking fund payments and calls $ 37,852 $ 46,629 $ 36,511
Sales 790 16,173 12,616
Fixed maturities available for sale:
Purchases (155,690) (86,072) (101,818)
Maturities, sinking fund payments and calls 50,515 96,578 84,229
Sales 89,683 13,180 27,055
Other investments, excluding policy loans:
Purchases (3,598) (9,121) (33,243)
Sales 16,671 21,113 14,233
Change in amounts due from brokers -- -- 995
Change in amounts due to brokers (4,507) (24,547) 26,047
- -----------------------------------------------------------------------------------------------
Net cash provided by investing activities 31,716 73,933 66,625
CASH FLOWS FROM FINANCING ACTIVITIES:
- -----------------------------------------------------------------------------------------------
Activity related to universal life-type insurance and
investment contracts:
Considerations received 68,978 76,009 112,732
Surrenders and death benefits (159,161) (205,946) (251,259)
Interest credited to account balances 50,767 55,073 62,294
Universal life-type insurance policy loans:
Issuance (5,057) (5,222) (4,848)
Repayment 3,186 3,599 2,753
Cash dividend to parent (12,000) (12,000) (10,000)
- -----------------------------------------------------------------------------------------------
Net cash used in financing activities (53,287) (88,487) (88,328)
- -----------------------------------------------------------------------------------------------
Net increase in cash and cash equivalents 5,124 3,007 --
Cash and cash equivalents at beginning of year 3,007 -- --
- -----------------------------------------------------------------------------------------------
Cash and cash equivalents at end of year $ 8,131 $ 3,007 $ --
- -----------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes.
- --------------------------------------------------------------------------------
IDS LIFE INSURANCE COMPANY OF NEW YORK F-5
<PAGE>
NOTES TO FINANCIAL STATEMENTS ($ THOUSANDS)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NATURE OF BUSINESS
IDS Life Insurance Company of New York (the Company) is engaged in the insurance
and annuity business in the state of New York. The Company's principal products
are deferred annuities and universal life insurance which are issued primarily
to individuals. It offers single premium and flexible premium deferred annuities
on both a fixed and variable dollar basis. Immediate annuities are offered as
well. The Company's insurance products include universal life (fixed and
variable), whole life, single premium life and term products (including waiver
of premium and accidental death benefits). The Company also markets disability
income and long-term care insurance.
BASIS OF PRESENTATION
The Company is a wholly owned subsidiary of IDS Life Insurance Company (IDS
Life), which is a wholly owned subsidiary of American Express Financial
Corporation (AEFC), which is a wholly owned subsidiary of American Express
Company. The accompanying financial statements have been prepared in conformity
with accounting principles generally accepted in the United States which vary in
certain respects from reporting practices prescribed or permitted by the New
York Department of Insurance as reconciled in Note 11.
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
INVESTMENTS
Fixed maturities that the Company has both the positive intent and the ability
to hold to maturity are classified as held to maturity and carried at amortized
cost. All other fixed maturities and all marketable equity securities are
classified as available for sale and carried at fair value. Unrealized gains and
losses on securities classified as available for sale are reported as a separate
component of accumulated other comprehensive (loss) income, net of deferred
policy acquisition costs and deferred income taxes.
Realized investment gains or losses are determined on an identified cost basis.
Prepayments are anticipated on certain investments in mortgage-backed securities
in determining the constant effective yield used to recognize interest income.
Prepayment estimates are based on information received from brokers who deal in
mortgage-backed securities.
Mortgage loans on real estate are carried at amortized cost less reserves for
mortgage loan losses. The estimated fair value of the mortgage loans is
determined by a discounted cash flow analysis using mortgage interest rates
currently offered for mortgages of similar maturities.
Impairment of mortgage loans is measured as the excess of the loan's recorded
investment over its present value of expected principal and interest payments
discounted at the loan's effective interest rate, or the fair value of
collateral. The amount of the impairment is recorded in an allowance for
mortgage loan losses. The allowance for mortgage loan losses is maintained at a
level that management believes is adequate to absorb estimated losses in the
portfolio. The level of the allowance account is determined based on several
factors, including historical experience, expected future principal and interest
payments, estimated collateral
- --------------------------------------------------------------------------------
F-6 IDS LIFE INSURANCE COMPANY OF NEW YORK
<PAGE>
values, and current economic and political conditions. Management regularly
evaluates the adequacy of the allowance for mortgage loan losses.
The Company generally stops accruing interest on mortgage loans for which
interest payments are delinquent more than three months. Based on management's
judgment as to the ultimate collectibility of principal, interest payments
received are either recognized as income or applied to the recorded investment
in the loan.
The cost of interest rate caps is amortized to investment income over the life
of the contracts and payments received as a result of these agreements are
recorded as investment income when realized.
Policy loans are carried at the aggregate of the unpaid loan balances which do
not exceed the cash surrender values of the related policies.
When evidence indicates a decline, which is other than temporary, in the
underlying value or earning power of individual investments, such investments
are written down to the fair value by a charge to income.
STATEMENTS OF CASH FLOWS
The Company considers investments with a maturity at the date of their
acquisition of three months or less to be cash equivalents. These securities are
carried principally at amortized cost which approximates fair value.
Supplementary information to the statements of cash flows for the years ended
December 31 is summarized as follows:
<TABLE>
<CAPTION>
1999 1998 1997
- --------------------------------------------------------------
<S> <C> <C> <C>
Cash paid during the year for:
Income taxes $20,670 $22,470 $17,811
Interest on borrowings 124 1,600 1,026
</TABLE>
RECOGNITION OF PROFITS ON ANNUITY CONTRACTS AND INSURANCE POLICIES
Profits on fixed deferred annuities are recognized by the Company over the lives
of the contracts, using primarily the interest method. Profits represent the
excess of investment income earned from investment of contract considerations
over interest credited to contract owners and other expenses.
The retrospective deposit method is used in accounting for universal life-type
insurance. This method recognizes profits over the lives of the policies in
proportion to the estimated gross profits expected to be realized.
Premiums on traditional life, disability income and long-term care insurance
policies are recognized as revenue when due, and related benefits and expenses
are associated with premium revenue in a manner that results in recognition of
profits over the lives of the insurance policies. This association is
accomplished by means of the provision for future policy benefits and the
deferral and subsequent amortization of policy acquisition costs.
Policyholder and contractholder charges include the monthly cost of insurance
charges, issue and administrative fees and surrender charges. These charges also
include the minimum death benefit guarantee fees received from the variable life
insurance separate accounts. Mortality and expense fees are received from the
variable annuity and variable life insurance separate accounts.
DEFERRED POLICY ACQUISITION COSTS
The costs of acquiring new business, principally sales compensation, policy
issue costs, underwriting and certain sales expenses, have been deferred on
insurance and annuity contracts. The deferred acquisition costs for most single
premium deferred annuities
- --------------------------------------------------------------------------------
IDS LIFE INSURANCE COMPANY OF NEW YORK F-7
<PAGE>
and installment annuities are amortized primarily using the interest method. The
costs for universal life-type insurance and certain installment annuities are
amortized as a percentage of the estimated gross profits expected to be realized
on the policies. For traditional life, disability income and long-term care
insurance policies, the costs are amortized over an appropriate period in
proportion to premium revenue.
Amortization of deferred policy acquisition costs requires the use of
assumptions including interest margins, mortality margins, persistency rates,
maintenance expense levels and, for variable products, separate account
performance. For universal life-type insurance and deferred annuities, actual
experience is reflected in the Company's amortization models monthly. As actual
experience differs from the current assumptions, management considers the need
to change key assumptions underlying the amortization models prospectively. The
impact of changing prospective assumptions is reflected in the period that such
changes are made and is generally referred to as an unlocking adjustment. Net
unlocking adjustments in 1999, 1998 and 1997 were not significant.
LIABILITIES FOR FUTURE POLICY BENEFITS
Liabilities for universal-life type insurance and fixed and variable deferred
annuities are accumulation values.
Liabilities for equity indexed deferred annuities are determined as the present
value of guaranteed benefits and the intrinsic value of index-based benefits.
Liabilities for future benefits on traditional life insurance are based on the
net level premium method, using anticipated mortality, policy persistency and
interest earning rates. Anticipated mortality rates are based on established
industry mortality tables. Anticipated policy persistency rates vary by policy
form, issue age and policy duration with persistency on cash value plans
generally anticipated to be better than persistency on term insurance plans.
Anticipated interest rates range from 4% to 10%, depending on policy form, issue
year and policy duration.
Liabilities for future disability income and long-term care policy benefits
include both policy reserves and claim reserves. Policy reserves are based on
the net level premium method, using anticipated morbidity, mortality, policy
persistency and interest earning rates. Anticipated morbidity and mortality
rates are based on established industry morbidity and mortality tables.
Anticipated policy persistency rates vary by policy form, issue age, policy
duration and, for disability income policies, occupation class. Anticipated
interest rates for disability income and long-term care policy reserves are 3%
to 9.5% at policy issue and grade to ultimate rates of 5% to 7% over 4 to 10
years.
Claim reserves are calculated based on claim continuance tables and anticipated
interest earnings. Anticipated claim continuance rates are based on established
industry tables. Anticipated interest rates for claim reserves for both
disability income and long-term care range from 5% to 8%.
REINSURANCE
The maximum amount of life insurance risk retained by the Company is $750 on any
policy insuring a single life and $1,500 on any policy insuring a joint-life
combination. Risk not retained is reinsured with other life insurance companies,
primarily on a yearly renewable term basis. Long-term care policies are
primarily reinsured on a coinsurance basis. The Company retains all disability
income and waiver of premium risk. Beginning in 2000, the Company will retain
all accidental death benefit risk.
