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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-1
POST-EFFECTIVE AMENDMENT NO. 3
TO REGISTRATION STATEMENT No. 33-50968
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 May 1, 1995.
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]
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Calculation of Registration Fee
<TABLE><CAPTION>
Proposed
Title of each class Amount Proposed maximum Amount of
of securities to be to be maximum offering aggregate registration
registered registered price per unit offering price fee
<S> <C>
N/A
/TABLE
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IDS LIFE ACCOUNT MGA
GROUP AND INDIVIDUAL FLEXIBLE PREMIUM
MARKET VALUE ANNUITY CONTRACTS ISSUED BY
IDS LIFE INSURANCE COMPANY
Cross-Reference Sheet
Pursuant to Regulation S-K
Item 501(b)
<TABLE><CAPTION>
Form S-1 Item Number and Caption Location in Prospectus
<S> <C>
1. Forepart of the Registration Statement
and Outside Front Cover Page of Prospectus.... Outside Front Cover
2. Inside Front and Outside Back
Cover Pages of Prospectus .................... Table of Contents
(inside front cover)
3. Summary Information, Risk Factors
and Ratio of Earnings to Fixed Charges ....... Summary or, as to ratio
of earnings to fixed
charges, Not Applicable
4. Use of Proceeds .............................. Investments by IDS Life
5. Determination of Offering Price .............. Not Applicable
6. Dilution ..................................... Not Applicable
7. Selling Security Holders ..................... Not Applicable
8. Plan of Distribution ......................... Distribution of Contracts
9. Description of Securities to Be
Registered ................................... Description of Contracts
10. Interests of Named Experts and Counsel ....... Not Applicable
11. Information with Respect to the
Registrant ................................... The Company;
Directors and Executive
Officers of the Registrant;
Executive Compensation;
Security Ownership of
Management;
Legal Proceedings and
Opinion; and
Financial Statements
12. Disclosure of Commission Position
on Indemnification for Securities
Act Liabilities ............................. See Item 14 in Part II
/TABLE
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PART I.
INFORMATION REQUIRED IN PROSPECTUS
Attached hereto and made a part hereof is the Prospectus.
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IDS Life Preferred Choice Annuity
Prospectus, May 1, 1995
This prospectus describes interests in a flexible premium group
market value annuity contract and individual market value annuity
contracts offered by IDS Life Insurance Company (IDS Life) to the
general public for non-tax qualified 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 the owner's 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 to fund retirement
programs that qualify under the following Sections of the Internal
Revenue Code of 1986, as amended (the Code): (1) plans qualified
under Section 401 (including 401(k)); (2) Tax-Sheltered Annuity
(TSA) plans adopted by public school systems and certain tax-exempt
organizations pursuant to Section 403(b); (3) individual retirement
annuities (IRAs) and simplified employee pensions (SEP/IRAs)
qualified under Section 408; and (4) deferred compensation plans
eligible under Section 457.
A minimum purchase payment of at least $5,000 must accompany the
application for a Contract. Additional purchase payments of at
least $2,000 are permitted under a Contract. The Contract
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 guarantee periods
under the Contract.
IDS Life Account MGA
Group and Individual Flexible Premium
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 END OF A
GUARANTEE PERIOD WHICH COULD RESULT IN RECEIPT OF LESS THAN THE
ORIGINAL PURCHASE PAYMENT.
GUARANTEED INTEREST RATES THAT APPLY TO FUTURE GUARANTEE PERIODS
WILL BE DECLARED BY IDS LIFE BASED ON VARIOUS FACTORS. THESE
INTEREST RATES MAY BE HIGHER OR LOWER THAN THE RATES PREVIOUSLY
GUARANTEED.
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THE MINIMUM GUARANTEED 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.
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Table of Contents Page
Summary...................................................
Glossary of Special Terms.................................
Description of Contracts..................................
General...................................................
Application and Purchase Payment..........................
Right to Cancel...........................................
Guarantee Periods.........................................
Surrenders, Free Withdrawals and Systematic Withdrawals...
Surrender Charge..........................................
Transfers.................................................
Market Value Adjustment...................................
Premium Taxes.............................................
Death Benefit Prior to Settlement.........................
Death Benefit After Settlement............................
Statement.................................................
Electing the Settlement Date and Annuity Payment Plan.....
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...................................................
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Appendix A (Total Surrender Illustration).................
Appendix B (Market Value Adjustment Illustration).........
IDS Life Financial Information............................
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Summary
IDS Life is offering group and individual flexible premium market
value annuity Contracts to the general public for non-tax qualified
and tax qualified purchases. IDS Life is a wholly owned subsidiary
of American Express Financial Corporation, which itself is a wholly
owned subsidiary of American Express Company. As described in this
prospectus, each subaccount of the Contracts has a guaranteed rate
of interest that is credited to the purchase payment when it is
held to the end of the subaccount guarantee period. Surrenders or
transfers before the end of a subaccount guarantee period are
subject to a market value adjustment and a surrender charge (if
applicable). Surrenders or transfers are available without market
value adjustment on the last day of each subaccount guarantee
period and during the first ten days of each new subaccount
guarantee period. A free withdrawal amount is available under each
subaccount.
When an initial purchase payment is made under an application, or
when additional purchase payments or transfers are made, the owner
allocates the payment or transfer to one or more subaccounts then
offered by IDS Life. A subaccount is established for each
combination of guarantee period and guarantee rate to which the
owner allocates a purchase payment or transfer. The purchase
payment or transfer allocated to each subaccount earns interest at
the applicable rate for that subaccount guarantee period as
established by IDS Life. Since interest is credited on a daily
basis, the interest credited also earns interest at the applicable
rate established for the guarantee period. The guarantee rate
established by IDS Life will always be at least 3 percent (See
Guarantee Periods page ).
When a subaccount guarantee period ends, a new guarantee period
will begin. IDS Life will transfer the subaccount accumulation
value without market value adjustment to a new subaccount. The new
subaccount guarantee period will be for one year unless the owner
elects a different period from those IDS Life then offers. The new
guarantee period may never extend beyond the settlement date (See
Guarantee Periods page ).
Each Contract year, the owner may surrender or transfer free
withdrawal amounts. These free withdrawal amounts are not subject
to either a surrender charge or a market value adjustment.
