UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d)of the Securities Exchange Act of 1934
(Mark one)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 33-28976
IDS LIFE INSURANCE COMPANY
(Exact name of registrant as specified in its charter)
MINNESOTA 41-0823832
(State or other jurisdiction of (I.R.S.Employer
incorporation or organization) Identification No.)
IDS TOWER 10, MINNEAPOLIS, MINNESOTA 55440-0010
(Address of principal executive offices) (Zip Code)
(Registrant's telephone number, including area code) (612) 671-1257
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
THE REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION H(1)(a) AND
(b) OF FORM 10-Q AND IS THEREFORE FILING THIS FORM WITH THE PERMITTED
ABBREVIATED NARRATIVE DISCLOSURE.
<PAGE>
IDS LIFE INSURANCE COMPANY
FORM 10-Q
For the Quarter Ended March 31, 1999
Table of Contents
PART I - FINANCIAL INFORMATION Page
Item 1. Financial Statements
Consolidated Balance Sheets as of
March 31, 1999 (unaudited) and
December 31, 1998 3 - 4
Consolidated Statements of Income for the
three months ended March 31, 1999 and 1998
(unaudited) 5
Consolidated Statements of Cash Flows for the
three months ended March 31, 1999 and 1998
(unaudited) 6 - 7
Notes to Consolidated Financial Statements
(unaudited) 8 - 10
Item 2. Management's Discussion and Analysis of
Consolidated Financial Condition and
Results of Operations 11 - 16
PART II - OTHER INFORMATION 17 - 20
SIGNATURES 21
<PAGE>
<TABLE>
<CAPTION>
IDS LIFE INSURANCE COMPANY
CONSOLIDATED BALANCE SHEETS
($ thousands, except per share amount)
March 31, December 31,
ASSETS 1999 1998
----------------- -------------
(unaudited)
<S> <C> <C>
Investments:
Fixed maturities:
Held to maturity, at amortized cost (Fair value:
1999, $8,016,693; 1998, $8,420,035) ......... $ 7,718,632 $7,964,114
Available for sale, at fair value (Amortized cost:
1999, $13,365,161; 1998, $13,344,949) ........ 13,458,072 13,613,139
----------- -----------
21,176,704 21,577,253
Mortgage loans on real estate ........................ 3,523,856 3,505,458
Policy loans ......................................... 530,875 525,431
Other investments .................................... 377,432 366,604
----------- -----------
Total investments ................... 25,608,867 25,974,746
Cash and cash equivalents ................................ 147,170 22,453
Amounts recoverable from reinsurers ...................... 274,772 262,260
Amounts due from brokers ................................. -- 327
Other accounts receivable ................................ 51,812 47,963
Accrued investment income ................................ 366,172 366,574
Deferred policy acquisition costs ........................ 2,504,741 2,496,352
Deferred income taxes .................................... 29,509 --
Other assets ............................................. 42,215 30,487
Separate account assets .................................. 28,244,257 27,349,401
----------- -----------
Total assets ........................ $57,269,515 $56,550,563
=========== ===========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
IDS LIFE INSURANCE COMPANY
CONSOLIDATED BALANCE SHEETS
($ thousands, except per share amount)
(continued)
March 31, December 31,
LIABILITIES AND STOCKHOLDER'S EQUITY 1999 1998
------------------ ------------
(unaudited)
<S> <C> <C>
Liabilities:
Future policy benefits:
Fixed annuities ................................. $21,035,980 $21,172,303
Universal life-type insurance ................... 3,360,603 3,343,671
Traditional life insurance ...................... 226,954 225,306
Disability income and
long-term care insurance .................... 693,819 660,320
Policy claims and other
policyholders' funds ............................ 111,740 70,309
Amounts due to brokers .............................. 83,808 195,406
Deferred income taxes ............................... -- 16,930
Other liabilities ................................... 445,016 410,285
Separate account liabilities ........................ 28,244,257 27,349,401
----------- -----------
Total liabilities .................. 54,202,177 53,443,931
----------- -----------
Stockholder's equity:
Capital stock, $30 par value per share;
100,000 shares authorized, issued and outstanding 3,000 3,000
Additional paid-in capital .......................... 288,327 288,327
Accumulated other comprehensive income, net of tax:
Net unrealized securities gains .................. 59,424 169,584
Retained earnings ................................... 2,716,587 2,645,721
----------- -----------
Total stockholder's equity ......... 3,067,338 3,106,632
----------- -----------
Total liabilities and stockholder's equity .............. $57,269,515 $56,550,563
=========== ===========
See accompanying notes .