FEDERAL INCOME TAXES
The Company's taxable income is included in the consolidated federal income tax
return of American Express Company. The Company provides for income taxes on a
separate return basis, except that, under an agreement between AEFC and American
- --------------------------------------------------------------------------------
F-8 IDS LIFE INSURANCE COMPANY OF NEW YORK
<PAGE>
Express Company, tax benefit is recognized for losses to the extent they can be
used on the consolidated tax return. It is the policy of AEFC and its
subsidiaries that AEFC will reimburse subsidiaries for all tax benefits.
Included in other liabilities at December 31, 1999 and 1998 are $366, and
$3,647, respectively, payable to IDS Life for federal income taxes.
SEPARATE ACCOUNT BUSINESS
The separate account assets and liabilities represent funds held for the
exclusive benefit of the variable annuity and variable life insurance contract
owners. The Company receives mortality and expense risk fees from the variable
annuity separate accounts.
The Company makes contractual mortality assurances to the variable annuity
contract owners that the net assets of the separate accounts will not be
affected by future variations in the actual life expectancy experience of the
annuitants and beneficiaries from the mortality assumptions implicit in the
annuity contracts. The Company makes periodic fund transfers to, or withdrawals
from, the separate account assets for such actuarial adjustments for variable
annuities that are in the benefit payment period. The Company also guarantees
that the rates at which administrative fees are deducted from contract funds
will not exceed contractual maximums.
For variable life insurance, the Company guarantees that the rates at which
insurance charges and administrative fees are deducted from contract funds will
not exceed contractual maximums. The Company also guarantees that the death
benefit will continue payable at the initial level regardless of investment
performance so long as minimum premium payments are made.
ACCOUNTING CHANGES
American Institute of Certified Public Accountants (AICPA) Statement of Position
(SOP) 98-1, "Accounting for Costs of Computer Software Developed or Obtained for
Internal Use" became effective January 1, 1999. The SOP requires the
capitalization of certain costs incurred after the date of adoption to develop
or obtain software for internal use. Software utilized by the Company is owned
by AEFC and capitalized by AEFC. As a result, the new rule did not have a
material impact on the Company's results of operations or financial condition.
Effective January 1, 1999, the Company adopted AICPA SOP 97-3, "Accounting by
Insurance and Other Enterprises for Insurance-Related Assessments," providing
guidance for the timing of recognition of liabilities related to guaranty fund
assessments. The Company had historically carried a balance in other liabilities
on the balance sheet for potential guaranty fund assessment exposure. Adoption
of the SOP did not have a material impact on the Company's results of operations
or financial condition.
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments
and Hedging Activities," which is effective January 1, 2001. This Statement
establishes accounting and reporting standards for derivative instruments,
including certain derivative instruments embedded in other contracts, and for
hedging activities. It requires that an entity recognize all derivatives as
either assets or liabilities in the balance sheet and measure those instruments
at fair value. The accounting for changes in the fair value of a derivative
depends on the intended use of the derivative and the resulting designation. The
ultimate financial effect of the new rule will be measured based on the
derivatives in place at adoption and cannot be estimated at this time.
PERMITTED STATUTORY ACCOUNTING PRACTICES
The Company's statutory-basis financial statements are prepared in accordance
with accounting practices prescribed or permitted by the New York Insurance
Department. Currently, "prescribed" statutory practices are interspersed
throughout state insurance laws and regulations, the NAIC ACCOUNTING PRACTICES
AND PROCEDURES MANUAL and a variety of other NAIC publications. "Permitted"
- --------------------------------------------------------------------------------
IDS LIFE INSURANCE COMPANY OF NEW YORK F-9
<PAGE>
statutory accounting practices encompass all accounting practices that are not
prescribed: such practices may differ from state to state, may differ from
company to company within a state, and may change in the future.
In 1998, the NAIC adopted codified statutory accounting principles
("Codification") effective January 1, 2001. Codification will likely change, to
some extent, prescribed statutory accounting practices and may result in changes
to the accounting practices that the Company uses to prepare its statutory-basis
financial statements. Codification will require adoption by the various states
before it becomes the prescribed statutory basis of accounting for insurance
companies domesticated within those states. Accordingly, before Codification
becomes effective for the Company, the State of New York must adopt Codification
as the prescribed basis of accounting on which domestic insurers must report
their statutory-basis results to the Insurance Department. New York has not yet
made a decision regarding whether or not it will accept Codification. While
management has not yet determined the impact of Codification to the Company's
statutory-basis financial statements, it does not believe the impact will be
material.
RECLASSIFICATIONS
Certain 1998 and 1997 amounts have been reclassified to conform to the 1999
presentation.
2. INVESTMENTS
Fair values of investments in fixed maturities represent quoted market prices
and estimated values when quoted prices are not available. Estimated values are
determined by established procedures involving, among other things, review of
market indices, price levels of current offerings of comparable issues, price
estimates and market data from independent brokers and financial files.
The amortized cost, gross unrealized gains and losses and fair value of
investments in fixed maturities at December 31, 1999 are as follows:
<TABLE>
<CAPTION>
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED FAIR
HELD TO MATURITY COST GAINS LOSSES VALUE
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. Government agency
obligations $ 2,490 $ 20 $ 150 $ 2,360
Corporate bonds and
obligations 384,241 6,066 7,058 383,249
Mortgage-backed securities 47,612 103 1,320 46,395
- ----------------------------------------------------------------------------------------
$434,343 $ 6,189 $ 8,528 $432,004
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED FAIR
AVAILABLE FOR SALE COST GAINS LOSSES VALUE
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
State and municipal
obligations $ 104 $ 6 $ -- $ 110
Corporate bonds and
obligations 374,846 2,324 20,325 356,845
Mortgage-backed securities 204,064 580 6,025 198,619
- ----------------------------------------------------------------------------
$579,014 $ 2,910 $26,350 $555,574
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
F-10 IDS LIFE INSURANCE COMPANY OF NEW YORK
<PAGE>
The amortized cost, gross unrealized gains and losses and fair value of
investments in fixed maturities at December 31, 1998 are as follows:
<TABLE>
<CAPTION>
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED FAIR
HELD TO MATURITY COST GAINS LOSSES VALUE
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. Government agency
obligations $ 2,871 $ 159 $ -- $ 3,030
Corporate bonds and
obligations 417,648 29,795 474 446,969
Mortgage-backed securities 53,073 844 7 53,910
- ----------------------------------------------------------------------------
$473,592 $30,798 $ 481 $503,909
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED FAIR
AVAILABLE FOR SALE COST GAINS LOSSES VALUE
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
State and municipal
obligations $ 105 $ 9 $ -- $ 114
Corporate bonds and
obligations 336,985 15,939 6,296 346,628
Mortgage-backed securities 224,235 7,614 -- 231,849
- ----------------------------------------------------------------------------
$561,325 $23,562 $ 6,296 $578,591
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
</TABLE>
The amortized cost and fair value of investments in fixed maturities at December
31, 1999 by contractual maturity are shown below. Expected maturities will
differ from contractual maturities because borrowers may have the right to call
or prepay obligations with or without call or prepayment penalties.
<TABLE>
<CAPTION>
AMORTIZED FAIR
HELD TO MATURITY COST VALUE
- --------------------------------------------------------------------
<S> <C> <C> <C> <C>
Due in one year or less $ 14,966 $ 15,118
Due from one to five years 213,933 214,972
Due from five to ten years 111,707 111,314
Due in more than ten years 46,125 44,205
Mortgage-backed securities 47,612 46,395
- --------------------------------------------------------------------
$434,343 $432,004
- --------------------------------------------------------------------
- --------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
AMORTIZED FAIR
AVAILABLE FOR SALE COST VALUE
- --------------------------------------------------------------------
<S> <C> <C> <C> <C>
Due in one year or less $ 14,422 $ 14,657
Due from one to five years 37,204 37,477
Due from five to ten years 214,169 203,150
Due in more than ten years 109,155 101,671
Mortgage-backed securities 204,064 198,619
- --------------------------------------------------------------------
$579,014 $555,574
- --------------------------------------------------------------------
- --------------------------------------------------------------------
</TABLE>
During the years ended December 31, 1999, 1998 and 1997, fixed maturities
classified as held to maturity were sold with amortized cost of $790, $16,175
and $12,737, respectively. Net gains and losses on these sales were not
significant. The sale of these fixed maturities was due to significant
deterioration in the issuers' creditworthiness.
Fixed maturities available for sale were sold during 1999 with proceeds of
$89,683 and gross realized gains and losses of $1,917 and $625, respectively.
Fixed maturities available for sale were sold during 1998 with proceeds of
$13,180 and gross realized gains and
- --------------------------------------------------------------------------------
IDS LIFE INSURANCE COMPANY OF NEW YORK F-11
<PAGE>
losses of $1,159 and $440, respectively. Fixed maturities available for sale
were sold during 1997 with proceeds of $27,055 and gross realized gains and
losses of $461 and $309, respectively.
At December 31, 1999, bonds carried at $254 were on deposit with the state of
New York as required by law.
At December 31, 1999, investments in fixed maturities comprised 85 percent of
the Company's total invested assets. These securities are rated by Moody's and
Standard & Poor's (S&P), except for securities carried at approximately $147
million which are rated by AEFC internal analysts using criteria similar to
Moody's and S&P. A summary of investments in fixed maturities, at amortized
cost, by rating on December 31 is as follows:
<TABLE>
<CAPTION>
RATING 1999 1998
- ----------------------------------------------------------------
<S> <C> <C>
Aaa/AAA $ 250,577 $ 280,669
Aa/AA 12,992 15,815
Aa/A 25,489 16,327
A/A 150,187 151,838
A/BBB 68,417 68,640
Baa/BBB 354,331 366,776
Baa/BB 23,562 39,666
Below investment grade 127,802 95,186
- ----------------------------------------------------------------
$1,013,357 $1,034,917
- ----------------------------------------------------------------
- ----------------------------------------------------------------
</TABLE>
At December 31, 1999, 94 percent of the securities rated Aaa/AAA are GNMA, FNMA
and FHLMC mortgage-backed securities. No holdings of any other issuer are
greater than one percent of the Company's total investments in fixed maturities.