However, they are subject to federal income tax and may be subject
to a federal penalty tax and, under certain tax qualified
Contracts, to 20 percent income tax withholding. Free withdrawal
amounts are calculated separately for each subaccount. From the
time a subaccount is established by payment or transfer up to the
next Contract anniversary, the free withdrawal amount is 10 percent
of the subaccount payment or transfer. During each Contract year
thereafter, the free withdrawal amount is 10 percent of the prior
Contract anniversary subaccount accumulation value. The owner also
may establish systematic withdrawals of amounts up to the free
withdrawal amount. (See Surrenders, Free Withdrawals and Systematic
Withdrawals page ).
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Subject to certain restrictions, partial or total surrenders are
permitted. IDS Life may defer payment of any surrender for a
period up to six months from the date it receives notice of
surrender, or for the period permitted by state law, if less. IDS
Life will not defer a payment for a period greater than seven days
except under extraordinary circumstances. IDS Life will pay annual
interest of at least 3 percent of any amounts deferred for more
than thirty days during such period if it chooses to exercise this
deferral right (See Surrenders, Free Withdrawals and Systematic
Withdrawals page ).
Surrenders may be subject to a surrender charge. Surrender charges
are calculated separately for each subaccount. The surrender
charge depends on the number of Contract years a purchase payment
to a subaccount has been in the Contract. For purchase payments
that have been in the Contract for less than eight Contract years,
a surrender charge, beginning at a maximum of 7 percent, will be
assessed on a surrender. There are no surrender charges for
payments that have been in the Contract for eight or more Contract
years or if the surrender occurs on the last day of a subaccount
guarantee period or during the first ten days of the new subaccount
guarantee period. In addition, IDS Life will waive the surrender
charge in certain instances (See Surrender Charge page ).
The owner may transfer the accumulation value from an existing
subaccount to a new subaccount at any time before the settlement
date as long as a subaccount is established for at least one
calendar year prior to the transfer. The minimum accumulation
value the owner may transfer is $2,000 or the entire subaccount
accumulation value, if less. For transfers before the end of a
subaccount guarantee period, there will be a market value
adjustment to the accumulation value in excess of the free
withdrawal amount (See Transfers page ).
A market value adjustment will be applied to a surrender or
transfer that occurs before the end of a subaccount guarantee
period. A market value adjustment is a positive or negative
adjustment of the subaccount accumulation value. Therefore, the
amount distributed from a subaccount on surrender or transfer may
be more or less than the total purchase payments or transfers made
to that subaccount (plus accrued interest). The market value
adjustment reflects the relationship, at the time of surrender or
transfer, between the subaccount guarantee rate and the interest
rate IDS Life then is crediting on purchase payments or transfers
made to new subaccounts with guarantee periods of the same duration
as the time remaining in the subaccount guarantee period (See
Market Value Adjustment page ).
IDS Life reserves 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
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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 payment
plans (See Electing the Settlement Date and Annuity Payment Plan
page ).
Glossary of Special Terms
As used in this prospectus, the following terms have the indicated
meanings:
Accumulation Value - The value of the net purchase and transfer
payments plus interest credited, adjusted for any surrenders. The
Contract accumulation value is the sum of all subaccount
accumulation values.
Annuitant - The person on whose life monthly annuity payments
depend.
Contract Anniversary - The same day and month as the Contract date
each year that the Contract remains in force.
Contract Date - The date from which Contract anniversaries,
Contract years and Contract months are determined.
Free Withdrawal Amount - The amount of surrenders and transfers
that may be made each Contract year without market value adjustment
or surrender charge. Free withdrawal amounts are calculated
separately for each subaccount. From the time a subaccount is
established by payment or transfer to the next Contract
anniversary, the free withdrawal amount is 10 percent of the
subaccount payment or transfer. During each Contract year
thereafter, the free withdrawal amount is 10 percent of the prior
Contract anniversary subaccount accumulation value.
Guarantee Period - The period for which IDS Life guarantees a
particular declared effective annual interest rate.
Guarantee Rate - The particular declared effective annual interest
rate IDS Life guarantees for a guarantee period.
Market Adjusted Value - The accumulation value in excess of the
free withdrawal amount, adjusted by the market value adjustment
formula, plus the free withdrawal amount. The adjustment is for
interest rate changes since a subaccount begins. The adjustment is
calculated separately for each subaccount. The Contract market
adjusted value is the sum of all subaccount market adjusted values.
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Market Value Adjustment - The difference between the market
adjusted value and the accumulation value. It is positive if the
market adjusted value is greater than the accumulation value. It
is negative if the accumulation value is greater than the market
adjusted value.
Owner - The person or entity to whom the Contract is issued. The
owner may be someone other than the annuitant.
Settlement - The application of the accumulation value of the
Contract to provide annuity payments.
Settlement Date - The date on which annuity payments are to begin.
Subaccount - An account IDS Life establishes for each combination
of guarantee period and guarantee rate to which the owner allocates
a purchase or transfer payment. Each subaccount is distinguished
by the guarantee period and the date the guarantee period begins.
Surrender Value - The accumulation value plus any applicable market
value adjustment, less any applicable surrender charge.
Written Request - A request in writing signed by the owner and
delivered to IDS Life at its Home Office.
Description of Contracts
General
This prospectus describes interests in a flexible premium group
market value annuity and individual market value annuity Contracts
offered by IDS Life to the general public for non-tax qualified
purchases. In addition, IDS Life may offer the Contracts in the
following tax qualified programs: (1) Section 401(a) (including
401(k)) plans; (2) TSA plans; (3) IRAs and IRA/SEPs; and (4)
deferred compensation plans eligible under Section 457.
As described in this prospectus, each subaccount of the Contracts
has a guaranteed interest rate that is credited to a purchase
payment when it is held to the end of the subaccount guarantee
period. Surrenders or transfers before the end of a subaccount
guarantee period are subject to a market value adjustment and a
surrender charge (if applicable).
Subject to insurance department approval of the Contract, IDS Life
will be offering this Contract in the District of Columbia and all
states except New York.
Application and Purchase Payment
To apply for a Contract, the owner must complete an application and
make a minimum purchase payment of $5,000. Additional purchase
payments of at least $2,000 are permitted under a Contract. These
additional purchase payments may be made until the date the
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Contract terminates or the date on which annuity payments begin,
whichever is earlier. The maximum total purchase payments in the
first and later Contract years is $500,000. IDS Life reserves the
right to change this maximum. If the owner purchases the Contract
to fund a tax qualified plan, that plan's limit on contributions
also will apply.