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
IDS LIFE INSURANCE COMPANY
CONSOLIDATED STATEMENTS OF INCOME
($ thousands)
(unaudited)
Three months ended
March 31,
1999 1998
------------- ---------
<S> <C> <C>
Revenues:
Premiums:
Traditional life insurance .................................... $ 13,377 $ 13,315
Disability income and
long-term care insurance .................................... 47,435 40,791
--------- ---------
Total premiums ................................... 60,812 54,106
Policyholder and contractholder charges ........................... 101,174 93,624
Management and other fees ......................................... 109,997 99,096
Net investment income ............................................. 481,132 501,885
Net realized gain (loss) on investments ........................... 3,703 (2,823)
--------- ---------
Total revenues ................................... 756,818 745,888
--------- ---------
Benefits and expenses:
Death and other benefits:
Traditional life insurance .................................... 7,773 7,683
Universal life-type insurance
and investment contracts .................................. 27,663 23,991
Disability income and
long-term care insurance .................................. 7,129 7,219
Increase in liabilities for
future policy benefits:
Traditional life insurance ................................ 1,591 1,555
Disability income and
long-term care insurance ............................. 19,965 16,730
Interest credited on universal life-type
insurance and investment contracts ............................ 310,785 338,814
Amortization of deferred policy
acquisition costs ............................................. 93,569 97,246
Other insurance and operating expenses ............................ 69,780 55,401
--------- ---------
Total benefits and expenses ...................... 538,255 548,639
--------- ---------
Income before income taxes ............................................ 218,563 197,249
Income taxes .......................................................... 77,697 65,292
--------- ---------
Net income ............................................................ $ 140,866 $ 131,957
========= =========
See accompanying notes
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
IDS LIFE INSURANCE COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
($ thousands)
(unaudited)
Three months ended
March 31,
1999 1998
----------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net income ................................................... $ 140,866 $ 131,957
Adjustments to reconcile net income to
net cash provided by operating activities:
Policy loans, excluding universal
life-type insurance:
Issuance ....................................... (12,239) (12,315)
Repayment ...................................... 12,627 15,246
Change in reinsurance recoverable .................... (12,512) (13,263)
Change in other accounts receivable .................. (3,849) (7,661)
Change in accrued investment income .................. 402 6,973
Change in deferred policy
acquisition costs, net ............................ (3,011) 174
Change in liabilities for future policy
benefits for traditional life,
disability income and
long-term care insurance .......................... 35,147 32,150
Change in policy claims and other
policyholders' funds .............................. 41,431 (31,617)
Change in deferred income taxes ...................... 12,878 3,023
Change in other liabilities .......................... 34,731 63,904
Amortization of premium
(accretion of discount), net ........................... 1,625 (1,166)
Net realized (gain) loss on investments .............. (3,703) 2,823
Policyholder and contractholder charges,
non-cash .......................................... (43,906) (41,934)
Other, net ........................................... (6,289) 5,784
--------- ---------
Net cash provided by operating activities $ 194,198 $154,078
--------- ---------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
IDS LIFE INSURANCE COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
($ thousands)
(unaudited)
(continued)
Three months ended
March 31,
1999 1998
--------------- ---------
<S> <C> <C>
Cash flows from investing activities:
Fixed maturities held to maturity:
Maturities, sinking fund payments and calls ..................... $215,088 $293,104
Sales ........................................................... 37,183 56,007
Fixed maturities available for sale:
Purchases ....................................................... (534,626) (891,593)
Maturities, sinking fund payments and calls ..................... 505,204 464,058
Sales ........................................................... 5,783 111,604
Other investments, excluding policy loans:
Purchases ....................................................... (119,594) (123,188)
Sales ........................................................... 84,085 118,370
Change in amounts due from broker ................................... 327 4,706
Change in amounts due to broker ..................................... (111,598) (17,233)
----------- -----------
Net cash provided by investing activities ................ 81,852 15,835
----------- -----------
Cash flows from financing activities:
Activity related to universal life-type insurance
and investment contracts:
Considerations received ......................................... 436,630 485,547
Surrenders and other benefits ................................... (822,899) (947,015)
Interest credited to account balances ........................... 310,784 338,815
Universal life-type insurance policy loans:
Issuance ........................................................ (24,238) (25,429)
Repayment ....................................................... 18,390 18,483
Dividends paid ............................................ (70,000) (60,000)
----------- -----------
Net cash used in financing activities ................ (151,333) (189,599)
----------- -----------
Net increase (decrease) in cash and cash equivalents ................... 124,717 (19,686)
Cash and cash equivalents at beginning of period ........................ 22,453 19,686
----------- -----------
Cash and cash equivalents at end of period .............................. $147,170 $ --
=========== ===========
See accompanying notes
</TABLE>
<PAGE>
IDS LIFE INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 1999
($ thousands)
(unaudited)
1. General
In the opinion of the management of IDS Life Insurance Company (the
Company), the accompanying unaudited consolidated financial statements
contain all adjustments (consisting of normal recurring adjustments)
necessary to present fairly its balance sheet as of March 31, 1999,
statements of income for the three months ended March 31, 1999 and
1998 and statements of cash flows for the three months ended March 31,
1999 and 1998.