At December 31, 1999, approximately 13 percent of the Company's investments were
mortgage loans on real estate. Summaries of mortgage loans by region of the
United States and by type of real estate are as follows:
<TABLE>
<CAPTION>
DECEMBER 31, 1999 DECEMBER 31, 1998
ON BALANCE COMMITMENTS ON BALANCE COMMITMENTS
REGION SHEET TO PURCHASE SHEET TO PURCHASE
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
West North Central $ 22,686 $ -- $ 24,725 $ --
East North Central 25,195 -- 29,134 59
South Atlantic 31,748 -- 34,175 598
Middle Atlantic 17,672 -- 18,350 --
Pacific 6,751 -- 9,706 --
Mountain 35,608 -- 36,636 --
New England 8,209 -- 7,851 --
East South Central 7,394 -- 7,521 --
West South Central 0 -- 237 --
- --------------------------------------------------------------------------------
155,262 -- 168,335 657
Less allowance for losses 1,200 -- 1,500 --
- --------------------------------------------------------------------------------
$154,062 $ -- $166,835 $657
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
F-12 IDS LIFE INSURANCE COMPANY OF NEW YORK
<PAGE>
<TABLE>
<CAPTION>
DECEMBER 31, 1999 DECEMBER 31, 1998
ON BALANCE COMMITMENTS ON BALANCE COMMITMENTS
PROPERTY TYPE SHEET TO PURCHASE SHEET TO PURCHASE
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Apartments $ 54,118 $ -- $ 59,019 $ --
Department/retail stores 49,810 -- 54,018 624
Office buildings 22,090 -- 23,902 --
Industrial buildings 16,938 -- 18,590 33
Nursing/retirement 5,058 -- 5,153 --
Medical buildings 7,248 -- 7,416 --
Hotels/motels -- -- 237 --
- --------------------------------------------------------------------------------
155,262 -- 168,335 657
Less allowance for losses 1,200 -- 1,500 --
- --------------------------------------------------------------------------------
$154,062 $ -- $166,835 $657
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
Mortgage loan fundings are restricted by state insurance regulatory authority to
80 percent or less of the market value of the real estate at the time of
origination of the loan. The Company holds the mortgage document, which gives it
the right to take possession of the property if the borrower fails to perform
according to the terms of the agreement. The fair value of the mortgage loans is
determined by a discounted cash flow analysis using mortgage interest rates
currently offered for mortgages of similar maturities. Commitments to purchase
mortgages are made in the ordinary course of business. The fair value of the
mortgage commitments is $nil.
At December 31, 1999 and 1998, the Company's recorded investment in impaired
loans was $nil and $1,268, with allowances of $nil and $300, respectively.
During 1999 and 1998, the average recorded investment in impaired loans was $nil
and $1,282, respectively.
The Company recognized $2, $123 and $126 of interest income related to impaired
loans for the years ended December 31, 1999, 1998 and 1997, respectively.
The following table presents changes in the allowance for investment losses
related to all loans:
<TABLE>
<CAPTION>
1999 1998 1997
- -----------------------------------------------------------
<S> <C> <C> <C>
Balance, January 1 $1,500 $1,500 $1,300
Provision (reduction) for
investment losses (300) -- 200
- -----------------------------------------------------------
Balance, December 31 $1,200 $1,500 $1,500
- -----------------------------------------------------------
- -----------------------------------------------------------
</TABLE>
Net investment income for the years ended December 31 is summarized as follows:
<TABLE>
<CAPTION>
1999 1998 1997
- ----------------------------------------------------------------
<S> <C> <C> <C>
Interest on fixed maturities $78,342 $ 85,164 $ 92,007
Interest on mortgage loans 12,895 14,599 14,228
Other investment income 4,764 3,365 1,715
Interest on cash equivalents 350 64 91
- ----------------------------------------------------------------
96,351 103,192 108,041
Less investment expenses 837 2,321 1,767
- ----------------------------------------------------------------
$95,514 $100,871 $106,274
- ----------------------------------------------------------------
- ----------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
IDS LIFE INSURANCE COMPANY OF NEW YORK F-13
<PAGE>
Net realized gains (losses) on investments for the years ended December 31 is
summarized as follows:
<TABLE>
<CAPTION>
1999 1998 1997
- -----------------------------------------------------------
<S> <C> <C> <C>
Fixed maturities $1,086 $2,018 $ 844
Mortgage loans 300 -- (200)
Other investments -- 145 (97)
- -----------------------------------------------------------
$1,386 $2,163 $ 547
- -----------------------------------------------------------
- -----------------------------------------------------------
</TABLE>
Changes in net unrealized appreciation (depreciation) of investments for the
years ended December 31 are summarized as follows:
<TABLE>
<CAPTION>
1999 1998 1997
- --------------------------------------------------------------
<S> <C> <C> <C>
Fixed maturities available for sale $(40,706) $(3,347) $9,599
</TABLE>
3. INCOME TAXES
The Company qualifies as a life insurance company for federal income tax
purposes. As such, the Company is subject to the Internal Revenue Code
provisions applicable to life insurance companies.
The income tax expense (benefit) for the years ending December 31 consists of
the following:
<TABLE>
<CAPTION>
1999 1998 1997
- --------------------------------------------------------------
<S> <C> <C> <C>
Federal income taxes:
Current $16,426 $20,192 $16,371
Deferred 2,196 (2,369) (960)
- --------------------------------------------------------------
18,622 17,823 15,411
State income taxes-current 619 1,275 1,060
- --------------------------------------------------------------
Income tax expense $19,241 $19,098 $16,471
- --------------------------------------------------------------
- --------------------------------------------------------------
</TABLE>
Increases (decreases) to the income tax provision applicable to pretax income
based on the statutory rate are attributable to:
<TABLE>
<CAPTION>
1999 1998 1997
PROVISION RATE PROVISION RATE PROVISION RATE
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Federal income taxes
based on the statutory
rate $20,148 35.0% $19,406 35.0% $16,677 35.0%
Increases (decreases) are
attributable to:
Tax-excluded interest and
dividend income (509) (0.9) (660) (1.2) (569) (1.2)
State tax, net of federal
benefit 402 0.7 829 1.5 689 1.4
Other, net (800) (1.4) (477) (0.9) (326) (0.6)
- -------------------------------------------------------------------------------
Total income taxes $19,241 33.4% $19,098 34.4% $16,471 34.6%
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
</TABLE>
A portion of life insurance company income earned prior to 1984 was not subject
to current taxation but was accumulated, for tax purposes, in a "policyholders'
surplus account." At December 31, 1999, the Company had a policyholders' surplus
account balance of $798. The policyholders' surplus account is only taxable if
dividends to the stockholder exceed the stockholder's surplus account or if the
Company is liquidated. Deferred income taxes of $279 have not been established
because no distributions of such amounts are contemplated.
- --------------------------------------------------------------------------------
F-14 IDS LIFE INSURANCE COMPANY OF NEW YORK
<PAGE>
Significant components of the Company's deferred income tax assets and
liabilities as of December 31 are as follows:
<TABLE>
<CAPTION>
1999 1998
- ----------------------------------------------------------
<S> <C> <C>
Deferred income tax assets:
Policy reserves $28,245 $29,318
Investments 6,980 --
Other 6,690 6,502
- ----------------------------------------------------------
Total deferred income tax assets 41,915 35,820
- ----------------------------------------------------------
- ----------------------------------------------------------
Deferred income tax liabilities:
Deferred policy acquisition costs 38,033 36,673
Investments -- 7,059
- ----------------------------------------------------------
Total deferred income tax liabilities 38,033 43,732
- ----------------------------------------------------------
Net deferred income tax assets
(liabilities) $ 3,882 ($7,912)
- ----------------------------------------------------------
- ----------------------------------------------------------
</TABLE>
The Company is required to establish a valuation allowance for any portion of
the deferred income tax assets that management believes will not be realized. In
the opinion of management, it is more likely than not that the Company will
realize the benefit of the deferred tax assets and, therefore, no such valuation
allowance has been established.
4. STOCKHOLDER'S EQUITY
Retained earnings available for distribution as dividends to IDS Life are
limited to the Company's surplus as determined in accordance with accounting
practices prescribed by the New York Department of Insurance. All dividend
distributions must be approved by the New York Department of Insurance.
Statutory unassigned surplus aggregated $155,952 and $132,702 as of
December 31, 1999 and 1998, respectively (see Note 3 with respect to the income
tax effect of certain distributions and Note 11 for a reconciliation of net
income and stockholder's equity per the accompanying financial statements to
statutory net income and surplus).
BENEFIT PLANS
The Company participates in the American Express Company Retirement Plan which
covers all permanent employees age 21 and over who have met certain employment
requirements. Employer contributions to the plan are based on participants' age,
years of service and total compensation for the year. Funding of retirement
costs for this plan complies with the applicable minimum funding requirements
specified by ERISA. The Company's share of the total net periodic pension cost
was $27, $37 and $39 in 1999, 1998 and 1997, respectively.