IDS Life will return an improperly completed application, along
with the corresponding purchase payment, five days after its
receipt if the application has not, by that time, been properly
completed.
A payment is credited to a Contract on the date IDS Life receives 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.
When an initial purchase payment is made under an application, or
when additional purchase payments or transfers are made, the owner
allocates the payment to one or more subaccounts then offered by
IDS Life. The minimum amount the owner may allocate to a
subaccount is $2,000 or, in the case of a transfer, the entire
subaccount accumulation value if less than $2,000. The owner has a
subaccount for each guarantee period to which an initial purchase
payment is allocated. The owner also has a subaccount for each
guarantee period to which an additional purchase payment is
allocated or to which a transfer of all or a portion of an existing
subaccount is made. Each subaccount is distinguished by the
guarantee period and the date the guarantee period begins.
Right to Cancel
The owner has the right to cancel the Contract within 10 days after
receipt of the Contract and receive a refund of the entire purchase
payment. For cancellation to be effective, mailing or delivery of
notice of cancellation must be made in writing to IDS Life's Home
Office at IDS Tower 10, Minneapolis, Minnesota 55440-0010.
Guarantee Periods
The owner selects guarantee periods from among those offered by IDS
Life. As of the date of this prospectus, IDS Life is offering
guarantee periods with annual durations from one to 10 years;
however, the guarantee periods IDS Life offers in the future could
be different. The guarantee period selected will determine the
guarantee rate. The purchase payment (less surrenders made and
less applicable premium taxes, if any) or any transfer will earn
interest at this guarantee rate during the entire guarantee period.
All interest earned will be credited daily; this compounding effect
is reflected in the guarantee rate.
Below is an illustration of how IDS Life will credit interest
during the guarantee period. For the purpose of this example, IDS
Life has made the assumptions as indicated.
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Example of Guarantee Rate
Beginning Subaccount Accumulation Value: $50,000
Guaranteed Period: 10 years
Guarantee Rate: 5 percent Annual Effective Rate
Interest Credited 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 in excess of
the free withdrawal amount (See Surrenders, Free Withdrawals and
Systematic Withdrawals). The hypothetical interest rates are
illustrative only and are not intended to predict future interest
rates to be declared by IDS Life. Actual interest rates declared
for any given time may be more or less than those shown.
End of a Subaccount Guarantee Period - When a subaccount guarantee
period ends, a new guarantee period will begin. IDS Life will
transfer the owner's subaccount accumulation value to a new
subaccount without applying a market value adjustment. At the end
of a guarantee period, or during the first ten days of the new
subaccount guarantee period, the owner also will be able to totally
or partially surrender the subaccount accumulation value without
market value adjustment or surrender charge. However, such a
surrender will be subject to federal income tax and may be subject
to a federal penalty tax. Surrenders from certain tax qualified
Contracts also may be subject to 20 percent income tax withholding.
If the owner surrenders less than the entire subaccount
accumulation value, at least $1,000 must remain in the subaccount.
IDS Life will mail the owner a notice twenty-one calendar days
before the guarantee period ends to remind the owner to select a
new guarantee period. If IDS Life does not receive the written
selection request within ten calendar days after the guarantee
period ends, the new guarantee period will be one year. The new
guarantee period will never extend beyond the settlement date. For
example, if the annuitant is age 62 at the end of a guarantee
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period and the settlement date is the annuitant's age 65, a
three-year guarantee period is the maximum guarantee period that
may be selected under the Contract.
The accumulation value transferred to the new subaccount is
guaranteed by IDS Life's general assets and will earn interest at a
guarantee rate that IDS Life has declared for the guarantee period.
This guarantee rate may be higher or lower than previous guarantee
rates. IDS Life may declare new schedules of guaranteed interest
rates as frequently as daily.
At the owner's written request, IDS Life will provide notice of the
guarantee rate that applies to a specific guarantee period. The
owner also may call IDS Life to inquire about guarantee rates.
Establishment of Guarantee Rates - The guaranteed rate of interest
for a chosen guarantee period will be known at the time a purchase
payment is received or a transfer is made. IDS Life will send the
owner a confirmation that will show the amount paid or transferred
and the applicable guarantee rate. When one subaccount guarantee
period ends and another begins, IDS Life will establish a guarantee
rate for the new period that is equal to or greater than the rate
credited on new comparable purchase payments at the time. The
minimum guarantee rate established by IDS Life will always be at
least 3 percent per year.
IDS Life has no specific formula for determining the rates of
interest that it will declare as guarantee rates in the future.
IDS Life will declare the guarantee rates from time to time based
on its analysis of current market conditions. (See Investments by
IDS Life). In addition, IDS Life also may consider various other
factors in determining guarantee rates for a given period,
including: regulatory and tax requirements; sales commission and
administrative expenses; general economic trends; and competitive
factors. IDS Life management will make the final determination as
to the guarantee rates to be declared. IDS Life cannot predict or
guarantee future guarantee rates above the 3 percent rate.
Surrenders, Free Withdrawals and Systematic Withdrawals
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.
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 the owner of the
amount payable in a total or partial surrender. Any total or
partial surrender may be subject to tax and tax penalties and
surrenders from certain tax qualified Contracts may be subject to
20 percent income tax withholding. (See Federal Tax
Considerations).<PAGE>
PAGE 16
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
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 values to
another TSA investment vehicle available through the employer.
Free Withdrawal Amounts - Each Contract year, the owner may
surrender or transfer free withdrawal amounts. These free
withdrawal amounts are not subject to either a surrender charge or
a market value adjustment. However, they are subject to federal
income tax and may be subject to a federal penalty tax and, if made
from certain tax qualified Contracts, to 20 percent income tax
withholding. Free withdrawal amounts are calculated separately for
each subaccount. From the time a subaccount is established by
payment or transfer up to the next Contract anniversary, the free
withdrawal amount is 10 percent of the subaccount payment or
transfer. During each Contract year thereafter, the free
withdrawal amount is 10 percent of the prior Contract anniversary
subaccount accumulation value.
