<PAGE>
PAGE 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-1
POST-EFFECTIVE AMENDMENT NO. 5
TO REGISTRATION STATEMENT NO. 33-28976
Under
The Securities Act of 1933
IDS Life Insurance Company
(Exact name of registrant as specified in charter)
Minnesota
(State or other jurisdiction of incorporation or organization)
63
___________________________________________________________________
(Primary Standard Industrial Classification Code Number)
41-0823832
___________________________________________________________________
(I.R.S. Employer Identification No.)
IDS Tower 10, Minneapolis, MN 55440-0010
(612) 671-3131
___________________________________________________________________
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
Mary Ellyn Minenko, Counsel
IDS Life Insurance Company
IDS Tower 10, Minneapolis, Minnesota 55440-0010
(612) 671-3678
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
It is proposed that this filing become effective on April 29, 1994.
If any of the Securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under
the Securities Act of 1933, check the following box. [X]
<PAGE>
PAGE 2
<TABLE>
<CAPTION>
Calculation of Registration Fee
Proposed
Title of each class Proposed maximum
of securities to be Amount to be maximum offering aggregate offering Amount of
registered registered price per unit price registration fee
<S> <C> <C> <C> <C>
N/A
/TABLE
<PAGE>
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IDS LIFE ACCOUNT MGA
GROUP AND INDIVIDUAL MARKET VALUE ANNUITY CONTRACTS ISSUED BY
IDS LIFE INSURANCE COMPANY
Cross-Reference Sheet
Pursuant to Regulation S-K
Item 501(b)
<TABLE>
<CAPTION>
Page
Number in
Form S-1 Item Number and Caption Location in Prospectus Prospectus
<S> <C> <C> <C>
1. Forepart of the Registration
Statement and Outside Front
Cover Page of Prospectus......................Outside Front Cover 5-6
2. Inside Front and Outside Back
Cover Pages of Prospectus.....................Table of Contents 7-8
(inside front cover)
3. Summary Information, Risk Factors
and Ratio of Earnings to Fixed
Charges.......................................Summary or, as to ratio 9-10
of earnings to fixed
charges, Not Applicable
4. Use of Proceeds...............................Investments by IDS Life 23-24
5. Determination of Offering Price...............Not Applicable
6. Dilution......................................Not Applicable
7. Selling Security Holders......................Not Applicable
8. Plan of Distribution..........................Distribution of Contracts 24
9. Description of Securities to Be
Registered....................................Description of Contracts 12-23
10. Interests of Named Experts and
Counsel.......................................Not Applicable
11. Information with Respect to the
Registrant....................................The Company; 26-33
Directors and Executive 33-35
Officers of the Registrant;
Executive Compensation; 35
Security Ownership of 35
Management;
Legal Proceedings and 36
Opinion; and
Financial Statements 42-57
12. Disclosure of Commission Position
on Indemnification for Securities
Act Liabilities...............................See Item 14 in Part II 58-59
/TABLE
<PAGE>
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PART I.
INFORMATION REQUIRED IN PROSPECTUS
Attached hereto and made a part hereof is the Prospectus.
<PAGE>
PAGE 5
IDS Life Market Value Annuity
Prospectus, April 29, 1994
This prospectus describes interests in a group market value annuity
contract and individual market value annuity contracts (Preferred
Choice Annuities) offered by IDS Life Insurance Company (IDS Life)
to the general public for non-tax benefited purchases. With
respect to the group contract, eligible individuals include members
of the general public.
Participation in a group contract will be accounted for separately
by the issuance of a certificate showing your interest under the
group contract. Participation in an individual contract is shown
by the issuance of an individual annuity contract. The certificate
and the individual contract are both referred to as the "Contract."
In addition, IDS Life may offer these Contracts in the following
tax benefited programs: (1) plans qualified under Section 401(a),
401(k) or 403(a) of the Internal Revenue Code of 1986, as amended
(the Code); (2) annuity purchase plans adopted by public school
systems and certain tax-exempt organizations pursuant to Section
403(b) of the Code; (3) individual retirement annuities established
by persons, eligible under Section 408 of the Code (IRA); (4)
contracts purchased by the U.S. Government, the government of any
state or political subdivision thereof, or by any agency or
instrumentality (within the meaning of Section 414(d) of the Code),
for use in satisfying its obligation to provide a benefit under a
governmental plan; and (5) deferred compensation plans under
Section 457 of the Code.
A minimum purchase payment of at least $5,000 must accompany the
application for a Contract. No additional payment is permitted
under a Contract. The Accumulation Value will be guaranteed by the
general assets of IDS Life. IDS Life generally intends to invest
funds received in relation to Contracts in a variety of debt
instruments having price durations which tend to match the
applicable Contract.
IDS Life Account MGA
Group and Individual Market
Value Annuity Contracts
Sold by:
IDS Life Insurance Company
IDS Tower 10
Minneapolis, MN 55440-0010
Telephone: 800-422-3542
THESE SECURITIES MAY BE SUBJECT TO A SUBSTANTIAL SURRENDER CHARGE
AND/OR MARKET VALUE ADJUSTMENT IF NOT HELD TO THE RENEWAL DATE
WHICH COULD RESULT IN YOUR RECEIPT OF LESS THAN YOUR ORIGINAL
PURCHASE PAYMENT.
FOR RENEWAL GUARANTEE PERIODS, THE RENEWAL INTEREST RATE WILL BE
DECLARED BY IDS LIFE BASED ON VARIOUS FACTORS. IT MAY BE HIGHER OR
LOWER THAN THE PREVIOUS GUARANTEED INTEREST RATE.<PAGE>
PAGE 6
THE MINIMUM GUARANTEED RENEWAL INTEREST RATE IS 3 PERCENT.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
IDS LIFE INSURANCE COMPANY IS NOT A BANK AND THE SECURITIES IT
OFFERS ARE NOT BACKED OR GUARANTEED BY ANY BANK, NOR ARE THEY
INSURED BY THE FDIC.
<PAGE>
PAGE 7
Table of Contents Page
Summary...................................................
Glossary of Special Terms.................................
Description of Contracts..................................
General...................................................
Application and Purchase Payment..........................
Right to Cancel...........................................
Guarantee Periods.........................................
Surrenders................................................
Surrender Charge..........................................
Market Value Adjustment...................................
Premium Taxes.............................................
Death Benefit Prior to Settlement.........................
Statement.................................................
Electing the Settlement Date and Form of Annuity..........
Investments by IDS Life...................................
Amendment of Contracts....................................
Distribution of Contracts.................................
Assignment of Contracts...................................
Federal Tax Considerations................................
The Company...............................................
Business..................................................
Selected Financial Data...................................
Management's Discussion and Analysis of Consolidated
Financial Condition and Results of Operations.............
Reserves..................................................
Investments...............................................
Competition...............................................
Employees.................................................
Properties................................................
State Regulation..........................................
Directors and Executive Officers..........................
Executive Compensation....................................
Security Ownership of Management..........................
Legal Proceedings and Opinion.............................
Experts...................................................
<PAGE>
PAGE 8
Appendix A (Partial Surrender Illustration)...............
Appendix B (Market Value Adjustment Illustration).........
IDS Life Financial Information............................
<PAGE>
PAGE 9
Summary
IDS Life is offering group and individual market value annuities to
the general public for non-tax benefited and tax benefited
purchases. IDS Life is a wholly owned subsidiary of IDS Financial
Corporation (IDS), which itself is a wholly owned subsidiary of
American Express Company (American Express). As described in this
prospectus, market value annuity Contracts have a guaranteed
interest rate that is credited to the purchase payment when it is
held to the end of the Guarantee Period (the Renewal Date).
Surrenders before the Renewal Date are subject to a Market Value
Adjustment and a surrender charge (if applicable).
When a payment is made under an application, the applicant selects
a Guarantee Period from among those then offered by IDS Life.
During this Guarantee Period, the purchase payment earns interest
at the applicable guaranteed interest rate as established by IDS
Life. Interest is credited on a daily basis and the interest
credited earns interest at the applicable guaranteed interest rate
as established by IDS Life. (See Guarantee Periods page ).
At the end of each Guarantee Period, a renewal Guarantee Period of
one year will begin, unless the Owner elects a different duration.
The Owner must elect the length of a renewal Guarantee Period
during the 30 days before the end of the previous Guarantee Period.
Failure to make an election will result in an automatic renewal for
a period of one year. As of the first day of each renewal
Guarantee Period the renewal value will earn interest at the then
applicable renewal guaranteed interest rate and the interest
credited will earn interest at the then applicable renewal
guaranteed interest rate. (See Guarantee Periods page ).
Subject to certain restrictions, partial or total surrenders are
permitted. We may defer payment of any surrender for a period up
to six months from the date we receive notice of surrender or the
period permitted by state law, if less. A deferral of payment will
not be for a period greater than seven days except under
extraordinary circumstances. We will pay annual interest of at
least 3 percent of any amounts deferred for more than thirty days
during such period if we choose to exercise this deferral right.
(See Surrenders page ).
Surrenders may be subject to a surrender charge and/or a Market
Value Adjustment. Before the eighth Contract anniversary, a
surrender charge beginning at a maximum of 8 percent will be
assessed if you surrender. No surrender charge will be applied for
any surrenders after the eighth Contract anniversary or if the
surrender occurs on the last day of a Guarantee Period. We will<PAGE>
PAGE 10
waive the surrender charge in certain instances. (See Surrender
Charge page ).
A Market Value Adjustment will be applied when the surrender occurs
before the Renewal Date. No Market Value Adjustment will be
applied to any surrender effective as of the end of a Guarantee
Period. The Market Adjusted Value will reflect the relationship,
at the time of surrender, between the rate we then are crediting on
purchase payments to new Contracts with the same durations as the
time remaining in the Guarantee Period, and the guaranteed interest
rate applicable to that Contract. Generally, significant factors
affecting the amount of the Market Value Adjustment are the level
of interest rates on investments that are similar to those
supporting current Contract purchase payments and the time
remaining to the end of the Guarantee Period. The Market Adjusted
Value is sensitive, therefore, to changes in Current Interest
Rates. The level of the Market Value Adjustment is dependent on
the Current Interest Rate at the time of surrender. The Market
Value Adjustment may increase or decrease the value of this
investment before the Renewal Date. It is possible that the amount
you receive on surrender would be less than your original purchase
payment if interest rates increase. Also, if interest rates
decrease, the amount you receive on surrender may be more than your
original purchase payment and accrued interest. The Market
Adjusted Value also affects settlements under an annuity payment
plan. (See Market Value Adjustment page ).
We reserve the right to deduct applicable premium taxes from the
Accumulation Value of the Contract. (See Premium Taxes page ).
The Contract provides for a guaranteed death benefit. In the event
of the death of the Annuitant or Owner prior to the Settlement
Date, IDS Life will pay to the Owner or beneficiary the death
benefit in lieu of any other payment under the Contract. The
amount of the death benefit will equal the Accumulation Value. (See
Death Benefit Prior to Settlement page ).
On the Settlement Date specified by the Owner, IDS Life will pay
the Owner a lump sum payment or start to pay a series of payments.
A series of payments may be elected under certain Annuity Plans.
(See Electing the Settlement Date and Form of Annuity page ).
<PAGE>
PAGE 11
Glossary of Special Terms
In this prospectus "we" "us" and "IDS Life" refer to IDS Life
Insurance Company and "you" and "yours" refer to an Owner who has
been issued a Contract.
In addition, as used in this prospectus, the following terms have
the indicated meanings:
Accumulation Value - The value of the purchase payment plus
interest credited, adjusted for any surrenders.
Annuitant - The person on whose life monthly annuity payments
depend.
Cash Surrender Value - The Market Adjusted Value less any
applicable surrender charge.
Contract Anniversary - The same day and month as the Contract Date
each year that the Contract remains in force.
Contract Date - The effective date of the Contract as designated in
the Contract.
Current Interest Rate - The applicable interest rate contained in a
schedule of rates established by us from time to time for various
Guarantee Periods.
Initial Guarantee Period - The period during which the Initial
Guarantee Rate will be credited.
Initial Guarantee Rate - The rate of interest credited to the
purchase payment during the Initial Guarantee Period.
Market Adjusted Value - The Accumulation Value adjusted by the
Market Adjusted Value formula, on any date before the end of the
Guarantee Period.
Market Value Adjustment - The Market Adjusted Value minus the
Accumulation Value.
Owner - The person or entity to whom the annuity Contract is
issued.
Renewal Date - The first day of a Renewal Guarantee Period. It
will always be on a Contract Anniversary.
Renewal Guarantee Period - A Renewal Guarantee Period will begin at
the end of each Guarantee Period.
Renewal Guarantee Rate - The rate of interest credited to the
Renewal Value during the Renewal Guarantee Period.
Renewal Value - The accumulation value at the end of the current
Guarantee Period.<PAGE>
PAGE 12
Settlement - The application of the Market Adjusted Value of the
Contract to provide annuity payments.
Settlement Date - The date on which annuity payments are to begin.
Written Request - A request in writing signed by you and delivered
to us at our Home Office.
Description of Contracts
General
This prospectus describes interests in market value annuities
offered by IDS Life for non-tax benefited purchases. In addition,
IDS Life may offer the Contracts in the following tax benefited
programs: (1) Section 401(a), 401(k) and 403(a) Plans; (2) Section
403(b) Plans; (3) IRAs; (4) certain governmental plans; and (5)
deferred compensation plans.
As described in this prospectus, the Contracts have a guaranteed
interest rate that is credited to a purchase payment in the
Contract when the purchase payment is held to its Renewal Date.
Surrenders prior to the Renewal Date are subject to a Market Value
Adjustment and a surrender charge (if applicable).
Application and Purchase Payment
To apply for a Contract, you must complete an application and make
a minimum purchase payment of $5,000. For individuals age 75 and
younger, the maximum purchase payment is $1,000,000 without prior
approval. For individuals age 76 to 85, it is $500,000. If you
purchase the Contract to fund a tax benefited plan, that plan's
limit on contributions also will apply.
We will return an improperly completed application, along with the
corresponding purchase payment, five days after we receive it if
the application has not, by that time, been properly completed.
A payment is credited to a Contract on the date we receive a
properly completed application along with the purchase payment.
Interest is earned the next day. IDS Life then issues a Contract
and confirms the purchase payment in writing.
Right to Cancel
State or Federal law may give you the right to cancel the Contract
within a specific period of time after receipt of the Contract and
receive a refund of the entire purchase payment. For revocation to
be effective, mailing or delivery of notice of cancellation must be
made in writing to our Home Office at IDS Tower 10, Minneapolis,
Minnesota 55440-0010.
<PAGE>
PAGE 13
Guarantee Periods
The Owner selects the duration of the Guarantee Period from among
those durations we offer. As of the date of this prospectus, we
are offering Guarantee Periods with annual durations from one to 10
years; however, the Guarantee Periods we offer in the future could
be different. The duration selected will determine the guaranteed
interest rate and the purchase payment (less surrenders made and
less applicable premium taxes, if any) will earn interest at this
guaranteed interest rate during the entire Guarantee Period. All
interest earned will be credited daily; this compounding effect is
reflected in the guaranteed interest rate.
Below is an illustration of how we will credit interest during the
Guarantee Period. For the purpose of this example, we have made
the assumptions as indicated.
Example of Guaranteed Rate of Accumulation
Beginning Account Value: $50,000
Guaranteed Period: 10 years
Guaranteed Rate: 5 percent Annual Effective Rate
Interest Credited
to the Account Cumulative Interest
Year During Year Credited to the Account
1 $2,500.00 $ 2,500.00
2 2,625.00 5,125.00
3 2,756.25 7,881.25
4 2,894.06 10,775.31
5 3,038.77 13,814.08
6 3,190.70 17,004.78
7 3,350.24 20,355.02
8 3,517.75 23,872.77
9 3,693.64 27,566.41
10 3,878.32 31,444.73
Guaranteed Accumulation Value at the end of 10 years is:
$50,000 + $31,444.73 = $81,444.73
Note: This example assumes no surrenders of any amount during the
entire ten-year period. A Market Value Adjustment applies and a
surrender charge may apply to any interim surrender. (See
Surrenders). The hypothetical interest rates are illustrative only
and are not intended to predict future interest rates to be
declared under the Contract. Actual interest rates declared for
any given time may be more or less than those shown.
Renewal Guarantee Periods - At the end of any Guarantee Period, a
Renewal Guarantee Period will begin. We will notify you in writing
about the Renewal Guarantee Periods available before the Renewal
Date. This written notification will not specify the interest rate
for the Renewal Value. You may elect in writing, during the 30-day
period before the end of the Guarantee Period, a Renewal Guarantee<PAGE>
PAGE 14
Period of a different duration from among those we offer at that
time. If no election is made, we will automatically apply the
Renewal Value to a Guarantee Period of one year. In no event may
Renewal Guarantee Periods extend beyond the Settlement Date then in
effect for the Contract. For example, if the Annuitant is age 62
at the end of a Guarantee Period and the Settlement Date for the
Annuitant is age 65, a three-year Guarantee Period is the maximum
Guarantee Period that may be selected under the Contract. The
Renewal Value will then earn interest at a guaranteed interest rate
that we have declared for such duration. We may declare new
schedules of guaranteed interest rates as frequently as daily.
At the beginning of any Renewal Guarantee Period, the Renewal Value
will be the Accumulation Value at the end of the Guarantee Period
just ending. The Renewal Value is guaranteed by our general
assets. This amount will earn interest for the Renewal Guarantee
Period at the then applicable guaranteed interest rate for the
period selected, that may be higher or lower than the previous
guaranteed interest rate.
At your Written Request, we will notify you of the Renewal
Guarantee Rates for the periods then available. You also may call
us to inquire about Renewal Guarantee Rates.
Establishment of Guaranteed Interest Rates - The guaranteed
interest rate for a chosen Guarantee Period will be known at the
time a purchase payment is received or an Accumulation Value is
renewed. We will send a confirmation that will show the amount and
the applicable guaranteed interest rate. The minimum guaranteed
interest rate for Renewal Values is 3 percent per year. The rate
on Renewal Values will be equal to or greater than the rate
credited on new comparable purchase payments at that time.
IDS Life has no specific formula for determining the rate of
interest that it will declare as guaranteed interest rates in the
future. We will declare the guaranteed interest rates from time to
time based on our analysis of current market conditions. (See
Investments by IDS Life). In addition, IDS Life also may consider
various other factors in determining guaranteed interest rates for
a given period, including, regulatory and tax requirements; sales
commission and administrative expenses we bear; general economic
trends; and competitive factors. IDS Life management will make the
final determination as to the guaranteed interest rates to be
declared. We cannot predict nor can we guarantee future guaranteed
interest rates above the 3 percent rate.
Surrenders
General - Subject to certain tax law and retirement plan
restrictions noted below, total and partial surrenders may be made
under a Contract at any time.
<PAGE>
PAGE 15
In the case of all surrenders, the Accumulation Value will be
reduced by the amount surrendered on the surrender date and that
amount will be payable to the Owner. The Accumulation Value also
will be reduced by any applicable surrender charge and either
reduced or increased by any Market Value Adjustment applicable to
the surrender. IDS Life will, on request, inform you of the amount
payable in a total or partial surrender. Any total or partial
surrender may be subject to tax and tax penalties. Surrenders from
certain tax benefited Contracts also may be subject to 20 percent
income tax withholding. (See Federal Tax Considerations).
Tax-Sheltered Annuities - The Code imposes certain restrictions on
an Owner's right to receive early distributions attributable to
salary reduction contributions from a Contract purchased for a
retirement plan qualified under Section 403(b) of the Code as a
Tax-Sheltered Annuity (TSA).
Distributions attributable to salary reduction contributions made
after Dec. 31, 1988, plus the earnings on them, or to transfers or
rollovers of such amounts from other contracts may be made from the
TSA contract only if the Owner has attained age 59-1/2, has become
disabled as defined in the Code, has separated from the service of
the employer that purchased the Contract or has died.
Additionally, if the Owner should encounter a financial hardship
(within the meaning of the Code), he or she may receive a
distribution of all Contract values attributable to salary
reduction contributions made after Dec. 31, 1988, but not of the
earnings on them.
Even though a distribution may be permitted under these rules
(e.g., for hardship or after separation from service), it may
nonetheless be subject to a 10 percent IRS penalty tax (in addition
to income tax) as a premature distribution and to 20 percent income
tax withholding. (See Federal Tax Considerations).
These restrictions do not apply to transfers of Contract value to
another TSA investment vehicle available through the employer.
Partial Surrenders - The minimum amount you may surrender is $250.
You cannot make a partial surrender if it would reduce the
Accumulation Value of your annuity to less than $2,000.
You may request the net check amount you wish to receive. We will
determine how much Accumulation Value needs to be surrendered to
yield the net check amount after any applicable Market Value
Adjustments and surrender charge deductions.
A partial surrender request not exceeding $40,000 may be made by
telephone. We have the authority to honor any telephone partial
surrender request believed to be authentic and will use reasonable
procedures to confirm that they are. This includes asking
identifying questions and tape recording calls. As long as
reasonable procedures are followed, neither IDS Life nor its
affiliates will be liable for any loss resulting from fraudulent
requests. At times when the volume of telephone requests is <PAGE>
PAGE 16
unusually high, we will take special measures to ensure that your
call is answered as promptly as possible. A telephone surrender
request will not be allowed within 30 days of a phoned-in address
change.
Total Surrenders - We will compute the value of your Contract at
the close of business after we receive your request for a complete
surrender. We may ask you to return the Contract.
Payment on Surrender - We may defer payment of any partial or total
surrender for a period not exceeding 6 months from the date we
receive your notice of surrender or the period permitted by state
insurance law, if less. Only under extraordinary circumstances
will we defer a surrender payment more than 7 days, and if we defer
payment for more than 30 days, we will pay annual interest of at
least 3 percent on the amount deferred. While all circumstances
under which we could defer payment upon surrender may not be
foreseeable at this time, such circumstances could include, for
example, our inability to liquidate assets due to a general
financial crisis. If we intend to withhold payment more than 30
days, we will notify you in writing.
Surrender Charge
A surrender charge may be assessed on any total or partial
surrender taken prior to the eighth Contract anniversary unless the
surrender occurs on the last day of a Guarantee Period. The amount
of the surrender charge will be based on the length of the
Guarantee Period. The table below shows the maximum amount of the
surrender charge.
Surrender Charge Percentage
Guarantee Period Contract Years as measured from the beginning
of a Guarantee Period
1 2 3 4 5 6 7 8
1 Year 1%
2 Years 2 1%
3 Years 3 2 1%
4 Years 4 3 2 1%
5 Years 5 4 3 2 1%
6 Years 6 5 4 3 2 1%
7 Years 7 6 5 4 3 2 1%
8 Years 8 7 6 5 4 3 2 1%
9 Years 8 7 6 5 4 3 2 1
10 Years 8 7 6 5 4 3 2 1
For Renewal Guarantee Periods, the surrender charge will be based
on the lesser of:
<PAGE>
PAGE 17
o the length of the new Guarantee Period, or
o the number of years remaining until the eighth Contract
anniversary.
For example, if a Contract Owner chose an Initial Guarantee Period
of 5 years and later a Renewal Guarantee Period of 4 years, the
surrender charge percentages would be:
Contract Year Surrender Charge
1 5%
2 4
3 3
4 2
5 1*
6 3
7 2
8 1
9+ 0
*0% on last day of 5th Contract year.
There will never be any surrender charges after the eighth Contract
anniversary.
Also, after the first Contract anniversary, surrender charges will
not apply to surrenders of amounts totalling up to 10 percent of
the Accumulation Value as of the last Contract anniversary.
Surrender Charge Calculation - If there is a surrender charge, it
is calculated as:
(A minus B) multiplied by P
where: A = Market Adjusted Value surrendered
B = 10 percent of Accumulation Value on last Contract
anniversary not already taken as a partial surrender
this Contract year.
P = applicable surrender charge percentage
For an illustration of a partial surrender and applicable surrender
charges, see Appendix A.
Waiver of Surrender Charge - There will be no surrender charge:
o on the last day of a Guarantee Period;
o after the eighth Contract anniversary;
o after the first Contract anniversary for surrenders of amounts
totalling up to 10 percent of the Contract Accumulation Value
as of the last Contract anniversary;
o upon the death of the Annuitant or Owner; or<PAGE>
PAGE 18
o upon the application of the Market Adjusted Value to provide
annuity payments under an annuity payment plan (if such
application occurs on a Renewal Date, there will be no
surrender charge or Market Value Adjustment, and the full
Accumulation Value will be applied under an annuity payment
plan).
In some cases, such as when an employer makes this annuity
available to employees, we may expect to incur lower sales and
administrative expenses or perform fewer services due to the size
of the group, the average contribution and the use of group
enrollment procedures. Then we may be able to reduce or eliminate
surrender charges. However, we expect this to occur infrequently.
Market Value Adjustment
The Accumulation Value, including the interest credited, is
guaranteed if the Contract is held until the end of the Guarantee
Period. However, a Market Value Adjustment will be applied if a
surrender occurs prior to the end of the Guarantee Period. The
Market Adjusted Value also affects Settlements under an annuity
payment plan.
The Market Adjusted Value is your Accumulation Value (purchase
payment plus interest credited minus surrenders and surrender
charges) adjusted by a formula. The Market Adjusted Value reflects
the relationship between the guaranteed interest rate on your
Contract and the interest rate we are crediting on new contracts
with Guarantee Periods that are the same as the time remaining in
your Guarantee Period.
The Market Adjusted Value is sensitive to changes in Current
Interest Rates. The difference between your Accumulation Value and
Market Adjusted Value on any day will depend on our current
schedule of guaranteed interest rates on that day, the time
remaining in your Guarantee Period and your guaranteed interest
rate.
Your Market Adjusted Value may be more or less than your
Accumulation Value. If your guaranteed interest rate is lower than
the Current Interest Rate, your Market Adjusted Value probably will
be lower than your Accumulation Value. If your guaranteed interest
rate is higher than the Current Interest Rate, your Market Adjusted
Value probably will be higher than your Accumulation Value.
For example, assume you bought a Contract with a Guarantee Period
of 10 years and a guaranteed interest rate of 4.5 percent annually.
Assume that after 3 years you decide to surrender your Contract
(you have 7 years left in your Guarantee Period). If the Current
Interest Rate we are offering on new Contracts with 7-year
Guarantee Periods is 5 percent, your Market Adjusted Value will be
lower than your Accumulation Value. On the other hand, if the
Current Interest Rate we are then offering on new Contracts with
7-year Guarantee Periods is 4 percent, your Market Adjusted Value
will be higher than your Accumulation Value.