The Company has a "Sales Benefit Plan" which is an unfunded, noncontributory
retirement plan for all eligible financial advisors. Total plan costs for 1999,
1998 and 1997, which are calculated on the basis of commission earnings of the
individual financial advisors, were $1,446, $1,480 and $1,965, respectively.
Such costs are included in deferred policy acquisition costs.
The Company also participates in defined contribution pension plans of American
Express Company which cover all employees who have met certain employment
requirements. Company contributions to the plans are a percent of either each
employee's eligible compensation or basic contributions. Costs of these plans
charged to operations in 1999, 1998 and 1997 were $218, $252 and $312,
respectively.
- --------------------------------------------------------------------------------
IDS LIFE INSURANCE COMPANY OF NEW YORK F-15
<PAGE>
The Company participates in defined benefit health care plans of AEFC that
provide health care and life insurance benefits to retired employees and retired
financial advisors. The plans include participant contributions and
service-related eligibility requirements. Upon retirement, such employees are
considered to have been employees of AEFC. Costs of these plans charged to
operations in 1999, 1998 and 1997 were $nil.
6. INCENTIVE PLAN AND RELATED PARTY OPERATING EXPENSES
The Company maintains a "Persistency Payment Plan." Under the terms of this
plan, financial advisors earn additional compensation based on the volume and
persistency of insurance sales. The total costs for the plan for 1999, 1998 and
1997 were $96, $140 and $1,490, respectively. Such costs are included in
deferred policy acquisition costs.
Charges by IDS Life and AEFC for the use of joint facilities, marketing services
and other services aggregated $13,042, $9,403 and $11,589 for 1999, 1998 and
1997, respectively. Certain of these costs are included in deferred policy
acquisition costs.
7. COMMITMENTS AND CONTINGENCIES
In January 2000, AEFC reached an agreement in principle to settle three
class-action lawsuits. The Company had been named as a co-defendant in one of
these lawsuits. It is expected the settlement will provide $215 million of
benefits to more than 2 million participants. The agreement in principle to
settle also provides for release by class members of all insurance and annuity
market conduct claims dating back to 1985 and is subject to a number of
contingencies including a definitive agreement and court approval. The portion
of the settlement allocated to the Company did not have a material impact on the
Company's financial position or results from operations.
At December 31, 1999 and 1998, traditional life insurance and universal
life-type insurance in force aggregated $5,448,451 and $4,941,727 respectively,
of which $272,276 and $248,280 were reinsured at the respective year ends.
In addition, the Company has a stop loss reinsurance agreement with IDS Life
covering ordinary life benefits. IDS Life agrees to pay all death benefits
incurred each year which exceed 125 percent of normal claims, where normal
claims are defined in the agreement as .095 percent of the mean retained life
insurance in force. Premiums ceded to IDS Life amounted to $150, $134 and $115
for the years ended December 31, 1999, 1998 and 1997, respectively. Claim
recoveries under the terms of this reinsurance agreement were $nil, $nil and
$963 in 1999, 1998 and 1997, respectively.
Premiums ceded to reinsurers other than IDS Life amounted to $2,873, $2,178 and
$1,583 for the years ended December 31, 1999, 1998 and 1997, respectively. Claim
recoveries from reinsurers other than IDS Life amounted to $473, $228 and $1,366
for the years ended December 31, 1999, 1998 and 1997, respectively.
Reinsurance contracts do not relieve the Company from its primary obligations to
policyholders.
The Company has an agreement to assume a block of extended term life insurance
business. The amount of insurance in force related to this agreement was
$237,038 and $267,806 at December 31, 1999 and 1998, respectively. The
accompanying statement of income includes premiums of $nil for the years ended
December 31, 1999, 1998 and 1997, and decreases in liabilities for future policy
benefits of $1,277, $1,742 and $1,889 related to this agreement for the years
ended December 31, 1999, 1998 and 1997, respectively.
- --------------------------------------------------------------------------------
F-16 IDS LIFE INSURANCE COMPANY OF NEW YORK
<PAGE>
8. LINES OF CREDIT
The Company has an available line of credit with AEFC aggregating $25,000. The
interest rate for any borrowing is established by reference to various indicies
plus 20 to 45 basis points depending on the term. There were no borrowings
outstanding under this agreement at December 31, 1999 or 1998.
9. DERIVATIVE FINANCIAL INSTRUMENTS
The Company enters into transactions involving derivative financial instruments
to manage its exposure to interest rate risk, including hedging specific
transactions. The Company does not hold derivative instruments for trading
purposes. The Company manages risks associated with these instruments as
described below.
Market risk is the possibility that the value of the derivative financial
instruments will change due to fluctuations in a factor from which the
instrument derives its value, primarily an interest rate. The Company is not
impacted by market risk related to derivatives held for non-trading purposes
beyond that inherent in cash market transactions. Derivatives are largely used
to manage risk and, therefore, the cash flow and income effects of the
derivatives are inverse to the effects of the underlying transactions.
Credit risk is the possibility that the counterparty will not fulfill the terms
of the contract. The Company monitors credit risk related to derivative
financial instruments through established approval procedures, including setting
concentration limits by counterparty and industry, and requiring collateral,
where appropriate. The Company's counterpart is rated A or better by Moody's and
Standard & Poor's.
Credit risk related to interest rate caps is measured by replacement cost of the
contracts. The replacement cost represents the fair value of the instruments.
The notional or contract amount of a derivative financial instrument is
generally used to calculate the cash flows that are received or paid over the
life of the agreement. Notional amounts are not recorded on the balance sheet.
Notional amounts far exceed the related credit exposure.
The Company's holdings of derivative financial instruments are as follows:
<TABLE>
<CAPTION>
NOTIONAL CARRYING FAIR TOTAL CREDIT
DECEMBER 31, 1999 AMOUNT AMOUNT VALUE EXPOSURE
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Assets:
Interest rate caps $200,000 $ -- $ -- $ --
- ------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31, 1998
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Assets:
Interest rate caps $200,000 $566 $ 2 $ 2
- ------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------
</TABLE>
The fair values of derivative financial instruments are based on market values,
dealer quotes or pricing models. The interest rate caps expire in the year 2000.
Interest rate caps are used to manage the Company's exposure to interest rate
risk. These instruments are used primarily to protect the margin between
interest rates earned on investments and the interest rates credited to related
annuity contract holders.
- --------------------------------------------------------------------------------
IDS LIFE INSURANCE COMPANY OF NEW YORK F-17
<PAGE>
10. FAIR VALUES OF FINANCIAL INSTRUMENTS
The Company discloses fair value information for most on- and off-balance sheet
financial instruments for which it is practicable to estimate that value. Fair
values of life insurance obligations, receivables and all non-financial
instruments, such as deferred acquisition costs, are excluded. Off-balance sheet
intangible assets, such as the value of the field force, are also excluded.
Management believes the value of excluded assets and liabilities is significant.
The fair value of the Company, therefore, cannot be estimated by aggregating the
amounts presented.
<TABLE>
<CAPTION>
1999 1998
CARRYING FAIR CARRYING FAIR
FINANCIAL ASSETS AMOUNT VALUE AMOUNT VALUE
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investments:
Fixed maturities (Note 2):
Held to maturity $ 434,343 $ 432,004 $ 473,592 $ 503,909
Available for sale 555,574 555,574 578,591 578,591
Mortgage loans on real
estate (Note 2) 154,062 152,942 166,835 178,559
Other:
Derivative financial
instruments (Note 9) -- -- 566 2
Separate accounts assets
(Note 1) 1,957,703 1,957,703 1,491,679 1,491,679
</TABLE>
<TABLE>
<CAPTION>
1999 1998
CARRYING FAIR CARRYING FAIR
FINANCIAL LIABILITIES AMOUNT VALUE AMOUNT VALUE
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Future policy benefits for
fixed annuities $ 732,752 $ 715,213 $ 788,780 $ 765,430
Separate account liabilities 1,722,028 1,668,067 1,355,430 1,302,422
</TABLE>
At December 31, 1999 and 1998, the carrying amount and fair value of future
policy benefits for fixed annuities exclude life insurance-related contracts
carried at $83,646 and $81,358, respectively, and policy loans of $5,594 and
$5,369, respectively. The fair value of these benefits is based on the status of
the annuities at December 31, 1999 and 1998. The fair value of deferred
annuities is estimated as the carrying amount less any surrender charges and
related loans. The fair value for annuities in non-life contingent payout status
is estimated as the present value of projected benefit payments at rates
appropriate for contracts issued in 1999 and 1998.
At December 31, 1999 and 1998, the fair value of liabilities related to separate
accounts is estimated as the carrying amount less applicable surrender charges
and less variable insurance contracts carried at $235,675 and $136,249,
respectively.