Systematic Withdrawals - The owner may establish systematic
withdrawals of amounts up to the free withdrawal amount by written
request or other method acceptable to IDS Life. The minimum
systematic withdrawal amount from the Contract is $100, and these
withdrawals can be made on a monthly, quarterly, semi-annual or
annual basis. The owner may designate the systematic withdrawal to
be made from the Contract in one of the following ways:
o withdrawing interest earnings up to the free withdrawal amount
from each subaccount over the systematic withdrawal period;
o withdrawing the entire free withdrawal amount over the
systematic withdrawal period; or
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PAGE 17
o withdrawing a specific dollar amount less than the free
withdrawal amount. Under this option, the specific dollar
amount will be withdrawn on a pro-rata basis from all the
subaccounts in which the owner has a balance, unless the owner
instructs otherwise.
The minimum Contract accumulation value required to begin
systematic withdrawals is $5,000. The owner may start or stop this
service at any time, but must give IDS Life 30 days' notice to
change any systematic withdrawal instructions that are currently in
place.
Systematic withdrawals may result in taxes, tax penalties and 20
percent income tax withholding being applied to all or a portion of
the amount withdrawn. The owner should consult a tax advisor
regarding the tax consequences of systematic withdrawals.
Partial Surrenders - The minimum Contract accumulation value the
owner may surrender is $1,000 (except for free withdrawal amounts
and systematic withdrawals as explained above). The minimum
balance in a subaccount after surrender is $1,000.
The owner may make a surrender by written request. This request
must specify the subaccount(s) from which the surrender is to be
made and the surrender amount. A partial surrender request not
exceeding $40,000 also may be made by telephone. IDS Life has 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 unusually high, IDS Life will take special
measures to ensure that calls are answered as promptly as possible.
A telephone surrender request will not be allowed within 30 days of
a phoned-in address change.
The owner may request the net check amount that he or she wishes to
receive. IDS Life 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.
Total Surrenders - IDS Life will compute the value of the Contract
at the close of business after receipt of the owner's request for a
complete surrender. A Contract terminates upon total surrender.
IDS Life may request return of the Contract prior to a total
surrender.
Payment on Surrender - IDS Life may defer payment of any partial or
total surrender for a period not exceeding 6 months from the date
it receives the owner's notice of surrender or the period permitted
by state insurance law, if less. Only under extraordinary
circumstances will IDS Life defer a surrender payment more than 7
days. If payment is deferred for more than 30 days, IDS Life will
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PAGE 18
pay annual interest of at least 3 percent on the amount deferred.
While all circumstances under which IDS Life could defer payment
upon surrender may not be foreseeable at this time, such
circumstances could include, for example, IDS Life's inability to
liquidate assets due to a general financial crisis. IDS Life will
notify the owner in writing if it intends to withhold payment more
than 30 days.
Surrender at the End of a Guarantee Period - A subaccount surrender
at the end of the guarantee period or during the first ten days of
the new guarantee period will not incur a surrender charge or
market value adjustment, nor will it reflect any interest earned
during this ten day period.
Surrender Charge
A surrender charge may be assessed on any total or partial
surrender of purchase payments that have been in the Contract for
less than eight Contract years unless the surrender occurs on the
last day of a subaccount guarantee period or during the first ten
days of the new subaccount guarantee period. Surrender charges are
calculated separately for each subaccount. The surrender charge
depends on the number of Contract years a purchase payment to a
subaccount has been in the Contract. The surrender charge
decreases each year on the Contract anniversary date. There are no
surrender charges for payments that have been in the Contract for
eight or more Contract years.
The surrender charge is determined by multiplying the applicable
surrender charge percentage by the subaccount market adjusted value
in excess of the free withdrawal amount. The surrender charge
percentages are as follows:
Contract Years Since Surrender Charge
Payment Received Percentage
1 7%
2 6
3 5
4 4
5 3
6 2
7 1
8 or more 0
For an example of how the surrender charge is calculated for the
total surrender of a subaccount, please see Appendix A.
No Surrender Charge - There will be no surrender charge for:
o exercise of the cancellation right;
o free withdrawal amounts;
o payments that have been in the Contract for eight or more
Contract years;
<PAGE>
PAGE 19
o transfers between subaccounts;
o surrenders from a subaccount at the end of its guarantee
period and during the first ten days of the new subaccount
guarantee period;
o application of the accumulation value to provide annuity
payments using an annuity payment plan; or
o death benefits.
In some cases, such as when an employer makes this annuity
available to employees, IDS Life 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 IDS Life may be able to reduce or
eliminate surrender charges. However, IDS Life expects this to
occur infrequently.
Transfers
The owner may transfer the accumulation value from an existing
subaccount to a new subaccount at any time before the settlement
date. A subaccount must have been established for at least one
calendar year before the owner can make a transfer from it. IDS
Life will not charge a fee for these transfers. However, the
transfers are subject to a market value adjustment.
For transfers before the end of a guarantee period, there will be a
market value adjustment to the accumulation value in excess of the
free withdrawal amount. There will not be a market value
adjustment for transfers at the end of a guarantee period.
The minimum accumulation value the owner may transfer is $2,000 or
the entire subaccount accumulation value, if less. The owner may
transfer less than the entire subaccount accumulation value only if
a minimum accumulation value of $1,000 remains in the subaccount
after the transfer.
The owner may make a transfer by written request. This request
must specify the subaccount from which the transfer is to be made
and the amount of the transfer if it is less than the entire
subaccount accumulation value. The request must also specify the
length of the new guarantee period.
Market Value Adjustment
The subaccount accumulation value, including the interest credited,
is guaranteed if the value is held in the subaccount until the end
of the guarantee period. However, IDS Life will apply a market
value adjustment if a surrender or transfer occurs prior to the end
of the guarantee period.
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PAGE 20
A market value adjustment is a positive or negative adjustment of
the subaccount accumulation value. The market value adjustment
reflects the relationship, at the time of surrender or transfer,
between the subaccount guarantee rate and the interest rate IDS
Life then is crediting on purchase payments or transfers made to
new subaccounts with guarantee periods of the same duration as the
time remaining in the subaccount guarantee period.
The market adjusted value is the subaccount accumulation value (in
excess of the free withdrawal amount) adjusted by the market value
adjustment, plus the free withdrawal amount. A subaccount's market
adjusted value may be lower or higher than its accumulation value.