The Company is a wholly owned subsidiary of American Express Financial
Corporation (AEFC), which is a wholly owned subsidiary of American
Express Company. The accompanying consolidated financial statements
include the accounts of the Company and its wholly owned subsidiaries,
IDS Life Insurance Company of New York, American Enterprise Life
Insurance Company, American Centurion Life Assurance Company, American
Partners Life Insurance Company and American Express Corporation. All
material intercompany accounts and transactions have been eliminated
in consolidation.
Purchased and written index options are carried at market value and
included in other investments or other liabilities as appropriate.
Gains or losses on index options that qualify as hedges are deferred
and recognized in management and other fees in the same period as the
hedged fee income. Gains or losses on index options that do not
qualify as hedges are marked to market through the income statement.
2. Nature of business
The Company is engaged in the life insurance and annuity business. The
Company sells various forms of fixed and variable individual life
insurance, group life insurance, individual and group disability
income insurance, long-term care insurance, and single and installment
premium fixed and variable annuities.
3. Statements of cash flows
The Company considers investments with a maturity at the date of their
acquisition of three months or less to be cash equivalents. These
securities are carried principally at amortized cost, which
approximates market value.
<PAGE>
IDS LIFE INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
($ thousands)
(unaudited)
(continued)
3. Statements of cash flows (continued)
Cash paid for interest on borrowings totaled $528 and $3,094 for the
three months ended March 31, 1999, and 1998, respectively. Cash (paid)
refunded for income taxes totaled $(26,711) and $12,715 for the three
months ended March 31, 1999 and 1998, respectively.
4. Commitments and contingencies
Commitments for purchases of investments in the ordinary course of
business at March 31, 1999 aggregated $174,459.
The maximum amount of risk retained by the Company on any one life is
$750 of life and waiver of premium benefits plus $50 of accidental
death benefits. The excesses are reinsured with other life insurance
companies on a yearly renewable term basis.
<PAGE>
IDS LIFE INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 1999
($ thousands)
(unaudited)
(continued)
4. Commitments and contingencies (continued)
A number of lawsuits have been filed against life and health insurers
in jurisdictions in which the Company and AEFC do business involving
insurers' sales practices, alleged agent misconduct, failure to
properly supervise agents, and other matters. The Company and AEFC,
like other life and health insurers, from time to time are involved in
such litigation. On December 13, 1996, an action entitled Lesa
Benacquisto and Daniel Benacquisto vs. IDS Life Insurance Company and
American Express Financial Corporation was commenced in Minnesota
state court. The action is brought by individuals who replaced an
existing Company insurance policy with a new Company policy. The
plaintiffs purport to represent a class consisting of all persons who
replaced existing Company policies with new policies from and after
January 1, 1985. The complaint puts at issue various alleged sales
practices and misrepresentations, alleged breaches of fiduciary duties
and alleged violations of consumer fraud statutes. The Company and
AEFC filed an answer to the Complaint on February 18, 1997, denying
the allegations. A second action, entitled Arnold Mork, Isabella Mork,
Ronald Melchart and Susan Melchart vs. IDS Life Insurance Company and
American Express Financial Corporation was commenced in the same court
on March 21, 1997. In addition to claims that are included in the
Benacquisto lawsuit, the second action includes an allegation of
improper replacement of an existing IDS Life annuity contract. A
subsequent class action, Richard Thoresen and Elizabeth Thoresen vs.