<PAGE>
PAGE 19
Market Adjusted Value Formula:
Market Adjusted Value = (Renewal Value)
(1 + ic + .0025)(N + t)
Renewal Value -- The Accumulation Value at the end of the current
Guarantee Period
ic -- The Current Interest Rate offered for new Contract
sales and renewals for the number of years
remaining in the Guarantee Period
N -- The number of complete Contract years to the end
of the current Guarantee Period
t -- The fraction of the Contract year remaining to the
end of the Contract year (for example, if 180 days
remain in a 365 day year, t would be .493)
The current guaranteed interest rate (ic) is declared by us
periodically. It is the rate which we are then paying on purchase
payments and renewals paid under this class of Contracts for
Guarantee Period durations equaling the remaining Guarantee Period
duration of the Contract to which the formula is being applied. If
the remaining Guarantee Period is a number of complete years, the
specific complete year guarantee rate will be used. If the
remaining Guarantee Period is less than 1 year, the one year
guarantee rate will be used. If the remaining Guarantee Period is
a number of complete years plus fractional years, the rate will be
determined by straight line interpolation between the two years'
rates. For example, if the remaining Guarantee Period duration is
8.5 years, and the current guaranteed interest rate for 8 years is
4 percent and for 9 years is 5 percent, IDS Life will use a
guaranteed interest rate of 4.5 percent.
Market Value Adjustment Formula:
Market Value Adjustment = Market Adjusted Value less
Accumulation Value
For an illustration showing an upward and downward adjustment, see
Appendix B.
Premium Taxes
We reserve the right to deduct an amount from the Accumulation
Value of the Contract at the time that any applicable premium taxes
not previously deducted are payable. If a tax is payable at the
time of the purchase payment and we choose to not deduct it at that
time, we further reserve the right to deduct it at a later date.
Current premium taxes range in an amount up to 3.5 percent
depending on jurisdiction.
<PAGE>
PAGE 20
Death Benefit Prior to Settlement
If the Annuitant or Owner dies before the Settlement Date, the
death benefit payable to the beneficiary will equal the
Accumulation Value.
If your Spouse is Sole Beneficiary or Co-Owner - If you, as Owner
or Co-Owner, die before the Settlement Date and your spouse is the
only beneficiary or Co-Owner, your spouse may keep the annuity as
Owner. To do this, your spouse must, within 60 days after we
receive proof of death, give us written instructions to keep the
Contract in force.
Section 401(k) Plans, Section 403(b) Plans (TSAs), Section 457
Plans, Custodial and Trusteed Plans, and IRAs - If the Contract is
purchased under a Section 401(k) plan, Section 403(b) plan, Section
457 plan, custodial or trusteed plan or for an IRA and we receive
proof of the annuitant's death before the Settlement Date, we will
pay the beneficiary the death benefit described above. If the
annuitant dies before reaching age 70-1/2 and the spouse is the
only beneficiary, the spouse may keep the annuity in force until
the date on which the annuitant would have reached 70-1/2. To do
this, the spouse must, within 60 days after we receive proof of
death, give us written instructions to keep the Contract in force.
Paying the Beneficiary - Unless you have given us other written
instructions, we will pay the beneficiary in a single payment. The
beneficiary may elect to receive this payment at any time within 5
years after the date of death. Payment from a tax benefited
Contract (except an IRA) made to a surviving spouse instead of
being directly rolled over to an IRA may be subject to 20 percent
income tax withholding. We may make payments under any payment
plan available under this Contract if:
o the beneficiary asks us in writing within 60 days after we
receive proof of death;
o payments begin no later than one year after death; and
o the payment period does not extend beyond the beneficiary's life
or life expectancy.
We will determine the Market Adjusted Value at the next close of
business after our death claim requirements are fulfilled. We will
mail payment to the beneficiary within seven days after our death
claim requirements are fulfilled.
Statement
Prior to the Settlement Date, at least annually, we will send a
statement showing a summary of the Contract.
<PAGE>
PAGE 21
Electing the Settlement Date and Form of Annuity
A Settlement Date is established when you apply for the Contract.
The Settlement Date may be changed, but any such change must be
made in writing and received by us at least 30 days prior to the
scheduled Settlement Date.
The Settlement Date cannot be later than the later of:
o the Contract anniversary nearest the Annuitant's 85th birthday;
or
o the 10th Contract anniversary.
Annuity Payments - The first payment will be made as of the
Settlement Date. Once annuity payments have started for an
Annuitant, no surrender of the annuity benefit can be made for the
purpose of receiving a lump sum in lieu of payments.
Death After Settlement Date - If you or the Annuitant dies after
the Settlement Date, the amount payable to the beneficiary, if any,
will continue as provided in the annuity payment plan then in
effect.
Annuity Plans - There are different ways to receive annuity
payments. We call these plans. You may select one of these plans,
or another payment arrangement to which we agree, by giving us
written notice at least 30 days before the Settlement Date.
The Market Adjusted Value (less applicable premium taxes, if any)
may be applied on the Settlement Date under any of the annuity
plans described below, but in the absence of an election, the
Market Adjusted Value will be applied on the Settlement Date under
Plan B to provide a life annuity with 120 monthly payments certain.
If the amount to be applied to an annuity plan is not at least
$2,000 or if payments are to be made to other than a natural
person, we have the right to make a lump sum payment of the Cash
Surrender Value. If a lump sum payment is made from a tax
benefited Contract (except an IRA), 20 percent income tax
withholding may apply.
o Plan A - This provides monthly annuity payments for the
lifetime of the Annuitant. No payments will be made after the
Annuitant dies.
o Plan B - This provides monthly annuity payments for the
lifetime of the Annuitant with a guarantee by us that payments
will be made for a period of at least 5, 10 or 15 years. You
must select the period.
o Plan C - This provides monthly annuity payments for the
lifetime of the Annuitant with a guarantee by us that payments
will be made for a certain number of months. We determine the<PAGE>
PAGE 22
number of months by dividing the Market Adjusted Value applied
under this plan by the amount of the monthly annuity payment.
o Plan D - We call this a Joint and Survivor life annuity.
Monthly payments will be paid for the lifetime of the
Annuitant and a joint annuitant. When either the Annuitant or
joint annuitant dies we will continue to make monthly payments
for the lifetime of the survivor. No payments will be paid
after the death of both the Annuitant and joint annuitant.
o Plan E - This provides monthly fixed dollar annuity payments
for a period of years. The period of years may be no less
than 10 nor more than 30.
The Contract provides for annuity payment plans on a fixed basis
only. The amount of each annuity payment will not change during
the annuity payment period. The amount of the annuity payment will
depend on:
- -- the Market Adjusted Value (less any applicable premium tax
not previously deducted) on the date;
- -- the annuity table we are then using for annuity settlements
(never less than the table guaranteed in the Contract);
- -- the Annuitant's age; and
- -- the annuity payment plan selected.
The tables for Plans A, B, C and D are based on the "1983
Individual Annuitant Mortality Table A" and an assumed rate of 4
percent per year. The table for Plan E is based on an interest
rate of 4 percent. IDS Life may, at our discretion, if mortality
appears more favorable and interest rates justify, apply other
tables that will result in higher monthly payments.
Restrictions for Some Tax Benefited Plans - If your annuity was
purchased under a Section 401(k) plan, custodial or trusteed plan,
Section 457 plan, Section 403(b) plan (TSA), or as an IRA, you must
select a payment plan that provides for payments:
o during the life of the Annuitant;
o during the joint lives of the Annuitant and beneficiary;
o for a period not exceeding the life expectancy of the Annuitant;
or
o for a period not exceeding the joint life expectancies of the
Annuitant and beneficiary.
Reference also must be made to the terms of the tax benefited plan
and applicable law for any limitations or restrictions on the
Settlement Date or annuity payment plan that may be selected.
<PAGE>
PAGE 23
Investments by IDS Life
Assets of IDS Life must be invested in accordance with requirements
established by applicable state laws regarding the nature and
quality of investments that may be made by life insurance companies
and the percentage of their assets that may be committed to any
particular type of investment. In general, these laws permit
investments, within specified limits and subject to certain
qualifications, in federal, state, and municipal obligations,
corporate bonds, preferred and common stocks, real estate
mortgages, real estate and certain other investments. All claims
by purchasers of the Contracts, and other general account products,
will be funded by the general account.
IDS Life intends to construct and manage the investment portfolio
using a strategy known as "immunization." Immunization seeks to
lock in a defined return on the pool of assets versus the pool of
liabilities over a specified time horizon. Since the return on the
assets versus the liabilities is locked in, it is "immune" to any
potential fluctuations in interest rates during the given time.
Immunization is achieved by constructing a portfolio of assets with
a price sensitivity to interest rate changes (i.e., price duration)
that is essentially equal to the price duration of the
corresponding portfolio of liabilities. Portfolio immunization
provides flexibility and efficiency to IDS Life in creating and
managing the asset portfolio, while still assuring safety and
soundness for funding liability obligations.
IDS Life's investment strategy will incorporate the use of a
variety of debt instruments having price durations tending to match
the applicable guaranteed interest periods. These instruments
include, but are not necessarily limited to, the following:
o Securities issued by the U.S. government or its agencies
or instrumentalities, which issues may or may not by
guaranteed by the U.S. government;
o Debt securities that have an investment grade, at the
time of purchase, within the four highest grades assigned
by the nationally recognized rating agencies;
o Debt instruments that are unrated, but which are deemed
by IDS Life to have an investment quality within the four
highest grades;
o Other debt instruments, which are rated below investment
grade, limited to 10 percent of assets at the time of
purchase; and
o Real estate mortgages, limited to 30 percent of portfolio
assets at the time of acquisition.
In addition, options and futures contracts on fixed income
securities will be used from time to time to achieve and maintain
appropriate investment and liquidity characteristics on the overall
asset portfolio.
<PAGE>
PAGE 24
While this information generally describes our investment strategy,
we are not obligated to follow any particular strategy except as
may be required by Federal law and Minnesota and other state
insurance laws.
Amendment of Contracts
We reserve the right to amend the Contracts to meet the
requirements of applicable federal or state laws or regulations.
We will notify you in writing of any such amendments.
Distribution of Contracts
IDS Life is the principal underwriter for the Contracts. IDS Life
is registered with the Securities and Exchange Commission under the
Securities Exchange Act of 1934 (1934 Act) as a broker-dealer and
is a member of the National Association of Securities Dealers,
Inc. IDS Life may enter into Distribution Agreements with certain
broker-dealers registered under the 1934 Act. IDS Life will pay a
maximum commission of 5 percent for the sale of a Contract. In the
future, we may pay a commission on an election of a subsequent
Guarantee Period by an Owner.
Assignment of Contracts
You may change ownership of your annuity at any time by filing a
change of ownership with us at our home office. No change of
ownership will be binding upon us until we receive and record it.
We take no responsibility for the validity of the change. If you
have a tax-benefited plan, the Contract may not be sold, assigned,
transferred, discounted or pledged as collateral for a loan or as
security for the performance of an obligation or for any other
purpose to any person other than IDS Life; provided, however, that
if the Owner is a trust or custodian, or an employer acting in a
similar capacity, ownership of a Contract may be transferred to the
Annuitant.
The value of any part of a non-tax benefited annuity contract
assigned or pledged is taxed like a cash withdrawal to the extent
allocable to investment in annuity contracts after Aug. 13, 1982.
Transfer of a non-tax benefited annuity Contract to another person
without adequate consideration is considered a gift and the
transfer will be considered a surrender of the Contract for federal
income tax purposes. The income in the Contract will be taxed to
the transferor who may be subject to the 10 percent IRS penalty tax
for early withdrawal. The transferee's investment in the annuity
will be the value of the annuity at the time of the transfer.
Consult with your tax adviser before taking any action.
Federal Tax Considerations
Under current law, there is no liability for federal income tax on
any increase in the annuity's value until payments are made (except
for change of ownership discussed above in "Assignment of
Contracts"). However, since federal tax consequences cannot always
<PAGE>
PAGE 25
be anticipated, you should consult a tax adviser if you have any
questions about the taxation of your annuity Contract.
You are not taxed on your investment in the Contract. Your
investment in the Contract generally includes purchase payments
made into the Contract with after-tax dollars. If the investment
in the Contract was made by you or on your behalf with pre-tax
dollars as part of a tax benefited retirement plan, such amounts
are not considered to be part of your investment in the Contract
and will be taxed when paid to you.
If you surrender part or all of your Contract before the date on
which you have decided to begin to receive annuity payments, you
will be taxed on the payments which you receive, to the extent that
the value of your Contract exceeds your investment in the Contract,
and you may have to pay an IRS penalty tax for early withdrawal.
If you begin receiving annuity payments under a non-tax benefited
annuity Contract, a portion of each payment will be subject to tax
and a portion of each payment will be considered to be part of your
investment in the Contract and will not be taxed. All amounts
received after your investment in the annuity is recovered will be
subject to tax. If you begin receiving payments from a tax
benefited annuity, for example an IRA, Section 403(b) plan, or
Section 457 plan, all of the payments generally will be subject to
taxation except to the extent that the contributions were made with
after-tax dollars.
Unlike life insurance proceeds, the death benefit under an annuity
contract is not tax exempt. The gain, if any, is taxable as
ordinary income to the beneficiary in the year(s) he or she
receives the payments.
Tax law requires that all non-qualified deferred annuity contracts
issued by the same company to the same contract owner during a
calendar year are to be treated as a single, unified contract. The
amount of income included and taxed in a distribution (or a
transaction deemed a distribution under tax law) taken from any one
of such contracts is determined by summing all such contracts.
The income earned on an annuity contract held by such entities as
corporations, partnerships or trusts generally will be treated as
ordinary income received during that year.
You may have to pay a 10 percent IRS penalty tax on any amount
includible in your ordinary income. This penalty will not apply to
any amount received:
o after you reach age 59-1/2;
o because of your death;
o because you become disabled (as defined in the Code);
o if the distribution is part of a series of substantially equal
periodic payments over your life or life expectancy (or joint
lives or life expectancies of you and your designated
beneficiary); or<PAGE>
PAGE 26
o if it is allocable to an investment before Aug. 14, 1982 (except
for Contracts in tax benefited plans).
These are the major exceptions to the 10 percent IRS penalty tax.
Additional exceptions may apply depending upon whether or not the
annuity is tax benefited.
For tax benefited Contracts, other penalties apply if you surrender
an annuity bought under your plan before the plan specifies that
payments can be made under the plan.
If you receive all or part of the Contract value from a tax
benefited annuity (except an IRA), mandatory 20 percent income tax
withholding generally will be imposed at the time the payment is
made. In addition, federal income tax and the 10 percent IRS
penalty tax for early withdrawals may apply to amounts properly
includible in income. This mandatory 20 percent income tax
withholding will not be imposed if:
o instead of receiving the payment, you elect to have the payment
rolled over directly to an IRA or another eligible plan;
o the payment is one of a series of substantially equal periodic
payments, made at least annually, over your life or life
expectancy (or joint lives or life expectancies of you and your
designated beneficiary) or made over a period of 10 years or
more; or
o the payment is a minimum distribution required under the Code.
These are the major exceptions to the mandatory 20 percent income
tax withholding. Payments made to a surviving spouse instead of
being directly rolled over to an IRA may be subject to 20 percent
income tax withholding. For taxable distributions that are not
subject to the mandatory 20 percent withholding, federal income tax
will be withheld from the taxable part of your distribution unless
you elect otherwise. State withholding also may be imposed on
taxable distributions.
You will receive a tax statement for any year that you receive a
taxable distribution from your annuity Contract.
Our discussion of federal tax laws is based upon our understanding
of these laws as they are currently interpreted. Either federal
tax laws or current interpretations of them may change. You are
urged to consult your tax adviser concerning your specific
circumstances.
The Company
Business
IDS Life is a stock insurance company organized in 1957 under the
laws of the State of Minnesota. IDS Life is a wholly owned
subsidiary of IDS Financial Corporation, which is a wholly owned <PAGE>
PAGE 27
subsidiary of American Express Company. IDS Life acts as a direct
writer of insurance policies and annuities and as the investment
manager of various investment companies. IDS Life is licensed to
write life insurance and annuity contracts in 49 states and the
District of Columbia. The headquarters of IDS Life is IDS Tower
10, Minneapolis, MN 55440-0010.
Selected Financial Data
The following selected financial data for IDS Life and its
subsidiaries should be read in conjunction with the consolidated
financial statements and notes included in the prospectus beginning
on page __.
<TABLE>
<CAPTION>
Years ended Dec. 31, (Thousands)
1993 1992 1991 1990 1989
<S> <C> <C> <C> <C> <C>
Premiums $ 127,245 $ 114,379 $ 102,338 $ 89,749 $ 135,700
Net investment income 1,783,219 1,616,821 1,422,866 1,204,934 1,030,232
Net gain (loss) on investments (6,737) (3,710) (5,837) 1,022 17,668
Other 304,344 240,959 198,344 165,742 136,809
Total revenues 2,208,071 1,968,449 1,717,711 1,461,447 1,320,409
Income before income taxes 412,726 315,821 259,467 227,742 214,639
Net income $ 270,079 $ 211,170 $ 182,037 $ 157,748 $ 144,019
Total assets $33,057,753 $27,295,773 $22,558,809 $18,088,351 $15,119,628
</TABLE>
Management's Discussion and Analysis of Consolidated Financial
Condition and Results of Operations
Results of Operations
1993 Compared to 1992: Consolidated income before income taxes
totaled $413 million in 1993, compared with $316 million in 1992.
In 1993, $104 million was from the life, disability income, health
and long-term care insurance segment, compared with $96 million in
1992. In 1993, $315 million was from the annuity segment, compared
with $223 million in 1992. The remaining $6.7 million loss in 1993
was a net loss on investments, compared with a net loss on
investments of $3.7 million in 1992.
Total premiums received increased to $5.3 billion in 1993, compared
with $4.4 billion in 1992. This increase is primarily due to
strong sales of variable annuities due to the low interest rate
environment. In addition, IDS Life reported small increases in its
fixed single premium deferred annuity line. Universal life-type
insurance and variable universal life insurance premiums received
also increased from the prior year.
Total revenues increased to $2.2 billion in 1993, compared with
$2.0 billion in 1992. Of this, net investment income was $1.8
billion in 1993, compared with $1.6 billion in 1992, reflecting an
increase in invested assets. Total invested assets grew 14 percent
to $21.9 billion at Dec. 31, 1993, from $19.2 billion at Dec. 31,
1992.
<PAGE>
PAGE 28
Policyholder and contractholder charges, which consist primarily of
cost of insurance charges on universal life-type policies,
increased 18 percent to $184 million in 1993, compared with $156
million in 1992. This increase reflects higher total life
insurance in force which grew 13 percent to $46.1 billion at
Dec. 31, 1993.
Management and other fees increased 41 percent to $120 million in
1993, compared with $85 million in 1992. This is primarily due to
an increase in assets held in segregated asset accounts, which grew
45 percent to $9.0 billion at Dec. 31, 1993, resulting from strong
sales of variable products. IDS Life provides investment
management services for the mutual funds used as investment options
for variable annuities and variable life insurance. IDS Life also
receives a mortality and expense risk fee from the segregated asset
accounts.
In 1993, IDS Life reported a net loss on investments of $6.7
million, compared with a net loss on investments of $3.7 million in
1992. During 1993, net realized losses from the sale of
investments amounted to $12.5 million. This was offset by a net
decrease in allowance for losses of $5.8 million, including an
increase of $9.3 million for mortgage investments and real estate,
offset by a decrease of $15.1 million for below investment grade
bonds (those rated below BBB).
Total benefits and expenses increased to $1.8 billion in 1993,
compared with $1.7 billion in 1992. The largest component of
expenses, interest credited to policyholder accounts for universal
life-type insurance and investment contracts aggregated $1.2
billion and was essentially unchanged from the prior year. This
reflected interest credited to higher accumulation values offset by
lower interest credited rates.
Amortization of deferred policy acquisition costs increased to $212
million in 1993, compared with $140 million in 1992, reflecting
prior years' growth of life insurance and annuity business and a
cumulative adjustment driven by the long-term decrease in accrual
rates on fixed annuities.
Other insurance and operating expenses, which include non-
capitalized commissions and indirect selling expenses, direct and
indirect operating expenses, premium taxes and guaranty association
expenses increased to $242 million in 1993, compared with $216
million in 1992.
In May 1993, the Financial Accounting Standards Board issued SFAS
No. 115, "Accounting for Certain Investments in Debt and Equity
Securities," which IDS Life will implement, effective Jan. 1, 1994.
Under the new rules, debt securities that IDS Life has both the
positive intent and ability to hold to maturity will be carried at
amortized cost. Debt securities that IDS Life does not have the
positive intent and ability to hold to maturity and all marketable
equity securities will be classified as available-for-sale and
carried at fair value. Unrealized gains and losses on securities <PAGE>
PAGE 29
classified as available-for-sale will be carried as a separate
component of stockholder's equity. The effect of the new rules
will be to increase stockholder's equity by approximately $181
million, net of taxes, as of Jan. 1, 1994, but the new rules will
have no material impact on IDS Life's results of operations.
SFAS No. 114, "Accounting by Creditors for Impairment of a Loan,"
and FASB Interpretation No. 39, "Offsetting of Amounts Related to
Certain Contracts," are expected to have no material impact on IDS
Life's results of operations or financial condition.
1992 Compared to 1991: Consolidated income before income taxes
totaled $316 million in 1992, compared with $259 million in 1991.
In 1992, $96 million was from the life, disability income, health
and long-term care insurance segment, compared with $90 million in
1991. In 1992, $223 million was from the annuity segment, compared
with $175 million in 1991. The remaining $3.7 million loss in 1992
was a net loss on investments, compared with a net loss on
investments of $5.8 million in 1991.
Total premiums received increased to $4.4 billion in 1992, compared
with $3.3 billion in 1991. This increase is primarily due to
strong sales of annuities with equity investment options as
investors were attracted to the stock market due to the low
interest rate environment. In addition, IDS Life reported
increases in its fixed single premium deferred annuity line.
Universal life-type insurance and variable universal life
insurance premiums increased from the prior year. Traditional
life insurance premiums were essentially unchanged from the prior
year, while long-term care sales increased.
Total revenues increased to $2.0 billion in 1992, compared with
$1.7 billion in 1991. Of this, net investment income was $1.6
billion in 1992, compared with $1.4 billion in 1991, reflecting an
increase in invested assets, partially offset by lower yields.
Total invested assets grew 20 percent to $19.2 billion at Dec. 31,
1992, from $16.0 billion at Dec. 31, 1991.
Policyholder and contractholder charges, which consist primarily
of cost of insurance charges on universal life-type policies,
increased to $156 million in 1992, compared with $137 million in
1991. This increase reflects higher total life insurance in force
which grew 12 percent to $40.9 billion at Dec. 31, 1992.
Management and other fees increased to $85 million in 1992,
compared with $61 million in 1991. This is primarily due to an
increase in assets held in segregated asset accounts, which grew 33
percent to $6.2 billion at Dec. 31, 1992, resulting from strong
sales of variable products and market appreciation. IDS Life
provides investment management services for the mutual funds used
as investment options for variable annuities and variable life
insurance. IDS Life also receives a mortality and expense risk fee
from the segregated asset accounts.
<PAGE>
PAGE 30
In 1992, IDS Life reported a net loss on investments of $3.7
million, compared with a net loss on investments of $5.8 million
in 1991. During 1992, net realized gains from the sale of
investments amounted to $1.2 million. This was offset by a net
increase in allowance for losses of $4.9 million, including an
increase of $12.5 million for mortgage investments and real estate,
offset by a decrease of $7.6 million for below investment grade
bonds (those rated below BBB).
During 1991, net realized gains from the sale of investments of
$16.0 million were offset by an increase in allowance for losses
of $21.8 million, resulting in a net loss of $5.8 million.
Total benefits and expenses increased to $1.7 billion in 1992,
compared with $1.5 billion in 1991. The largest component of
expenses, interest credited to policyholder accounts for universal
life-type insurance and investment contracts, increased to $1.2
billion in 1992, compared with $1.1 billion in 1991. This reflects
an increase in liabilities for future policy benefits for universal
life-type insurance, which grew 8.8 percent to $2.6 billion at Dec.
31, 1992, and an increase in liabilities for future policy benefits
for fixed annuities, which grew 20 percent to $16 billion at Dec.
31, 1992.
Amortization of deferred policy acquisition costs increased to $140
million in 1992, compared with $116 million in 1991, reflecting
prior years' growth of life insurance and annuity business.
Other insurance and operating expenses, which include non-
capitalized commissions and indirect selling expenses, direct and
indirect operating expenses, premium taxes and guaranty association
expenses increased to $216 million in 1992, compared with $154
million in 1991. The increase is primarily due to an increased
provision for assessments by state guaranty associations. The
assessments are used to fund claims of policyholders of insolvent
insurance companies.
Liquidity and Capital Resources
The liquidity requirements of IDS Life are met by funds provided
from operations and investment activity. The components of the
funds provided are premiums, investment income, proceeds from sales
of investments as well as maturities and periodic repayments of
investment principal.
The primary uses of funds are policy benefits, commissions and
operating expenses, policy loans and new investment purchases.
IDS Life has available lines of credit with two banks aggregating
$75 million, which are used strictly as short-term
sources of funds. Borrowings outstanding under the agreements were
$1.5 million at Dec. 31, 1993. IDS Life also uses reverse
repurchase agreements for short-term liquidity needs. Reverse
repurchase agreements aggregated $30 million at Dec. 31, 1993.
<PAGE>
PAGE 31
At Dec. 31, 1993, investments in fixed maturities comprised 89
percent of IDS Life's total invested assets. Of the fixed maturity
portfolio, approximately 51 percent is invested in GNMA, FNMA and
FHLMC mortgage-backed securities which are considered AAA/Aaa
quality.
At Dec. 31, 1993, approximately 8.8 percent of IDS Life's
investments in fixed maturities were below investment grade bonds.
These investments may be subject to a higher degree of risk than
the more "traditional" issues because of the borrower's generally
greater sensitivity to adverse economic conditions, such as
recession or increasing interest rates, and in certain instances,
the lack of an active secondary market. Expected returns on below
investment grade bonds reflect consideration of such factors. IDS
Life has established an allowance for losses for below investment
grade bonds totaling $23 million at Dec. 31, 1993. Management
believes that the allowance for losses is adequate, however, future
economic factors could impact the ratings of securities owned and
additional reserves for losses may be required.
At Dec. 31, 1993, net unrealized appreciation on fixed maturities
included $1.1 billion of gross unrealized appreciation and $82
million of gross unrealized depreciation.
At Dec. 31, 1993, IDS Life had an allowance for losses for mortgage
loans totaling $35 million and for real estate totaling $11
million.
