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 September 30, 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 September 30, 1999
Table of Contents
PART I - FINANCIAL INFORMATION Page
Item 1. Financial Statements
Consolidated Balance Sheets as of
September 30, 1999 (unaudited) and
December 31, 1998 3 - 4
Consolidated Statements of Income for the
three months ended September 30, 1999 and 1998
(unaudited) 5
Consolidated Statements of Income for the
nine months ended September 30, 1999 and 1998
(unaudited) 6
Consolidated Statements of Cash Flows for the
nine months ended September 30, 1999 and 1998
(unaudited) 7 - 8
Notes to Consolidated Financial Statements
(unaudited) 9 - 11
Item 2. Management's Discussion and Analysis of
Consolidated Financial Condition and
Results of Operations 12 - 17
PART II - OTHER INFORMATION 18 - 21
SIGNATURES 22
<PAGE>
<TABLE>
<CAPTION>
IDS LIFE INSURANCE COMPANY
CONSOLIDATED BALANCE SHEETS
($ thousands)
September 30, December 31,
ASSETS 1999 1998
---------------- ------------------
(unaudited)
<S> <C> <C>
Investments:
Fixed Maturities:
Held to maturity, at amortized cost (Fair value:
1999, $7,418,127; 1998,$8,420,035) $7,348,073 $7,964,114
Available for sale, at fair value (Amortized cost:
1999, $13,971,969; 1998, $13,344,949) 13,545,662 13,613,139
---------------- ------------------
20,893,735 21,577,253
Mortgage loans on real estate 3,549,240 3,505,458
Policy loans 551,485 525,431
Other investments 461,630 366,604
---------------- ------------------
Total investments 25,456,090 25,974,746
Cash and cash equivalents 21,131 22,453
Amounts recoverable from reinsurers 306,289 262,260
Amounts due from brokers 1,326 327
Other accounts receivable 8,185 47,963
Accrued investment income 349,879 366,574
Deferred policy acquisition costs 2,558,907 2,496,352
Deferred income taxes 174,356 --
Other assets 43,335 30,487
Separate account assets 28,895,778 27,349,401
---------------- ------------------
Total assets $57,815,276 $56,550,563
================ ==================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
IDS LIFE INSURANCE COMPANY
CONSOLIDATED BALANCE SHEETS
($ thousands, except share amounts)
(continued)
September 30, December 31,
LIABILITIES AND STOCKHOLDER'S EQUITY 1999 1998
---------------- ------------------
(unaudited)
<S> <C> <C>
Liabilities:
Future policy benefits:
Fixed annuities $20,776,918 $21,172,303
Universal life-type insurance 3,377,499 3,343,671
Traditional life insurance 224,876 225,306
Disability income and
long-term care insurance 772,513 660,320
Policy claims and other
policyholders' funds 59,169 70,309
Amounts due to brokers 301,393 195,406
Deferred income taxes -- 16,930
Other 565,949 410,285
liabilities
Separate account liabilities 28,895,778 27,349,401
---------------- ------------------
Total liabilities 54,974,096 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 (losses) gains (268,211) 169,584
Retained earnings 2,818,065 2,645,721
---------------- ------------------
Total stockholder's equity 2,841,180 3,106,632
---------------- ------------------
Total liabilities and stockholder's equity $57,815,276 $56,550,563
================ ==================
See accompanying notes.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
IDS LIFE INSURANCE COMPANY
CONSOLIDATED STATEMENTS OF INCOME
($ thousands)
(unaudited)
Three months ended
September 30,
1999 1998
---------------- ------------------
Revenues:
<S> <C> <C>
Premiums:
Traditional life insurance $13,314 $13,391
Disability income and
long-term care insurance 51,384 44,570
---------------- ------------------
Total premiums 64,698 57,961
Policyholder and contractholder charges 99,872 95,919
Management and other fees 119,551 93,268
Net investment income 462,424 492,488
Net realized gain on investments 7,996 4,429
---------------- ------------------
Total revenues 754,541 744,065
---------------- ------------------
Benefits and expenses:
Death and other benefits:
Traditional life insurance 7,459 7,223
Universal life-type insurance
and investment contracts 30,371 26,673
Disability income and
long-term care insurance 8,220 7,120
Increase in liabilities for
future policy benefits:
Traditional life insurance 2,221 1,313
Disability income and
long-term care insurance 23,948 20,201
Interest credited on universal life-type
insurance and investment contracts 298,685 321,008
Amortization of deferred policy
acquisition costs 88,947 93,864
Other insurance and operating expenses 79,191 81,967
---------------- ------------------
Total benefits and expenses 539,042 559,369
---------------- ------------------
Income before income taxes 215,499 184,696
Income taxes 62,171 54,170
---------------- ------------------
Net income $153,328 $130,526