AEFC, American Partners Life Insurance Company, American Enterprise
Life Insurance Company, American Centurion Life Assurance Company, IDS
Life Insurance Company and IDS Life Insurance Company of New York, was
filed in the same court on October 13, 1998 alleging that the sale of
annuities in tax-deferred contributory retirement investment plans
(e.g. IRA's) was done through deceptive marketing practices, which the
company denies. Plaintiffs in each of the aforementioned actions seek
damages in an unspecified amount and also seek to establish a claims
resolution facility for the determination of individual issues.
The Company and its parent believe they have meritorious defenses to
the claims raised in the lawsuits. The outcome of any litigation
cannot be predicted with certainty. In the opinion of management,
however, the ultimate resolution of the above lawsuits and others
filed against the Company should not have a material adverse effect on
the Company's consolidated financial position.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF CONSOLIDATED FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Results of Operations
Three Months Ended March 31, 1999 Compared to Three Months Ended March 31, 1998:
Consolidated net income increased 7 percent to $141 million for the
three months ended March 31, 1999, compared to $132 million in 1998. Earnings
growth resulted primarily from increases in management fees and policyholder and
contractholder charges and an increase in spread rates.
Premiums received totaled $1.0 billion for the three months ended March
31, 1999 compared to $1.1 billion a year ago. This is the result of decreased
sales of fixed and variable annuities partially offset by increased sales of
life insurance.
Policyholder and contractholder charges increased to $101 million for
the three months ended March 31, 1999, compared with $94 million a year ago.
This increase was primarily due to higher life insurance in force.
Management and other fees increased to $110 million for the three
months ended March 31, 1999 compared with $99 million a year ago. This was
primarily due to an increase in average separate account assets outstanding,
resulting primarily from market appreciation. The Company provides investment
management services for the mutual funds, which are used as investment options
for variable annuities and variable life insurance. The Company also receives a
mortality and expense risk fee from the separate accounts.
Total benefits and expenses were $538 million for the three months
ended March 31, 1999, a decrease of 2 percent from a year ago. The largest
component of expenses, interest credited on universal life-type insurance and
investment contracts, decreased 8 percent to $311 million. This was due to lower
aggregate amounts of fixed annuities in force and lower crediting rates,
reflecting market conditions. Other insurance and operating expenses increased
26 percent as a result of business growth and technology costs related to growth
initiatives.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF CONSOLIDATED FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Liquidity and Capital Resources
The liquidity requirements of the Company are met by funds provided
from operations and investment activity. The primary 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, new investment purchases and dividends to
parent.
The Company has an available line of credit with its parent totaling
$100 million. This line of credit is used strictly as a short-term source of
funds. At March 31, 1999, outstanding borrowings under this agreement were $nil.
The Company also uses reverse repurchase agreements for short-term liquidity
needs. Outstanding reverse repurchase agreements totaled $4 million at March 31,
1999.
At March 31, 1999, approximately 11 percent of the Company's invested
assets were below-investment-grade bonds, compared to 13 percent at December 31,
1998. These investments may be subject to a higher degree of risk than
higher-rated issues because of the borrowers' generally greater sensitivity to
adverse economic conditions, such as recession or increasing interest rates, and
in certain instances the lack of an active secondary market. Expected returns on
below-investment-grade bonds reflect consideration of such factors. The Company
has identified those fixed maturities for which a decline in fair value is
determined to be other than temporary, and has written them down to fair value
with a charge to earnings.
For the three months ended March 31, 1999, sales of fixed maturities
held to maturity were due to significant deterioration in the issuers'
creditworthiness.
At March 31, 1999, the Company had an allowance for losses on mortgage
loans of $41 million.
The Company paid $70 million in dividends to its parent during the
three months ended March 31, 1999.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF CONSOLIDATED FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Year 2000
The Company is a wholly owned subsidiary of American Express Financial
Corporation (AEFC), which is a wholly owned subsidiary of American Express
Company (American Express). All of the major systems used by the Company are
maintained by AEFC and are utilized by multiple subsidiaries and affiliates of
AEFC. American Express is coordinating Year 2000 (Y2K) efforts on behalf of all
of its businesses and subsidiaries. Representatives of AEFC are participating in
these efforts.