The economy and other factors have caused an increase in the number
of insurance companies that are under regulatory supervision. This
circumstance has resulted in an increase in assessments by state
guaranty associations to cover losses to policyholders of insolvent
or rehabilitated companies. Some assessments can be partially
recovered through a reduction in future premium taxes in certain
states. IDS Life established an asset for guaranty association
assessments from those states allowing a reduction in future
premium taxes over a reasonable period of time. The asset will be
amortized as future premium taxes are reduced. IDS Life has also
estimated the potential effect of future assessments on IDS Life's
financial position and results of operations and has established a
reserve for such potential assessments.
In the first quarter of 1994, IDS Life paid a $40 million dividend
to its parent. In 1993, dividends paid to its parent were $25
million.
Segment Information
IDS Life's operations consist of two business segments:
Individual and group life, disability income, long-term care and
health insurance; and fixed and variable annuity products designed
for individuals, pension plans, small businesses and
employer-sponsored groups. IDS Life is not dependent upon any
single customer and no single customer accounted for more than 10
percent of revenue in 1993, 1992 or 1991. (See Note 8, Segment
information, in the "Notes to Consolidated Financial Statements".)
<PAGE>
PAGE 32
Reinsurance
Reinsurance arrangements are used to reduce exposure to large
losses. The maximum amount of risk retained by IDS Life on any one
life is $750,000 of life and waiver of premium benefits plus
$50,000 of accidental death benefits. The excesses are reinsured
with other life insurance companies. At Dec. 31, 1993, traditional
life and universal life-type insurance in force aggregated $46.1
billion, of which $3.0 billion was reinsured.
IDS Life has a reinsurance agreement with an affiliated company,
whereby IDS Life assumed 100 percent of a block of single premium
life insurance business. Reserves related to this agreement were
$760 million at Dec. 31, 1993. IDS Life also has a reinsurance
agreement to cede 50 percent of its long-term care insurance
business to an affiliated company. Reserves and reinsurance
receivables related to this agreement both amounted to $44.1
million at Dec. 31, 1993.
Reserves
In accordance with the insurance laws and regulations under which
IDS Life operates, it is obligated to carry on its books, as
liabilities, actuarially determined reserves to meet its
obligations on its outstanding life and health insurance policies
and annuity contracts. Reserves for policies and contracts are
based on mortality and morbidity tables in general use in the
United States. These reserves are computed amounts that, with
additions from premiums to be received, and with interest on such
reserves compounded annually at assumed rates, will be sufficient
to meet IDS Life's policy obligations at their maturities or in the
event of an insured's death. In the accompanying financial
statements these reserves are determined in accordance with
generally accepted accounting principles. (See Note 1, Liabilities
for future policy benefits, in the "Notes to Consolidated Financial
Statements.")
Investments
Of IDS Life's consolidated total investments of $21.9 billion at
Dec. 31, 1993, 46 percent was invested in mortgage-backed
securities, 43 percent in corporate and other bonds, 9.4 percent
in primary mortgage loans on real estate, 1.6 percent in policy
loans and the remaining 0.5 percent in other investments.
Competition
IDS Life is engaged in a business that is highly competitive due to
the large number of stock and mutual life insurance companies and
other entities marketing insurance products. There are over 2,600
stock, mutual and other types of insurers in the life insurance
business. In Fortune magazine's May 1993 listing of the 50 largest
life insurance companies as ranked by assets, IDS Life ranked
fourteenth. Best's Insurance Reports, Life-Health edition, 1993,
assigned IDS Life one of its highest classifications, A+
(Superior).
<PAGE>
PAGE 33
Employees
As of Dec. 31, 1993, IDS Life and its subsidiaries had 764
employees; including 711 employed at the home office in
Minneapolis, MN, and 53 employed at IDS Life Insurance Company of
New York located in Albany, NY.
Properties
IDS Life occupies office space in Minneapolis, MN, which is rented
by its parent, IDS Financial Corporation. IDS Life reimburses IDS
Financial Corporation for rent based on direct and indirect
allocation methods. Facilities occupied by IDS Life and its
subsidiaries are believed to be adequate for the purposes for which
they are used and are well maintained.
State Regulation
IDS Life is subject to the laws of the State of Minnesota governing
insurance companies and to the regulations of the Minnesota
Department of Commerce. An annual statement in the prescribed form
is filed with the Minnesota Department of Commerce each year
covering IDS Life's operation for the preceding year and its
financial condition at the end of such year. Regulation by the
Minnesota Department of Commerce includes periodic examination to
determine IDS Life's contract liabilities and reserves so that the
Minnesota Department of Commerce may certify that these items are
correct. IDS Life's books and accounts are subject to review by
the Minnesota Department of Commerce at all times. Such regulation
does not, however, involve any supervision of the account's
management or IDS Life's investment practices or policies. In
addition, IDS Life is subject to regulation under the insurance
laws of other jurisdictions in which it operates. A full
examination of IDS Life's operations is conducted periodically by
the National Association of Insurance Commissioners.
Under insurance guaranty fund laws, in most states, insurers doing
business therein can be assessed up to prescribed limits for
policyholder losses incurred by insolvent companies. Most of these
laws do provide, however, that an assessment may be excused or
deferred if it would threaten an insurer's own financial strength.
Directors and Executive Officers*
The members of the Board of Directors and the principal executive
officers of IDS Life, together with the principal occupation of
each during the last five years, are as follows:
Directors
Louis C. Fornetti, 44
Director since March 1994; Senior Vice President and Director, IDS,
since February 1985.
<PAGE>
PAGE 34
David R. Hubers, 51
Director since September 1989; President and Chief Executive
Officer, IDS, since August 1993, and Director, IDS, since January
1984. Senior Vice President, Finance and Chief Financial Officer,
IDS, from January 1984 to August 1993.
Richard W. Kling, 53
Director since February 1984; President since March 1994.
Executive Vice President, Marketing and Products from January 1988
to March 1994. Vice President, IDS, since January 1988. Director
of IDS Life Series Fund, Inc. and Manager of IDS Life Variable
Annuity Funds A & B.
Paul F. Kolkman, 47
Director since May 1984; Executive Vice President since March 1994;
Vice President, Finance from May 1984 to March 1994; Vice
President, IDS, since January 1987.
Peter A. Lefferts, 52
Director and Executive Vice President, Marketing since March 1994;
Senior Vice President and Director, IDS, since February 1986.
Janis E. Miller, 42
Director and Executive Vice President, Variable Assets since March
1994; Vice President, IDS, since June 1990. Director, Mutual Funds
Product Development and Marketing, IDS, from May 1987 to May 1990.
Director of IDS Life Series Fund, Inc. and Manager of IDS Life
Variable Annuity Funds A & B.
James A. Mitchell, 52
Chairman of the Board since March 1994; Director since July 1984;
Chief Executive Officer since November 1986; President from July
1984 to March 1994; Senior Vice President and Director, IDS, since
July 1984.
Barry J. Murphy, 43
Director and Executive Vice President, Client Service since March
1994; Senior Vice President, Operations, Travel Related Services
(TRS), a subsidiary of American Express Company, since July 1992;
Vice President, TRS, from November 1989 to July 1992; Chief
Operating Officer, TRS, from March 1988 to November 1989.
Stuart A. Sedlacek, 36
Director and Executive Vice President, Assured Assets since March
1994; Vice President, IDS, since September 1988.
Melinda S. Urion, 40
Director and Controller since September 1991; Executive Vice
President since March 1994; Vice President and Treasurer from
September 1991 to March 1994; Vice President, IDS, since September
1991; Chief Accounting Officer, IDS, from July 1988 to September
1991.
<PAGE>
PAGE 35
Officers Other Than Directors
Morris Goodwin Jr., 42
Vice President and Treasurer since March 1994; Vice President and
Corporate Treasurer, IDS, since July 1989; Chief Financial Officer
and Treasurer, IDS Bank & Trust, from January 1988 to July 1989.
William A. Stoltzmann, 45
Vice President, General Counsel and Secretary since 1985.
*The address for all of the directors and principal officers is:
IDS Tower 10, Minneapolis, MN 55440-0010.
Executive Compensation
Executive officers of IDS Life also may serve one or more
affiliated companies. The following table reflects cash
compensation paid to the five most highly compensated executive
officers as a group for services rendered in 1993 to IDS Life and
its affiliates. The table also shows the total cash compensation
paid to all executive officers of IDS Life, as a group, who were
executive officers at any time during 1993.
Name of individual Cash
or number in group Position held compensation
Five most highly compensated
executive officers as a group: $ 1,929,713
James A. Mitchell President
Richard W. Kling Exec. Vice President,
Marketing and Products
ReBecca K. Roloff Exec. Vice President,
Operations
Alan R. Dakay Vice President,
Institutional Insurance Marketing
Paul F. Kolkman Vice President,
Finance
All executive officers
as a group (12) $ 2,811,894
Security Ownership of Management
IDS Life's directors and officers do not beneficially own any
outstanding shares of stock of IDS Life. All of the outstanding
shares of stock of IDS Life are beneficially owned by its parent,
IDS Financial Corporation. The percentage of shares of IDS
Financial Corporation owned by any director, and by all directors
and officers of IDS Life as a group, does not exceed one percent of
the class outstanding.
<PAGE>
PAGE 36
Legal Proceedings and Opinion
Legal matters in connection with federal laws and regulations
affecting the issue and sale of the Contracts described in this
prospectus and the organization of IDS Life, its authority to issue
Contracts under Minnesota law and the validity of the forms of the
Contracts under Minnesota law have been passed on by the General
Counsel of IDS Life.
Experts
The consolidated financial statements of IDS Life Insurance Company
at Dec. 31, 1993, and 1992, and for each of the three years in the
period ended Dec. 31, 1993, appearing in this Prospectus and
Registration Statement have been audited by Ernst & Young,
independent auditors, as set forth in their reports thereon
appearing elsewhere herein and in the Registration Statement, and
are included in reliance upon such reports given upon the authority
of such firm as experts in accounting and auditing.
Appendix A
Partial Surrender Illustration
Involving a Surrender Charge and a Market Value Adjustment
Annuity Assumptions:
Single Payment $10,000
Guarantee Period 10 Years
Guarantee Rate (ig) 4.5 percent effective
annual yield
End of Contract year
Contract Surrender Accumulation Values
year Charge % if no surrenders
1 8% $10,450.00
2 7 $10,920.25
3 6 $11,411.66
4 5 $11,925.19
5 4 $12,461.82
6 3 $13,022.60
7 2 $13,608.62
8 1 $14,221.01
9 0 $14,860.95
10 0 $15,529.69
Partial Surrender Assumptions:
On the first day of your 4th Contract year you request a partial
surrender of:
Example I - $2,000 of your Accumulation Value
Example II - A $2,000 net surrender check
You may surrender 10 percent of $11,411.66 (end of 3rd Contract
year Accumulation Value) without surrender charge but subject to a
Market Value Adjustment -- this is $1,141.17
<PAGE>
PAGE 37
The excess Market Adjusted Value surrendered is subject to both a 5
percent (4th Contract year) surrender charge and a Market Value
Adjustment.
The current rate (ic) for applicable new sales and renewals = 4
percent
The number of full years left in your Guarantee Period (N) = 7
The number of fractional years left in your Guarantee Period (t) =
0
Example I - $2,000 of Accumulation Value Surrendered
What Will Be Your Market Value Adjustment Amount?
The Market Adjusted Value of your $2,000 partial surrender will be:
Renewal Value of Accumulation Value Surrendered
(1 + ic + .0025)(N+t)
= $2,000 (1 + ig)7
(1 + ic + .0025)7
= $2,000 (1.045)7
(1.0425)7
= $2,033.82
The Market Value Adjustment = the Market Adjusted Value surrendered
less the Accumulation Value surrendered
$2,033.82 - $2,000 = $33.82
(NOTE: This Market Value Adjustment is Positive. In Other Cases
The Market Value Adjustment May Be Negative.)
What Will Be Your Surrender Charge Amount?
The surrender charge will be 5 percent multiplied by the excess of
the Market Adjusted Value over the Accumulation Value that may be
surrendered without surrender charge:
($2,033.82 - $1,141.17) x .05 = $44.63
What Net Amount Will You Receive?
Your Contract's Accumulation Value will decrease by $2,000 and we
will send you a check for:
Accumulation Value surrendered $2,000.00
Plus Market Value Adjustment 33.82
Less surrender charge (44.63)
Net surrender amount $1,989.19
<PAGE>
PAGE 38
Example II - $2,000 Net Surrender Check Requested
What Will Be The Accumulation Value Surrendered?
Tell us if you want a specific net surrender check amount. We will
work backwards using an involved formula to determine how much
Accumulation Value must be surrendered to result in a net check to
you for a specific amount. For a $2,000 net check to you, the
formula results in $2,011.20 of Accumulation Value to be
surrendered.
What Will Be Your Market Value Adjustment Amount?
The Market Adjusted Value is:
Renewal Value of Accumulation Value Surrendered
(1 + ic + .0025)(N+t)
= $2,011.20 (1 + ig)7
(1 + ic + .0025)7
= $2,011.20 (1.045)7
(1.0425)7
= $2,045.21
The Market Value Adjustment = the Market Adjusted Value surrendered
less the Accumulation Value surrendered
$2,045.21 - $2,011.20 = $34.00
(NOTE: This Market Value Adjustment is Positive. In Other Cases
The Market Value Adjustment May Be Negative.)
What Will Be Your Surrender Charge Amount?
The surrender charge will be 5 percent multiplied by the excess of
the Market Adjusted Value over the Accumulation Value that may be
surrendered without surrender charge:
($2,045.21 - $1,141.17) x .05 = $45.20
What Net Amount Will You Receive?
Your Contract's Accumulation Value will decrease by $2,011.20 and
we will send you a check for:
Accumulation Value surrendered $2,011.20
Plus Market Value Adjustment 34.00
Less surrender charge (45.20)
Net surrender amount $2,000.00
<PAGE>
PAGE 39
Appendix B
Market Value Adjustment Illustration
Annuity Assumptions:
Single Payment $50,000
Guarantee Period 10 Years
Guarantee Rate 4.5 percent effective annual yield
Market Adjustment Assumptions: These examples show how the Market
Value Adjustment may affect your Contract values. The surrenders
in these examples occur one year after the Contract date. There
are no previous surrenders.
The Accumulation Value at the end of one year is $52,250. If there
aren't any surrenders, the Renewal Value at the end of the 10 year
Guarantee Period will be $77,648.47.
The Market Value Adjustment is based on the rate we are crediting
(at the time of your surrender) on new Contracts with the same
length Guarantee Period as the time remaining in your Guarantee
Period. After one year, you have 9 years left of your 10 year
Guarantee Period.
Example I shows a downward Market Value Adjustment. Example II
shows an upward Market Value Adjustment. These examples do not
show the surrender charge (if any) which would be calculated
separately after the Market Value Adjustment. Surrender charge
calculations are shown in Appendix A.
Market Adjusted Value Formula:
Market Adjusted = (Renewal Value)
Value (1 + ic + .0025)(N+t)
Renewal Value -- The Accumulation Value at the end of the
current Guarantee Period
ic -- The Current Interest Rate offered for new
Contract sales and renewals for the number of
years remaining in the Guarantee Period
N -- The number of complete Contract years to the
end of the current Guarantee Period
t -- The fraction of the Contract year remaining to
the end of the Contract year
Example I - Downward Market Value Adjustment
A surrender results in a downward Market Value Adjustment when
interest rates have increased. Assume after 1 year, we are now
crediting 5 percent for a new Contract with a 9 year Guarantee
Period. If you fully surrender, the Market Adjusted Value would
be:<PAGE>
PAGE 40
Renewal Value
(1 + ic + .0025)(N+t)
= $77,648.47
(1 + .05 + .0025)9
= $48,993
The Market Value Adjustment is a $3,257 reduction of the
Accumulation Value:
($3,257) = $48,993 - $52,250
If you surrendered half of your Contract instead of all, the Market
Adjusted Value of the surrendered portion would be one-half that of
the full surrender:
$38,824.24
$24,496.50 = (1 + .05 + .0025)9
Example II - Upward Market Value Adjustment
A surrender results in an upward Market Value Adjustment when
interest rates have decreased. Assume after 1 year, we are now
crediting 4 percent for a new Contract with a 9 year guarantee
period. If you fully surrender, the Market Adjusted Value would
be:
Renewal Value
(1 + ic + .0025)(N+t)
= $77,648.47
(1 + .04 + .0025)9
= $53,388.58
The Market Value Adjustment is a $1,138.58 increase of the
Accumulation Value:
$1,138.58 = $53,388.50 - $52,250
If you surrendered half of your Contract instead of all, the Market
Adjusted Value of the surrendered portion would be one-half that of
the full surrender:
$38,824.24
$26,694.29 = (1 + .04 + .0025)9
<PAGE>
PAGE 41
Annual Financial Information
Report of Independent Auditors
The Board of Directors
IDS Life Insurance Company
We have audited the accompanying consolidated balance sheets of IDS
Life Insurance Company (a wholly owned subsidiary of IDS Financial
Corporation) as of December 31, 1993 and 1992, and the related
consolidated statement of income and cash flows for each of the
three years in the period ended December 31, 1993. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the consolidated financial
position of IDS Life Insurance Company at December 31, 1993 and
1992, and the consolidated results of its operations and its cash
flows for each of the three years in the period ended December 31,
1993, in conformity with generally accepted accounting principles.
Ernst & Young
Minneapolis, Minnesota
February 3, 1994
<PAGE>
PAGE 42
IDS Life Financial Information
The Financial statements shown below are those of the insurance
company and not those of the Account. They are included in the
prospectus for the purpose of informing investors as to the
financial condition of the insurance company and its ability to
carry out its obligations under the variable annuity contracts.
IDS Life Insurance Company
<TABLE>
<CAPTION>
Consolidated Balance Sheets Dec. 31, 1993 Dec. 31,1992
Assets (Thousands)
______________________________________________________________________________________________________________________________
<S> <C> <C>
Investments:
Fixed maturities (Fair value: 1993, $20,425,979; 1992, $17,896,374) $19,392,424 $17,185,879
Mortgage loans on real estate (Fair value: 1993, $2,125,686; 1992, $1,785,970) 2,055,450 1,688,490
Policy loans 350,501 320,016
Other investments 56,307 51,955
______________________________________________________________________________________________________________________________
Total investments 21,854,682 19,246,340
______________________________________________________________________________________________________________________________
Cash and cash equivalents 146,281 73,563
Receivables:
Reinsurance 55,298 -
Amounts due from brokers 5,719 20,202
Other accounts receivable 21,459 20,095
Premiums due 1,329 1,361
______________________________________________________________________________________________________________________________
Total receivables 83,805 41,658
______________________________________________________________________________________________________________________________
Accrued investment income 307,177 285,120
Deferred policy acquisition costs 1,652,384 1,440,875
Other assets 21,730 18,672
Assets held in segregated asset accounts, primarily common stocks at market 8,991,694 6,189,545
______________________________________________________________________________________________________________________________
Total assets $33,057,753 $27,295,773
______________________________________________________________________________________________________________________________
Liabilities and Stockholder's Equity
______________________________________________________________________________________________________________________________
Liabilities:
Fixed annuities - future policy benefits $18,492,135 $16,342,419
Universal life-type insurance - future policy benefits 2,753,455 2,567,687
Traditional life-type insurance - future policy benefits 210,205 210,886
Disability income, health and long-term care insurance - future policy benefits 185,272 104,896
Policy claims and other policyholders' funds 44,516 49,899
Deferred federal income taxes 43,620 87,913
Amounts due to brokers 351,486 258,654
Other liabilities 292,024 235,509
Liabilities related to segregated asset accounts 8,991,694 6,189,545
______________________________________________________________________________________________________________________________
Total liabilities 31,364,407 26,047,408
______________________________________________________________________________________________________________________________
Stockholder's equity:
Capital stock, $30 per value per share; 100,000 shares authorized, issued and outstanding 3,000 3,000
Additional paid-in capital 222,000 22,000
Net unrealized appreciation on equity securities 114 214
Retained earnings 1,468,232 1,223,151
______________________________________________________________________________________________________________________________
Total stockholder's equity 1,693,346 1,248,365
______________________________________________________________________________________________________________________________
Total liabilities and stockholder's equity $33,057,753 $27,295,773
Commitments and contingencies (Note 6)
______________________________________________________________________________________________________________________________
See accompanying notes to consolidated financial statements.
/TABLE
<PAGE>
PAGE 43
<TABLE>
<CAPTION>
Consolidated Statement of Income Years ended Dec. 31,
1993 1992 1991
(Thousands)
__________________________________________________________________________________________________________________________________
<S> <C> <C> <C>
Revenues:
Premiums:
Traditional life insurance $ 48,137 $ 49,719 $ 49,706
Disability income and long-term care insurance 79,108 64,660 52,632
__________________________________________________________________________________________________________________________________
127,245 114,379 102,338
Policyholder and contractholder charges 184,205 156,368 137,202
Management and other fees 120,139 84,591 61,142
Net investment income 1,783,219 1,616,821 1,422,866
Net loss on investments (6,737) (3,710) (5,837)
__________________________________________________________________________________________________________________________________
Total revenues 2,208,071 1,968,449 1,717,711
__________________________________________________________________________________________________________________________________
Benefits and expenses:
Death and other benefits - traditional life insurance 32,136 34,139 30,170
Death and other benefits - universal life-type insurance
and investment contracts 49,692 42,174 38,529
Death and other benefits - disability income, health and
long-term care insurance 13,148 10,701 8,242
Increase (decrease) in liabilities for future policy benefits -
traditional life insurance (4,513) (5,788) (6,425)
Increase (decrease) in liabilities for future policy benefits -
disability income, health and long-term care insurance 32,528 27,172 19,700
Interest credited on universal life-type insurance and investment contracts 1,218,647 1,188,379 1,098,281
Amortization of deferred policy acquisition costs 211,733 140,159 116,078
Other insurance and operating expenses 241,974 215,692 153,669
__________________________________________________________________________________________________________________________________
Total benefits and expenses 1,795,345 1,652,628 1,458,244
__________________________________________________________________________________________________________________________________
Income before income taxes 412,726 315,821 259,467
Income taxes 142,647 104,651 77,430
__________________________________________________________________________________________________________________________________
Net income $ 270,079 $ 211,170 $ 182,037
__________________________________________________________________________________________________________________________________
See accompanying notes to consolidated financial statements.
/TABLE
<PAGE>
PAGE 44
<TABLE>
<CAPTION>
Consolidated Statements of Cash Flows Years ended Dec. 31,
1993 1992 1991
(Thousands)
__________________________________________________________________________________________________________________________________
<S> <C> <C> <C>
Cash flows from operating activities:
Net income $ 270,079 $ 211,170 $ 182,037
Adjustments to reconcile net income to net cash provided by operating activities:
Issuance - policy loans, excluding universal life-type insurance (35,886) (32,881) (29,309)
Repayment - policy loans, excluding universal life-type insurance 29,557 26,750 19,928
Change in reinsurance receivable (55,298) - -
Change in other accounts receivable (1,364) (4,772) (1,558)
Change in accrued investment income (22,057) (15,853) (26,022)
Change in deferred policy acquisition costs, net (211,509) (229,252) (175,442)
Change in liabilities for future policy benefits for traditional life, disability
income, health and long-term care insurance 79,695 21,384 13,275
Change in policy claims and other policyholders' funds (5,383) (1,347) 11,801
Change in deferred federal income taxes (44,237) (30,385) (29,207)
Change in other liabilities 56,515 88,997 45,323
Amortization of premium (accretion of discount), net (27,438) (4,289) 19,726
Net loss on investments 6,737 3,710 5,837
Premiums related to universal life-type insurance 397,883 312,621 264,504
Surrenders and death benefits related to universal life-type insurance (255,133) (166,162) (109,307)
Interest credited to account balances related to universal life-type insurance 156,885 161,873 160,585
Policyholder and contractholder charges, non-cash (115,140) (100,975) (96,211)
Other, net (1,907) (10,647) 2,258
__________________________________________________________________________________________________________________________________
Net cash provided by operating activities $ 221,999 $ 229,942 $ 258,218
__________________________________________________________________________________________________________________________________
Cash flows from investing activities:
Acquisition of investments, excluding policy loans $(7,102,546) $(7,001,348) $(5,518,481)
Maturities, sinking fund payments and calls of investments, excluding policy loans 3,931,819 2,700,479 838,589
Sale of investments, excluding policy loans 613,571 1,073,950 2,274,401
Change in amounts due from brokers 14,483 289,335 (134,312)
Change in amounts due to brokers 92,832 42,182 72,382
__________________________________________________________________________________________________________________________________
Net cash used in investing activities (2,449,841) (2,895,402) (2,467,421)
__________________________________________________________________________________________________________________________________
Cash flows from financing activities:
Considerations received related to investment contracts 2,843,668 2,821,069 2,316,333
Surrenders and death benefits related to investment contracts (1,765,869) (1,168,633) (871,808)
Interest credited to account balances related to investment contracts 1,071,917 1,026,506 937,696
Issuance - universal life-type insurance policy loans (70,304) (72,007) (76,010)
Repayment - universal life-type insurance policy loans 46,148 40,351 31,860
Capital contribution from parent 200,000 - -
Cash dividend to parent (25,000) (20,000) (20,000)
__________________________________________________________________________________________________________________________________
Net cash provided by financing activities 2,300,560 2,627,286 2,318,071
__________________________________________________________________________________________________________________________________
Net increase (decrease) in cash and cash equivalents 72,718 (38,174) 108,868
Cash and cash equivalents at beginning of year 73,563 111,737 2,869
__________________________________________________________________________________________________________________________________
Cash and cash equivalents at end of year $ 146,281 $ 73,563 $ 111,737
__________________________________________________________________________________________________________________________________
See accompanying notes to consolidated financial statements.
/TABLE
<PAGE>
PAGE 45
Notes to Consolidated Financial Statements ($ Thousands)
Dec. 31, 1993, 1992, 1991
1. Summary of significant accounting policies
Nature of business
IDS Life Insurance Company (the Company) is engaged in the
insurance and annuity business. The Company sells various forms of
fixed and variable individual life insurance, group life insurance,
individual and group disability income insurance, long-term care
insurance, and single and installment premium fixed and variable
annuities.
Basis of presentation
The Company is a wholly owned subsidiary of IDS Financial
Corporation (IDS), which is a wholly owned subsidiary of American
Express Company. The accompanying consolidated financial
statements include the accounts of the Company and its wholly owned
subsidiaries, IDS Life Insurance Company of New York and American
Enterprise Life Insurance Company. All material intercompany
accounts and transactions have been eliminated in consolidation.
The accompanying consolidated financial statements have been
prepared in conformity with generally accepted accounting
principles which vary in certain respects from reporting practices
prescribed or permitted by state insurance regulatory authorities.