================ ==================
See accompanying notes.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
IDS LIFE INSURANCE COMPANY
CONSOLIDATED STATEMENTS OF INCOME
($ thousands)
(unaudited)
Nine months ended
September 30,
1999 1998
---------------- ------------------
Revenues:
<S> <C> <C>
Premiums:
Traditional life insurance $40,361 $40,284
Disability income and
long-term care insurance 146,645 128,054
---------------- ------------------
Total premiums 187,006 168,338
Policyholder and contractholder charges 304,991 284,461
Management and other fees 344,993 296,145
Net investment income 1,429,794 1,489,846
Net realized gain on investments 17,457 3,820
---------------- ------------------
Total revenues 2,284,242 2,242,610
---------------- ------------------
Benefits and expenses:
Death and other benefits:
Traditional life insurance 22,560 23,282
Universal life-type insurance
and investment contracts 88,019 78,437
Disability income and
long-term care insurance 22,960 21,190
Increase in liabilities for
future policy benefits:
Traditional life insurance 5,447 4,485
Disability income and
long-term care insurance 65,473 55,621
Interest credited on universal life-type
insurance and investment contracts 923,072 993,250
Amortization of deferred policy
acquisition costs 279,301 284,136
Other insurance and operating expenses 221,246 204,089
---------------- ------------------
Total benefits and expenses 1,628,078 1,664,490
---------------- ------------------
Income before income taxes 656,164 578,120
Income taxes 193,820 176,477
---------------- ------------------
Net income $462,344 $401,643
================ ==================
See accompanying notes.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
IDS LIFE INSURANCE COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
($thousands)
(unaudited)
Nine months ended
September 30,
1999 1998
---------------- ------------------
Cash flows from operating activities:
<S> <C> <C>
Net income $462,344 $401,643
Adjustments to reconcile net income to
net cash provided by operating activities:
Policy loans, excluding universal
life-type insurance:
Issuance (43,764) (42,396)
Repayment 40,865 45,556
Change in amounts recoverable from reinsurers (44,029) (39,219)
Change in other accounts receivable 39,778 (8,538)
Change in accrued investment income 16,695 638
Change in deferred policy
acquisition costs, net (41,585) (13,921)
Change in liabilities for future policy
benefits for traditional life,
disability income and
long-term care insurance 111,763 101,092
Change in policy claims and other
policyholders' funds (11,140) 986
Change in deferred income taxes 44,451 (16,221)
Change in other liabilities 155,664 (26,932)
Accretion of discount, net (14,986) (108)
Net realized gain on investments (17,457) (3,820)
Policyholder and contractholder charges,
non-cash (131,370) (126,424)
Other, net (6,897) 8,689
---------------- ------------------
Net cash provided by operating activities $560,332 $281,025
---------------- ------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
IDS LIFE INSURANCE COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
($ thousands)
(unaudited)
(continued)
Nine months ended
September 30,
1999 1998
---------------- ------------------
Cash flows from investing activities:
<S> <C> <C>
Fixed maturities held to maturity:
Purchases ($859) ($1,020)
Maturities, sinking fund payments and calls 572,084 964,874
Sales 42,952 235,683
Fixed maturities available for sale:
Purchases (3,141,968) (2,305,827)
Maturities, sinking fund payments and calls 1,212,007 1,457,454
Sales 1,358,234 205,777
Other investments, excluding policy loans:
Purchases (474,322) (424,042)
Sales 314,686 406,663
Change in amounts due from broker (999) 7,620
Change in amounts due to broker 105,987 (66,636)
---------------- ------------------
Net cash (used in) provided by investing
activities (12,198) 480,546
---------------- ------------------
Cash flows from financing activities:
Activity related to universal life-type insurance
and investment contracts:
Considerations received 1,455,882 1,393,409
Surrenders and death benefits (2,615,240) (2,929,807)
Interest credited to account balances 923,072 993,250
Universal life-type insurance policy loans:
Issuance (75,483) (75,904)
Repayment 52,312 52,069
Cash dividends to parent (290,000) (180,000)
---------------- ------------------
Net cash used in financing activities (549,457) (746,983)
---------------- ------------------
Net (decrease) increase in cash and cash equivalents (1,322) 14,588
Cash and cash equivalents at beginning of period 22,453 19,686
---------------- ------------------
Cash and cash equivalents at end of period $21,131 $34,274
================ ==================
See accompanying notes.