American Express' and AEFC's Y2K compliance effort is divided into two
initiatives. The first, known as "Millenniax," relates to mainframe and other
technological systems maintained by the American Express Technologies
organization (AET). The second, known as "Business T," relates to the
technological assets that are owned, managed or maintained by American Express'
individual business and staff units, including AEFC. American Express' and
AEFC's plans for remediation of theY2K issue include the following program
phases: (i) employee awareness and mobilization, (ii) inventory collection and
assessment, (iii) impact analysis, (iv) remediation/decommission, (v) testing
and (vi) implementation. With respect to systems maintained by American Express
and AEFC, the first three phases referred to above have largely been completed
for both Millenniax and Business T. In addition, the remediation/decommission
phase for critical systems is nearly complete. As of March 31, 1999, for
Millenniax for American Express, the remediation/decommission, testing and
implementation phases for critical and non-critical systems in total are 91%,
85% and 74% complete, respectively. For Millenniax for AEFC, such phases are
99%, 98% and 97% complete, respectively. For Business T for American Express,
such phases are 94%, 85% and 84% complete, respectively. For Business T for
AEFC, such phases are 85%, 80% and 80% complete, respectively.
American Express' cumulative costs since inception of the Y2K initiatives were
$427 million through March 31, 1999 and are estimated to be in the range of $90
- - $116 million for the remainder through 2000.* AEFC's cumulative costs since
inception of the Y2K initiatives were $59 million through March 31, 1999 and are
estimated to be in the range of $12 - $13 million for the remainder through
2000.* These costs, which are expensed as incurred, relate to both Millenniax
and Business T, and have not had, nor are they expected to have, a material
adverse impact on American Express', AEFC's, or the Company's results of
operations or financial condition.* Y2K costs related to Millenniax represent 6%
and 1% of the AET budget for the years 1999 and 2000, respectively.*
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF CONSOLIDATED FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Year 2000 (continued)
American Express' and AEFC's major businesses are heavily dependent upon
internal computer systems, and all have significant interaction with systems of
third parties, both domestically and internationally. American Express and AEFC
are working with key external parties, including merchants, clients,
counterparties, vendors, exchanges, utilities, suppliers, agents and regulatory
agencies to mitigate the potential risks to American Express and AEFC of Y2K. As
part of their overall compliance program, American Express and AEFC are actively
communicating with third parties through face-to-face meetings and
correspondence, on an ongoing basis, to ascertain their state of readiness.
Although numerous third parties have indicated to American Express and AEFC in
writing that they are addressing their Y2K issues on a timely basis, the
readiness of third parties overall varies across the spectrum. The failure of
external parties to resolve their own Y2K issues in a timely manner could result
in a material financial risk to American Express, AEFC or the Company.
At this point, with remediation and testing of individual internal systems
substantially complete, American Express' and AEFC's primary focus is on testing
of systems on an integrated basis, independent validation of such testing and
completing Y2K contingency plans. The contingency planning effort is a
full-scale initiative that includes both internal and external experts under the
guidance of an American Express-wide steering committee. The contingency plans,
which are based in part on an assessment of the magnitude and probability of
potential risks, primarily focus on proactive steps to prevent Y2K-related
failures from occurring, or if they should occur, detecting them quickly,
minimizing their impact and expediting their repair. The Y2K contingency plans
supplement disaster recovery and business continuity plans already in place, and
include measures such as selecting alternative suppliers and channels of
distribution and developing American Express' and AEFC's own technology
infrastructure in lieu of those provided by third parties.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF CONSOLIDATED FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Year 2000 (continued)
Such plans encompass the creation of both remediation and business resumption
contingency plans, generally in accordance with guidelines established by the
Federal Financial Institutions Examination Council. For critical systems that
are not yet Y2K compliant, American Express and AEFC are on track to achieve
remediation by the second quarter of 1999*; to the extent that unforeseen
circumstances arise that result in non-compliance of any such systems,
remediation contingency plans are also being developed to mitigate such risk.