Also, the consolidated financial statements are presented on a
historical cost basis without adjustment of the net assets
attributable to the 1984 acquisition of IDS by American Express
Company.
Investments
Investments in fixed maturities are carried at cost, adjusted where
appropriate for amortization of premiums and accretion of
discounts. Mortgage loans on real estate are carried principally
at the unpaid principal balances of the related loans. Policy
loans are carried at the aggregate of the unpaid loan balances
which do not exceed the cash surrender values of the related
policies. Other investments include interest rate caps, real
estate and equity securities. When evidence indicates a decline,
which is other than temporary, in the underlying value or earning
power of individual investments, such investments are written down
to the estimated realizable value by a charge to income. Equity
securities are carried at market value and the related net
unrealized appreciation or depreciation is reported as a credit or
charge to stockholder's equity.
The Company has the ability and the intent to recover the costs of
these investments by holding them for the forseeable future. The
ability to hold investments to scheduled maturity dates is
dependent on, among other things, annuity contract owners
maintaining their annuity contracts in force.
The Company will implement, effective January 1, 1994, Statement of
Financial Accounting Standards No. 115, "Accounting for Certain
Investments in Debt and Equity Securities." Under the new rules,
debt securities that the Company has both the positive intent and
ability to hold to maturity will be carried at amortized cost.
Debt securities that the Company does not have the positive intent <PAGE>
PAGE 46
1. Summary of significant accounting policies (continued)
and ability to hold to maturity and all marketable equity
securities will be classified as available-for-sale and carried at
fair value. Unrealized gains and losses on securites classified as
available-for-sale will be carried as a separate component of
stockholder's equity. The effect of the new rules will be to
increase stockholder's equity by approximately $181 million, net of
taxes, as of January 1, 1994, but the new rules will have no
material impact on the Company's results of operations.
Realized investment gain or loss is determined on an identified
cost basis.
Interest rate cap contracts are purchased to reduce the Company's
exposure to rising interest rates which would increase the cost of
future policy benefits for interest sensitive products. Costs
are amortized over the lives of the agreements and benefits are
recognized when realized.
Prepayments are anticipated on certain investments in
mortgage-backed securities in determining the constant effective
yield used to recognize interest income. Prepayment estimates
are based on information received from brokers who deal in
mortgage-backed securities.
Statement of cash flows
The Company considers investments with a maturity at the date of
their acquisition of three months or less to be cash equivalents.
These securities are carried principally at amortized cost which
approximates fair value.
Supplementary information to the consolidated statement of cash
flows for the years ended Dec. 31 is summarized as follows:
1993 1992 1991
___________________________________________________________________
Cash paid during the year for:
Income taxes $188,204 $140,445 $111,809
Interest on borrowings 2,661 1,265 108
___________________________________________________________________
Recognition of profits on annuity contracts and insurance policies
The Company issues single premium deferred annuity contracts that
provide for a service fee (surrender charge) at annually decreasing
rates upon withdrawal of the annuity accumulation value by the
contract owner. No sales fee is deducted from the contract
considerations received on these contracts ("no load" annuities).
Single premium deferred annuities issued prior to 1980 had a sales
fee and no surrender charge. All of the Company's single premium
deferred annuity contracts provide for crediting the contract
owners' accumulations at specified rates of interest. Such rates
are revised by the Company from time to time based on changes in
the market investment yield rates for fixed-income securities.
<PAGE>
PAGE 47
1. Summary of significant accounting policies (continued)
Profits on single premium deferred annuities and installment
annuities are recognized by the Company over the lives of the
contracts and represent the excess of investment income earned
from investment of contract considerations over interest credited
to contract owners and other expenses.
The retrospective deposit method is used in accounting for
universal life-type insurance. This method recognizes profits over
the lives of the policies in proportion to the estimated gross
profits expected to be realized.
Premiums on traditional life, disability income, health and
long-term care insurance policies are recognized as revenue when
collected or due, and related benefits and expenses are associated
with premium revenue in a manner that results in recognition of
profits over the lives of the insurance policies. This association
is accomplished by means of the provision for future policy
benefits and the deferral and subsequent amortization of policy
acquisition costs.
Deferred policy acquisition costs
The costs of acquiring new business, principally sales
compensation, policy issue costs, underwriting and certain sales
expenses, have been deferred on insurance and annuity contracts.
The deferred acquisition costs for single premium deferred
annuities and installment annuities are amortized based upon
surrender charge revenue and a portion of the excess of investment
income earned from investment of the contract considerations over
the interest credited to contract owners. The costs for universal
life-type insurance are amortized over the lives of the policies as
a percentage of the estimated gross profits expected to be
realized on the policies. For traditional life, disability income,
health and long-term care insurance policies, the costs are
amortized over an appropriate period in proportion to premium
revenue.
Liabilities for future policy benefits
Liabilities for universal life-type insurance, single premium
deferred annuities and installment annuities are accumulation
values.
Liabilities for fixed annuities in a benefit status are based on
the Progressive Annuity Table with interest at 5 percent, the 1971
Individual Annuity Table with interest at 7 percent or 8.25
percent, or the 1983a Table with various interest rates ranging
from 5.5 percent to 9.5 percent, depending on year of issue.
Liabilities for future benefits on traditional life insurance have
been computed principally by the net level premium method, based on
anticipated rates of mortality (approximating the 1965-1970 Select
and Ultimate Basic Table for policies issued after 1980 and the
1955-1960 Select and Ultimate Basic Table for policies issued prior
to 1981), policy persistency derived from Company experience data
(first year rates ranging from approximately 70 percent to 90
percent and increasing rates thereafter), and estimated future
investment yields of 4 percent for policies issued before 1974 and
<PAGE>
PAGE 48
1. Summary of significant accounting policies (continued)
5.25 percent for policies issued from 1974 to 1980. Cash value
plans issued in 1980 and later assume future investment rates that
grade from 9.5 percent to 5 percent over 20 years. Term insurance
issued from 1981 to 1984 assumes an 8 percent level investment rate
and term insurance issued after 1984 assumes investment rates that
grade from 10 percent to 6 percent over 20 years.
Liabilities for future disability income policy benefits have been
computed principally by the net level premium method, based on the
1964 Commissioners Disability Table with the 1958 Commissioners
Standard Ordinary Mortality Table at 3 percent interest for 1980
and prior, 8 percent interest for persons disabled from 1981 to
1991 and 6 percent interest for persons disabled after 1991.
Liabilities for future benefits on long-term care insurance have
been computed principally by the net level premium method, using
morbidity rates based on the 1985 National Nursing Home Survey and
mortality rates based on the 1983a Table. The interest rate basis
is 9.5 percent grading to 7 percent over ten years for policies
issued from 1989 to 1992, 7.75 percent grading to 7 percent over
four years for policies issued after 1992, 8 percent for claims
incurred in 1989 to 1991 and 6 percent for claims incurred after
1991.
At Dec. 31, 1993 and 1992, the carrying amount and fair value of
fixed annuities future policy benefits, after excluding life
insurance-related contracts carried at $913,127 and $834,909, were
$17,579,008 and $15,507,510, and $16,881,747 and $14,867,066,
respectively. The fair value is net of policy loans of $59,132 and
$51,394 at Dec. 31, 1993 and 1992, respectively. The fair value of
these benefits is based on the status of the annuities at Dec. 31,
1993 and 1992. The fair value of deferred annuities is estimated
as the carrying amount less any surrender charges and related
loans. The fair value for annuities in non-life contingent payout
status is estimated as the present value of projected benefit
payments at the rate appropriate for contracts issued in 1993 and
1992.
Reinsurance
The maximum amount of life insurance risk retained by the Company
on any one life is $750 of life and waiver of premium benefits plus
$50 of accidental death benefits. The maximum amount of disability
income risk retained by the Company on any one life is $6 of
monthly benefit for benefit periods longer than three years. The
excesses are reinsured with other life insurance companies on a
yearly renewable term basis. Graded premium whole life policies
and long term care are primarily reinsured on a coinsurance basis.
In 1993 the Company adopted Statement of Financial Accounting
Standards (SFAS) No. 113, "Accounting and Reporting for Reinsurance
of Short-Duration and Long-Duration Contracts." Under SFAS No.
113, amounts paid or deemed to have been paid for reinsurance
contracts are recorded as reinsurance receivables. Prior to 1993,
these amounts were recorded as a reduction of the liability for
future insurance policy benefits. The cost of reinsurance is
accounted for over the period covered by the reinsurance contract.
<PAGE>
PAGE 49
1. Summary of significant accounting policies (continued)
Federal income taxes
The Company's taxable income is included in the consolidated
federal income tax return of American Express Company. The Company
provides for income taxes on a separate return basis, except that,
under an agreement between IDS and American Express Company, tax
benefit is recognized for losses to the extent they can be used on
the consolidated tax return. It is the policy of IDS and its
subsidiaries that IDS will reimburse a subsidiary for any tax
benefit.
Included in other liabilities at Dec. 31, 1993 and 1992 are $14,709
and $18,181, respectively, payable to IDS for federal income taxes.
Segregated asset account business
The segregated asset account assets and liabilities represent funds
held for the exclusive benefit of the variable annuity and variable
life insurance contract owners. The Company receives investment
management and mortality and expense assurance fees from the
variable annuity and variable life insurance mutual funds and
segregated asset accounts. The Company also deducts a monthly cost
of insurance charge and receives a minimum death benefit guarantee
fee and issue and administrative fee from the variable life
insurance segregated asset accounts.
The Company makes contractual mortality assurances to the variable
annuity contract owners that the net assets of the segregated asset
accounts will not be affected by future variations in the actual
life expectancy experience of the annuitants and the beneficiaries
from the mortality assumptions implicit in the annuity contracts.
The Company makes periodic fund transfers to, or withdrawals from,
the segregated asset accounts for such actuarial adjustments for
variable annuities that are in the benefit payment period. The
Company guarantees, for the variable life insurance policyholders,
the cost of the contractual insurance rate and that the death
benefit will never be less than the death benefit at the date of
issuance.
At Dec. 31, 1993 and 1992 the fair value of liabilities related to
segregated asset accounts was $8,305,209 and $5,727,402,
respectively. The fair value of these liabilities at Dec. 31, 1993
and 1992 is estimated as the carrying amount less variable
insurance contracts carried at $346,276 and $226,946, respectively,
and surrender charges, if applicable.
Reclassification
Certain 1992 and 1991 amounts have been reclassified to conform to
the 1993 presentation.
2. Investments
Market values of investments in fixed maturities represent quoted
market prices and estimated fair values when quoted prices are not
available. Estimated fair values are determined by established
procedures involving, among other things, review of market indices,
price levels of current offerings of comparable issues, price
estimates and market data from independent brokers and financial
files. <PAGE>
PAGE 50
2. Investments (continued)
Net gain (loss) on investments for the years ended Dec. 31 is
summarized as follows:
<TABLE>
<CAPTION>
1993 1992 1991
________________________________________________________________________________________________
<S> <C> <C> <C>
Fixed maturities $ 5,460 $ 14,474 $ 22,750
Mortgage loans (11,422) (5,004) (1,064)
Other investments (6,606) (8,265) (5,695)
(12,568) 1,205 15,991
Net (increase) decrease in allowance for losses 5,831 (4,915) (21,828)
$ (6,737) $ (3,710) $ (5,837)
________________________________________________________________________________________________
Changes in net unrealized appreciation
(depreciation) of investments for the years
ended Dec. 31 are summarized as follows:
1993 1992 1991
________________________________________________________________________________________________
Fixed maturities $323,060 $(128,683) $861,355
Equity securities (156) 300 418
________________________________________________________________________________________________
Fair values of and gross unrealized gains
and losses on investments in fixed maturities
carried at amortized cost at Dec. 31 are as follows:
Gross Gross
Amortized Unrealized Unrealized Fair
1993 Cost Gains Losses Value
________________________________________________________________________________________________
U.S. Government agency obligations $ 63,532 $ 3,546 $ 1,377 $ 65,701
State and municipal obligations 11,072 2,380 - 13,452
Corporate bonds and obligations 9,362,074 768,747 45,706 10,085,115
Mortgage-backed securities 9,978,523 341,067 57,879 10,261,711
19,415,201 1,115,740 104,962 20,425,979
Less allowance for losses 22,777 - 22,777 -
$19,392,424 $1,115,740 $ 82,185 $20,425,979
________________________________________________________________________________________________
Gross Gross
Amortized Unrealized Unrealized Fair
1992 Cost Gains Losses Value
________________________________________________________________________________________________
U.S. Government agency obligations $ 36,753 $ 3,658 $ 4 $ 40,407
State and municipal obligations 11,234 1,542 - 12,776
Corporate bonds and obligations 7,688,190 431,781 104,707 8,015,264
Mortgage-backed securities 9,487,601 377,539 37,213 9,827,927
17,223,778 814,520 141,924 17,896,374
Less allowance for losses 37,899 - 37,899 -
$17,185,879 $ 814,520 $104,025 $17,896,374
________________________________________________________________________________________________
The amortized cost and fair value of investments in fixed maturities at Dec. 31, 1993 by
contractual maturity are shown below. Expected maturities will differ from contractual
maturities because borrowers may have the right to call or prepay obligations with or without
call or prepayment penalties.
Amortized Fair
Cost Value
________________________________________________________________________________________________
Due in one year or less $ 89,160 $ 90,928
Due from one to five years 1,430,756 1,532,298
Due from five to ten years 5,488,955 5,924,580
Due in more than ten years 2,427,807 2,616,462
Mortgage-backed securities 9,978,523 10,261,711
$19,415,201 $20,425,979
________________________________________________________________________________________________
/TABLE
<PAGE>
PAGE 51
2. Investments (continued)
Proceeds from sales of investments in fixed maturities during 1993
and 1992 were $482,523 and $996,619, respectively. During 1993 and
1992, gross gains of $48,499 and $94,915, respectively, and gross
losses of $43,039 and $80,441, respectively, were realized on those
sales.
At Dec. 31, 1993, the amount of net unrealized appreciation on
equity securities included $160 of gross unrealized appreciation,
$nil of gross unrealized depreciation and deferred tax credits of
$46. At Dec. 31, 1992, the amount of net unrealized appreciation
on equity securities included $328 of gross unrealized
appreciation, $12 of gross unrealized depreciation and deferred tax
credits of $102. The fair value of equity securities was $1,900
and $2,005 at Dec. 31, 1993 and 1992, respectively.
Included in other investments at Dec. 31, 1993 are interest rate
caps at amortized cost of $26,923 with a fair value of $14,201.
These interest rate caps carry a notional amount of $4,400,000 and
expire on various dates from 1994 to 1998.
At Dec. 31, 1993, bonds carried at $4,184 were on deposit with
various states as required by law.
Net investment income for the years ended Dec. 31 is summarized as
follows:
<TABLE>
<CAPTION>
1993 1992 1991
______________________________________________________________________________________
<S> <C> <C> <C>
Interest on fixed maturities $1,589,802 $1,449,234 $1,279,317
Interest on mortgage loans 175,063 148,693 122,723
Other investment income 29,345 24,281 20,005
Interest on cash equivalents 2,137 5,363 8,729
1,796,347 1,627,571 1,430,774
Less investment expenses 13,128 10,750 7,908
______________________________________________________________________________________
$1,783,219 $1,616,821 $1,422,866
______________________________________________________________________________________
</TABLE>
At Dec. 31, 1993, investments in fixed maturities comprised 89
percent of the Company's total invested assets. These securities
are rated by Moody's and Standard & Poor's (S&P), except for
approximately $2.1 billion which is rated by IDS internal analysts
using criteria similar to Moody's and S&P. A summary of
investments in fixed maturities by rating on Dec. 31 is as follows:
<TABLE>
<CAPTION>
Dec. 31, Dec. 31,
Rating 1993 1992
________________________________________________________________________
<S> <C> <C>
Aaa/AAA $ 9,959,884 $ 9,480,345
Aa/AA 258,659 219,370
Aa/A 160,638 109,806
A/A 2,021,177 1,735,750
A/BBB 654,949 447,592
Baa/BBB 3,936,366 3,352,192
Baa/BB 717,606 392,361
Below investment grade 1,705,922 1,486,362
________________________________________________________________________
$19,415,201 $17,223,778
________________________________________________________________________
</TABLE>
<PAGE>
PAGE 52
2. Investments (continued)
At Dec. 31, 1993, 99 percent of the securities rated Aaa/AAA are
GNMA, FNMA and FHLMC mortgage-backed securities. No holdings of
any other issuer are greater than 1 percent of the Company's total
investments in fixed maturities.
At Dec. 31, 1993, approximately 9.4 percent of the Company's
invested assets were mortgage loans on real estate. Summaries of
mortgage loans by region of the United States and by type of real
estate at Dec. 31, 1993 and 1992 are as follows:
<TABLE><CAPTION>
Dec. 31, 1993 Dec. 31, 1992
On Balance Commitments On Balance Commitments
Region Sheet to Purchase Sheet to Purchase
______________________________________________________________________________________
<S> <C> <C> <C> <C>
East North Central $ 552,150 $ 20,933 $ 484,808 $ 21,728
West North Central 361,704 16,746 357,388 14,327
South Atlantic 452,679 52,440 320,593 32,022
Middle Atlantic 260,239 41,090 188,294 56,816
New England 155,214 17,620 114,170 24,677
Pacific 120,378 15,492 89,636 5,148
West South Central 43,948 525 46,296 716
East South Central 73,748 - 83,994 10,085
Mountain 70,410 14,594 26,906 8,882
______________________________________________________________________________________
2,090,470 179,440 1,712,085 174,401
Less allowance for losses 35,020 - 23,595 -
______________________________________________________________________________________
$2,055,450 $179,440 $1,688,490 $174,401
______________________________________________________________________________________
Dec. 31, 1993 Dec. 31, 1992
On Balance Commitments On Balance Commitments
Property type Sheet to Purchase Sheet to Purchase
______________________________________________________________________________________
Apartments $ 744,788 $ 79,153 $ 541,855 $ 70,198
Department/retail stores 624,651 65,402 504,331 74,671
Office buildings 234,042 15,583 327,216 12,950
Industrial buildings 217,648 9,279 203,361 15,150
Nursing/retirement homes 83,768 917 56,431 716
Hotels/motels 33,138 - 34,631 716
Medical buildings 30,429 5,954 23,006 -
Residential 78 - 6,618 -
Other 121,928 3,152 14,636 -
______________________________________________________________________________________
2,090,470 179,440 1,712,085 174,401
Less allowance for losses 35,020 - 23,595 -
______________________________________________________________________________________
$2,055,450 $179,440 $1,688,490 $174,401
______________________________________________________________________________________
</TABLE>
Mortgage loan fundings are restricted by state insurance regulatory
authorities to 80 percent or less of the market value of the real
estate at the time of origination of the loan. The Company holds
the mortgage document, which gives the right to take possession of
the property if the borrower fails to perform according to the
terms of the agreement. The fair value of the mortgage loans is
determined by a discounted cash flow analysis using mortgage
interest rates currently offered for mortgages of similar
maturities. Commitments to purchase mortgages are made in the
ordinary course of business. The fair value of the mortgage
commitments is $nil.
<PAGE>
PAGE 53
3. Income taxes
The Company qualifies as a life insurance company for federal
income tax purposes. As such, the Company is subject to the
Internal Revenue Code provisions applicable to life insurance
companies.
Income tax expense consists of the following:
<TABLE>
<CAPTION>
1993 1992 1991
_______________________________________________________________________________
<S> <C> <C> <C>
Federal income taxes:
Current $180,558 $130,998 $104,292
Deferred (44,237) (30,385) (29,207)
_______________________________________________________________________________
136,321 100,613 75,085
State income taxes-Current 6,326 4,038 2,345
_______________________________________________________________________________
Income tax expense $142,647 $104,651 $ 77,430
_______________________________________________________________________________
</TABLE>
Increases (decreases) to the federal tax provision applicable to
pretax income based on the statutory rate are attributable to:
<TABLE><CAPTION>
1993 1992 1991
_________________________________________________________________________________________________________
Provision Rate Provision Rate Provision Rate
_________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
Federal income taxes based on
the statutory rate $144,454 35.0% $107,379 34.0% $88,219 34.0%
Increases (decreases) are attributable to:
Tax-excluded interest and dividend income (11,002) (2.7) (8,209) (2.6) (9,496) (3.7)
Other, net 2,869 0.7 1,443 0.4 (3,638) (1.4)
_________________________________________________________________________________________________________
Federal income taxes $136,321 33.0% $100,613 31.8% $75,085 28.9%
_________________________________________________________________________________________________________
</TABLE>
A portion of life insurance company income earned prior to 1984 was
not subject to current taxation but was accumulated, for tax
purposes, in a "policyholders' surplus account." At Dec. 31, 1993,
the Company had a policyholders' surplus account balance of
$19,032. The policyholders' surplus account is only taxable if
dividends to the stockholder exceed the stockholder's surplus
account or if the Company is liquidated. Deferred income taxes of
$6,661 have not been established because no distributions of such
amounts are contemplated.
Significant components of the Company's deferred tax assets and
liabilities as of Dec. 31 are as follows:
<TABLE><CAPTION>
Deferred tax assets: 1993 1992
______________________________________________________________________________________
<S> <C> <C>
Policy reserves $453,436 $356,712
Life insurance guarantee fund assessment reserve 35,000 21,794
______________________________________________________________________________________
Total deferred tax assets 488,436 378,506
______________________________________________________________________________________
Deferred tax liabilities:
______________________________________________________________________________________
Deferred policy acquisition costs 509,868 446,579
Investments 10,105 2,435
Other 12,083 17,405
______________________________________________________________________________________
Total deferred tax liabilities 532,056 466,419
______________________________________________________________________________________
Net deferred tax liabilities $ 43,620 $ 87,913
______________________________________________________________________________________
/TABLE
<PAGE>
PAGE 54
4. Stockholder's equity
Retained earnings available for distribution as dividends to parent
are limited to the Company's surplus as determined in accordance
with accounting practices prescribed by state insurance regulatory
authorities. Statutory unassigned surplus aggregated $922,246 as
of Dec. 31, 1993 and $685,103 as of Dec. 31, 1992 (see Note 3 with
respect to the income tax effect of certain distributions). In
addition, any dividend distributions in 1994 in excess of
approximately $259,063 would require approval of the Department of
Commerce of the State of Minnesota.
Statutory net income for 1993, 1992 and 1991 and stockholder's
equity as of Dec. 31, 1993, 1992 and 1991 are summarized as
follows:
<TABLE><CAPTION>
1993 1992 1991
___________________________________________________________________________________
<S> <C> <C> <C>
Statutory net income $ 275,015 $180,296 $200,704
Statutory stockholder's equity 1,157,022 714,942 551,939
___________________________________________________________________________________
</TABLE>
Dividends paid to IDS were $25,000 in 1993, $20,000 in 1992 and
$20,000 in 1991.
5. Related party transactions
The Company has loaned funds or agreed to loan funds to IDS under
two separate loan agreements. The balance of the first loan was
$75,000 and $nil at Dec. 31, 1993 and 1992, respectively. This
loan can be increased to a maximum of $100,000 and pays interest at
a rate equal to the preceding month's effective new money rate for
the Company's permanent investments. It is collateralized by
equities valued at $96,790 at Dec. 31, 1993. The second loan was
used to fund the construction of the IDS Operations Center. This
loan had an outstanding balance of $84,588 and $85,278 at Dec. 31,
1993 and 1992, respectively. The loan is secured by a first lien
on the IDS Operations Center property and has an interest rate of
9.89 percent. The Company also has a loan to an affiliate which
was used to fund construction of the IDS Learning Center. At Dec.
31, 1993 and 1992, the balance outstanding was $22,573 and $22,755,
respectively. The loan is secured by a first lien on the IDS
Learning Center property and has an interest rate of 9.82 percent.
Interest income on the above loans totaled $11,116, $10,711 and
$14,783 in 1993, 1992 and 1991, respectively.
The Company purchased a five year secured note from an affiliated
company which had an outstanding balance of $27,222 and $31,111 at
Dec. 31, 1993 and 1992, respectively. The note bears a market
interest rate, revised semi-annually, which at Dec. 31, 1993 was
8.42 percent.
The Company has a reinsurance agreement whereby it assumed 100
percent of a block of single premium life insurance business from
an affiliated company. The accompanying consolidated balance sheet
at Dec. 31, 1993 and 1992 includes $759,714 and $746,060,
respectively, of future policy benefits related to this agreement.
<PAGE>
PAGE 55
5. Related party transactions (continued)
The accompanying consolidated statement of income includes revenue
from policyholder charges of $21, $109 and $243, and expenses of
$4,931, $5,897 and $6,445 related to this agreement for 1993, 1992
and 1991, respectively.
The Company has a reinsurance agreement to cede 50 percent of its
long-term care insurance business to an affiliated company. The
accompanying consolidated balance sheet at Dec. 31, 1993 includes
$44,086 of reinsurance receivables related to this agreement.
Liabilities for future policy benefits were reduced by $27,028 at
Dec. 31, 1992 for the effect of this agreement. Premiums ceded
amounted to $16,230, $12,499 and $6,365 and reinsurance recovered
from reinsurers amounted to $404, $250 and $187 for the years ended
Dec. 31, 1993, 1992 and 1991, respectively.
The Company participates in the retirement plan of IDS which covers
all permanent employees age 21 and over who have met certain
employment requirements. The benefits are based on the number of
years the employee participates in the plan, their final average
monthly salary, the level of social security benefits the employee
is eligible for and the level of vesting the employee has earned in
the plan. IDS' policy is to fund retirement plan costs accrued
subject to ERISA and federal income tax considerations. The
Company's share of the total net periodic pension cost was $nil in
1993, 1992 and 1991.
The Company also participates in defined contribution pension plans
of IDS which cover all employees who have met certain employment
requirements. Company contributions to the plans are a percent of
either each employee's eligible compensation or basic
contributions. Costs of these plans charged to operations in 1993,
1992 and 1991 were $2,008, $1,826 and $1,682, respectively.
The Company participates in defined benefit health care plans of
IDS that provide health care and life insurance benefits to retired
employees and retired financial planners. The plans include
participant contributions and service-related eligibility
requirements. Upon retirement, such employees are considered to
have been employees of IDS. IDS expenses these benefits and
allocates the expenses to its subsidiaries. Accordingly, costs of
such benefits to the Company are included in employee compensation
and benefits and cannot be identified on a separate company basis.
Charges by IDS for use of joint facilities and other services
aggregated $243,346, $204,675 and $174,500 for 1993, 1992 and 1991,
respectively. Certain of these costs are included in deferred
policy acquisition costs. In addition, the Company rents its home
office space from IDS on an annual renewable basis. Such rentals
aggregated $4,513, $4,074 and $3,469 for 1993, 1992 and 1991,
respectively.