- --------------------------------------------------------------------------------
F-18 IDS LIFE INSURANCE COMPANY OF NEW YORK
<PAGE>
11. STATUTORY INSURANCE ACCOUNTING PRACTICES
Reconciliations of net income for the years ended December 31 and stockholder's
equity at December 31, as shown in the accompanying financial statements, to
that determined using statutory accounting practices are as follows:
<TABLE>
<CAPTION>
1999 1998 1997
- -----------------------------------------------------------------
<S> <C> <C> <C>
Net income, per accompanying
financial statements $ 38,324 $ 36,348 $ 31,178
Deferred policy acquisition costs (6,015) (2,841) (7,432)
Adjustments of future policy
benefit liabilities (4,615) (6,199) (4,928)
Deferred income tax benefit 2,196 (2,369) (960)
Provision for losses on investments (161) 862 296
IMR gain/loss transfer and
amortization (154) (1,451) (119)
Adjustment to separate account
reserves 5,498 2,767 10,267
Other, net 766 (350) 430
- -----------------------------------------------------------------
Net income, on basis of statutory
accounting practices $ 35,839 $ 26,767 $ 28,732
- -----------------------------------------------------------------
- -----------------------------------------------------------------
Stockholder's equity, per
accompanying financial statements $279,810 $279,466 $257,279
Deferred policy acquisition costs (136,229) (129,477) (126,614)
Adjustments of future policy
benefit liabilities 2,845 4,697 9,452
Deferred income taxes (3,881) 7,912 11,445
Asset valuation reserve (16,164) (15,516) (16,698)
Adjustments of separate account
liabilities 61,721 56,223 53,456
Adjustments of investments to
amortized cost 23,440 (17,266) (20,613)
Premiums due, deferred and advance 1,485 1,381 1,237
Deferred revenue liability 3,021 2,482 1,941
Allowance for losses 1,200 1,500 1,645
Non-admitted assets (421) (450) (552)
Interest maintenance reserve (3,155) (3,001) (1,551)
Other, net (5,416) (2,915) (1,463)
- -----------------------------------------------------------------
Stockholder's equity, on basis of
statutory accounting practices $208,256 $185,036 $168,963
- -----------------------------------------------------------------
- -----------------------------------------------------------------
</TABLE>
12. YEAR 2000 (UNAUDITED)
The Year 2000 issue is the result of computer programs having been written using
two digits rather than four to define a year. Any programs that have
time-sensitive software may recognize a date using "00" as the year 1900 rather
than 2000. This could result in the failure of major systems or miscalculations,
which could have a material impact on the operations of the Company. All of the
major systems used by the Company are maintained by AEFC and are utilized by
multiple subsidiaries and affiliates of AEFC. The Company's businesses are
heavily dependent upon AEFC's computer systems and have significant interaction
with systems of third parties.
A comprehensive review of AEFC's computer systems and business processes,
including those specific to the Company, was conducted to identify the major
systems that could be affected by the Year 2000 issue. Steps were taken to
resolve potential problems including modification to existing software and the
purchase of new software. As of December 31, 1999, AEFC had completed its
program of corrective measures on its internal systems and applications,
including Year 2000 compliance testing. As of December 31, 1999, AEFC had also
completed an evaluation of the Year 2000 readiness of other third parties whose
system failures could have an impact on the Company's operations.
- --------------------------------------------------------------------------------
IDS LIFE INSURANCE COMPANY OF NEW YORK F-19
<PAGE>
AEFC's Year 2000 project also included establishing Year 2000 contingency plans
for all key business units. Business continuation plans, which address business
continuation in the event of a system disruption, are in place for all key
business units. At December 31, 1999, these plans had been amended to include
specific Year 2000 considerations.
In assessing its Year 2000 initiatives and the results of actual production
since January 1, 2000, management believes no material adverse consequences were
experienced, and there was no material effect on the Company's business, results
of operations, or financial condition as a result of the Year 2000 issue.
- --------------------------------------------------------------------------------
F-20 IDS LIFE INSURANCE COMPANY OF NEW YORK
<PAGE>
PART C.
Item 24. Financial Statements and Exhibits
(a) Financial Statements included in Part B of this Registration Statement.
IDS Life of New York Accounts 4, 5, 6, 9, 10, 11, 12, 13 and 14:
Statements of Net Assets at Dec. 31, 1999.
Statements of Operations for the year ended Dec. 31, 1999.
Statements of Changes in Net Assets for the years ended Dec. 31, 1999
and Dec. 31, 1998.
Notes to Financial Statements.
Report of Independent Auditors dated March 17, 2000.
IDS Life Insurance Company of New York.
Balance Sheets at Dec. 31, 1999 and 1998;
Statements of Income for the years ended Dec. 31, 1999, 1998, and 1997;
Statements of Cash Flows for the years ended Dec. 31, 1999, 1998, and
1997; Notes to Financial Statements. Report of Independent Auditors
dated February 3, 2000.
(b) Exhibits:
1.1 Resolution of the Executive Committee of the Board of Directors of IDS
Life of New York establishing Accounts C, D, E, F, G, H dated November
12, 1981, filed electronically as Exhibit 1.1 to Registration Statement
No. 33-52567, is incorporated herein by reference.
1.2 Resolution of the Executive Committee of the Board of Directors of IDS
Life of New York establishing Account 9 on Feb. 12, 1986, filed
electronically as Exhibit 1.2 to Registration Statement No. 33-52567,
is incorporated herein by reference.
1.3 Resolution of the Board of Directors of IDS Life Insurance Company of
New York establishing Accounts 10 and 11 on Oct. 8, 1991, filed
electronically as Exhibit 1.3 to Registration Statement No. 33-52567,
is incorporated herein by reference.
1.4 Consent in Writing in Lieu of Meeting of Board of directors of IDS Life
Insurance Company of New York establishing Accounts 12, 13 and 14 on
April 17, 1996, filed electronically as Exhibit 1.4 to Registration
Statement No. 33-52567, is incorporated herein by reference.
2. Not applicable.
3. Form of Variable Annuity and Life Insurance Distribution Agreement
filed electronically as Exhibit 3 to Registration Statement No.
33-52567, is incorporated herein by reference.
4.1 Copy of form of Group Deferred Annuity Contract (form 38607) filed
electronically as Exhibit 4.1 to Registration Statement No. 33-52567,
is incorporated herein by reference.
4.2 Copy of form of Group Deferred Annuity Participant Certificate (form
38611) filed electronically as Exhibit 4.2 to Registration Statement
No. 33-52567, is incorporated herein by reference.
<PAGE>
5.1 Copy of form of Employee Benefit Annuity Master Application for Group
Deferred Annuity Contract (form 38608 A), filed electronically as
Exhibit 5.1 to Post-Effective Amendment No. 1 to Registration Statement
No. 33-52567, is incorporated herein by reference.
5.2 Copy of form of Participant Enrollment Form (for Employee Benefit
Annuity) (form 38609 A), filed electronically as Exhibit 5.2 to
Post-Effective Amendment No. 1 to Registration Statement No. 33-52567,
is incorporated herein by reference.
6.1 Copy of the Revised Charter of IDS Life of New York, dated April, 1992,
filed electronically as Exhibit 6.1 to Registration Statement No.
33-52567, is incorporated herein by reference.
6.2 Copy of Amended By-Laws of IDS Life of New York, dated May, 1992, filed
electronically as Exhibit 6.2 to Registration Statement No. 33-52567,
is incorporated herein by reference.
7. Not applicable.
8. Not applicable.
9. Opinion of counsel and consent to its use as to the legality of the
securities being registered, filed electronically herewith.
10. Consent of Independent Auditors, filed electronically herewith.
11. None.
12. Not applicable.
13. Copy of schedule for computation of each performance quotation provided
in the Registration Statement in response to Item 21, filed
electronically as Exhibit 13 to Pre-Effective Amendment No. 1 to
Registration Statement No. 33-52567, is incorporated herein by
reference.
14. Power of Attorney to sign Amendments to this Registration Statement,
dated April 14, 1999, filed electronically as Exhibit 14 to
Post-Effective Amendment No. 7 to Registration Statement No. 33-52567,
is incorporated herein by reference.
<PAGE>
<TABLE>
<CAPTION>
Item 25. Directors and Officers of the Depositor (IDS Life Insurance Company of New York)
<S> <C> <C>
Name Principal Business Address Positions and Offices with Depositor
- ------------------------------------- ----------------------------------------- -------------------------------------
Timothy V. Bechtold 200 AXP Financial Center Director and President
Minneapolis, MN 55474
Maureen A. Buckley 20 Madison Ave. Extension Director, Vice President, Chief
Albany, NY Operating Officer and Consumer
Affairs Officer
Rodney P. Burwell Xerxes Corporation Director
790 Xerxes Ave. So.
Minneapolis, MN
John R. Cattau 20 Madison Ave. Extension Director
Albany, NY
James E. Choat 200 AXP Financial Center Executive Vice President,
Minneapolis, MN 55474 Institutional Products Group
Robert R. Grew 20 Madison Avenue Extension Director
Albany, NY
Lorraine R. Hart 200 AXP Financial Center Vice President, Investments
Minneapolis, MN 55474
Jeffrey S. Horton 200 AXP Financial Center Vice President and Treasurer
Minneapolis, MN 55474
Jean B. Keffeler 3424 Zenith Ave. So. Director
Minneapolis, MN
Richard W. Kling 200 AXP Financial Center Director and Chairman of the Board
Minneapolis, MN 55474
Bruce A. Kohn 200 AXP Financial Center Counsel and Assistant Secretary
Minneapolis, MN 55474
Eric L. Marhoun 200 AXP Financial Center General Counsel and Secretary
Minneapolis, MN 55474
Thomas R. McBurney 1700 Foshay Tower Director
821 Marquette Ave.
Minneapolis, MN
Mary Ellyn Minenko 200 AXP Financial Center Counsel and Assistant Secretary
Minneapolis, MN 55474
Edward J. Muhl 200 AXP Financial Center Director
Minneapolis, MN 55474
Thomas V. Nicolosi Suite 220 Director
500 Mamaroneck Avenue
Harrison, NY 10528
Stephen P. Norman World Financial Center Director
New York, NY
<PAGE>
Richard M. Starr 20 Madison Avenue Extension Director
Albany, NY
William A. Stoltzmann 200 AXP Financial Center Counsel and Assistant Secretary
Minneapolis, MN 55474
Philip C. Wentzel 200 AXP Financial Center Vice President and Controller, Risk
Minneapolis, MN 55474 Management
Michael R. Woodward 20 Madison Avenue Extension Director
Albany, NY
</TABLE>
Item 26. Persons Controlled by or Under Common Control with the
Depositor or Registrant
IDS Life Insurance Company of New York is a wholly-owned
subsidiary of IDS Life Insurance Company which is a
wholly-owned subsidiary of American Express Financial
Corporation. American Express Financial Corporation is a
wholly-owned subsidiary of American Express Company (American
Express).