American Express' and AEFC's business resumption contingency planning effort is
divided into four phases: (i) establishing organizational planning guidelines;
(ii) completing a business impact analysis; (iii) developing the business
resumption contingency plans and (iv) validating and verifying the business
resumption contingency plans. The first two of these phases have essentially
been completed, and have identified and assessed the need for Y2K business
resumption contingency plans for American Express' and AEFC's most critical core
business processes. Such processes include, but are not limited to, credit
authorization, Cardmember billing, merchant payment, client investments, funds
transfer, securities settlement, and travel reservations. The contingency plans
also address third party systems that American Express' and AEFC's businesses
interface with and rely upon, such as international telecommunications networks,
global financial payment and clearing systems, and airline and other travel
systems. American Express and AEFC expect that the development phase of their
business resumption contingency plans will be substantially complete by the
second quarter of 1999.* The final phase, which will include independent
validation and verification of these plans, will take place during the third
quarter of 1999.* American Express and AEFC will continue to refine their
contingency planning activities throughout 1999 as additional information
related to their exposures is gathered.* To the extent that there are Y2K
failures that affect major internal processes or third party systems that
American Express or AEFC relies upon, including but not limited to those
described above, such failures could have a material impact on American Express
and its businesses or subsidiaries, including the Company, through business
interruption or shutdown, financial loss, reputational damage and legal
liability to third parties.
For a more complete discussion of the Y2K issue, see pages eleven through
thirteen of the Company's 1998 10-K report.
* Statements in this Y2K discussion marked with an asterisk are forward-looking
statements which are subject to risks and uncertainties. Important factors that
could cause results to differ materially from these forward-looking statements
include, among other things, the ability of American Express or AEFC to
successfully identify all systems containing two-digit codes, the nature and
amount of programming required to fix the affected systems, the costs of labor
and consultants related to such efforts, the continued availability of such
resources, and the ability of third parties that interface with American Express
or AEFC to successfully address their Y2K issues.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF CONSOLIDATED FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
New Accounting Pronouncements
On January 1, 1999, the Company adopted, Statement of Position (SOP)
98-1, Accounting for the Costs of Computer Software Developed or Obtained for
Internal Use, which was issued by the American Institute of Certified Public
Accountants (AICPA). The SOP requires the capitalization of certain costs
incurred subsequent to December 31, 1998, in connection with developing or
obtaining software for internal use. Adoption of the SOP did not have a material
impact on the Company's earnings or financial position.
On January 1, 1999 the Company also adopted SOP 97-3, Accounting by
Insurance and Other Enterprises for Insurance Related Assessments. The SOP
requires recognition of liabilities for insurance-related assessments when
information indicates it is probable an assessment will be imposed and the
amount of the assessment can be reasonably estimated. The Company had previously
been recognizing a liability for potential insurance-related assessments.
Therefore, adoption of the SOP did not have a material impact on the Company's
earnings or financial position.
<PAGE>
PART II - OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
Reference is made to Note 4 of the Notes to Consolidated
Financial Statements (unaudited) contained in the Report
filed on Form 10-Q for the quarterly period ended March 31,
1999.
Item 2. CHANGES IN SECURITIES
Not applicable.
Item 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
Item 5. OTHER INFORMATION
Not applicable.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(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. 5 to Registration Statement No.
33-28976 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.
5 to Registration Statement No. 33-28976 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. 5 to
Registration Statement No. 33-28976 is
incorporated herein by reference.
<PAGE>
PART II - OTHER INFORMATION (continued)
4.1 Copy of Group Annuity Contract, Form
30363C, filed electronically as Exhibit 4.1
to Post-Effective Amendment No. 5 to
Registration Statement No. 33-28976 is
incorporated herein by reference.
4.2 Copy of Group Annuity Certificate, Form
30360C, filed electronically as Exhibit 4.2
to Post-Effective Amendment No. 5 to
Registration Statement No. 33-28976 is
incorporated herein by reference.
4.3 Copy of Endorsement No. 30340C-GP to the
Group Annuity Contract filed electronically
as Exhibit 4.3 to Post-Effective Amendment
No. 5 to Registration Statement No.
33-28976 is incorporated herein by
reference.
4.4 Copy of Endorsement No. 30340C to the Group
Annuity Certificate filed electronically as
Exhibit 4.4 to Post-Effective Amendment No.
5 to Registration Statement No. 33-28976 is
incorporated herein by reference.
4.5 Copy of Tax qualified Group Annuity
Contract, Form 30369C, filed electronically
as Exhibit 4.6 to Post-Effective Amendment
No. 10 to Registration Statement No.
33-28976 is incorporated herein by
reference.