Certain commission and marketing services expenses are allocated to
the Company by its affiliates. The expenses for 1993, 1992 and
1991 were $127,000, $110,064 and $95,367, respectively. Certain of
the costs assessed to the Company are included in deferred policy
acquisition costs.
<PAGE>
PAGE 56
6. Commitments and contingencies
At Dec. 31, 1993 and 1992, traditional life insurance and universal
life-type insurance in force aggregated $46,125,515 and
$40,904,345, respectively, of which $3,038,426 and $2,937,590 were
reinsured at the respective year ends. The Company also reinsures
a portion of the risks assumed under disability income policies.
Under the agreements, premiums ceded to reinsurers amounted to
$28,276, $24,222 and $16,908 and reinsurance recovered from
reinsurers amounted to $3,345, $6,766 and $6,447 for the years
ended Dec. 31, 1993, 1992 and 1991.
Reinsurance contracts do not relieve the Company from its primary
obligation to policyholders.
The Company is a defendant in various lawsuits, none of which, in
the opinion of the Company counsel, will result in a material
liability.
The Company received the revenue agent's report for the tax years
1984 through 1986 in February 1992, and has settled on all agreed
audit issues. The Company will protest the remaining open issues
and, while the outcome of the appeal is not known at this time,
management does not believe there will be any material impact as a
result of this audit.
7. Lines of credit
The Company has available lines of credit with two banks
aggregating $75,000 at 45 to 80 basis points over the banks' cost
of funds or equal to the prime rate, depending on which line of
credit agreement is used. Borrowings outstanding under these
agreements were $1,519 and $nil at Dec. 31, 1993 and 1992,
respectively.
8. Segment information
The Company's operations consist of two business segments; first,
individual and group life insurance, disability income, health and
long-term care insurance, and second, annuity products designed for
individuals, pension plans, small businesses and employer-sponsored
groups. The consolidated statement of income for the years ended
Dec. 31, 1993, 1992 and 1991 and total assets at Dec. 31, 1993,
1992 and 1991 by segment are summarized as follows:
<PAGE>
PAGE 57
8. Segment information (continued)
<TABLE>
<CAPTION>
1993 1992 1991
___________________________________________________________________________________________________________
<S> <C> <C> <C>
Net investment income:
Life, disability income, health and long-term care insurance $ 250,224 $ 246,676 $ 233,828
Annuities 1,532,995 1,370,145 1,189,038
___________________________________________________________________________________________________________
$ 1,783,219 $ 1,616,821 $ 1,422,866
___________________________________________________________________________________________________________
Premiums and other considerations:
Life, disability income and long-term care insurance $ 281,284 $ 250,386 $ 220,754
Annuities 143,876 104,952 79,928
___________________________________________________________________________________________________________
$ 425,160 $ 355,338 $ 300,682
___________________________________________________________________________________________________________
Income before income taxes:
Life, disability income, health and long-term care insurance $ 104,127 $ 96,215 $ 90,050
Annuities 315,336 223,316 175,254
Net loss on investments (6,737) (3,710) (5,837)
___________________________________________________________________________________________________________
$ 412,726 $ 315,821 $ 259,467
___________________________________________________________________________________________________________
Total assets:
Life, disability income, health and long-term care insurance $ 4,810,145 $ 4,093,778 $ 3,670,197
Annuities 28,247,608 23,201,995 18,888,612
___________________________________________________________________________________________________________
$33,057,753 $27,295,773 $22,558,809
___________________________________________________________________________________________________________
</TABLE>
Allocations of net investment income and certain general expenses
are based on various assumptions and estimates.
Assets are not individually identifiable by segment and have been
allocated principally based on the amount of future policy benefits
by segment.
Capital expenditures and depreciation expense are not material, and
consequently, are not reported.
<PAGE>
PAGE 58
PART II.
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution.
The expenses of the issuance and distribution of the interests
in the IDS Life Account MGA of IDS Life Insurance Company to be
registered, other than commissions on sales of the Contracts, are
to be borne by the registrant.
Item 14. Indemnification of Directors and Officers
Section 300.083 of Minnesota Law provides in part that a
corporation organized under such law shall have power to indemnify
anyone made, or threatened to be made, a party to a threatened,
pending or completed proceeding, whether civil or criminal,
administrative or investigative, because he is or was a director or
officer of the corporation, or served as a director or officer of
another corporation at the request of the corporation.
Indemnification in such a proceeding may extend to judgments,
penalties, fines and amounts paid in settlement, as well as to
reasonable expenses, including attorneys' fees and disbursements.
In a civil proceeding, there can be no indemnification under the
statute, unless it appears that the person seeking indemnification
has acted in good faith and in a manner he reasonably believed to
be in, or not opposed to, the best interests of the corporation and
its shareholders and unless such person has received no improper
personal benefit; in a criminal proceeding, the person seeking
indemnification must also have no reasonable cause to believe his
conduct was unlawful.
Article IX of the By-laws of the IDS Life Insurance Company
requires the IDS Life Insurance Company to indemnify directors and
officers to the extent indemnification is permitted as stated by
the preceding paragraph, and contains substantially the same
language as the above-mentioned Section 300.083.
Article IX, paragraph (2), of the By-laws of the IDS Life
Insurance Company provides as follows:
"Section 2. The Corporation shall indemnify any person who
was or is a party or is threatened to be made a party, by reason of
the fact that he is or was a 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>
PAGE 59
The parent company of IDS Life Insurance Company maintains an
insurance policy which affords liability coverage to directors and
officers of the IDS Life Insurance Company while acting in that
capacity. IDS Life Insurance Company pays its proportionate share
of the premiums for the policy.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, 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 15. Recent Sales of Unregistered Securities
None
Item 16. Exhibits and Financial Statement Schedules
(a) Exhibits
3.1 Copy of Certificate of Incorporation of IDS Life
Insurance Company is filed electronically herewith.
3.2 Copy of the Amended By-laws of IDS Life Insurance Company
is filed electronically herewith.
3.3 Copy of Resolution of the Board of Directors of IDS Life
Insurance Company, dated May 5, 1989, establishing IDS
Life Account MGA is filed electronically herewith.
4.1 Form of Group Annuity Contract, Form 30363C, is filed
electronically herewith.
4.2 Form of Group Annuity Certificate, Form 30360C, is filed
electronically herewith.
4.3 Copy of Endorsement No. 30340C-GP to the Group Annuity
Contract is filed electronically herewith.
4.4 Copy of Endorsement No. 30340C to the Group Annuity
Certificate is filed electronically herewith.
5. Copy of Opinion of Counsel regarding legality of
contracts, dated Oct. 3, 1990, is filed electronically
herewith.<PAGE>
PAGE 60
22. Copy of List of Subsidiaries is filed electronically
herewith.
24. Consent of Independent Auditors is filed electronically
herewith.
25. Power of Attorney, dated March 31, 1994, is filed
electronically herewith.
(b) Financial Statement Schedules
27. Report of Independent Auditors dated February 3, 1994.
Schedule I - Consolidated Summary of Investments Other
than Investments in Related Parties
Schedule V - Supplementary Insurance Information
Schedule VI - Reinsurance
Schedule VIII - Valuation and Qualifying Accounts
Schedule IX - Short-Term Borrowings
All other schedules to the consolidated financial statements
required by Article 7 of Regulation S-X are not required under
the related instructions or are inapplicable and, therefore,
have been omitted.
Item 17. Undertakings
A. The Registrant undertakes: (a) to file, during any period in
which offers or sales are being made, a post-effective amendment to
this registration statement: (i) to include any prospectus required
by Section 10(a)(3) of the Securities Act of 1933, (ii) to reflect
in the prospectus any facts or events arising after the effective
date of the Registration Statement (or the most recent post-
effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in the Registration Statement, (iii) to include any material
information with respect to the plan of distribution not previously
disclosed in the Registration Statement or any material change to
such information in the Registration Statement, (b) that, for the
purpose of determining any liability under the Securities Act of
1933, each such post-effective amendment may be deemed to be a new
Registration Statement relating to the securities offered therein
and the offering of such securities at that time may be deemed to
be the initial bona fide offering thereof, (c) that all
post-effective amendments will comply with the applicable forms,
rules and regulations of the Commission in effect at the time such
post-effective amendments are filed, and (d) to remove from
registration by means of a post-effective amendment any of the
securities being registered which will remain at the termination of
the offering.
B. The Registrant represents that it is relying upon the no-action
assurance given to the American Council of Life Insurance (pub.
avail. Nov. 28, 1988). Further, the Registrant represents that it
has complied with the provisions of paragraphs (1) - (4) of the no-
action letter.<PAGE>
PAGE 61
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, IDS
Life Insurance Company has duly caused this Registration Statement
to be signed on behalf of the Registrant by the undersigned,
thereunto duly authorized in this City of Minneapolis, and State of
Minnesota on the 5th day of April, 1994.
IDS Life Insurance Company
(Registrant)
By IDS Life Insurance Company
By /s/ James A. Mitchell*
James A. Mitchell
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following
persons in the capacities indicated on the 5th day of April, 1994.
Signature Title
/s/ James A. Mitchell* Chairman of the Board
James A. Mitchell and Chief Executive
Officer
/s/ Richard W. Kling* Director and President
Richard W. Kling
/s/ Louis C. Fornetti* Director
Louis C. Fornetti
/s/ David R. Hubers* Director
David R. Hubers
/s/ Paul F. Kolkman* Director and Executive Vice
Paul F. Kolkman President
/s/ Peter A. Lefferts* Director and Executive Vice
Peter A. Lefferts President, Marketing
/s/ Janis E. Miller* Director and Executive Vice
Janis E. Miller President, Variable Assets
/s/ Barry J. Murphy* Director and Executive Vice
Barry J. Murphy President, Client Service
/s/ Stuart A. Sedlacek* Director and Executive Vice
Stuart A. Sedlacek President, Assured Assets
<PAGE>
PAGE 62
/s/ Melinda S. Urion* Director, Exective Vice
Melinda S. Urion President and Controller
*Signed pursuant to Power of Attorney dated March 31, 1994, filed
as Exhibit 25 to Registration Statement No. 33-28976 for IDS Life
Insurance Company (IDS Life Account MGA).
By:
Mary Ellyn Minenko
IDS Life Account MGA
Registration Number 33-28976
EXHIBIT INDEX
3.1 Copy of Certificate of Incorporation of IDS Life
Insurance Company is filed electronically herewith.
3.2 Copy of the Amended By-laws of IDS Life Insurance Company
is filed electronically herewith.
3.3 Copy of Resolution of the Board of Directors of IDS Life
Insurance Company, dated May 5, 1989, establishing IDS
Life Account MGA is filed electronically herewith.
4.1 Form of Group Annuity Contract, Form 30363C, is filed
electronically herewith.
4.2 Form of Group Annuity Certificate, Form 30360C, is filed
electronically herewith.
4.3 Copy of Endorsement No. 30340C-GP to the Group Annuity
Contract is filed electronically herewith.
4.4 Copy of Endorsement No. 30340C to the Group Annuity
Certificate is filed electronically herewith.
5. Copy of Opinion of Counsel regarding legality of
contracts, dated Oct. 3, 1990, is filed electronically
herewith.
22. Copy of List of Subsidiaries is filed electronically
herewith.
24. Consent of Independent Auditors is filed electronically
herewith.
25. Power of Attorney, dated March 31, 1994, is filed
electronically herewith.
27. Financial Statement Schedules and Report of Independent
Auditors
<PAGE>
PAGE 1
CERTIFICATE OF INCORPORATION
OF
IDS LIFE INSURANCE COMPANY
We, the undersigned, for the purpose of forming an insurance
corporation under and pursuant to the provisions of the Minnesota
Statutes, Chapter 300 relating thereto, and of any amendments
thereof, do hereby associate ourselves as a body corporate and do
hereby adopt the following Articles of Incorporation:
ARTICLE I
The name of this Corporation shall be IDS Life Insurance
Company.
ARTICLE II
The purposes of and general nature of its business shall be:
(a) To engage in the general business of a life insurance company,
and to effect all forms, types, variations and combinations of
life insurance, endownment or annuity contracts or policies,
on a group or individual basis, for the payment of money in a
single sum or in installments upon the contingencies of death,
disability or survivorship. To provide in such policies or
contracts supplemental thereto, for additional benefits in the
event of the death of the insured by accidental means, total
and permenent disability of the insured, or specific
dismemberment or disablement suffered by the insured.
(b) To engage in the general business of an accident and health
insurance company, for the purpose of effecting insurance
against loss or damage by the sickness, bodily injury or death
by accident of the assured or his dependents, on a group or
individual basis; to effect all forms, types, variations and
combinations of policies or contracts of insurance providing
for indemnities in the event of death, sickness or disability.
(c) To effect contracts of reinsurance or co-insurance of any
individual or group risk underwritten by this Corporation, to
reinsure risks of this Corporation or any part thereof with
any other company or to reinsure the whole of or any portion
of the risks of any other company.
(d) To effect all other contracts of insurance authorized by
clauses (4) and (5)(a) of subdivision 1 of Section 60.29 of
Minnesota Statutes.
(e) To have one or more offices and to conduct business in this
state or elsewhere.
(f) To acquire, hold and dispose of shares of stock, notes, bonds
or other evidences of indebtedness or securities of any other
corporation or corporations.
<PAGE>
PAGE 2
(g) To transact all business and to do all other things necessary
or incidental to the foregoing purposes.
ARTICLE III
The duration of this Corporation shall be perpetual.
ARTICLE IV
The principal place of transacting the business of this
Corporation shall be the City of Minneapolis, State of Minnesota.
ARTICLE V
2/9/72
10/18/85
The capital stock of this Corporation shall consist of One
Hundred Thousand (100,000) shares of stock with a par value of
Thirty Dollars ($30.00) per share. The amount of stated capital of
this Corporation shall be Three Million Dollars ($3,000,000).
ARTICLE VI
(1) The general management of this Corporation shall be vested
in a Board of Directors.
(2) The names and post office addresses of the members of the
first Board of Directors are respectively as follows:
Joseph M. Fitzsimmons 800 Investors Building
Minneapolis 2, Minnesota
John W. McCartin 800 Investors Building
Minneapolis 2, Minnesota
Virgil C. Sullivan 800 Investors Building
Minneapolis 2, Minnesota
A. Edward Archibald 800 Investors Building
Minneapolis 2, Minnesota
Harold E. Miller, M.D. 1531 Medical Arts Building
Minneapolis 2, Minnesota
Said named Directors shall serve as such until the first
annual meeting of the shareholders of the Corporation and until
their successors have been duly elected and qualified.
ARTICLE VII
The first Board of Directors of this Corporation shall have
full power and authority to make and adopt By-Laws for the
government of this Corporation and its affairs as they may deem
advisable or necessary and as shall not be inconsistent with the
<PAGE>
PAGE 3
provisions of these Articles. The By-Laws may be amended or
altered by the shareholders at any regular or special meeting
called therefore.
ARTICLE VIII
These Articles of Incorporation may be amended by the
affirmative vote of the holders of a majority of the voting power
of the capital stock.
ARTICLE IX
The first meeting of the Corporation shall be a meeting of the
Incorporators and Subscribers to the capital stock of the
Corporation. Three days' written notice of such meeting shall be
given unless there is a written Waiver of Notice.
ARTICLE X
The names and post office addresses of the Incorporators are
as follows:
Lloyd J. Muehlberg 800 Investors Building
Minneapolis 2, Minnesota
Joseph F. Grinnell 800 Investors Building
Minneapolis 2, Minnesota
Edward M. Burke 800 Investors Building
Minneapolis 2, Minnesota
IN TESTIMONY WHEREOF we have set our hands this 23rd day of
July, 1957.
IN PRESENCE OF: Lloyd J. Muehlberg
M. Gould Joseph F. Grinnell
D. Fairchild Edward M. Burke
State of Minnesota)
)SS.
County of Hennepin)
On this 23rd day of July, 1957, before me, a Notary Public,
personally appeared Lloyd J. Muehlberg, Joseph F. Grinnell, and
Edward M. Burke, to me known to be the persons named in and who
executed the foregoing instrument, and they acknowledged to me that
they executed the same as their free act and deed and for the uses
and purposes therein expressed.
<PAGE>
PAGE 4
(Notarial seal) Helen M. Bochnak
Helen M. Bochnak
Notary Public, Hennepin County, Minn.
My Commission Expired Nov. 12, 1958
APPROVAL OF COMMISSIONER OF INSURANCE
The foregoing Certificate of Incorporation of Investors
Syndicate Life Insurance and Annuity Company is hereby approved
this 24th day of July, 1957.
Cyril C. Sheehan
Commissioner of Insurance
State of Minnesota
J.O.M.
<PAGE>
PAGE 1
AMENDED BY-LAWS OF
IDS LIFE INSURANCE COMPANY
ARTICLE I
OFFICES
Section 1. The principal place of transacting the business of
this Corporation shall be in the City of Minneapolis, State of
Minnesota.
Section 2. The Corporation may also have offices at such
other places, within or without the State, as the Board of
Directors may from time to time determine or the business of the
Corporation may require.
ARTICLE II
STOCKHOLDER'S MEETINGS
Secction 1. All meetings of stockholders for the election of
Directors shall be held at the principal office of the Corporation
in the City of Minneapolis, Minnesota. Meetings of stockholders
for any other purpose may be held at such place, within or without
the State of Minnesota, and at such time as may be designated in
the call and notice thereof.
Section 2. The annual meeting of stockholders for the
election of Directors and the transaction of such other business as
may properly come before the meeting shall be held on the Wednesday
following the first Tuesday on or after the nineteenth day of April
in each year, at 10:30 o'clock A.M. Election of Directors shall be
by plurality vote.
Section 3. In the event the stockholders shall fail to hold
an annual meeting at the time specified therefore in Section 2 of
this Article, or the Directors are not elected thereat, Directors
may be elected at a special meeting held for that purpose upon call
and notice as hereinafter provided for a special meeting of
stockholders.
Section 4. Special meetings of stockholders may be called for
any purpose or purposes at any time by the President, the
Secretary, the Board of Directors, any two or more members of the
Board of Directors or in the manner hereinafter provided by one or
more stockholders holding not less than one-tenth of the issued and
outstanding stock entitled to vote. Upon request in writing by
registered mail or delivered in person to the President, any Vice
President, or Secretary, by any person or persons entitled to call
a meeting of stockholders, such officer shall forthwith cause
notice to be given to the stockholders entitled to vote at a
special meeting of stockholders to be held at such time and place
as such officer shall fix, not less than ten or more than sixty
days after the receipt of such request. Any such request shall
state the purpose or purposes of the proposed meeting.
<PAGE>
PAGE 2
Section 5. Written notice of each meeting of stockholders,
stating the time and place, and in case of a special meeting the
purpose thereof, shall be served upon or mailed to each stockholder
of record entitled to vote thereat at such address as appears on
the stock register of the Corporation, at least ten days before
such meeting.
Section 6. Notice of the time, place and purpose of any
meeting of shareholders, whether required by statute, by the
Articles of Incorporation or by these By-Laws, may be waived in
writing by any stockholder. Such waiver may be given before or
after the meeting, and shall be filed with the Secretary or entered
upon the records of the meeting.
Section 7. Business transacted at all special meetings shall
be confined to the objects stated in the call.
Section 8. The presence, at any meeting of stockholders, in
person or by proxy of the holder of a majority of the stock
entitled to vote thereat shall constitute a quorum for the
transaction of business, except as otherwise provided by statute.
If, however, a quorum shall not be present at any meeting of the
stockholders, the stockholders present in person or by proxy shall
have power to adjourn the meeting from time to time, until a quorum
shall be present. If any meeting of stockholders be adjourned to
another time or place, whether for lack of quorum or otherwise, no
notice as to such adjourned meeting need by given other than by an
announcement, giving the time and place thereof, at the meeting at
which the adjournment is taken. At such adjourned meeting at which
a quorum shall be present, any business may be transacted which
might have been transacted at the meeting as originally noticed.
The stockholders present at a duly called or held meeting at which
a quorum is present may continue to transact business until final
adjournment, notwithstanding the withdrawal of enough stockholders
to leave less than a quorum.
Section 9. At each meeting of the stockholders, every
stockholder of record at the date fixed by the Board of Directors
as the record date for the determination of the persons entitled to
vote at a meeting of stockholders, or, of no date has been fixed,
then at the date of the meeting, shall be entitled at such meeting
to one vote for each share having voting power standing in his name
on the books of the Corporation. A stockholder may cast his vote
or votes in person or by proxy. The appointment of a proxy shall
be in writing filed with the Secretary at or before the meeting.
ARTICLE III
BOARD OF DIRECTORS
Section 1. The number of directors which shall constitute the
whole Board shall not be less than three nor more than fourteen, as
the stockholders may from time to time determine. The President of
the Corporation shall be a Director. Directors shall be elected at
the annual meeting of the stockholders of the Corporation, except
<PAGE>
PAGE 3
that if the number of directors is increased at any time other than
at an annual meeting of stockholders, an additional Director or
Directors to fill the places on the Board created by any such
increase may be elected at a special meeting of stockholders called
for that purpose. Each Director shall be elected to serve until
the next annual meeting of the stockholders and until his successor
shall be elected and shall qualify.
Section 2. Vacancies in the Board of Directors, not to exceed
one-third of the members of the Board in any one year, shall be
filled by the remaining members of the Board, though less than a
quorum, and each person so elected shall be a Director until his
successor is elected by the stockholders who may make such election
at their next annual meeting or at any special meeting called for
that purpose. A vacancy in the Board of Directors, which cannot be
filled by the remaining members of the Board, shall be filled by
the stockholders at any special meeting called for that purpose.
Section 3. The Board of Directors shall have the general
management, control and supervision of all business and affairs of
the Corporation, and shall fix and change, as it may from time to
time determine, by majority vote, the compensation to be paid
Directors, officers and agents of the Corporation, and do all such
lawful acts and things as are not by statue or by the Articles of
Incorporation or by the By-Laws directed or required to be
exercised or done by the stockholders.
ARTICLE IV
EXECUTIVE COMMITTEE
Section 1. The Board of Directors may, by affirmative action
of the entire Board, designate two or more of their number, one of
which shall be the President, to constitute an Executive Committee,
which, to the extent determined by affirmative action of the entire
Board, shall have and exercise the authority of the Board in the
management of the business of the Corporation. Any such Executive
Committee shall act only in the interval between meetings of the
Board, and shall be subject at all times to the control and
direction of the Board. The Executive Committee shall keep regular
minutes of its proceedings and report the same to the Board.
ARTICLE V
MEETINGS OF THE BOARD OF DIRECTORS
Section 1. The annual meeting of the Board of Directors of
the Corporation shall be held at its principal office in the City
of Minneapolis, Minnesota, as soon as practicable after the final
adjournment of the annual meeting of the stockholders in each year,
and no notice of such meeting shall be necessary to the newly
elected Directors in order to legally constitute the meeting
provided a quorum shall be present; except, however, that such
<PAGE>
PAGE 4
meeting may be held at such other place, whether in this state or
elsewhere, as a majority of the Board of Directors may have
previously determined.
Section 2. Regular meetings of the Board of Directors may be
held without notice at such time and place either within or without
the State of Minnesota, as shall from time to time have been
previously determined by the Board.
Section 3. Special meetings of the Board may be called by the
President on two days notice to each Director, either personally or
by mail or telegram; special meetings shall be called by the
President or Secretary in like manner and on like notice on the
written request of two Directors. Any Directors, may in writing,
either before or after the meeting, waive notice thereof; and,
without notice, any Director by his attendance at and participation
in the action taken at the meeting shall be deemed to have waived
notice.
Section 4. At all meetings of the Board of Directors, a
majority of the Directors shall be necessary and sufficient to
constitute a quorum for the transaction of business; and the acts
of a majority of the Directors present at a meeting at which a
quorum is present shall be the acts of the Board of Directors. If
a quorum shall not be present at any meeting of Directors, the
Directors present thereat may adjourn the meeting from time to
time, until a quorum shall be present. No notice of an adjourned
meeting, whether for lack of quorum or otherwise, need be given
other than by announcement, giving the time and place thereof, at
the meeting at which the adjournment is taken.
Section 5. Any action, which might be taken at a meeting of
the Board of Directors, may be taken without a meeting if done in
writing signed by all of the Directors.
ARTICLE VI
NOTICES
Section 1. Whenever under the provisions of statutes or of
the Articles of Incorporation or of the By-Laws, notice is required
to be given to any Directors or stockholder, it shall not be
construed to mean personal notice, but such notice may be given in
writing by depositing the same in a post office or letter box, in a
postpaid sealed wrapper, addressed to such Director or stockholder
at such address as appears on the stock register or books of this
Corporation, or, in default of address appearing in the stock
register of the Corporation or any known address, to such Director
or stockholder at the Main Post Office in the City of Minneapolis,
Minnesota, and such notice shall be deemed to be given at the time
when the same shall thus be mailed.
<PAGE>
PAGE 5
ARTICLE VII
OFFICERS
Section 1. The officers of the Corporation shall be a
Chairman of the Board, a President, one or more Vice Presidents
(the number thereof to be determined by the Board of Directors), a
Treasurer, a Secretary, a Medical Director, and such Assistant
Treasurers, Assistant Secretaries, and such other officers as the
Board of Directors may deem necessary. All officers of the
Corporation shall exercise such powers and perform such duties as
shall be set forth in these By-Laws and as shall be determined from
time to time by the Board of Directors or by the President. Any
two of the offices, except those of President and Vice President,
Treasurer and Assistant Treasurer, and Secretary and Assistant
Secretary may be held by the same person.
Section 2. The Board of Directors, at its annual meeting,
shall elect a Chairman of the Board, a President, a Secretary, a
Treasurer, a Medical Director and such Executive Vice Presidents or
Senior Vice Presidents as the Board shall determine. Only the
Chairman of the Board and the President need be a member of the
Board. The President, or his designee, may appoint any other
officers permitted by Section 1 of this Article.
Section 3. The officers of the Corporation shall, except in
the event of death, resignation, or removal by the Board of
Directors, hold office until their successors are chosen and
qualify in their stead. Any officer elected by the Board of
Directors may be removed at any time by the Board of Directors with
or without cause; such removal, however, shall be without prejudice
to the contract rights, if any, of the person so removed. When a
vacancy for any reason occurs among the officers, the Board of
Directors shall have the power to elect a successor to fill such
vacancy for the unexpired term.
Section 4. Chairman of the Board. The Chairman of the Board
shall preside at all meetings of the stockholders and of the Board
of Directors, and will perform such other duties as are assigned to
him by the Board of Directors.