The following list includes the names of major subsidiaries of
American Express.
<TABLE>
<CAPTION>
<S> <C>
Jurisdiction of
Name of Subsidiary Incorporation
I. Travel Related Services
American Express Travel Related Services Company, Inc. New York
II. International Banking Services
American Express Bank Ltd. Connecticut
III. Companies engaged in Financial Services
Advisory Capital Partners LLC Delaware
Advisory Capital Strategies Group Inc. Minnesota
American Centurion Life Assurance Company New York
American Enterprise Investment Services Inc. Minnesota
American Enterprise Life Insurance Company Indiana
American Express Asset Management Group Inc. Minnesota
American Express Asset Management International Inc. Delaware
American Express Asset Management International (Japan) Ltd. Japan
American Express Asset Management Ltd. England
American Express Client Service Corporation Minnesota
American Express Corporation Delaware
American Express Financial Advisors Inc. Delaware
American Express Financial Advisors Japan Inc. Delaware
American Express Financial Corporation Delaware
American Express Insurance Agency of Arizona Inc. Arizona
American Express Insurance Agency of Idaho Inc. Idaho
American Express Insurance Agency of Nevada Inc. Nevada
American Express Insurance Agency of Oregon Inc. Oregon
American Express Minnesota Foundation Minnesota
<PAGE>
American Express Property Casualty Insurance Agency of Kentucky Inc. Kentucky
American Express Property Casualty Insurance Agency of Maryland Inc. Maryland
American Express Property Casualty Insurance Agency of Mississippi Inc. Mississippi
American Express Property Casualty Insurance Agency of Pennsylvania Inc. Pennsylvania
American Express Trust Company Minnesota
American Partners Life Insurance Company Arizona
IDS Cable Corporation Minnesota
IDS Cable II Corporation Minnesota
IDS Capital Holdings Inc. Minnesota
IDS Certificate Company Delaware
IDS Futures Brokerage Group Minnesota
IDS Futures Corporation Minnesota
IDS Insurance Agency of Alabama Inc. Alabama
IDS Insurance Agency of Arkansas Inc. Arkansas
IDS Insurance Agency of Massachusetts Inc. Massachusetts
IDS Insurance Agency of Mississippi Ltd. Mississippi
IDS Insurance Agency of New Mexico Inc. New Mexico
IDS Insurance Agency of North Carolina Inc. North Carolina
IDS Insurance Agency of Ohio Inc. Ohio
IDS Insurance Agency of Texas Inc. Texas
IDS Insurance Agency of Utah Inc. Utah
IDS Insurance Agency of Wyoming Inc. Wyoming
IDS Life Insurance Company Minnesota
IDS Life Insurance Company of New York New York
IDS Management Corporation Minnesota
IDS Partnership Services Corporation Minnesota
IDS Plan Services of California, Inc. Minnesota
IDS Property Casualty Insurance Company Wisconsin
IDS Real Estate Services, Inc. Delaware
IDS Realty Corporation Minnesota
IDS Sales Support Inc. Minnesota
Investors Syndicate Development Corp. Nevada
Public Employee Payment Company Minnesota
</TABLE>
Item 27. Number of Contractowners
On March 31, 2000, there were 2,296 contract owners of the IDS
Life of New York Employee Benefit Annuity.
Item 28. Indemnification
The By-Laws of the depositor provide that it shall indemnify
any person who was or is a party or is threatened to be made a
party, by reason of the fact that he is or was a director,
officer, employee or agent of this Corporation, or is or was
serving at the direction of the Corporation as a director,
officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, to any
threatened, pending or completed action, suit or proceeding,
wherever brought, to the fullest extent permitted by the laws
of the State of Minnesota, as now existing or hereafter
amended, provided that this Article shall not indemnify or
protect any such director, officer, employee or agent against
any liability to the Corporation or its security holders to
which he would otherwise be subject by reason of willful
misfeasance, bad faith, or gross negligence, in the
performance of his duties or by reason of his reckless
disregard of his obligations and duties.
<PAGE>
Insofar as indemnification for liability arising under the
Securities Act of 1933 may be permitted to director, officers
and controlling persons of the registrant pursuant to the
foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such
liabilities (other than the payment by the registrant of
expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense
of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it
is against public policy as expressed in the Act and will be
governed by the final adjudication of such issue.
Item 29. Principal Underwriters.
(a) American Express Financial Advisors acts as principal underwriter for the
following investment companies:
AXP Bond Fund, Inc.; AXP California Tax-Exempt Trust; AXP Discovery
Fund, Inc.; AXP Equity Select Fund, Inc.; AXP Extra Income Fund, Inc.;
AXP Federal Income Fund, Inc.; AXP Global Series, Inc.; AXP Growth
Series, Inc.; AXP High Yield Tax-Exempt Fund, Inc.; AXP International
Fund, Inc.; AXP Investment Series, Inc.; AXP Managed Series, Inc.; AXP
Market Advantage Series, Inc.; AXP Money Market Series, Inc.; AXP New
Dimensions Fund, Inc.; AXP Precious Metals Fund, Inc.; AXP Progressive
Fund, Inc.; AXP Selective Fund, Inc.; AXP Special Tax-Exempt Series
Trust; AXP Stock Fund, Inc.; AXP Strategy Series, Inc.; AXP Tax-Exempt
Series, Inc.; AXP Tax-Free Money Fund, Inc.; AXP Utilities Income Fund,
Inc., Growth Trust; Growth and Income Trust; Income Trust; Tax-Free
Income Trust; World Trust; IDS Certificate Company; Strategist Income
Fund, Inc.; Strategist Growth Fund, Inc.; Strategist Growth and Income
Fund, Inc.; Strategist World Fund, Inc. and Strategist Tax-Free Income
Fund, Inc.
(b) As to each director, officer or partner of the principal underwriter:
Name and Principal Business Address Position and Offices with
Underwriter
- ------------------------------------- -----------------------------------
Ronald. G. Abrahamson Vice President - Business
200 AXP Financial Center Transformation
Minneapolis, MN 55474
Douglas A. Alger Senior Vice President - Human
200 AXP Financial Center Resources
Minneapolis, MN 55474
Peter J. Anderson Senior Vice President -
200 AXP Financial Center Investment Operations
Minneapolis, MN 55474
Ward D. Armstrong Senior Vice President -
200 AXP Financial Center Retirement Services
Minneapolis, MN 55474
John M. Baker Vice President - Plan Sponsor
200 AXP Financial Center Services
Minneapolis, MN 55474
<PAGE>
Joseph M. Barsky, III Vice President - Mutual Fund
200 AXP Financial Center Equities
Minneapolis, MN 55474
Timothy V. Bechtold Vice President - Risk Management
200 AXP Financial Center Products
Minneapolis, MN 55474
John D. Begley Group Vice President -
Suite 100 Ohio/Indiana
7760 Olentangy River Rd.
Columbus, OH 43235
Brent L. Bisson Group Vice President - Los
Suite 900 Angeles Metro
E. Westside Twr
11835 West Olympic Blvd.
Los Angeles, CA 90064
John C. Boeder Vice President - Nonproprietary
200 AXP Financial Center Products
Minneapolis, MN 55474
Walter K. Booker Group Vice President - New Jersey
200 AXP Financial Center
Minneapolis, MN 55474
Bruce J. Bordelon Group Vice President - San
1333 N. California Blvd., Suite 200 Francisco Bay Area
Walnut Creek, CA 94596
Charles R. Branch Group Vice President - Northwest
Suite 200
West 111 North River Dr.