4.6 Copy of Tax qualified Group Annuity
Certificate, Form 30368C, filed
electronically as Exhibit 4.6 to Post-
Effective Amendment No. 10 to Registration
Statement No. 33-28976 is incorporated
herein by reference.
4.7 Copy of Group IRA Annuity Contract, Form
30372C, filed electronically as Exhibit 4.7
to Post-Effective Amendment No. 10 to
Registration Statement No. 33-28976 is
incorporated herein by reference.
4.8 Copy of Group IRA Annuity Certificate, Form
30371C, filed electronically as Exhibit 4.8
to Post-Effective Amendment No. 10 to
Registration Statement No. 33-28976 is
incorporated herein by reference.
4.9 Copy of Non-tax qualified Individual
Annuity Contract, Form 30365D, filed
electronically as Exhibit 4.9 to
Post-Effective Amendment No. 10 to
Registration Statement No. 33-28976 is
incorporated herein by reference.
<PAGE>
PART II - OTHER INFORMATION (continued)
4.10 Copy of Endorsement No. 30379 to the
Individual Annuity Contract, filed
electronically as Exhibit 4.10 to Post-
Effective Amendment No. 10 to Registration
Statement No. 33-28976 is incorporated
herein by reference.
4.11 Copy of Tax qualified Individual Annuity
Contract, Form 30370C, filed electronically
as Exhibit 4.11 to Post-Effective Amendment
No. 10 to Registration Statement No.
33-28976 is incorporated herein by
reference.
4.12 Copy of Individual IRA Annuity Contract,
Form 30373C, filed electronically as Exhibit
4.12 to Post-Effective Amendment No.10 to
Registration Statement No. 33-28976 is
incorporated herein by reference.
4.13 Copy of Endorsement No. 33007 filed
electronically as Exhibit 4.13 to Post-
Effective Amendment No. 12 to Registration
Statement No. 33-28976 is incorporated
herein by reference.
4.14 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.
4.15 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.
4.16 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.
4.17 Form of Group Deferred Variable Annuity
Contract, Form 34660, filed electronically
as Exhibit 4.1 to Post-Effective Amendment
No. 2 to Registration Statement No.
33-48701 is incorporated herein by
reference.
4.18 Copy of Non-tax qualified Group Annuity
Contract, Form 33111, filed electronically
as Exhibit 4.1 to Registration Statement
No.333-42793 is incorporated herein by
reference.
<PAGE>
PART II - OTHER INFORMATION (continued)
4.19 Copy of Non-tax qualified Group Annuity
Certificate, Form 33114, filed
electroncially as Exhibit 4.2 to
Registration Statement No. 333-42793 is
incorporated herein by reference.
4.20 Copy of Tax qualified Group Annuity
Contract, Form 33112, filed electronically
as Exhibit 4.3 to Registration Statement No.
333-42793 is incorporated herein by
reference.
4.21 Copy of Tax qualified Group Annuity
Certificate, Form 33115, filed
electronically as Exhibit 4.4 to
Registration Statement No. 333-42793 is
incorporated herein by reference.
4.22 Copy of Group IRA Annuity Contract, Form
33113, filed electronically as Exhibit 4.5
to Registration Statement No. 333-42793 is
incorporated herein by reference.
4.23 Copy of Group IRA Annuity Certificate, Form
33116, filed electronically as Exhibit 4.6
to Registration Statement No.333-42793 is
incorporated herein by reference.
4.24 Copy of Non-tax qualified Individual Annuity
Contract, Form 30484, filed electronically
as Exhibit 4.7 to Post-Effective Amendment
No. 1 to Registration Statement No.333-42793
is incorporated herein by reference.
4.25 Copy of Tax qualified Individual Annuity
Contract, Form 30485, filed electronically
as Exhibit 4.8 to Post-Effective Amendment
No. 1 to Registration Statement No.
333-42793 is incorporated herein by
reference.
4.26 Copy of Individual IRA Contract, Form 30486
filed electronically as Exhibit 4.9 to
Post-Effective Amendment No. 1 to
Registration Statement No. 333-42793 is
incorporated herein by reference.
27. Financial data schedule is filed
electronically herewith.
(b) No reports on Form 8-K were required to be filed
by the Company for the nine months ended March
31, 1999.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
REGISTRANT IDS LIFE INSURANCE COMPANY
BY /s/ Philip C. Wentzel
NAME AND TITLE Philip C. Wentzel
Vice President and Controller
DATE May 11, 1999
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