Section 5. President. The President shall be the chief
executive officer of the Corporation. He shall have general and
active supervision and direction over the business affairs of the
Corporation and over its several officers, subject to the control
of the Board of Directors whose policies he shall execute. He
shall see that all lawful orders and resolutions of the Board of
Directors and of the Executive Committee are carried into effect
and he shall make or cause to be made timely and appropriate
reports to the Board of Directors of all matters which in the
interest of the Corporation are required to be brought to their
notice. He shall be a member of the Executive Committee and shall
preside at its meetings and he shall ex officio be a member of all
standing committees or other committees as may be from time to time
constituted or appointed by the Board of Directors.
<PAGE>
PAGE 6
Section 6. Secretary. The Secretary shall attend all
meetings of the Board of Directors and of the stockholders and
record their proceedings in a book to be kept for that purpose, and
shall perform like duties for the Executive Committee when
required. In case the Secretary shall be absent from any meeting,
the Chairman of the meeting may appoint a temporary secretary to
act at such meeting. The Secretary shall give, or cause to be
given, notice of all meetings of the stockholders and special
meetings of the Board of Directors. He shall have the custody of
the stock register, minute books and the seal of the Corporation,
and shall make such reports and perform such other duties as are
incident to this office or are properly required of him by the
Board of Directors.
Section 7. Treasurer. The Treasurer, unless otherwise
ordered by the Board of Directors, shall have the custody of all
the funds and securities of the Corporation, and shall deposit all
monies and valuables in the name of and to the credit of the
Corporation in such banks or depositories as the Board of Directors
may designate, and shall keep regular books of account, and shall
have custody of the books and records incident to his office and
such as the Board of Directors may direct, and he shall have such
other powers and shall perform such other duties as are incident to
his office or which are properly required of him by the Board of
Directors.
Section 8. Medical Director. The Medical Director shall,
under the direction of the Board of Directors, appoint all medical
examiners for this Corporation and shall have such other powers and
shall perform such other duties as are incident to his office or
which are properly required of him by the Board of Directors. In
his absence or inability to act, an assistant, designated by the
Executive Committee, may act for and in his stead.
Section 9. The powers and duties of all other officers shall
be such as are usual in like corporations under the direction and
control of the Board of Directors.
ARTICLE VIII
CLOSING OF TRANSFER BOOKS
AND FIXING OF RECORD DATE
Section 1. The Board of Directors may fix a time, not less
than twenty nor more than forty days preceding the date of any
meeting of stockholders, as a record date for the determination of
the stockholders entitled to notice of and to vote at such meeting,
and in such case by stockholders of record on the date so fixed, or
their legal representatives, shall be entitled to notice of and to
vote at such meeting, notwithstanding any transfer of any shares on
the books of the Corporation after any record date so fixed. The
Board of Directors may close the books of the Corporation against
transfers of shares during the whole or any part of such period.
<PAGE>
PAGE 7
Section 2. The Board of Directors may fix a time not
exceeding forty days preceding the date fixed for the payment of
any dividend or distribution, or the date for the allotment of
rights, or, subject to contract rights with respect thereto, the
date when any change or conversion or exchange of shares shall be
made or go into effect, as a record date for the determination of
the stockholders entitled to receive payment of any such dividend,
distribution or allotment of rights or to exercise rights in
respect to any such change, conversion or exchange of shares, and
in such case only stockholders of record on the date so fixed shall
be entitled to receive payment of such dividend, distribution or
allotment of rights or to exercise such rights of change,
conversion or exchange of shares, as the case may be,
notwithstanding any transfer of any shares on the books of the
Corporation after any record date fixed as aforesaid. The Board of
Directors may close the books of the Corporation against the
transfer of shares during the whole or any part of such period.
ARTICLE IX
MISCELLANEOUS
Section 1. The Corporation shall be entitled to treat the
holder of record of any share or shares of stock as the holder in
fact thereof, and, accordingly, shall not be found to recognize any
equitable or other claim to or interest in such share on the part
of any other person, whether or not it shall have express or other
notice thereof, except as expressly provided by the laws of the
State of Minnesota.
Section 2. The Corporation shall indemnify any person who was
or is a party or is threatened to be made a party, by reason of the
fact that he is or was a Manager of Variable Annuity Funds A and B,
director, officer, employee or agent of this Corporation, or is or
was serving at the direction of the Corporation as a Manager of
Variable Annuity Funds A and B, director, officer, employee or
agent of another corporation, partnership, joint venture, trust or
other enterprise, to any threatened, pending or completed action,
suit or proceeding, wherever brought, to the fullest extent
permitted by the laws of the State of Minnesota, as now existing or
hereafter amended, provided that this Article shall not indemnify
or protect any such Manager of Variable Annuity Funds A and B,
director, officer, employee or agent against any liability to the
Corporation or its security holders to which he would otherwise be
subject by reason of willful misfeasance, bad faith, or gross
negligence, in the performance of his duties or by reason of his
reckless disregard of his obligations and duties.
<PAGE>
PAGE 8
ARTICLE X
LOST STOCK CERTIFICATES
Section 1. The Board of Directors may direct a new
certificate or certificates to be issued in place of any
certificate or certificates theretofore issued by the Corporation
alleged to have been destroyed or lost upon the making of an
affidavit of that fact by the person claiming the certificate of
stock to be lost or destroyed, and the Board of Directors, when
authorizing such issue of a new certificate or certificates, may,
in its discretion and as a condition precedent to the issuance
thereof, require the owner of such lost or destroyed certificate or
certificates, or his legal representative, to advertise the same in
such manner as it shall require and/or give the Corporation a bond
in such sum as it may direct, to indemnify the Corporation against
any claim arising from the issue of such new certificate.
ARTICLE XI
POLICIES, CONTRACTS AND CONVEYANCES
Section 1. Subject to the provisions of Section 2 of this
Article, the President or any Vice President may with the Secretary
or any Assistant Secretary, sign, cause the corporate seal to be
affixed thereto when necessary, acknowledge and deliver all
conveyances, contracts, deeds, notes, mortgages, satisfactions,
leases, assignments, licenses, transfers, powers of attorney,
certificates for shares of stock, and all other similar and
dissimilar instruments.
The Board of Directors may by resolution authorize any officer or
officers alone or with another officer or officers, to sign or
counter-sign, cause the corporate seal to be affixed thereto when
necessary, acknowledge and deliver any written instrument, or class
of written instruments, for and on behalf of this Corporation.
Section 2. All insurance, annuity or endowment policies or
contracts issued by this Corporation and all reinsurance agreements
of this Corporation shall be signed by the President or a Vice
President and the Secretary or an Assistant Secretary. The
signature of any of said officers, on the foregoing or any other
instrument may be a facsimile signature, if the same is
countersigned by an officer or employee duly authorized by the
Board of Directors or Executive Committee of this Corporation to
counter-sign the same.
Section 3. All checks, demands for money, and notes of the
Corporation shall be signed by such officer or officers or such
other person or persons as may from time to time be authorized by
the Board of Directors.
<PAGE>
PAGE 9
ARTICLE XII
AMENDMENTS OF BY-LAWS
Section 1. These By-Laws may be altered at any regular
meeting of the stockholders, or at any special meeting of the
stockholders at which a quorum is present or represented, provided
notice of the proposed alteration is contained in the notice of
such meeting, by the affirmative vote of the holders of a majority
of the shares issued and outstanding and entitled to vote at such
meeting and present or represented thereat.
<PAGE>
PAGE 1
MINUTES OF A SPECIAL MEETING
of the Board of Directors
IDS Life Insurance Company
May 5, 1989
Pursuant to the call of the President and notice duly given, a
special meeting in lieu of the Annual Meeting of the Board of
Directors of IDS Life Insurance Company was held at 11:30 a.m., May
5, 1989, at the offices of the Corporation in the IDS Tower,
Minneapolis, Minnesota. Members present were: Ms. Roloff and
Messrs. Kling, Kolkman, Kudrna, Mitchell and Smith. The Secretary,
Mr. O'Brien, was also present and recorded the minutes of the
meeting.
Mr. Mitchell said that the first item of business was to consider a
proposal to ratify the investment transactions of the Corporation
during 1988. All such transactions were listed in the 1988 NAIC
Convention Blanks, which were available to the directors at the
meeting. After a discussion, upon motion duly made and seconded,
the following resolution was unanimously adopted:
RESOLVED, that the investment transactions entered into by the
Corporation during 1988 for its general and separate accounts,
as listed in the 1988 Annual Statement on the NAIC Convention
Blanks, are hereby ratified and confirmed in all respects.
The Board next considered the election of officers to serve until
the next annual meeting. After a discussion, upon motion duly made
and seconded, the following resolution was duly adopted:
RESOLVED, that the individuals listed below are elected to the
office set forth opposite their names, to serve at the
pleasure of this Board until the next annual election:
Harvey Golub Chairman of the Board
James A. Mitchell President and Chief Executive Officer
Richard W. Kling Executive Vice President, Marketing
and Products
ReBecca K. Roloff Executive Vice President, Operations
Timothy V. Bechtold Vice President, Insurance Product
Development
John L. Burbidge Vice President
William H. Dudley Vice President
Theodore H. Busboom Vice President, Investments
Roger P. Husemoller Vice President, Intercorporate
Insurance Operations
Thomas J. Kelly Vice President, New Business
Paul F. Kolkman Vice President, Finance
Donald E. Kreider Vice President, Intercorporate
Insurance Products
Christopher R. Kudrna Vice President, Systems & Technology
Development
Ryan R. Larson Vice President, Annuity Product
Development
Patricia A. Mitshulis Vice President, Real Estate Loan
Management
William F. Nuessle, MD Vice President, Medical Director
Richard J. O'Brien Vice President, General Counsel and
Secretary<PAGE>
PAGE 2
James R. Palmer Vice President, Taxes
William A. Smith Vice President, Controller and Taxer
Cathy H. Waldhauser Vice President, Corporate Actuarial,
Planning and Analysis
Nancy R. Hughes Assistant Vice President
Laurie Anderson Assistant Secretary
Nancy R. Anderson Assistant Secretary
Sena M. Barr Assistant Secretary
Sandra Berg Assistant Secretary
Carrie Bergum Assistant Secretary
Karen G. Brajdich Assistant Secretary
Teresa Butts Assistant Secretary
Mary Clasemann Assistant Secretary
Margaret Coyle Assistant Secretary
Joni Dalman Assistant Secretary
Patricia Engelstad Assistant Secretary
Janet M. Foster Assistant Secretary
Elizabeth Gamber Assistant Secretary
Kim Goodsell Assistant Secretary
Lisa Graney Assistant Secretary
Bob Hammond Assistant Secretary
John J. Hirsch Assistant Secretary
Paula Hodges Assistant Secretary
Paul E. Horvath Assistant Secretary
Dawn M. Johnson Assistant Secretary
Andrea Kelly Assistant Secretary
Heidi Keske Assistant Secretary
Jack R. Kispert Assistant Secretary
Milton S. Lysdahl Assistant Secretary
Jane Mayer Assistant Secretary
N. Clyde Nielsen Assistant Secretary
Sandra K. Norby Assistant Secretary
Becky Orrock Assistant Secretary
Ronald W. Powell Assistant Secretary
Michelle L. Price Assistant Secretary
Diana L. Roberts Assistant Secretary
Paul D. Sand Assistant Secretary
William A. Stoltzmann Assistant Secretary
Joyce Ternus Assistant Secretary
Lori Thompson Assistant Secretary
Karen Underwood Assistant Secretary
Daniel J. Willius Assistant Secretary
Robert Young Assistant Secretary
Norma Zachow Assistant Secretary
Richard W. Burnham Assistant Treasurer
Lavern Johnson Assistant Treasurer
Lowell A. Turner Assistant Treasurer
F. Dale Simmons Assistant Treasurer
Melinda S. Urion Assistant Treasurer
Gary C. Ziemer Assistant Treasurer
The Board them considered the composition of the Investment
Committee. After discussion, upon motion duly made and seconded,
the following resolution was unanimously adopted:
<PAGE>
PAGE 3
RESOLVED, that the following individuals shall serve as the
Corporation's Investment Committee until the next annual
meeting of this Board:
Theodore H. Busboom
William H. Dudley
Richard W. Kling
Paul F. Kolkman
James A. Mitchell
William A. Smith, and
David R. Hubers - Advisor
Mr. Mitchell then said that the final item of business was to
consider certain actions to facilitate the introduction of a new
product - a modified guaranteed annuity. After a discussion, upon
motion duly made and seconded, the following resolutions were
unanimously adopted:
RESOLVED, That a separate account, to be known as IDS Life
Separate Account MGA, is hereby established in accordance with
Section 61A.14, Minnesota Statutes, for use in connection with
the Corporation's proposed modified guaranteed annuity
product; and
RESOLVED FURTHER, That the proper officers of the Corporation
are hereby authorized and directed to accomplish all filings
and registrations necessary to enable the corporation to offer
a modified guaranteed annuity product.
There being no further business to come before the meeting, it was
duly voted to adjourn.
\s\ Richard J. O'Brien
Secretary
<PAGE>
PAGE 1
GROUP ANNUITY CONTRACT
o Purchase payments are payable in a single sum.
o Annuity payments begin on the settlement date.
o This contract is nonparticipating. Dividends are not payable.
Contractholder:
Contract Number:
Contract Date:
IDS Life Insurance Company, herein called the Company, will pay the
benefits provided by this contract in accordance with and subject
to all provisions of this contract.
We issue this contract in consideration of the application of the
contractholder.
THE GROUP ANNUITY CONTRACT CONTAINS A MARKET VALUE ADJUSTMENT
FORMULA WHICH MAY RESULT IN BOTH UPWARD AND DOWNWARD ADJUSTMENTS IN
CASH SURRENDER BENEFITS. Surrenders are available without market
value adjustment on the last day of each certificate guarantee
period.
Signed for and issued by IDS Life Insurance Company, Minneapolis,
Minnesota, as of the contract date shown above.
President:
James A. Mitchell
Secretary:
William A. Stoltzmann<PAGE>
PAGE 2
CONTRACT DATA
GROUP CONTRACT HOLDER: GROUP
CONTRACT
NUMBER:
Surrender Charge Percentage
(Applied to Market Adjusted Value Surrendered)
Guarantee Participant's Certificate Years as measured from the
Period beginning of a Guarantee Period
1 2 3 4 5 6 7 8
1 Year 1%
2 Years 2% 1%
3 Years 3% 2% 1%
4 Years 4% 3% 2% 1%
5 Years 5% 4% 3% 2% 1%
6 Years 6% 5% 4% 3% 2% 1%
7 Years 7% 6% 5% 4% 3% 2% 1%
8 Years 8% 7% 6% 5% 4% 3% 2% 1%
9 Years 8% 7% 6% 5% 4% 3% 2% 1%
10 Years 8% 7% 6% 5% 4% 3% 2% 1%
For renewal guarantee periods, the surrender charge percentages
will be based on the lesser of:
1. The length of the new guarantee period, or
2. The number of years remaining until the eighth
certificate anniversary.
There are no surrender charges on the last day of a guarantee
period.
Therw will never be surrender charges beyond the eighth certificate
anniversary.<PAGE>
PAGE 3
GUIDE TO CONTRACT PROVISIONS
Definitions
Important words and meanings/Page 4
The Annuity Contract
Entire contract; Modification; Incontestability; Misstatement of
birthdate or sex/Page 6
Contractholder and Owner
Contractholder; Owner's rights; Change of ownership;
Assignment/Page 7
Beneficiary and Payments to Beneficiary
Who is thebeneficiary; Change of beneficiary; Payments to
beneficiary/Page 8
Purchase Payment
Payment of the purchase payment/Page 9
Accumulation Value, Cash Surrender Value, and Market Adjusted Value
How the accumulation value is determined; Surrender of the
certificate for the cash surrender value; How the market adjusted
value is determined; Annual statement of value/Page 10
Annuity Payment Plans
When annuity payments begin; Different ways to receive annuity
payments/Page 14
Tables of Settlement Rates
Table showing monthly annuity payment amounts for the various
plans/Page 16<PAGE>
PAGE 4
DEFINITIONS
The following words are used often in this contract. When we use
these words, this is what we mean:
the annuitant
The person on whose life monthly annuity payments depend.
owner
The owner of the certificate. The owner may be someone other than
the annuitant. The owner is shown in the enrollment application
unless the owner has been changed as provided in this contract.
we, our, us
IDS Life Insurance Company
certificate date
It is the date from which certificate anniversaries, certificate
years, and certificate months are determined. The certificate date
is shown under certificate data, in the certificate.
certificate anniversary
The same day and month as the certificate date each year that the
certificate remains in force.
initial guarantee period
The period during which the initial guarantee rate will be
credited. It is shown under certificate data, in the certificate.
initial guarantee rate
The rate of interest credited to the purchase payment as described
in the accumulation value section. It is shown under certificate
data, in the certificate.
renewal guarantee period
A renewal guarantee period will begin at the end of each guarantee
period. It is determined in accordance with the terms of the
contract.
renewal guarantee rate
The rate of interest credited to the renewal value as described in
the accumulation value section.
renewal date
The first day of a renewal guarantee period. It will always be on
a certificate anniversary.
current rate
The applicable interest rate contained in a schedule of rates
established by us from time to time for various guarantee periods.
accumulation value
The value of the purchase payment plus interest credited, adjusted
for any surrenders.
market adjusted value
The accumulation value adjusted by the market adjusted value
formula.
<PAGE>
PAGE 5
market value adjustment
The market adjusted value minus the accumulation value.
renewal value
The accumulation value at the end of the guarantee period.
cash surrender value
The market adjusted value less any applicable surrender charge.
written request
A request in writing signed by the owner and delivered to us at our
home office.
settlement
The application of the market adjusted value of a certificate to
provide annuity payments.
settlement date
The date on which annuity payments are to begin under a
certificate. This date may be changed as provided in the contract.
<PAGE>
PAGE 6
The Annuity Contract
What is the entire contract?
The entire contract consists of this Group Contract, the
application of the Group Contractholder, which is attached to the
Group Contract, and the enrollment applications.
No one except one of our corporate officers (President, Vice
President, Secretary or Assistant Secretary) can change or waive
any of our rights or requirements under the contract. That person
must do so in writing. None of our agents or other persons has the
authority to change or waive any of our rights or requirements
under the contract.
In issuing the certificates, we have relied upon the applications.
The statements contained in the applications are, in the absence of
fraud, considered representations and not warranties. No
statements made in connection with the applications will be used by
us to void the contract or to deny a claim unless that statement is
part of the applications.
Can this contract be modified?
This contract may be modified at any time by written agreement
between the contractholder and us. The modification must be signed
by one of our corporate officers (President, Vice President,
Secretary or Assistant Secretary). No modification will affect the
amount of term of any certificates issued before the effective date
of the modification unless it is required to conform the contract
to, or give the contractholder the benefit of, any Federal or State
statutes.
When will the certificate become incontestable?
After the certificate has been in force during the annuitant's
lifetime for two years from the date of issue, we cannot contest
the certificate.
What if the annuitant's birthdate or sex has been misstated?
If the annuitant's birthdate or sex has been misstated, payments
under the certificate will be based on what would have been
provided at the correct birthdate and sex. Any underpayments made
by us will be made up immediately. Any overpayments made by us
will be subtracted from the future payments.
What laws govern the contract?
The contract is governed by the law of the state in which it is
delivered. The values and benefits of the certificates are at
least equal to those required by such state.<PAGE>
PAGE 7
Contractholder and Owner
Who is the Group Contractholder?
The group contractholder is listed on the cover page of this
contract. The contract provides for a successor contractholder.
In the event the contractholder should merge with another
corporation, the new corporation would be the group contractholder.
What are the rights of the owners of the certificates?
As long as the annuitant is living and unless otherwise provided in
this contract, the owner may exercise all rights and privileges in
this contract or allowed by us.
How can the ownership be changed on the certificate?
The owner can change the ownership of the certificate by written
request on a form approved by us. The change must be made while
the annuitant is living. Once the change is recorded by us, it
will take effect as of the date of the request, subject to any
action taken or payment made by us before the recording.
Can the owner assign the certificate as collateral?
Yes. While the annuitant is living, the owner can assign the
certificate or any interest in it. The owner's interest and the
interest of any beneficiary is subject to the interest of the
assignee. An assignment is not a change of ownership and an
assignee is not an owner as these terms are used in the contract.
Any amounts payable to the assignee will be paid in a single sum.
A copy of any assignment must be submitted to us at our home
office. Any assignment is subject to any action taken or payment
made by us before the assignment was recorded at our home office.
We are not responsible for the validity of any assignment.<PAGE>
PAGE 8
Beneficiary and Payments to Beneficiary
What death benefits are paid if the annuitant or certificate owner
dies before settlement?
If the annuitant or owner dies before settlement while the
certificate is in force, we will pay the beneficiary:
1. the greater of the market adjusted value or the purchase
payment adjusted for surrenders (if death occurred before the
annuitant's attaining age 75); otherwise
2. the market adjusted value (if death occurred on or after age
75).
The market adjusted value will be determined as of the date due
proof of death is received at our home office.
The above described payment will also be made upon the first to die
if ownership is in a joint tenancy except where spouses are joint
owners with right of survivorship and the surviving spousal joint
owner elects to continue the certificate.
Unless the owner has provided otherwise during the lifetime of the
annuitant, the beneficiary may elect by written request to have the
amount payable applied under the terms of the annuity payment plans
section of the contract. If any amounts are so applied to a plan,
the references to "annuitant" in the annuity payment plans section
of the contract will apply to the beneficiary.
Any election to have the amount payable to a beneficiary under the
terms of the annuity payment plans section is also subject to the
following:
1. the beneficiary must elect the plan within 60 days after we
receive due proof of death; and
2. payments must begin no later than one year after the date of
death; and
3. the plan must provide equal or substantially equal payments
over a period which does not exceed the life of the
beneficiary or the life expectancy of the beneficiary.
To whom are death benefits payable?
Benefits will be paid equally to all primary beneficiaries
surviving the annuitant. If none survive, proceeds will be paid
equally to all contingent beneficiaries surviving the annuitant.
If no beneficiary survives the annuitant, we will pay the benefits
to the owner, if living, otherwise to the owner's estate.
Who is the beneficiary?
The beneficiary or beneficiaries are as named in the enrollment
application unless the owner has since changed the beneficiary as
provided below. If the beneficiary has been changed, we will pay
any benefits in accordance with the owner's last change of
beneficiary request.
<PAGE>
PAGE 9
How does the owner change the beneficiary?
The owner may change the beneficiary any time while the annuitant
is living by satisfactory written request to us. Once the change
is recorded by us, it will take effect as of the date of the
owner's request, subject to any action taken or payment made by us
before the recording.
What is the spouse's option to continue the certificate?
If the owner's death occurs prior to the settlement date, the
owner's spouse, if designated as sole beneficiary, may elect in
writing to forego receipt of the death benefit and instead continue
the certificate in force as its owner. The election by the spouse
must be made within 60 days after we receive due proof of death.
What if the annuitant dies after settlement?
If the annuitant dies after settlement, the amount payable, if any,
will be as provided in the annuity payment plan then in effect.
Purchase Payment
What is the purchase payment for a certificate?
The purchase payment for a certificate is shown under certificate
data on the certificate. It is payable to us on or before we
deliver the certificate. It must be paid or mailed to us at our
home office or to an authorized agent.
Accumulation Value
Cash Surrender Value
Market Adjusted Value
How is the accumulation value determined?
On the certificate date the accumulation value of the certificate
is the purchase payment. Thereafter interest accrues from day to
day for the guarantee periods initially at the rate shown under
certificate data in the certificate and later at the renewal
rate(s). These rates represent an effective annual yield. At no
time while the certificate is in force shall interest accrue at a
rate less than 3% compounded annually. The accumulation value will
be adjusted for any amounts surrendered.
Are there premium tax charges?
We reserve the right to deduct an amount from the accumulation
value of the certificate at the time that any applicable premium
taxes not previously deducted are payable.
If a tax is payable at the time of the purchase payment and we
choose to not deduct it at that time, we further reserve the right
to deduct it at a later date.
How are renewal guarantee periods determined?
At the end of any guarantee period a renewal guarantee period will
begin. We will notify the owner in writing 45 days before the
renewal guarantee period. Each renewal guarantee period will be
one year unless the owner elects a different length from those
offered at the time. We must receive the owner's written request
at least 15 days before the renewal date. The renewal guarantee
period may never extend beyond the settlement date.
<PAGE>
PAGE 10
The accumulation value on the renewal date will be equal to the
accumulation value at the end of the guarantee period just ending.
This value will earn interest at the renewal guarantee rate. Upon
written request within 45 days of the renewal guarantee period, we
will notify the owner of the renewal guarantee rate then in effect
for certificates renewing at that time. The actual renewal
guarantee rate will be determined on the renewal date.
What is the market adjusted value and how is it determined?
The market adjusted value is the accumulation value on any date
before the end of the current guarantee period adjusted by a
formula. The formula adjustment reflects the relationship between:
1. the interest rate we are then crediting for new certificate
sales and renewals (Form 30360) for the time remaining in the
certificate's current guarantee period; and
2. the guaranteed interest rate applicable to the certificate's
current guarantee period.
The market adjusted value may be more or less than the accumulation
value.
The market adjusted value formula is as follows:
market adjusted value = the accumulation value at the end of
the owner's current guarantee period.
N = the number of complete certificate years
to the end of the owner's guarantee
period.
t = the fraction of the certificate year
remaining to the end of the owner's
certificate year (for example, if 180 days
remain in a 365 day certificate year, it
would be .493)
ic = the current rate offered for new
certificate sales and renewals (Form
30360) for the number of years left in the
owner's guarantee period (straight line
interpolation between whole year rates).
If N is zero, ic is the rate for one year
guarantee periods.
The market value adjustment is as follows:
market value adjustment = market adjusted value -
accumulation value
There will be no market value adjustment made on the last day of a
guarantee period.
<PAGE>
PAGE 11
Can the owner request surrender of any amounts under the
certificate before settlement?
Yes. By written request to us and subject to the rules below the
owner may:
1. surrender the certificate for the total cash surrender value;
2. partially surrender the certificate for a part of the cash
surrender value.
How is the cash surrender value determined?
The cash surrender value is the market adjusted value less a
surrender charge. The surrender charge is based on the amount
surrendered and the certificate year in which the surrender is
made. The schedule of surrender charges is shown under certificate
data in the certificate.
After the first certificate anniversary, surrender charges will not
apply to surrenders of amounts totalling up to 10% of the
certificate accumulation value as of the last certificate
anniversary.
What are the rules for a surrender or partial surrender?
The amount surrendered and any applicable market value adjustment
or surrender charge will be deducted from the accumulation value of
the certificate on the date of surrender. The owner may surrender
all or a portion of the cash surrender value. However the
accumulation value that remains after a partial surrender must be
at least $2,000. Any partial surrender must be at least $250.