For example, assume the owner made a purchase payment to a
subaccount with a guarantee period of 10 years and a guarantee rate
of 4.5 percent annually. Assume that after 3 years the owner
decides to surrender the value of that subaccount (with 7 years
left in the subaccount guarantee period). If, at the time of
surrender, the guarantee rate IDS Life is crediting on subaccounts
with 7-year guarantee periods is 5 percent, the market adjusted
value will be lower than the accumulation value. On the other
hand, if the current guarantee rates on subaccounts with 7-year
guarantee periods is 4 percent, the market adjusted value will be
higher than the accumulation value.
Determining the Market Value Adjustment - The market value
adjustment is determined by:
o Calculating the subaccount accumulation value to be adjusted.
This is the amount to be surrendered or transferred from the
subaccount;
o Calculating the market adjusted value of that accumulation
value using the market adjusted value formula below; and
o Subtracting the accumulation value from the market adjusted
value.
Market Adjusted Value Formula:
Market Adjusted Value = [(AVc - FWA) X F] + FWA
where:
AVc = the subaccount accumulation value to be surrendered or
transferred
FWA = free withdrawal amount
F = (1 + ig)(N + t)
_____________________
(1 + ic + .0025)(N + t)
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PAGE 21
where:
ig = the subaccount guarantee rate
N = the number of complete years to the end of the
guarantee period for the subaccount
t = the fraction of a year remaining to the end of the
guarantee period (for example, if 180 days remain in
a 365 day year, t would be .493 for the subaccount)
ic = the subaccount guarantee rate IDS Life then is
crediting on purchase payments or transfers made to
new subaccounts with guarantee periods of the same
duration as the time remaining in the subaccount
guarantee period (straight line interpolation
between whole year rates. If N is zero, ic is the
rate for a one year guarantee period)
For an illustration showing an upward and downward market value
adjustment, please see Appendix B.
No Market Value Adjustment - There will be no market value
adjustment for:
o exercise of the cancellation right;
o free withdrawal amounts;
o surrenders or transfers from a subaccount at the end of its
guarantee period and during the first ten days of the new
subaccount guarantee period;
o application of the accumulation value to provide annuity
payments using an annuity payment plan; or
o death benefits.
Premium Taxes
IDS Life reserves 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 IDS Life chooses
not to deduct it at that time, it further reserves the right to
deduct it at a later date. Current premium taxes range in an
amount up to 3.5 percent depending on jurisdiction.
Death Benefit Prior to Settlement
If the annuitant or owner dies before the settlement date while the
Contract is in force, the death benefit payable to the beneficiary
will equal the accumulation value as determined at the next close
of business after IDS Life's death claim requirements are
fulfilled.
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PAGE 22
If the Spouse is Sole Beneficiary or Co-Owner - If the owner or
co-owner dies before the settlement date and the spouse is the only
beneficiary or co-owner, the spouse may keep the Contract as owner.
To do this, the spouse must, within 60 days after IDS Life receives
proof of death, give IDS Life written instructions to keep the
Contract in force.
Tax qualified Plans - If the Contract is purchased under a plan
qualified under Code Section 401 (including 401(k)), a TSA plan, a
plan eligible under Code Section 457, a custodial or trusteed plan,
or as an IRA or a SEP/IRA and IDS Life receives proof of the
annuitant's death before the settlement date, IDS Life 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 Contract in force until the
date on which the annuitant would have reached 70-1/2 or such other
date as permitted by the Code. To do this, the spouse must, within
60 days after IDS Life receives proof of death, give IDS Life
written instructions to keep the Contract in force.
Paying the Beneficiary - Unless the owner has given other written
instructions, IDS Life will pay the beneficiary in a single
payment. Payment from a tax qualified Contract (except an IRA or
SEP/IRA) made to a surviving spouse instead of being directly
rolled over to an IRA may be subject to 20 percent income tax
withholding. The beneficiary may elect to receive this payment at
any time within 5 years after the date of death. Instead of a
single payment, IDS Life may make payments under any annuity
payment plan available under this Contract if:
o the beneficiary elects the plan in writing within 60 days
after IDS Life receives proof of death;
payments begin no later than one year after death; and
o the plan provides payments over a period that does not extend
beyond the beneficiary's life or life expectancy.
Death Benefit 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.
Statement
Prior to the settlement date, at least annually, IDS Life will send
a statement showing a summary of the Contract.
Electing the Settlement Date and Annuity Payment Plan
A settlement date is established when the owner applies for the
Contract. The settlement date may be changed, but any such change
must be made in writing and received by IDS Life at least 30 days
prior to the scheduled settlement date. The settlement date cannot
be later than the latest of:
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PAGE 23
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.
Annuity Payment Plans - On the settlement date, the owner may
receive a lump sum payment of the surrender value (see Surrenders,
Free Withdrawals and Systematic Withdrawals) or begin receiving
annuity payments. If a lump sum payment is made from a tax
qualified Contract (except an IRA or SEP/IRA), 20 percent income
tax withholding may apply. There are different ways to receive
annuity payments called payment plans. The owner may elect one of
these payment plans, or another payment arrangement to which IDS
Life agrees, by giving IDS Life written notice at least 30 days
before the settlement date. In the absence of an election, IDS
Life will make annuity payments according to Plan B with payments
guaranteed for ten years.
If the amount to be applied to a payment plan is not at least
$2,000 or if payments are to be made to other than a natural
person, IDS Life has the right to make a lump sum payment of the
surrender value.
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 IDS Life that
payments will be made for a period of at least 5, 10 or 15
years. The owner must select the guaranteed period.
o Plan C - This provides monthly annuity payments for the
lifetime of the annuitant with a guarantee by IDS Life that
payments will be made for a certain number of months. IDS
Life determines the number of months by dividing the
accumulation value applied under this plan by the amount of
the monthly annuity payment.
o Plan D - This is 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, IDS Life will continue to make monthly payments for the
lifetime of the survivor. No payments will be made 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 or more than 30.
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PAGE 24
The Contract provides for annuity payments 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:
o the annuity table IDS Life then is using for annuity
settlements (never less than the table guaranteed in the
Contract);
o the annuitant's age; and
o 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 its discretion, if mortality
appears more favorable and interest rates justify, apply other
tables that will result in higher monthly payments.