Spokane, WA 99201
<PAGE>
Douglas W. Brewers Vice President - Sales Support
200 AXP Financial Center
Minneapolis, MN 55474
Karl J. Breyer Corporate Senior Vice President
200 AXP Financial Center
Minneapolis, MN 55474
Cynthia M. Carlson Vice President - American Express
200 AXP Financial Center Securities Services
Minneapolis, MN 55474
Mark W. Carter Senior Vice President and Chief
200 AXP Financial Center Marketing Officer
Minneapolis, MN 55474
James E. Choat Senior Vice President - Third
200 AXP Financial Center Party Distribution
Minneapolis, MN 55474
Kenneth J. Ciak Vice President and General
IDS Property Casualty Manager - IDS Property Casualty
1400 Lombardi Avenue
Green Bay, WI 54304
<PAGE>
Paul A. Connolly Vice President - Advisor
200 AXP Financial Center Staffing, Training and Support
Minneapolis, MN 55474
Henry J. Cormier Group Vice President - Connecticut
Commerce Center One
333 East River Drive
East Hartford, CT 06108
John M. Crawford Group Vice President -
Suite 200 Arkansas/Springfield/Memphis
10800 Financial Ctr Pkwy
Little Rock, AR 72211
Kevin F. Crowe Group Vice President -
Suite 312 Carolinas/Eastern Georgia
7300 Carmel Executive Pk
Charlotte, NC 28226
Colleen Curran Vice President and Assistant
200 AXP Financial Center General Counsel
Minneapolis, MN 55474
Luz Maria Davis Vice President - Communications
200 AXP Financial Center
Minneapolis, MN 55474
Arthur E. DeLorenzo Group Vice President - Upstate
4 Atrium Drive, #100 New York
Albany, NY 12205
Scott M. DiGiammarino Group Vice President -
Suite 500 Washington/Baltimore
8045 Leesburg Pike
Vienna, VA 22182
Bradford L. Drew Group Vice President - Eastern
Two Datran Center Florida
Penthouse One B
9130 S. Dadeland Blvd.
Miami, FL 33156
Douglas K. Dunning Vice President - Assured Assets
200 AXP Financial Center Product Development and Management
Minneapolis, MN 55474
James P. Egge Group Vice President - Western
4305 South Louise, Suite 202 Iowa, Nebraska, Dakotas
Sioux Falls, SD 57103
Gordon L. Eid Senior Vice President, General
200 AXP Financial Center Counsel and Chief Compliance
Minneapolis, MN 55474 Officer
Robert M. Elconin Vice President - Government
200 AXP Financial Center Relations
Minneapolis, MN 55474
<PAGE>
Phillip W. Evans, Group Vice President - Rocky
Suite 600 Mountain
6985 Union Park Center
Midvale, UT 84047-4177
Gordon M. Fines Vice President - Mutual Fund
200 AXP Financial Center Equity Investments
Minneapolis, MN 55474
Douglas L. Forsberg Vice President - International
200 AXP Financial Center
Minneapolis, MN 55474
Jeffrey P. Fox Vice President and Corporate
200 AXP Financial Center Controller
Minneapolis, MN 55474
William P. Fritz Group Vice President - Gateway
Suite 160
12855 Flushing Meadows Dr.
St. Louis, MO 63131
Carl W. Gans Group Vice President - Twin City
8500 Tower Suite 1770 Metro
8500 Normandale Lake Blvd.
Bloomington, MN 55437
Peter A. Gallus Vice President-Investment
200 AXP Financial Center Administration
Minneapolis, MN 55474
Derek G. Gledhill Vice President - Integrated
200 AXP Financial Center Financial Services Field
Minneapolis, MN 55474 Implementation
David A. Hammer Vice President and Marketing
200 AXP Financial Center Controller
Minneapolis, MN 55474
Teresa A. Hanratty Senior Vice President-Field
Suites 6&7 Management
169 South River Road
Bedford, NH 03110
Robert L. Harden Group Vice President - Boston
Two Constitution Plaza Metro
Boston, MA 02129
Lorraine R. Hart Vice President - Insurance
200 AXP Financial Center Investments
Minneapolis, MN 55474
Scott A. Hawkinson Vice President and Controller -
200 AXP Financial Center Private Client Group
Minneapolis, MN 55474
Brian M. Heath Senior Vice President and General
Suite 150 Sales Manager
801 E. Campbell Road
Richardson, TX 75081
<PAGE>
Janis K. Heaney Vice President - Incentive
200 AXP Financial Center Management
Minneapolis, MN 55474
Jon E. Hjelm Group Vice President - Rhode
310 Southbridge Street Island/Central - Western
Auburn, MA 01501 Massachusetts
David J. Hockenberry Group Vice President - Tennessee
30 Burton Hills Blvd. Valley
Suite 175
Nashville, TN 37215
Jeffrey S. Horton Vice President and Treasurer
200 AXP Financial Center
Minneapolis, MN 55474
David R. Hubers Chairman, President and Chief
200 AXP Financial Center Executive Officer
Minneapolis, MN 55474
Debra A. Hutchinson Vice President - Relationship
200 AXP Financial Center Leader
Minneapolis, MN 55474
James M. Jensen Vice President and
200 AXP Financial Center Controller-Advice and Retail
Minneapolis, MN 55474 Distribution Group
Marietta L. Johns Senior Vice President - Field
200 AXP Financial Center Management
Minneapolis, MN 55474
Nancy E. Jones Vice President - Business
200 AXP Financial Center Development
Minneapolis, MN 55474
Ora J. Kaine Vice President - Financial
200 AXP Financial Center Advisory Services
Minneapolis, MN 55474
Linda B. Keene Vice President - Market
200 AXP Financial Center Development
Minneapolis, MN 55474
G. Michael Kennedy Vice President - Senior Portfolio
200 AXP Financial Center Manager
Minneapolis, MN 55474
Richard W. Kling Senior Vice President - Products
200 AXP Financial Center
Minneapolis, MN 55474
John M. Knight Vice President - Investment
200 AXP Financial Center Accounting
Minneapolis, MN 55474
<PAGE>
Paul F. Kolkman Vice President - Actuarial Finance
200 AXP Financial Center
Minneapolis, MN 55474
Claire Kolmodin Vice President - Service Quality
200 AXP Financial Center
Minneapolis, MN 55474
David S. Kreager Group Vice President - Greater
Suite 108 Michigan
Trestle Bridge V
5126 Lovers Lane
Kalamazoo, MI 49002
Steven C. Kumagai Director and Senior Vice
200 AXP Financial Center President-Direct and Interactive
Minneapolis, MN 55474 Group
Mitre Kutanovski Group Vice President - Chicago
Suite 680 Metro
8585 Broadway
Merrillville, IN 48410
Kurt A. Larson Vice President - Senior Portfolio
200 AXP Financial Center Manager
Minneapolis, MN 55474
Lori J. Larson Vice President - Brokerage and
200 AXP Financial Center Direct Services
Minneapolis, MN 55474
Daniel E. Laufenberg Vice President and Chief U.S.