The surrender payment will normally be mailed to the owner within
seven days of the receipt of the owner's written request.
Upon surrender of the certificate for the total cash surrender
value, the certificate will terminate. We may require that the
owner return the certificate to our home office before we pay the
total cash surrender value.
Can we delay or suspend payment of a partial or full surrender?
We may defer payment of any partial or full surrender for a period
not to exceed 6 months from the date we receive the owner's
surrender request or the period permitted by state insurance law,
if less. If we defer payment more than 30 days, we will pay annual
interest of at least 3% on the amount deferred.
Will the owner receive information about the certificate value?
Yes. At least once a year we will send the owner a statement
showing both the accumulation value and the cash surrender value of
the certificate. The statement will specify the surrender charge
and market value adjustment used to determine the cash surrender
value. This statement will be based on any laws or regulations
that apply.
We will also notify the owner 45 days before the end of a guarantee
period concerning renewal periods available and the owner's right
to surrender without a market value adjustment on the last day of
the guarantee period.
<PAGE>
PAGE 12
Annuity Payment Plans
When will annuity payments begin?
The first payment will be made as of the settlement date. Before
payments begin we will require satisfactory proof that the
annuitant is alive. We may also require that the owner exchange
the certificate for a supplemental contract which provides the
annuity payments.
Can the owner change the settlement date?
Yes. The owner must tell us the new date by written request.
However, the settlement date cannot be later than the later of:
1. the certificate anniversary nearest the annuitant's 85th
birthday; or
2. the 10th certificate anniversary.
Also, if the owner selects a new date, it must be at least 30 days
after we receive the owner's written request at our home office.
What are the annuity payment plans?
There are different ways to receive annuity payments. We call
these plans.
Plan A - This provides monthly annuity payments for the lifetime of
the annuitant. No payments will be made after the annuitant dies.
Plan B - This provides monthly annuity payments for the lifetime of
the annuitant with a guarantee by us that payments will be made for
a period of at least five, ten or fifteen years. The owner must
select the guaranteed period.
Plan C - This provides monthly annuity payments for the lifetime of
the annuitant with a guarantee by us that payments will be made for
a certain number of months. We determine the number of months by
dividing the market adjusted value applied under this plam by the
amount of the monthly annuity payment.
Plan D - We call this a joint and survivor life annuity. Monthly
payments will be paid for the lifetime of the annuitant and a joint
annuitant. When either the annuitant or joint annuitant dies we
will continue to make monthly payments for the lifetime of the
survivor. No payments will be paid after the death of both the
annuitant and joint annuitant.
Plan E - This provides monthly fixed dollar annuity payments for a
period of years. The period of years may be no less than 10 nor
more than 30.
What are the requirements for selecting a plan?
By written request to us at least 30 days before the settlement
date, the owner may select the plan or change to another plan. If
at least 30 days before the settlement date we have not received at
our home office the owner's written request to select a plan, we
will make payments according to plan B with payments guaranteed for
ten years.
<PAGE>
PAGE 13
If the amount to be applied to a plan is not at least $2,000, or if
payments are to be made to other than a natural person, we have the
right to make a lump sum payment of the cash surrender value.
How will payments be made?
Payments will be made by us by check. The check must be personally
endorsed by the payee or payees as well as the annuitant (or joint
annuitant under plan D). If the annuitant or joint annuitant does
not endorse the check, other evidence must be furnished to show
that the annuitant or joint annuitant is still alive.
TABLE OF SETTLEMENT RATES
What will be the amount of the monthly annuity payments?
The amount of each monthly annuity payment for each $1,000 of
market adjusted value applied under any payment Plan will be based
on our Table of Settlement Rates in effect at the time of the first
payment. The amounts will not be less than those shown in the
table below. The amount of such payments under Plans A, B, and C
will depend upon the sex and the adjusted age of the annuitant on
the settlement date. The amount of such payments under plan D will
depend on the sex and the adjusted age of the annuitant and the
joint annuitant on the settlement dates. Adjusted age means the
age on the annuitant's nearest birthday minus an "adjustment" based
on the calendar year of birth of the annuitant as follows:
Calendar Year of Annuitant's Birth Adjustment
Prior to 1920 0
1920 through 1924 1
1925 through 1929 2
1930 through 1934 3
1935 through 1939 4
1940 through 1944 5
1945 through 1949 6
1950 through 1959 7
1960 through 1969 8
1970 through 1979 9
1980 through 1989 10
After 1989 11<PAGE>
PAGE 14
<TABLE>
<CAPTION>
Amount of Each Monthly Annuity Payment Per $1,000 Applied
Plan A Plan B Plan C
Life 5 Years 10 Years 15 Years With
Adj. Income Certain Certain Certain Refund
Age* M F M F M F M F M F
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
55 5.29 4.84 5.26 4.83 5.20 4.80 5.09 4.74 5.05 4.71
56 5.39 4.92 5.36 4.91 5.29 4.87 5.17 4.81 5.13 4.77
57 5.49 5.00 5.47 4.99 5.38 4.95 5.25 4.88 5.21 4.85
58 5.61 5.09 5.58 5.08 5.48 5.03 5.33 4.96 5.30 4.92
59 5.73 5.19 5.70 5.17 5.59 5.12 5.42 5.04 5.40 5.00
60 5.86 5.29 5.82 5.27 5.70 5.22 5.51 5.12 5.50 5.09
61 6.00 5.40 5.96 5.38 5.82 5.32 5.60 5.21 5.60 5.18
62 6.16 5.52 6.10 5.50 5.95 5.42 5.69 5.30 5.72 5.27
63 6.32 5.65 6.26 5.62 6.08 5.53 5.79 5.39 5.83 5.37
64 6.49 5.78 6.42 5.75 6.21 5.65 5.89 5.49 5.96 5.48
65 6.68 5.92 6.60 5.89 6.35 5.77 5.98 5.58 6.09 5.59
66 6.88 6.08 6.78 6.03 6.50 5.90 6.08 5.69 6.23 5.71
67 7.09 6.24 6.98 6.19 6.65 6.04 6.18 5.79 6.38 5.83
68 7.31 6.42 7.18 6.36 6.81 6.19 6.28 5.90 6.53 5.97
69 7.56 6.61 7.40 6.54 6.97 6.34 6.37 6.01 6.69 6.11
70 7.82 6.81 7.64 6.74 7.14 6.50 6.47 6.12 6.86 6.26
71 8.09 7.04 7.88 6.95 7.31 6.67 6.55 6.22 7.04 6.42
72 8.39 7.28 8.14 7.17 7.48 6.84 6.64 6.33 7.23 6.59
73 8.71 7.54 8.41 7.41 7.65 7.02 6.72 6.44 7.43 6.77
74 9.05 7.83 8.70 7.67 7.83 7.21 6.80 6.54 7.64 6.97
75 9.41 8.14 9.00 7.95 8.00 7.40 6.87 6.64 7.86 7.17
/TABLE
<PAGE>
PAGE 15
<TABLE>
<CAPTION>
[Table A, cont'd]
Plan D - Joint and Survivor
Adj. Adjusted Age of Female Joint Annuitant
Male 10 Years 5 Years Same 5 Years 10 Years
Age* Younger Younger Age Older Older
<S> <C> <C> <C> <C> <C>
55 4.11 4.27 4.45 4.62 4.79
56 4.15 4.32 4.51 4.70 4.88
57 4.19 4.37 4.57 4.77 4.96
58 4.24 4.43 4.64 4.85 5.06
59 4.28 4.49 4.71 4.94 5.16
60 4.34 4.55 4.79 5.03 5.27
61 4.39 4.62 4.87 5.13 5.38
62 4.45 4.69 4.96 5.24 5.50
63 4.51 4.77 5.06 5.35 5.64
64 4.57 4.85 5.16 5.48 5.78
65 4.64 4.94 5.27 5.61 5.93
66 4.71 5.03 5.38 5.75 6.09
67 4.79 5.13 5.51 5.90 6.27
68 4.87 5.24 5.64 6.06 6.46
69 4.96 5.35 5.78 6.24 6.66
70 5.06 5.47 5.94 6.43 6.87
71 5.16 5.60 6.10 6.63 7.11
72 5.26 5.74 6.28 6.84 7.36
73 5.38 5.89 6.47 7.08 7.62
74 5.50 6.05 6.68 7.33 7.91
75 5.63 6.22 6.90 7.60 8.22
*Adjusted Age of annuitant. M = Male F = Female
The table above is based on the "1983 Individual Annuitant Mortality Table A" assuming an interest rate of 4% per year
compounded annually. Settlement rates for any age, or any combination of age and sex not shown above, will be calculated on
the same basis as those rates shown in the table above. Such rates will be furnished by us upon request. Amounts shown in
the table below are based on an assumed interest rate of 4% per year compounded annually.
Plan E - Dollar Amount of Each Monthly Fixed Dollar Annuity Payment Per $1,000 Applied
Years Monthly Years Monthly Years Monthly
Payable Payment Payable Payment Payable Payment
10 $10.06 17 $6.71 24 $5.35
11 9.31 18 6.44 25 5.22
12 8.69 19 6.21 26 5.10
13 8.17 20 6.00 27 5.00
14 7.72 21 5.81 28 4.90
15 7.34 22 5.64 29 4.80
16 7.00 23 5.49 30 4.72
</TABLE>
<PAGE>
PAGE 1
GROUP ANNUITY CERTIFICATE
o Purchase payment is payable in a single sum.
o Annuity payments to begin on the settlement date.
o This certificate is nonparticipating. Dividends are not
payable.
This annuity certificate summarizes the provisions of the Group
Annuity Contract specified on the enrollment application. It does
not amend or modify any of the provisions of the Group Contract.
All rights, privileges and benefits are governed by the provisions
of the Group Contract. The Group Contract may be inspected by the
certificate owner or annuitant at the Contractholder's office
during office hours.
THE GROUP ANNUITY CONTRACT CONTAINS A MARKET VALUE ADJUSTMENT
FORMULA WHICH MAY RESULT IN BOTH UPWARD AND DOWNWARD ADJUSTMENTS IN
CASH SURRENDER BENEFITS. Surrenders are available without market
value adjustment on the last day of each certificate guarantee
period.
If the annuitant is living on the Settlement Date, we will begin to
pay you monthly annuity payments. Any payments made by us are
subject to the Terms of the Group Contract.
We issue this certificate in consideration of your enrollment
application, and payment of the single purchase payment.
Signed for and issued by IDS Life Insurance Company, Minneapolis,
Minnesota, as of the certificate date shown below.
President:
James R. Mitchell
Secretary:
William A. Stoltzmann
IDS Life Insurance Company
IDS Tower 10
Minneapolis, Minnesota 55440<PAGE>
PAGE 2
CERTIFICATE DATA
GROUP CONTRACTHOLDER: GROUP
CONTRACT
NUMBER:
GROUP ANNUITY CERTIFICATE OWNER:
PURCHASE PAYMENT:
INITIAL GUARANTEE RATE:
INITIAL GUARANTEE PERIOD:
ACCUMULATION VALUE AT END OF INITIAL GUARANTEE PERIOD:
Surrender Charge Percentage
(Applied to Market Adjusted Value Surrendered)
Guarantee Participant's Certificate Years as measured from the
Period beginning of a Guarantee Period
1 2 3 4 5 6 7 8
1 Year 1%
2 Years 2% 1%
3 Years 3% 2% 1%
4 Years 4% 3% 2% 1%
5 Years 5% 4% 3% 2% 1%
6 Years 6% 5% 4% 3% 2% 1%
7 Years 7% 6% 5% 4% 3% 2% 1%
8 Years 8% 7% 6% 5% 4% 3% 2% 1%
9 Years 8% 7% 6% 5% 4% 3% 2% 1%
10 Years 8% 7% 6% 5% 4% 3% 2% 1%
For renewal guarantee periods, the surrender charge percentages
will be based on the lesser of:
1. The length of the new guarantee period, or
2. The number of years remaining until the eighth
certificate anniversary.
There are no surrender charges on the last day of a guarantee
period.
There will never be surrender charges beyond the eighth certificate
anniversary.
ANNUITANT:
CERTIFICATE NUMBER:
CERTIFICATE DATE:
CERTIFICATE SETTLEMENT DATE:<PAGE>
PAGE 3
Guide to Certificate Provisions
Definitions
Important words and meanings/Page 4
The Annuity Contract
Entire contract; Incontestability; Misstatement of birthdate or
sex/Page 6
Owner
Owner's rights; Change of ownership; Assignment/Page 7
Beneficiary and Payments to Beneficiary
Who is the beneficiary; Change of beneficiary; Payments to
beneficiary/Page 8
Purchase Payment
Payment of the purchase payment/Page 10
Accumulation Value, Cash Surrender Value, and Market Adjusted Value
How the accumulation value is determined; Surrender of the
certificate for the cash surrender value; How the market adjusted
value is determined; Annual statement of value/Page 10
Annuity Payment Plans
When annuity payments begin; Different ways to receive annuity
payments/Page 13
Table of Settlement Rates
Table showing monthly annuity payment amounts for the various
plans/Page 15<PAGE>
PAGE 4
DEFINITIONS
The following words are used often in this certificate. When we
use these words, this is what we mean:
the annuitant
The person on whose life monthly annuity payments depend.
you, your
The owner of this certificate. The owner may be someone other than
the annuitant. The owner is shown in the enrollment application
unless the owner has been changed as provided in this certificate.
we, our, us
IDS Life Insurance Company
certificate date
It is the date from which certificate anniversaries, certificate
years, and certificate months are determined. Your certificate
date is shown under Certificate Data.
certificate anniversary
The same day and month as the certificate date each year that the
certificate remains in force.
initial guarantee period
The period during which the initial guarantee rate will be
credited. It is shown under certificate data.
initial guarantee rate
The rate of interest credited to the purchase payment as described
in the accumulation value section. It is shown under certificate
data.
renewal guarantee period
A renewal guarantee period will begin at the end of each guarantee
period. It is determined in accordance with the terms of the
certificate.
renewal guarantee rate
The rate of interest credited to the renewal value as described in
the accumulation value section.
renewal date
The first day of a renewal guarantee period. It will always be on
a certificate anniversary.
current rate
The applicable interest rate contained in a schedule of rates
established by us from time to time for various guarantee periods.
accumulation value
The value of the purchase payment plus interest credited, adjusted
for any surrenders.
market adjusted value
The accmulation value adjusted by the market adjusted value
formula.
<PAGE>
PAGE 5
market value adjustment
The market adjusted value minus the accumulation value.
renewal value
The accumulation value at the end of the guarantee period.
cash surrender value
The market adjusted value less any applicable surrender charge.
written request
A request in writing signed by you and delivered to us at our home
office.
settlement
The application of the market adjusted value of this certificate to
provide annuity payments.
settlement date
The date on which annuity payments are to begin. This date may be
changed as provided in this certificate.<PAGE>
PAGE 6
The Annuity Contract
What is the entire contract?
The entire contract consists of the Group Contract, the application
of the Group Contractholder, which is attached to the Group
Contract, and the enrollment application.
No one except one of our corporate officers (President, Vice
President, Secretary or Assistant Secretary) can change or waive
any of our rights or requirements under the contract. That person
must do so in writing. None of our agents or other persons has the
authority to change or waive any of our rights or requirements
under the contract.
In issuing this certificate, we have relied upon the applications.
The statements contained in the applications are, in the absence of
fraud, considered representations and not warranties. No
statements made in connection with the applications will be used by
us to void the certificate or to deny a claim unless that statement
is part of the applications.
When will the certificate become incontestable?
After this certificate has been in force during the annuitant's
lifetime for two years from the date of issue, we cannot contest
the certificate.
What if the annuitant's birthdate or sex has been misstated?
If the annuitant's birthdate or sex has been misstated, payments
under this certificate will be based on what would have been
provided at the correct birthdate and sex. Any underpayments made
by us will be made up immediately. Any overpayments made by us
will be subtracted from the future payments.
What laws govern the contract?
The contract is governed by the law of the state in which it is
delivered. The values and benefits of this certificate are at
least equal to those required by such state.<PAGE>
PAGE 7
Owner
What are your rights as owner of this certificate?
As long as the annuitant is living and unless otherwise provided in
the contract, you may exercise all rights and privileges in the
contract or allowed by us.
How can you change ownership for this certificate?
You can change the ownership of this certificate by written request
on a form approved by us. The change must be made while the
annuitant is living. Once the change is recorded by us, it will
take effect as of the date of your request, subject to any action
taken or payment made by us before the recording.
Can you assign this certificate as collateral?
Yes. While the annuitant is living, you can assign this
certificate or any interest in it. Your interest and the interest
of any beneficiary is subject to the interest of the assignee. An
assignment is not a change of ownership and an assignee is not an
owner as these terms are used int he contract. Any amounts payable
to the assignee will be paid in a single sum.
A copy of any assignment must be submitted to us at our home
office. Any assignment is subject to any action taken or payment
made by us before the assignment was recorded at our home office.
We are not responsible for the validity of any assignment.<PAGE>
PAGE 8
Beneficiary and Payments to Beneficiary
What death benefits are paid if the annuitant or owner dies before
settlement?
If the annuitant or owner dies before settlement while this
certificate is in force, we will pay the beneficiary:
1. the greater of the market adjusted value or the purchase
payment adjusted for surrenders (if death occurred before the
annuitant's attaining age 75); otherwise
2. the market adjusted value (if death occurred on or after age
75).
The market adjusted value will be determined as of the date due
proof of death is received at our home office.
The above described payment will also be made upon the first to die
if ownership is in a joint tenancy except where spouses are joint
owners with right of survivorship and the surviving spousal joint
owner elects to continue the certificate.
Unless you have provided otherwise during the lifetime of the
annuitant, the beneficiary may elect by written request to have the
amount payable applied under the terms of the annuity payment plans
section of the contract. If any amounts are so applied to a plan,
the references to "annuitant" in the annuity payment plans section
of the contract will apply to the beneficiary.
Any election to have the amount payable to a beneficiary under the
terms of the annuity payment plans section is also subject to the
following:
1. the beneficiary must elect the plan within 60 days after we
receive due proof of death; and
2. payments must begin no later than one year after the due date
of death; and
3. the plan must provide equal or substantially equal payments
over a period which does not exceed the life of the
beneficiary or the life expectancy of the beneficiary.
To whom are death benefits payable?
Benefits will be paid equally to all primary beneficiaries
surviving the annuitant. If none survive, proceeds will be paid
equally to all contingent beneficiaries surviving the annuitant.
If no beneficiary survives the annuitant, we will pay the benefits
to you, if living, otherwise to your estate.
Who is the beneficiary?
The beneficiary or beneficiaries are as named in the enrollment
application unless you have since changed the beneficiary as
provided below. If the beneficiary has been changed, we will pay
any benefits in accordance with your last change of beneficiary
request.
<PAGE>
PAGE 9
How do you change the beneficiary?
You may change the beneficiary any time while the annuitant is
living by satisfactory written request to us. Once the change is
recorded by us, it will take effect as of the date of your request,
subject to any action taken or payment made by us before the
recording.
What is the spouse's option to continue this certificate?
If the owner's death occurs prior to the settlement date, the
owner's spouse, if designated as sole beneficiary, may elect in
writing to forego receipt of the death benefit and instead continue
the certificate in force as its owner. The election by the spouse
must be made within 60 days after we receive due proof of death.
What if the annuitant dies after settlement?
If the annuitant dies after settlement, the amount payable, if any,
will be as provided in the annuity payment plan then in effect.<PAGE>
PAGE 10
Purchase Payment
What is the purchase payment for this certificate?
The purchase payment for this certificate is shown under
certificate data. It is payable to us on or before the date we
deliver this certificate. It must be paid or mailed to us at our
home office or to an authorized agent.
Accumulation Value
Cash Surrender Value
Market Adjusted Value
How is the accumulation value determined?
On the certificate date the accumulation value of this certificate
is the purchase payment. Thereafter interest accrued from day to
day for the guarantee period at the rate shown under certificate
data. This rate represents an effective annual yield. At no time
while the certificate is in force shall interest accrue at a rate
less than 3% compounded annually. The accumulation value will be
adjusted for any amounts surrendered.
Are there premium tax charges?
We reserve the right to deduct an amount from the accumulation
value of this certificate at the time that any applicable premium
taxes not previously deducted are payable.
If a tax is payable at the time of your purchase payment and we
choose to not deduct it at that time, we further reserve the right
to deduct it at a later date.
How are renewal guarantee periods determined?
At the end of any guarantee period a renewal guarantee period will
begin. We will notify you in writing 45 days before the renewal
guarantee period. Each renewal guarantee period will be one year
unless you elect a different length from those offered at the time.
We must receive your written request at least 15 days before the
renewal date. The renewal guarantee period may never extend beyond
the settlement date.
The accumulation value on the renewal date will be equal to the
accumulation value at the end of the guarantee period just ending.
This value will earn interest at the renewal guarantee rate. Upon
written request within 45 days of the renewal guarantee period, we
will notify you of the renewal guarantee rate then in effect for
certificates renewing at that time. The actual renewal guarantee
rate will be determined on the renewal date.
What is the market adjusted value and how is it determined?
The market adjusted value is the accumulation value on any date
before the end of the current guarantee period adjusted by a
formula. The formula adjustment reflects the relationship between:
1. the interest rate we are then crediting for new certificate
sales and renewals (Form 30360) for the time remaining in your
certificate's current guarantee period; and
2. the guaranteed interest rate applicable to your certificate's
current guarantee period.
<PAGE>
PAGE 11
The market adjusted value may be more or less than the accumulation
value.
The market adjusted value formula is as follows:
market adjusted value = renewal value
(1 + ic + .0025) (N + t)
where: renewal value = the number of complete
certificate years to the end of
your guarantee period.
N = the number of complete certificate
years to the end of your guarantee
period.
t = the fraction of the certificate year
remaining to the end of your
certificate year (for example, if 180
days remain in a 365 day certificate
year, t would be .493)
ic = the current rate offered for new
certificate sales and renewals (Form
30360) for the number of years left
in your guarantee period (straight
line interpolation between whole year
rates). If N is zero, ic is the rate
for one year guarantee periods.
The market value adjustment is as follows:
market value adjustment = market adjusted value - accumulation
value
There will be no market value adjustment made on the last day of a
guarantee period.
Can you request surrender of any amounts under this certificate
before settlement?
Yes. By written request to us and subject to the rules below you
may:
1. surrender this certificate for the total cash surrender value;
2. partially surrender this certificate for a part of the cash
surrender value.
How is the cash surrender value determined?
The cash surrender value is the market adjusted value less a
surrender charge. The surrender charge is based on the amount
surrendered and the certificate year in which the surrender is
made. The schedule of surrender charges is shown under certificate
data.
After the first certificate anniversary, surrender charges will not
apply to surrenders of amounts totalling up to 10% of the
certificate accumulation value as of the last certificate
anniversary.<PAGE>
PAGE 12
What are the rules for a surrender or partial surrender?
The amount surrendered and any applicable market value adjustment
or surrender charge will be deducted from the accumulation value of
the certificate on the date of surrender. You may surrender all or
a portion of the cash surrender value. However, the accumulation
value that remains after a partial surrender must be at least
$2,000. Any partial surrender must be at least $250.
The surrender payment will normally be mailed to you within seven
days of the receipt of your written request.
Upon surrender of this certificate for the total cash surrender
value, this certificate will terminate. We may require that you
return this certificate to our home office before we pay the total
cash surrender value.
Can we delay or suspend payment of a partial or full surrender?
We may defer payment of any partial or full surrender for a period
not to exceed 6 months from the date we receive your surrender
request or the period permitted by state insurance law, if less.
If we defer payment more than 30 days, we will pay annual interest
of at least 3% on the amount deferred.
Will you receive information about your certificate values?
Yes. At least once a year we will send you a statement showing
both the accumulation value and the cash surrender value of this
certificate. The statement will specify the surrender charge and
market value adjustment used to determine the cash surrender value.
This statement will be based on any laws or regulations that apply.
We will also notify you 45 days before the end of a guarantee
period concerning renewal periods available and your right to
surrender without a market value adjustment on the last day of your
guarantee period.
<PAGE>
PAGE 13
Annuity Payment Plans
When will annuity payments begin?
The first payment will be made as of the settlement date. Before
payments begin we will require satisfactory proof that the
annuitant is alive. We may also require that the owner exchange
the certificate for a supplemental contract which provides the
annuity payments.
Can the owner change the settlement date?
Yes. The owner must tell us the new date by written request.
However, the settlement date cannot be later than the later of:
1. the certificate anniversary nearest the annuitant's 85th
birthday; or
2. the 10th certificate anniversary.
Also, if the owner selects a new date, it must be at least 30 days
after we receive the owner's written request at our home office.
What are the annuity payment plans?
There are different ways to receive annuity payments. We call
these plans.
Plan A - This provides monthly annuity payments for the lifetime of
the annuitant. No payments will be made after the annuitant dies.
Plan B - This provides monthly annuity payments for the lifetime of
the annuitant with a guarantee by us that payments will be made for
a period of at least five, ten or fifteen years. The owner must
select the guaranteed period.
Plan C - This provides monthly annuity payments for the lifetime of
the annuitant with a guarantee by us that payments will be made for
a certain number of months. We determine the number of months by
dividing the market adjusted value applied under this plam by the
amount of the monthly annuity payment.
Plan D - We call this a joint and survivor life annuity. Monthly
payments will be paid for the lifetime of the annuitant and a joint
annuitant. When either the annuitant or joint annuitant dies we
will continue to make monthly payments for the lifetime of the
survivor. No payments will be paid after the death of both the
annuitant and joint annuitant.
Plan E - This provides monthly fixed dollar annuity payments for a
period of years. The period of years may be no less than 10 nor
more than 30.
What are the requirements for selecting a plan?
By written request to us at least 30 days before the settlement
date, the owner may select the plan or change to another plan. If
at least 30 days before the settlement date we have not received at
our home office the owner's written request to select a plan, we
will make payments according to plan B with payments guaranteed for
ten years.
<PAGE>
PAGE 14
If the amount to be applied to a plan is not at least $2,000, or if
payments are to be made to other than a natural person, we have the
right to make a lump sum payment of the cash surrender value.
How will payments be made?
Payments will be made by us by check. The check must be personally
endorsed by the payee or payees as well as the annuitant (or joint
annuitant under plan D). If the annuitant or joint annuitant does
not endorse the check, other evidence must be furnished to show
that the annuitant or joint annuitant is still alive.<PAGE>
PAGE 15
TABLE OF SETTLEMENT RATES
The amount of the first and all subsequent monthly fixed dollar
annuity payments for each $1,000 of value applied under any payment
plan will be based on our fixed dollar Table of Settlement Rates in
effect on the settlement date. Such rates are guaranteed to be not
less than those shown in Table A.