Restrictions for Some Tax qualified Plans - If the Contract was
purchased under a plan qualified under Code Section 401( including
401(k)), a TSA plan, a plan eligible under Code Section 457, a
custodial or trusteed plan, or as an IRA or a SEP/IRA, the owner
must elect 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 qualified plan
and applicable law for any limitations or restrictions on the
settlement date or annuity payment plan that may be selected.
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.
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PAGE 25
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 be
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.
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
IDS Life reserves the right to amend the Contracts to meet the
requirements of applicable federal or state laws or regulations.
IDS Life will notify the owner of the Contract in writing of any
such amendments.
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PAGE 26
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, IDS Life may pay a commission on an election of a
subsequent guarantee period by an owner or when an owner maintains
a Contract in force.
Assignment of Contracts
The owner may change ownership of the Contract at any time by
filing a change of ownership with IDS Life at its home office. No
change of ownership will be binding upon IDS Life until it receives
and records the change. IDS Life takes no responsibility for the
validity of the change. If the Contract is purchased under a tax
qualified 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 trustee 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 qualified Contract assigned or
pledged is taxed like a surrender to the extent allocable to
investment in annuity contracts after Aug. 13, 1982.
Transfer of a non-tax qualified 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 Contract will
be the value of the Contract at the time of the transfer. The
owner should consult with a tax advisor before taking any action.
Federal Tax Considerations
Under current law, there is no liability for federal income tax on
any increase in the Contract's value until payments are made
(except for change of ownership discussed above in "Assignment of
Contracts"). However, since federal tax consequences cannot always
be anticipated, the owner should consult a tax advisor regarding
any questions about the taxation of the Contract.
The owner is not taxed on the investment in the Contract. The
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 or on behalf of the owner with pre-tax
<PAGE>
PAGE 27
dollars as part of a tax qualified retirement plan, such amounts
are not considered to be part of the investment in the Contract and
will be taxed when payment is made.
If the owner surrenders part or all of the Contract or takes a free
withdrawal amount, the owner will be taxed on the payments
received, to the extent that the value of the Contract exceeds the
investment in the Contract, and the owner may have to pay an IRS
penalty tax for early withdrawal.
A portion of each annuity payment under a non-tax qualified
Contract will be subject to tax and a portion of each payment will
be considered to be part of the investment in the Contract and will
not be taxed. All amounts received after the investment in the
Contract is recovered will be subject to tax. All annuity payments
from a tax qualified Contract, for example an IRA, TSA or a plan
eligible under Code Section 457, 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 a 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-tax 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 a Contract held by such entities as
corporations, partnerships or trusts generally will be treated as
ordinary income received during that year.
A 10 percent IRS penalty tax may apply on any amount includible in
ordinary income. This penalty will not apply to any amount
received:
o after the owner reaches age 59-1/2;
o after the owner dies;
o after the owner becomes disabled (as defined in the Code);
o as a distribution that is part of a series of substantially
equal periodic payments over the life or life expectancy of
the owner (or joint lives or life expectancies of the owner
and beneficiary); or
o if it is allocable to an investment before Aug. 14, 1982
(except for Contracts in tax qualified plans).
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PAGE 28
These are the major exceptions to the 10 percent IRS penalty tax.
Additional exceptions may apply depending upon whether or not the
Contract is tax qualified.
For tax qualified Contracts, other penalties apply if a Contract
bought under a plan is surrendered before the plan specifies that
payments can be made under the plan.
If the owner receives all or part of the Contract value from a tax
qualified annuity (except an IRA or SEP/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, the owner elects to have the
payment rolled over directly to an IRA or another eligible
plan;
o the payment is one of a series of substantially equal periodic
payments, made at least annually, over the life or life
expectancy of the owner (or joint lives or life expectancies
of the owner and 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 the owner's distribution
unless he or she elects otherwise. State withholding also may be
imposed on taxable distributions.
IDS Life will send the owner and/or annuitant, as appropriate, a
tax statement for any year that a taxable distribution from the
Contract is received.
The Contract is intended to qualify as an annuity for federal
income tax purposes. To that end, the provisions of the Contract
are to be interpreted to ensure or maintain such tax qualification,
notwithstanding any other provisions of the Contract. We reserve
the right to amend the Contract to reflect any clarifications that
may be needed or are appropriate to maintain such qualification or
to conform the Contract to any applicable changes in the tax
qualification requirements. We will send you a copy of any such
amendments.
This discussion of federal tax laws is based upon IDS Life's
understanding of these laws as they are currently interpreted.
Either federal tax laws or current interpretations of them may
change. Please consult a tax advisor concerning specific
circumstances.
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PAGE 29
The Company
Business
IDS Life is a stock life insurance company organized in 1957 under
the laws of the State of Minnesota. IDS Life is a wholly owned
subsidiary of American Express Financial Corporation, which is a
wholly owned 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)
1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C>
Premiums $ 127,245 $ 114,379 $ 102,338 $ 89,749
Net investment income 1,783,219 1,616,821 1,422,866 1,204,934
Net gain (loss) on investments (6,737) (3,710) (5,837) 1,022
Other 304,344 240,959 198,344 165,742
Total revenues 2,208,071 1,968,449 1,717,711 1,461,447
Income before income taxes 412,726 315,821 259,467 227,742
Net income $ 270,079 $ 211,170 $ 182,037 $ 157,748
Total assets $33,057,753 $27,295,773 $22,558,809 $18,088,351
</TABLE>
Management's Discussion and Analysis of Consolidated Financial
Condition and Results of Operations
Results of Operations
1994 Compared to 1993:
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.
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PAGE 30
Total revenues increased to $2.2 billion in 1993, compared with
$2.0 billion in 1992. Of this, net investment income was $1.8
billion in 1993, compared with $1.6 billion in 1992, reflecting an
increase in invested assets. Total invested assets grew 14 percent
to $21.9 billion at Dec. 31, 1993, from $19.2 billion at Dec. 31,
1992.
Policyholder and contractholder charges, which consist primarily of
cost of insurance charges on universal life-type policies,
increased 18 percent to $184 million in 1993, compared with $156
million in 1992. This increase reflects higher total life
insurance in force which grew 13 percent to $46.1 billion at
Dec. 31, 1993.