200 AXP Financial Center Economist
Minneapolis, MN 55474
Jane W. Lee Vice President - New Business
200 AXP Financial Center Development and Marketing
Minneapolis, MN 55474
Peter A. Lefferts Senior Vice President - Corporate
200 AXP Financial Center Strategy and Development
Minneapolis, MN 55474
Douglas A. Lennick Director and Executive Vice
200 AXP Financial Center President - Private Client Group
Minneapolis, MN 55474
Fred A. Mandell Vice President - Field Marketing
200 AXP Financial Center Readiness
Minneapolis, MN 55474
Daniel E. Martin Group Vice President - Pittsburgh
Suite 650 Metro
5700 Corporate Drive
Pittsburgh, PA 15237
Timothy J. Masek Vice President and Director of
200 AXP Financial Center Global Research
Minneapolis, MN 55474
<PAGE>
Sarah A. Mealey Vice President - Mutual Funds
200 AXP Financial Center
Minneapolis, MN 55474
Paula R. Meyer Vice President - Assured Assets
200 AXP Financial Center
Minneapolis, MN 55474
William P. Miller Vice President and Senior
200 AXP Financial Center Portfolio Manager
Minneapolis, MN 55474
Shashank B. Modak Vice President - Technology Leader
200 AXP Financial Center
Minneapolis, MN 55474
Pamela J. Moret Vice President - Variable Assets
200 AXP Financial Center
Minneapolis, MN 55474
Barry J. Murphy Senior Vice President - Client
200 AXP Financial Center Service
Minneapolis, MN 55474
Mary Owens Neal Vice President-Consumer Marketing
200 AXP Financial Center
Minneapolis, MN 55474
Thomas V. Nicolosi Group Vice President - New York
Suite 220 Metro Area
500 Mamaroneck Avenue
Harrison, NY 10528
Michael J. O'Keefe Vice President - Advisory
200 AXP Financial Center Business Systems
Minneapolis, MN 55474
James R. Palmer Vice President - Taxes
200 AXP Financial Center
Minneapolis, MN 55474
Marc A. Parker Group Vice President -
10200 SW Greenburg Road Portland/Eugene
Suite 110
Portland, OR 97223
Carla P. Pavone Vice President-Compensation
200 AXP Financial Center Services and ARD Product
Minneapolis, MN 55474 Distribution
Thomas P. Perrine Senior Vice President - Group
200 AXP Financial Center Relationship Leader/American
Minneapolis, MN 55474 Express Technologies Financial
Services
Susan B. Plimpton Vice President - Marketing
200 AXP Financial Center Services
Minneapolis, MN 55474
<PAGE>
Larry M. Post Group Vice President -
One Tower Bridge Philadelphia Metro and Northern
100 Front Street, 8th Fl New England
West Conshohocken, PA 19428
Ronald W. Powell Vice President and Assistant
200 AXP Financial Center General Counsel
Minneapolis, MN 55474
Diana R. Prost Group Vice President -
3030 N.W. Expressway Kansas/Oklahoma
Suite 900
Oklahoma City, OK 73112
James M. Punch Vice President and Project
200 AXP Financial Center Manager - Platform I Value
Minneapolis, MN 55474 Enhanced
Frederick C. Quirsfeld Senior Vice President - Fixed
200 AXP Financial Center Income
Minneapolis, MN 55474
Rollyn C. Renstrom Vice President - Corporate
200 AXP Financial Center Planning and Analysis
Minneapolis, MN 55474
R. Daniel Richardson Group Vice President - Southern
Suite 800 Texas
Arboretum Plaza One
9442 Capital of Texas Hwy. N
Austin, TX 78759
ReBecca K. Roloff Senior Vice President - Field
200 AXP Financial Center Management and Financial Advisory
Minneapolis, MN 55474 Service
Stephen W. Roszell Senior Vice President -
200 AXP Financial Center Institutional
Minneapolis, MN 55474
Max G. Roth Group Vice President -
Suite 201 S. IDS Ctr Wisconsin/Upper Michigan
1400 Lombardi Avenue
Green Bay, WI 54304
Erven A. Samsel Senior Vice President - Field
45 Braintree Hill Park Management
Suite 402
Braintree, MA 02184
Theresa M. Sapp Vice President - Relationship
200 AXP Financial Center Leader
Minneapolis, MN 55474
Russell L. Scalfano Group Vice President -
Suite 201 Illinois/Indiana/Kentucky
101 Plaza East Blvd.
Evansville, IN 47715
<PAGE>
William G. Scholz Group Vice President -
Suite 205 Arizona/Las Vegas
7333 E. Doubletree Ranch Rd
Scottsdale, AZ 85258
Stuart A. Sedlacek Senior Vice President and Chief
200 AXP Financial Center Financial Officer
Minneapolis, MN 55474
Donald K. Shanks Vice President - Property Casualty
200 AXP Financial Center
Minneapolis, MN 55474
Judy P. Skoglund Vice President - Quality and
200 AXP Financial Center Service Support
Minneapolis, MN 55474
James B. Solberg Group Vice President - Eastern
466 Westdale Mall Iowa Area
Cedar Rapids, IA 52404
Bridget Sperl Vice President - Geographic
200 AXP Financial Center Service Teams
Minneapolis, MN 55474
Paul J. Stanislaw Group Vice President - Southern
Suite 1100 California
Two Park Plaza
Irvine, CA 92714
Lisa A. Steffes Vice President - Marketing Offer
200 AXP Financial Center Development
Minneapolis, MN 55474
Lois A. Stilwell Group Vice President - Outstate
Suite 433 Minnesota Area/North
9900 East Bren Road Dakota/Western Wisconsin
Minnetonka, MN 55343
William A. Stoltzmann Vice President and Assistant
200 AXP Financial Center General Counsel
Minneapolis, MN 55474
James J. Strauss Vice President and General Auditor
200 AXP Financial Center
Minneapolis, MN 55474
Jeffrey J. Stremcha Vice President - Information
200 AXP Financial Center Resource Management/ISD
Minneapolis, MN 55474
Barbara Stroup Stewart Vice President - Channel
200 AXP Financial Center Development
Minneapolis, MN 55474
Craig P. Taucher Group Vice President -
Suite 150 Orlando/Jacksonville
4190 Belfort Road
Jacksonville, FL 32216
<PAGE>
Neil G. Taylor Group Vice President -
Suite 425 Seattle/Tacoma/Hawaii
101 Elliott Avenue West
Seattle, WA 98119
John R. Thomas Senior Vice President
200 AXP Financial Center
Minneapolis, MN 55474
Keith N. Tufte Vice President and Director of
200 AXP Financial Center Equity Research
Minneapolis, MN 55474
Peter S. Velardi Group Vice President -
Suite 180 Atlanta/Birmingham
1200 Ashwood Parkway
Atlanta, GA 30338
Charles F. Wachendorfer Group Vice President - Detroit
Suite 100 Metro
Stanford Plaza II
7979 East Tufts Ave. Pkwy
Denver, CO 80237
Donald F. Weaver Group Vice President - Greater
3500 Market Street, Suite 200 Pennsylvania
Camp Hill, PA 17011
Norman Weaver Jr. Senior Vice President - Alliance
1010 Main St., Suite 2B Group
Huntington Beach, CA 92648
Michael L. Weiner Vice President - Tax Research and
200 AXP Financial Center Audit
Minneapolis, MN 55474
Jeffry M. Welter Vice President - Equity and Fixed
200 AXP Financial Center Income Trading
Minneapolis, MN 55474
Thomas L. White Group Vice President - Cleveland
Suite 200 Metro
28601 Chagrin Blvd.
Woodmere, OH 44122
Eric S. Williams Group Vice President - Virginia
Suite 250
3951 Westerre Parkway
Richmond, VA 23233
William J. Williams Group Vice President - Western
Two North Tamiami Trail Florida
Suite 702
Sarasota, FL 34236
<PAGE>
Edwin M. Wistrand Vice President and Assistant
200 AXP Financial Center General Counsel
Minneapolis, MN 55474
<PAGE>
Michael D. Wolf Vice President - Senior Portfolio
200 AXP Financial Center Manager
Minneapolis, MN 55474
Michael R. Woodward Senior Vice President - Field
32 Ellicott St. Management
Suite 100
Batavia, NY 14020
Rande L. Zellers Group Vice President-Gulf States
1 Galleria Blvd., Suite 1900
Metairie, LA 70001
Item 29 (c).
Net Underwriting
Name of Principal Discounts and Compensation on Brokerage
Underwriter Commissions Redemption Commissions Compensation
American Express $957,659 $993,347 None None
Financial Advisors
Inc.
Item 30: Location of Accounts and Records
IDS Life Insurance Company of New York
20 Madison Avenue Extension
Albany, NY 12203
Item 31. Management Services
Not applicable.
Item 32. Undertakings
(a) (b) & (c) These undertakings were filed with the Registrant's initia
Registration Statement, File No. 33-52567.
(d) The sponsoring insurance company represents that the fees and
charges deducted under the contract, in the aggregate, are
reasonable in relation to the services rendered, the expenses
expected to be incurred, and the risks assumed by the
insurance company.
<PAGE>
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company Act of
1940, IDS Life Insurance Company of New York, on behalf of the Registrant,
certifies that it meets the requirements for effectiveness of this Amendment to
its Registration Statement pursuant to Rule 485(b) under the Securities Act of
1933 and has duly caused this Registration Statement to be signed on its behalf,
in the City of Minneapolis, and State of Minnesota, on the 27th day of April,
2000.
IDS LIFE ACCOUNT 4
IDS LIFE ACCOUNT 5
IDS LIFE ACCOUNT 6
IDS LIFE ACCOUNT 9
IDS LIFE ACCOUNT 10
IDS LIFE ACCOUNT 11
IDS LIFE ACCOUNT 12
IDS LIFE ACCOUNT 13
IDS LIFE ACCOUNT 14
(Registrant)
By IDS Life Insurance Company of
New York
(Sponsor)
By /s/ Richard W. Kling*
Richard W. Kling
Chairman of the Board
As required by the Securities Act of 1933, this Registration Statement has been
signed by the following persons in the capacities indicated on the 27th day of
April, 2000.
Signature Title
/s/ Richard W. Kling* Director and Chairman of
Richard W. Kling the Board
/s/ Timothy V. Bechtold* Director and President
Timothy V. Bechtold
/s/ Maureen A. Buckley* Director, Vice
Maureen A. Buckley President, Chief
Operating Officer,
Consumer Affairs Officer
and Claims Officer
/s/ Rodney P. Burwell* Director
Rodney P. Burwell
/s/ John R. Cattau* Director
John R. Cattau
/s/ Robert R. Grew* Director
Robert R. Grew
/s/ Jeffrey S. Horton* Vice President and
Jeffrey S. Horton Treasurer
<PAGE>
/s/ Jean B. Keffeler* Director
Jean B. Keffeler
/s/ Thomas R. McBurney* Director
Thomas R. McBurney
/s/ Edward J. Muhl* Director
Edward J. Muhl
/s/ Thomas V. Nicolosi* Director
Thomas V. Nicolosi
/s/ Stephen P. Norman* Director
Stephen P. Norman
/s/ Richard M. Starr* Director
Richard M. Starr
/s/ Philip C. Wentzel* Vice President and
Philip C. Wentzel Controller
/s/ Michael R. Woodward* Director
Michael R. Woodward
*Signed pursuant to Power of Attorney, dated April 14, 1999 filed as Exhibit 14
to Registrant's Post-Effective Amendment No. 7,
By /s/ Mary Ellyn Minenko
Mary Ellyn Minenko
<PAGE>
CONTENTS OF POST-EFFECTIVE AMENDMENT NO. 8
This Registration Statement is comprised of the following papers and documents:
The Cover Page.
Part A.
The prospectus.
Part B.
Statement of Additional Information.
Financial Statements.
Part C.
Other Information.
The signatures.
Exhibits.
IDS Life of New York Employee Benefit Annuity
Registration No. 33-52567/811-3500
EXHIBIT INDEX
Exhibit 9: Opinion of Counsel, dated April 27, 2000.
Exhibit 10: Consent of Independent Auditors, dated April 24, 2000.
April 27, 2000
IDS Life Insurance Company of New York
20 Madison Avenue Extension
Albany, New York 12203
RE: Registration Statement on Form N-4
File No.: 33-52567
Ladies and Gentlemen:
I am familiar with the establishment of the IDS Life of New York Accounts 4, 5,
6, 9, 10, 12, 13 and 14 ("Account"), which is a separate account of IDS Life
Insurance Company of New York ("Company") established by the Company's Board of
Directors according to applicable insurance law. I also am familiar with the
above-referenced Registration Statement filed by the Company on behalf of the
Account with the Securities and Exchange Commission.
I have made such examination of law and examined such documents and records as
in my judgment are necessary and appropriate to enable me to give the following
opinion:
1. The Company is duly incorporated, validly existing and in good standing
under applicable state law and is duly licensed or qualified to do
business in each jurisdiction where it transacts business. The Company
has all corporate powers required to carry on its business and to issue
the contracts.
2. The Account is a validly created and existing separate account of the
company and is duly authorized to issue the securities registered.
3. The contracts issued by the Company, when offered and sold in
accordance with the prospectus contained in the Registration Statement
and in compliance with applicable law, will be legally issued and
represent binding obligations of the Company in accordance with their
terms.
I hereby consent to the filing of this opinion as an exhibit to the Registration
Statement.
Sincerely,
/s/ Mary Ellyn Minenko
Mary Ellyn Minenko
Group Counsel
(612) 671-3678
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Independent Auditors"
in the Statement of Additional Information and to the use of our report dated
February 3, 2000 with respect to the financial statements of IDS Life Insurance
Company of New York and to the use of our report dated March 17, 2000 with
respect to the financial statements of IDS Life of New York Accounts 5, 4, 6,
13, 12, 10, 9, 14, and 11, included in Post-Effective Amendment No. 8 to the
Registration Statement (Form N-4, No. 33-52567) and related Prospectus for the
registration of the Employee Benefit Annuity Contracts to be offered by IDS Life
Insurance Company of New York.
/s/ Ernst & Young LLP
Minneapolis, Minnesota
April 24, 2000