In addition, the amount of such fixed annuity payments will not be
less than that which would be provided if a single premium
immediate annuity certificate then offered by us to annuitants in
the same class were to be purchased with the greater of:
1. the cash surrender value of the certificate; or
2. 95% of the accumulation value of the certificate.
The amount of such fixed annuity payments under Plans A, B and C
will depend upon the sex and the adjusted age of the annuitant on
the date of settlement. The amount of such annuity payments under
Plan D will depend on the sex and adjusted age of the annuitant and
the joint annuitant on the date of settlement.
Adjusted age shall be equal to the age on the nearest birthday
minus an "adjustment" depending on the calendar year of birth of
the annuitant as follows:
Calendar Year of Annuitant's Birth Adjustment
Prior to 1920 0
1920 through 1924 1
1925 through 1929 2
1930 through 1934 3
1935 through 1939 4
1940 through 1944 5
1945 through 1949 6
1950 through 1959 7
1960 through 1969 8
1970 through 1979 9
1980 through 1989 10
After 1989 11<PAGE>
PAGE 16
<TABLE>
<CAPTION>
TABLE A - TABLE OF FIXED DOLLAR SETTLEMENT RATES
NON-QUALIFIED AND IRA CERTIFICATES
Amount of Each Monthly Fixed Dollar Annuity Payment Per $1,000 Applied
Life 5 Years 10 Years 15 Years With
Adj. Income Certain Certain Certain Refund
Age* M F M F M F M F M F
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
45 4.53 4.24 4.52 4.23 4.50 4.23 4.46 4.21 4.42 4.19
46 4.59 4.28 4.58 4.28 4.55 4.27 4.51 4.25 4.47 4.23
47 4.65 4.33 4.64 4.33 4.61 4.32 4.56 4.30 4.52 4.27
48 4.72 4.38 4.71 4.38 4.67 4.37 4.62 4.34 4.58 4.32
49 4.79 4.44 4.77 4.43 4.74 4.42 4.68 4.39 4.63 4.36
50 4.86 4.50 4.85 4.49 4.81 4.47 4.74 4.45 4.69 4.41
51 4.94 4.56 4.92 4.55 4.88 4.53 4.80 4.50 4.76 4.47
52 5.02 4.62 5.00 4.61 4.95 4.59 4.87 4.56 4.82 4.52
53 5.10 4.69 5.08 4.68 5.03 4.66 4.94 4.62 4.90 4.58
54 5.19 4.76 5.17 4.75 5.11 4.72 5.01 4.68 4.97 4.64
55 5.29 4.84 5.26 4.83 5.20 4.80 5.09 4.74 5.05 4.71
56 5.39 4.92 5.36 4.91 5.29 4.87 5.17 4.81 5.13 4.77
57 5.49 5.00 5.47 4.99 5.38 4.95 5.25 4.88 5.21 4.85
58 5.61 5.09 5.58 5.08 5.48 5.03 5.33 4.96 5.30 4.92
59 5.73 5.19 5.70 5.17 5.59 5.12 5.42 5.04 5.40 5.00
60 5.86 5.29 5.82 5.27 5.70 5.22 5.51 5.12 5.50 5.09
61 6.00 5.40 5.96 5.38 5.82 5.32 5.60 5.21 5.60 5.18
62 6.16 5.52 6.10 5.50 5.95 5.42 5.69 5.30 5.72 5.27
63 6.32 5.65 6.26 5.62 6.08 5.53 5.79 5.39 5.83 5.37
64 6.49 5.78 6.42 5.75 6.21 5.65 5.89 5.49 5.96 5.48
65 6.68 5.92 6.60 5.89 6.35 5.77 5.98 5.58 6.09 5.59
66 6.88 6.08 6.78 6.03 6.50 5.90 6.08 5.69 6.23 5.71
67 7.09 6.24 6.98 6.19 6.65 6.04 6.18 5.79 6.38 5.83
68 7.31 6.42 7.18 6.36 6.81 6.19 6.28 5.90 6.53 5.97
69 7.56 6.61 7.40 6.54 6.97 6.34 6.37 6.01 6.69 6.11
70 7.82 6.81 7.64 6.74 7.14 6.50 6.47 6.12 6.86 6.26
71 8.09 7.04 7.88 6.95 7.31 6.67 6.55 6.22 7.04 6.42
72 8.39 7.28 8.14 7.17 7.48 6.84 6.64 6.33 7.23 6.59
73 8.71 7.54 8.41 7.41 7.65 7.02 6.72 6.44 7.43 6.77
74 9.05 7.83 8.70 7.67 7.83 7.21 6.80 6.54 7.64 6.97
75 9.41 8.14 9.00 7.95 8.00 7.40 6.87 6.64 7.86 7.17
/TABLE
<PAGE>
PAGE 17
<TABLE>
<CAPTION>
[Table A, cont'd]
Plan D - Joint and Survivor
Adj. Adjusted Age of Female Joint Annuitant
Male 10 Years 5 Years Same 5 Years 10 Years
Age* Younger Younger Age Older Older
<S> <C> <C> <C> <C> <C>
45 3.80 3.89 3.99 4.10 4.19
46 3.82 3.92 4.03 4.14 4.24
47 3.85 3.95 4.07 4.18 4.29
48 3.87 3.98 4.10 4.22 4.34
49 3.90 4.02 4.15 4.27 4.39
50 3.93 4.06 4.19 4.32 4.45
51 3.96 4.09 4.23 4.38 4.51
52 4.00 4.13 4.28 4.43 4.57
53 4.03 4.18 4.33 4.49 4.64
54 4.07 4.22 4.39 4.56 4.72
55 4.11 4.27 4.45 4.62 4.79
56 4.15 4.32 4.51 4.70 4.88
57 4.19 4.37 4.57 4.77 4.96
58 4.24 4.43 4.64 4.85 5.06
59 4.28 4.49 4.71 4.94 5.16
60 4.34 4.55 4.79 5.03 5.27
61 4.39 4.62 4.87 5.13 5.38
62 4.45 4.69 4.96 5.24 5.50
63 4.51 4.77 5.06 5.35 5.64
64 4.57 4.85 5.16 5.48 5.78
65 4.64 4.94 5.27 5.61 5.93
66 4.71 5.03 5.38 5.75 6.09
67 4.79 5.13 5.51 5.90 6.27
68 4.87 5.24 5.64 6.06 6.46
69 4.96 5.35 5.78 6.24 6.66
70 5.06 5.47 5.94 6.43 6.87
71 5.16 5.60 6.10 6.63 7.11
72 5.26 5.74 6.28 6.84 7.36
73 5.38 5.89 6.47 7.08 7.62
74 5.50 6.05 6.68 7.33 7.91
75 5.63 6.22 6.90 7.60 8.22
*Adjusted Age of annuitant. Refer to the explanation of adjusted age on page 22.
M = Male F = Female
The table above is based on the "1983 Individual Annuitant Mortality Table A" assuming an
interest rate of 4% per year compounded annually. Settlement rates for any age, or any
combination of age and sex not shown above, will be calculated on the same basis as those
rates shown in the table above. Such rates will be furnished by us upon request. Amounts
shown in the table below are based on an assumed interest rate of 4% per year compounded
annually.
Plan E - Dollar Amount of Each Monthly Fixed Dollar Annuity Payment Per $1,000 Applied
Years Monthly Years Monthly Years Monthly
Payable Payment Payable Payment Payable Payment
10 $10.06 17 $6.71 24 $5.35
11 9.31 18 6.44 25 5.22
12 8.69 19 6.21 26 5.10
13 8.17 20 6.00 27 5.00
14 7.72 21 5.81 28 4.90
15 7.34 22 5.64 29 4.80
16 7.00 23 5.49 30 4.72
</TABLE>
Group
Annuity
Certificate
o Purchase payment is payable in a single sum.
o Annuity payments to begin on the settlement date.
o This certificate is nonparticipating. Dividends are not payable.
IDS Life Insurance Company
IDS Tower 10
Minneapolis, Minnesota 55440
<PAGE>
PAGE 1
Annuity
Endorsement
___________________________________________________________________
This endorsement is made a part of the annuity contract to which it
is attached. It changes the terms and provisions therein with
respect to the death benefits payable if the annuitant or owner
dies before settlement for certificates issued pursuant to the
group annuity on or after the effective date shown below.
___________________________________________________________________
Beneficiary and Payments
To Beneficiary
The following provisions are deleted from this group annuity for
certificates issued on or after the effective date shown below:
What death benefits are paid if the annuitant or owner dies
before settlement?
If the annuitant or owner dies before settlement while
the certificate is in force, we will pay the beneficiary:
1. the greater of the market adjusted value or the
purchase payment adjusted for any surrenders
(if death occurred before the annuitant's
attaining age 75); otherwise
2. the market adjusted value (if death occurred on
or after age 75).
The market adjusted value will be determined as of the
date on which due proof of death is received at our home
office.
The following provision is added to this group annuity for
certificates issued on or after the effective date shown below:
What death benefits are paid if the annuitant or owner dies
before settlement?
If the annuitant or owner dies before settlement while
the certificate is in force, we will pay the beneficiary
the accumulation value.
This endorsement is issued and executed the effective date shown
below,or the contract date, if later.
Effective date____________________
IDS Life Insurance Company
Secretary
/s/William A. Stoltzman
<PAGE>
PAGE 1
Annuity
Endorsement
___________________________________________________________________
This endorsement is made a part of the annuity certificate to which
it is attached. It changes the terms and provisions therein with
respect to the death benefits payable if the annuitant or owner
dies before settlement.
___________________________________________________________________
Beneficiary and Payments
To Beneficiary
The following provisions are deleted from:
What death benefits are paid if the annuitant or owner dies
before settlement?
If the annuitant or owner dies before settlement while
this certificate is in force, we will pay the
beneficiary:
1. the greater of the market adjusted value or the
purchase payment adjusted for any surrenders (if
death occurred before the annuitant's attaining age
75); otherwise
2. the market adjusted value (if death occurred on or
after age 75).
The market adjusted value will be determined as of the date on
which due proof of death is received at our home office.
The following provision is added to:
What death benefits are paid if the annuitant or owner dies
before settlement?
If the annuitant or owner dies before settlement while this
certificate is in force, we will pay the beneficiary the
accumulation value.
This endorsement is issued and executed as of the certificate date.
IDS Life Insurance Company
Secretary
/s/ William A. Stoltzmann
William A. Stoltzmann
<PAGE>
PAGE 1
IDS Life Insurance Company
IDS Tower 10
Minneapolis, Minnesota 55440
October 3, 1990
Board of Directors
IDS Life Insurance Company
IDS Tower 10
Minneapolis, Minnesota 55440
Gentlemen:
As General Counsel of IDS Life Insurance Company ("Company"), I am
familiar with its legal affairs and with IDS Life Account MGA,
which is a separate account of the Company established by the
Company's Board of Directors pursuant to Section 61A.14 of the
Minnesota Statutes. I am also familiar with the Registration
Statement on Form S-1 and Pre-Effective Amendment No. 1 thereto
(File No. 33-28976), filed by the Company on behalf of the Account
with the Securities and Exchange Commission with respect to
$150,000 000 interests in IDS Life Account MGA pursuant to Group
and Individual Modified Guaranteed Annuity Contracts ("Contracts").
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 express the following opinions. I am of the opinion that:
1. The Company is duly incorporated, validly existing and in good
standing under the laws of the State of Minnesota, and is duly
licensed or qualified to do business in each other
jurisdiction wherein the business transacted by it requires
such licensing or qualification. The Company has all
corporate powers required to carry on its business as now
conducted and to issue the Contracts.
2. IDS Life Account MGA is a separate account of the Company,
duly established and validly existing pursuant to Minnesota
law.
3. The Contracts, when issued, offered and sold in accordance
with the Prospectus contained in the aforesaid Registration
Statement and, upon compliance with local law, will be legal
and binding obligations of the Company in accordance with
their terms.
<PAGE>
PAGE 2
4. There is no limitation as to the interests in the Account that
may be issued.
There is no material pending or threatened litigation, claims or
assessments (including any unasserted claims or assessments)
against the Company.
Please be advised you are correct in your understanding that I will
advise and cunsult with you concerning questions of disclosure and
the applicable requirements of Statements of Financial Accounting
Standards No. 5 if, and when, in the course of performing legal
services for the Company or the Account with respect to a matter
recognized by me to involve an unasserted claim or assessment that
may require financial statement disclosure or consider disclosure
of any such possible claim or assessment in your financial
statements. You may furnish a copy of this letter to your
accountants.
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Sincerely,
\s\ William A. Stoltzmann
William A. Stoltzmann
Vice President, General Counsel & Secretary
WAS/bkp
<PAGE>
PAGE 1
LIST OF SUBSIDIARIES
The wholly-owned subsidiaries of IDS Life Insurance Company are:
IDS Life Insurance Company of New York
American Enterprise Life Insurance Company
<PAGE>
PAGE 1
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Experts"
and to the use of our reports dated February 3, 1994 on the
financial statements and financial statement schedules of IDS Life
Insurance Company in Post-Effective Amendment No. 5 to the
Registration Statement (Form S-1 No. 33-28976) and related
Prospectus of IDS Life Insurance Company for the registration of
interests in group and individual market value annuity contracts.
Ernst & Young
Minneapolis, Minnesota
April 5, 1994
<PAGE>
PAGE 1
IDS LIFE INSURANCE COMPANY
DIRECTORS POWER OF ATTORNEY
City of Minneapolis
State of Minnesota
Each of the undersigned, as directors of the below listed unit
investment trusts that previously have filed registration
statements and amendments thereto pursuant to the requirements of
the Securities Act of 1933 and the Investment Company Act of 1940
with the Securities and Exchange Commission:
<TABLE><CAPTION>
1933 Act 1940 Act
Reg. Number Reg. Number
<S> <C> <C>
IDS Life Accounts F, IZ, JZ, G, H and N
IDS Life Flexible Annuity 33-4173 811-3217
IDS Life Accounts F, IZ, JZ, G, H and N
IDS Life Variable and Combination
Retirement Annuities 2-73114 811-3217
IDS Life Accounts F, IZ, JZ, G, H and N
IDS Life Employee Benefit Annuity 33-52518 811-3217
IDS Life Accounts F, IZ, JZ, G, H and N
IDS Life Group Variable Annuity Contract 33-47302 811-3217
IDS Life Insurance Company
IDS Life Group Variable Annuity Contract
(Fixed Account) 33-48701 N/A
IDS Life Insurance Company
IDS Life Market Value Annuity 33-28976 N/A
IDS Life Insurance Company
IDS Life Preferred Choice Annuity 33-50968 N/A
IDS Life Variable Life Separate Account
Flexible Premium Variable Life Insurance Policy 33-11165 811-4298
IDS Life Variable Life Separate Account
IDS Life Single Premium Variable Life 2-97637 811-4298
IDS Life Variable Account for Smith Barney Shearson
LifeVest Single Premium Variable Life 33-5210 811-4652
IDS Life Account SBS
IDS Life Symphony Annuity 33-40779 812-7731
IDS Life Account RE
IDS Life Real Estate Variable Annuity 33-13375 N/A
IDS Life Variable Annuity Fund A 2-29081 811-1653
IDS Life Variable Annuity Fund B 2-47430 811-1674
</TABLE>
hereby constitutes and appoints William A. Stoltzmann, Mary Ellyn
Minenko and Colleen Curran or either one of them, as her or his
attorney-in-fact and agent, to sign for her or him in her or his
name, place and stead any and all filings, applications (including
applications for exemptive relief), periodic reports, registration
statements (with all exhibits and other documents required or
desirable in connection therewith) other documents, and amendments
thereto and to file such filings, applications, periodic reports,
registration statements other documents, and amendments thereto
with the Securities and Exchange Commission, and any necessary
states, and grants to any or all of them the full power and<PAGE>
PAGE 2
authority to do and perform each and every act required or
necessary in connection therewith.
Dated the 31st day of March, 1994.
/s/ Louis C. Fornetti /s/ Janis E. Miller
Louis C. Fornetti Janis E. Miller
/s/ David R. Hubers /s/ James A. Mitchell
David R. Hubers James A. Mitchell
/s/ Richard W. Kling /s/ Barry J. Murphy
Richard W. Kling Barry J. Murphy
/s/ Paul F. Kolkman /s/ Stuart A. Sedlacek
Paul F. Kolkman Stuart A. Sedlacek
/s/ Peter A. Lefferts /s/ Melinda S. Urion
Peter A. Lefferts Melinda S. Urion
of Independent Auditors
<PAGE>
PAGE 1
Report of Independent Auditors
The Board of Directors
IDS Life Insurance Company
We have audited the consolidated financial statements of IDS Life
Insurance Company as of December 31, 1993 and 1992, and for each of
the three years in the period ended December 31, 1993, and have
issued our report thereon dated February 3, 1994 (included
elsewhere in this Registration Statement).
Our audits also included the financial statement schedules I, V,
VI, VIII and IX included elsewhere in this Registration Statement.
These schedules are the responsibility of the Company's management.
Our responsibility is to express an opinion based on our audits.
In our opinion, the financial statement schedules referred to
above, when considered in relation to the basic financial
statements taken as a whole, present fairly, in all material
respects, the information set forth therein.
Ernst & Young
Minneapolis, Minnesota
February 3, 1994
<PAGE>
PAGE 2
<TABLE><CAPTION>
IDS LIFE INSURANCE COMPANY
SCHEDULE I - CONSOLIDATED SUMMARY OF INVESTMENTS
OTHER THAN INVESTMENTS IN RELATED PARTIES ($ thousands)
AS OF DECEMBER 31, 1993
________________________________________________________________________________________
Column A Column B Column C Column D
Type of Investment Cost Value Amount at which
shown in the
balance sheet
________________________________________________________________________________________
<S> <C> <C> <C>
Fixed maturities:
Bonds:
United States Government and
government agencies and
authorities (a) $ 5,591,309 $ 5,737,439 $ 5,591,309
States, municipalities and
polictical subdivisions 11,072 13,452 11,072
All other corporate bonds 13,790,043 14,675,088 13,790,043
____________ _____________ ______________
Total fixed maturities 19,392,424 20,425,979 19,392,424
Mortgage loans on real estate 2,055,450 XXXXXXXXX 2,055,450
Policy loans 350,501 XXXXXXXXX 350,501
Other investments 56,307 XXXXXXXXX 56,307
____________ ______________ ______________
Total investment $ 21,854,682 $ XXXXXXXXX $ 21,854,682
____________ ______________ ______________
(a) - Includes mortgage-backed securities with a cost and market value of $5,527,777 and $5,671,738, respectively.
/TABLE
<PAGE>
PAGE 3
IDS LIFE INSURANCE COMPANY
SCHEDULE V - SUPPLEMENTARY INSURANCE INFORMATION ($ thousands)
FOR THE YEAR ENDED DECEMBER 31, 1991
<TABLE><CAPTION>
Column A Column B Column C Column D Column E Column F
Segment Deferred Future Unearned Other policy Premium
policy policy premiums claims and revenue
acquisition benefits benefits
cost losses, payable
claims and
loss expenses
<S> <C> <C> <C> <C> <C>
Annuities $ 693,184 $13,663,477 $ - $ 30,041 $ -
Life, DI,
Long-Term Care and
Health Insurance 518,439 2,654,915 - 21,205 102,338
Total $1,211,623 $16,318,392 $ - $ 51,246 $102,338
</TABLE>
<TABLE><CAPTION>
Column A Column G Column H Column I Column J Column K
Segment Net Benefits, Amortization Other Premiums
investment claims, of deferred operating written
income losses and policy expenses
settlement acquisition
expenses costs
<S> <C> <C> <C> <C> <C>
Annuities $1,189,038 $ 1,639 $ 63,821 $ 66,068 $ N/A
Life, DI,
Long-Term Care and
Health Insurance 233,828 88,577 52,257 87,601 N/A
Total $1,422,866 $90,216 $116,078 $ 153,669 N/A
</TABLE>
<PAGE>
PAGE 4
DS LIFE INSURANCE COMPANY
SCHEDULE V - SUPPLEMENTARY INSURANCE INFORMATION ($ thousands)
FOR THE YEAR ENDED DECEMBER 31, 1992
<TABLE><CAPTION>
Column A Column B Column C Column D Column E Column F
Segment Deferred Future Unearned Other policy Premium
policy policy premiums claims and revenue
acquisition benefits benefits
cost losses, payable
claims and
loss expenses
<S> <C> <C> <C> <C> <C>
Annuities $ 860,027 $16,342,419 $ - $ 28,705 $ -
Life, DI,
Long-Term Care and
Health Insurance 580,848 2,883,469 - 21,194 114,379
Total $1,440,875 $19,225,888 $ - $ 49,899 $114,379
</TABLE>
<TABLE><CAPTION>
Column A Column G Column H Column I Column J Column K
Segment Net Benefits, Amortization Other Premiums
investment claims, of deferred operating written
income losses and policy expenses
settlement acquisition
expenses costs
<S> <C> <C> <C> <C> <C>
Annuities $1,370,145 $ 1,870 $ 81,706 $ 100,928 $ N/A
Life, DI,
Long-Term Care and
Health Insurance 246,676 106,528 58,453 114,764 N/A
Total $1,616,821 $108.398 $140,159 $ 215,692 N/A
</TABLE>
<PAGE>
PAGE 5
IDS LIFE INSURANCE COMPANY
SCHEDULE V - SUPPLEMENTARY INSURANCE INFORMATION ($ thousands)
FOR THE YEAR ENDED DECEMBER 31, 1993
<TABLE><CAPTION>
Column A Column B Column C Column D Column E Column F
Segment Deferred Future Unearned Other policy Premium
policy policy premiums claims and revenue
acquisition benefits benefits
cost losses, payable
claims and
loss expenses
<S> <C> <C> <C> <C> <C>
Annuities $1,008,378 $18,492,135 $ - $ 21,508 $ -
Life, DI,
Long-Term Care and
Health Insurance 644,006 3,148,932 - 23,008 127,245
Total $1,652,384 $21,641,067 $ - $ 44,516 $127,245
</TABLE>
<TABLE><CAPTION>
Column A Column G Column H Column I Column J Column K
Segment Net Benefits, Amortization Other Premiums
investment claims, of deferred operating written
income losses and policy expenses
settlement acquisition
expenses costs
<S> <C> <C> <C> <C> <C>
Annuities $1,532,995 $ 3,656 $139,602 $ 122,999 $ N/A
Life, DI,
Long-Term Care and
Health Insurance 250,224 119,335 72,131 118,975 N/A
Total $1,783,219 $122,991 $211,733 $ 241,974 N/A
</TABLE>
<PAGE>
PAGE 6
<TABLE>
<CAPTION>
IDS LIFE INSURANCE COMPANY
SCHEDULE VI - REINSURANCE ($ thousands)
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
____________________________________________________________________________________________________________________
Column A Column B Column C Column D Column E Column F
Gross amount Ceded to other Assumed from Net % of amount
companies other companies Amount assumed to net
____________________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C>
For the year ended
December 31, 1993
Life insurance in force $ 44,188,493 $ 3,038,426 $ 2,015,382 $ 43,165,449 4.67%
____________________________________________________________________________________________________________________
Premiums:
Life insurance $ 51,764 $ 3,627 $ -- $ 48,137 0.00%
DI & health insurance 96,250 17,142 -- 79,108 0.00%
____________________________________________________________________________________________________________________
Total premiums $ 148,014 $ 20,769 $ -- $ 127,245 0.00%
____________________________________________________________________________________________________________________
For the year ended
December 31, 1992
Life insurance in force $ 38,888,963 $ 2,937,590 $ 2,015,382 $ 37,966,755 5.31%
____________________________________________________________________________________________________________________
Premiums:
Life insurance $ 53,238 $ 3,849 $ 330 $ 49,719 0.66%
DI & health insurance 78,347 13,687 -- 64,660 0.00%
____________________________________________________________________________________________________________________
Total premiums $ 131,585 $ 17,536 $ 330 $ 114,379 0.29%
____________________________________________________________________________________________________________________
For the year ended
December 31, 1991
Life insurance in force $ 34,596,113 $ 2,902,381 $ 2,020,900 $ 33,714,632 5.99%
_____________________________________________________________________________________________________________________
Premiums:
Life insurance $ 53,223 $ 3,902 $ 385 $ 49,706 0.77%
DI & health insurance 59,844 7,212 -- 52,632 0.00%
____________________________________________________________________________________________________________________
Total premiums $ 113,067 $ 11,114 $ 385 $ 102,338 0.38%
____________________________________________________________________________________________________________________
/TABLE
<PAGE>
PAGE 7
<TABLE>
<CAPTION>
IDS LIFE INSURANCE COMPANY
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS ($ thousands)
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
____________________________________________________________________________________________________________________
Column A Column B Column C Column D Column E
Additions
--------------
Balance at Charged to
Description Beginning Charged to Other Accounts- Deductions- Balance at End
of Period Costs & Expenses Describe * Describe ** of Period
____________________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C>
For the year ended
December 31, 1993
- ------------------------------
Reserve for Mortgage Loans $23,595 $13,635 $0 $2,210 $35,020
Reserve for Fixed Maturities $37,899 ($15,122) $0 $22,777
Reserve for Other Investments $12,834 ($4,344) $0 ($2,210) $10,700
For the year ended
December 31, 1992
- -------------------------------
Reserve for Mortgage Loans $16,131 $8,440 $0 $976 $23,595
Reserve for Fixed Maturities $45,100 ($7,601) $400 $0 $37,899
Reserve for Other Investments $7,782 $4,076 $0 ($976) $12,834
For the year ended
December 31, 1991
- ------------------------------
Reserve for Mortgage Loans $12,655 $6,860 $0 $3,384 $16,131
Reserve for Fixed Maturities $26,096 $19,004 $0 $0 $45,100
Reserve for Other Investments $8,434 ($4,036) $0 ($3,384) $7,782
* Cash received on bond previously written down
** Transfer between reserve accounts
/TABLE
<PAGE>
PAGE 8
<TABLE>
<CAPTION>
IDS LIFE INSURANCE COMPANY
SCHEDULE IX - SHORT-TERM BORROWINGS ($ thousands)
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
______________________________________________________________________________________________________
Column A Column B Column C Column D Column E Column F
Maximum Average Weighted
Weighted amount amount average
Category of aggregate Balance average outstanding outstanding interest rate
short-term borrowing at end interest during the during the during the
of period rate period period period
______________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C>
1993
Line of Credit $1,519 N/A $22,700 $1,297 3.70%
1992
Line of Credit $ 0 N/A $20,000 $ 825 5.45%
1991
Line of Credit $ 0 N/A $32,725 $1,483 7.28%
</TABLE>