Management and other fees increased 41 percent to $120 million in
1993, compared with $85 million in 1992. This is primarily due to
an increase in assets held in segregated asset accounts, which grew
45 percent to $9.0 billion at Dec. 31, 1993, resulting from strong
sales of variable products. 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.
<PAGE>
PAGE 31
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
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.
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.
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
<PAGE>
PAGE 32
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 1994, 1993 or 1992. (See Note 8, Segment
information, in the "Notes to Consolidated Financial Statements".)
Reinsurance
Reinsurance arrangements are used to reduce exposure to large
losses. The maximum amount of risk retained by 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
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PAGE 33
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 $____ billion at
Dec. 31, 1994, ___ percent was invested in mortgage-backed
securities, ___ percent in corporate and other bonds, ___ percent
in primary mortgage loans on real estate, ___ percent in policy
loans and the remaining ___ 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 1994 listing of the 50 largest
life insurance companies as ranked by assets, IDS Life ranked
fourteenth. Best's Insurance Reports, Life-Health edition, 1994,
assigned IDS Life one of its highest classifications, A+
(Superior).
Employees
As of Dec. 31, 1994, IDS Life and its subsidiaries had ___
employees; including ___ employed at the home office in
Minneapolis, MN, and ___ 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, American Express Financial Corporation. IDS Life
reimburses American Express Financial Corporation for rent based on
<PAGE>
PAGE 34
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, 45
Director since March 1994; senior vice president and director, IDS,
since February 1985.
David R. Hubers, 52
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, 54
Director since February 1984; president since March 1994.
Executive vice president, Marketing and Products from January 1988
to March 1994. Senior vice president, IDS, since __________.
Director of IDS Life Series Fund, Inc. and manager of IDS Life
Variable Annuity Funds A and B.
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PAGE 35
Paul F. Kolkman, 48
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, 53
Director and executive vice president, Marketing since March 1994;
senior vice president and director, IDS, since February 1986.
Janis E. Miller, 43
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 and B.
James A. Mitchell, 53
Chairman of the board since March 1994; director since July 1984;
chief executive officer since November 1986; president from July
1984 to March 1994; executive vice president, IDS, since March
1994; director, IDS, since July 1984; senior vice president, IDS,
from July 1984 to March 1994.
Barry J. Murphy, 44
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, 37
Director and executive vice president, Assured Assets since March
1994; vice president, IDS, since September 1988.
Melinda S. Urion, 41
Director and controller since September 1991; executive vice
president since March 1994; vice president and treasurer from
September 1991 to March 1994; corporate controller, IDS, since
__________; vice president, IDS, since September 1991; chief
accounting officer, IDS, from July 1988 to September 1991.
Officers Other Than Directors
Timothy V. Bechtold, 41
Vice president, Insurance Product Development, since __________.
David J. Berry, 51
Vice president since __________.
Alan R. Dakay, 42
Vice president, Institutional Insurance Marketing, since
__________.
Robert M. Elconin, __
Vice president since __________.
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PAGE 36
Morris Goodwin Jr., 43
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.
Lorraine R. Hart, 43
Vice president, Investments, since __________.
Ryan R. Larson, 44
Vice president, Annuity Product Development, since __________.
Mary O. Neal, 41
Vice president, Sales Support, since __________.
James R. Palmer, 49
Vice president, Taxes, since __________.
F. Dale Simmons, 57
Vice president, Real Estate Loan Management, since __________.
William A. Stoltzmann, 46
Vice president, general counsel and secretary since 1985; vice
president and assistant general counsel, IDS, since __________.
*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 1994 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 1994.
Name of individual Cash
or number in group Position held compensation
Five most highly compensated
executive officers as a group: $
James A. Mitchell President
Richard W. Kling Exec. Vice President,
Marketing and Products
ReBecca K. Roloff Exec. Vice President,
Operations
Alan R. Dakay Vice President,
Institutional Insurance Marketing
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PAGE 37
Paul F. Kolkman Vice President,
Finance
All executive officers
as a group (12) $
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,
American Express Financial Corporation. The percentage of shares
of American Express 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.
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, 1994 and 1993, and for each of the three years in the
period ended Dec. 31, 1994, appearing in this Prospectus and
Registration Statement have been audited by Ernst & Young LLP,
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
Total Surrender of a Subaccount
This example shows how surrender charges are calculated for the
total surrender of one subaccount.
Assumptions:
The Contract is dated January 15, 1994. The Contract year is
January 15 to January 14 and the anniversary date is January 15th
each year.
Subaccount P is established with a $5,000 payment on July 1, 1995.
The surrender charge percentages for Subaccount P will be:
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PAGE 38
Surrender Date Surrender Charge Percentage
7-1-95 to 1-14-96 7%
1-15-96 to 1-14-97 6
1-15-97 to 1-14-98 5
1-15-98 to 1-14-99 4
1-15-99 to 1-14-00 3
1-15-00 to 1-14-01 2
1-15-01 to 1-14-02 1
January 15, 2002+ 0
The Subaccount P market adjusted value is transferred to Subaccount
Q on September 1, 1996. The above surrender charge percentage date
limits do not change even though Subaccount P transferred to
Subaccount Q.
Subaccount Q is entirely surrendered November 4, 1999, when the
Subaccount Q accumulation value is $8,300. Interest rates have
increased since Subaccount Q started. The January 15, 1999 (prior
Contract anniversary) Subaccount Q accumulation value was $8,000.
Assume that the November 4, 1999 market adjusted value is $8,000.
This includes the $800 free withdrawal amount (10 percent of the
January 15, 1998 Subaccount Q accumulation value) and an assumed
($300) negative market value adjustment due to interest rate
increases.
What is the Surrender Charge Amount?
The $8,000 market adjusted value less the $800 free withdrawal
amount is subject to a 3 percent surrender charge. The surrender
charge is 3 percent of $7,200 which is $216.
What Net Amount does the Owner Receive?
The owner receives a net surrender check of $7,784 which is:
Subaccount Q Market adjusted value $8,000
(Which includes the $800 free withdrawal amount
and the ($300) market value adjustment)
Less Subaccount Q surrender charge - 216
Net Subaccount Q surrender check $7,784
Appendix B
Market Value Adjustment Illustration
Assumptions:
Contract Date: January 1, 1994
Subaccount Established: July 1, 1994
Purchase Payment: $50,000
Subaccount Guarantee Period: 10 Years
Subaccount Guarantee Rate: 4.5 percent effective annual yield
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PAGE 39
Market Value Adjustment Assumptions: These examples show how the
market value adjustment may affect your Contract subaccount values.
The surrenders in these examples occur on July 1, 1995, one year
after the subaccount is established. There are no previous
surrenders.
The subaccount accumulation value at the end of one year is
$52,250. If there are no surrenders, the subaccount accumulation
value at the end of the 10-year guarantee period will be
$77,648.47.
The subaccount accumulation value on January 1, 1995, the Contract
anniversary, is: $50,000 x (1 + .045)(184/365) = $51,121.87. The
free withdrawal amount for the next year is $5,112.19. This free
withdrawal amount (10 percent of the Contract anniversary
subaccount accumulation value) is free of both market value
adjustment and surrender charge.
The market value adjustment reflects the relationship (at the time
of surrender) between the subaccount guarantee rate and the
interest rate IDS Life then is crediting on purchase payments or
transfers made to new subaccounts with guarantee periods of the
same duration as the time remaining in the subaccount guarantee
period. After one year, there are 9 years left of the 10-year
subaccount 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
separtately after the market value adjustment. Surrender charge
calculations are shown in Appendix A.
Market Adjusted Value Formula:
Market Adjusted Value = [(AVc - FWA) x F] + FWA
where:
AVc = the subaccount accumulation value to be surrendered or
transferred
FWA = free withdrawal amount
F = (1 + ig)(N + t)
(1 + ic + .0025)(N + t)
where:
ig = the subaccount guarantee rate
N = the number of complete years to the end of the guarantee
period for the subaccount
t = the fraction of a year remaining to the end of the
guarantee period (for example, if 180 days remain in a
365 day year, t would be .493 for the subaccount)<PAGE>
PAGE 40
ic = the subaccount guarantee rate IDS Life then is crediting
on purchase payments or transfers made to new subaccounts
with guarantee periods of the same duration as the time
remaining in the subaccount guarantee period (straight
line interpolation between whole year rates. If N is
zero, ic is the rate for a one year guarantee period)
Example I - Downward Market Value Adjustment
A surrender results in a downward market value adjustment when
interest rates have increased. Assume after one year, IDS Life is
crediting 5 percent for a new subaccount with a 9-year guarantee
period. If the owner totally surrenders the subaccount, the market
adjusted value is:
[(AVc - FWA) x F] + FWA
[($52,250.00 - $5,112.19) x (1 + .045)9]+ 5,112.19 = $49,311.66
(1 + .05 + .0025)9]
The market value adjustment is a $2,938.34 reduction of the
accumulation value:
($2,938.34) = $49,311.66 - $52,250.00
Example II - Upward Market Value Adjustment
A surrender results in an upward market value adjustment when
interest rates have decreased. Assume after one year, IDS Life is
crediting 4 percent for a new subaccount with a 9-year guarantee
period. If the owner totally surrenders the subaccount, the market
adjusted value is:
[(AVc - FWA) x F] + FWA
[$52,250.00 - $5,112.19) x (1 + .045)9] + $5,112.19 = $53,277.18
(1 + .04 + .0025)9]
The market value adjustment is a $1,027.18 increase of the
accumulation value:
$1,027.18 = $53,277.18 - $52,250.00
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PAGE 41
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."
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PAGE 42
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 filed electronically as Exhibit 3.1 to
Post-Effective Amendment No. 2 to Registration Statement
No. 33-50968 is incorporated herein by reference.
3.2 Copy of the Amended By-laws of IDS Life Insurance Company
filed electronically as Exhibit 3.2 to Post-Effective
Amendment No. 2 to Registration Statement No. 33-50968 is
incorporated herein by reference.
3.3 Copy of Resolution of the Board of Directors of IDS Life
Insurance Company, dated May 5, 1989, establishing IDS
Life Account MGA filed electronically as Exhibit 3.3 to
Post-Effective Amendment No. 2 to Registration Statement
No. 33-50968 is incorporated herein by reference.
4.1 Copy of Group Annuity Contract, Form 30363D, filed
electronically as Exhibit 4.1 to Post-Effective Amendment
No. 2 to Registration Statement No. 33-50968 is
incorporated herein by reference.
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PAGE 43
4.2 Copy of Group Annuity Certificate, Form 30360D, filed
electronically as Exhibit 4.2 to Post-Effective Amendment
No. 2 to Registration Statement No. 33-50968 is
incorporated herein by reference.
4.3 Form of Deferred Annuity Contract, Form 30365E, filed
electronically as Exhibit 4.3 to Post-Effective Amendment
No. 2 to Registration Statement No. 33-50968 is
incorporated herein by reference.
5. Copy of Opinion of Counsel regarding legality of
Contracts, dated Sept. 28, 1992, filed electronically as
Exhibit 5 to Post-Effective Amendment No. 2 to
Registration Statement No. 33-50968 is incorporated
herein by reference.
22. Copy of List of Subsidiaries filed electronically as
Exhibit 22 to Post-Effective Amendment No. 2 to
Registration Statement No. 33-50968 is incorporated
herein by reference.
24. Consent of Independent Auditors filed electronically as
Exhibit 24 to Post-Effective Amendment No. 2 to
Registration Statement No. 33-50968 is incorporated
herein by reference.
25. Power of Attorney, dated March 31, 1994, filed
electronically as Exhibit 25 to Post-Effective Amendment
No. 2 to Registration Statement No. 33-50968 is
incorporated herein by reference.
(b) Financial Statement Schedules
27. To be filed by amendment.
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 shall 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-
<PAGE>
PAGE 44
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.
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PAGE 45
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 23rd day of February, 1995.
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 23rd day of February,
1995.
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
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Signature Title
/s/ Stuart A. Sedlacek* Director and Executive Vice
Stuart A. Sedlacek President, Assured Assets
/s/ Melinda S. Urion* Director, Exective Vice
Melinda S. Urion President and Controller
*Signed pursuant to Power of Attorney dated March 31, 1994, filed
as Exhibit 25 to Registration Statement No. 33-50968 for IDS Life
Insurance Company (IDS Life Account MGA).
By:
Mary Ellyn Minenko