</TABLE>
<PAGE>
IDS LIFE INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 1999
($ 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 September 30, 1999, statements of income for the
three and nine months ended September 30, 1999 and 1998 and statements of cash
flows for the nine months ended September 30, 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 $2,838 and $10,550 for the nine
months ended September 30, 1999, and 1998, respectively. Cash paid for income
taxes totaled $170,533 and $175,768 for the nine months ended September 30, 1999
and 1998, respectively.
4. Commitments and contingencies
Commitments for purchases of investments in the ordinary course of business at
September 30, 1999 aggregated $150,493.
The maximum amount of risk retained by the Company on any one life is $750 of
life and waiver of premium benefits plus $50 of accidental death benefits. The
excesses are reinsured with other life insurance companies on a yearly renewable
term basis.
<PAGE>
IDS LIFE INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 1999
($ 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
Melchert and Susan Melchert 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
Nine Months Ended September 30, 1999 Compared to Nine Months Ended September 30,
1998:
Consolidated net income increased 15 percent to $462 million for the nine months
ended September 30, 1999, compared to $402 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 $3.4 billion for the nine months ended September 30,
1999, compared to $3.3 billion a year ago. Increased sales of variable annuities
and life insurance were partially offset by decreased sales of fixed annuities.
Policyholder and contractholder charges increased to $305 million for the nine
months ended September 30, 1999, compared with $284 million a year ago. This
increase was primarily due to an increase in life insurance in force.
Management and other fees increased to $345 million for the nine months ended
September 30, 1999 compared with $296 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 many of 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.
Net investment income decreased to $1,430 million for the nine months ended
September 30, 1999 compared to $1,490 million one year ago. This is primarily
due to lower investments in fixed maturities at September 30, 1999 compared to
September 30, 1998.
Total benefits and expenses were $1.6 billion for the nine months ended
September 30, 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 7 percent to $923 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 8
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 September 30, 1999, outstanding borrowings under this agreement were $100
million. The Company also uses reverse repurchase agreements for short-term
liquidity needs. Outstanding reverse repurchase agreements totaled $5.5 million
at September 30, 1999.
At September 30, 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 nine months ended September 30, 1999, sales of fixed maturities held to
maturity were due to significant deterioration in the issuers' creditworthiness.
At September 30, 1999, the Company had an allowance for losses on mortgage loans
of $41 million.
The Company paid $290 million in dividends to its parent during the nine months
ended September 30, 1999.
<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>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF CONSOLIDATED FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Year 2000
The Company began addressing the Year 2000 (Y2K) issue in 1995 and has
established a plan for resolution, which involves the remediation,
decommissioning and replacement of relevant systems, including mainframe,
mid-range and desktop computers, application software, operating systems,
systems software, data back-up archival and retrieval services, telephone and
other communications systems, and hardware peripherals and facilities dependent
on embedded technology. The 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 the Company's
individual business and staff units. Our plans for remediation of the Y2K 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
the Millenniax systems and Business T assets, all of the program phases referred
to above are at least 99 percent complete.
The Company's cumulative costs since inception of the Y2K initiatives were $495
million through September 30, 1999 and are estimated to be in the range of $22 -
$48 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 the Company's results of
operations or financial condition.* Y2K costs related to Millenniax represent 6
percent and 1 percent of the AET budget for the years 1999 and 2000,
respectively.*
The Company's major businesses are heavily dependent upon internal computer
systems, and all have significant interaction with systems of third parties,
both domestically and internationally. The Company is working with key external
parties, including merchants, clients, counterparties, vendors, exchanges,
utilities, suppliers, agents and regulatory agencies to mitigate the potential
risks to us of Y2K. As part of our overall compliance program, the Company is
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 us in writing that they are
addressing their Y2K issues on a timely basis, the Company does not directly
control the remediation efforts of such parties, and therefore cannot provide
assurances that they will be Y2K compliant. The failure of external parties to
resolve their own Y2K issues in a timely manner could have a material adverse
effect on the Company.*
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF CONSOLIDATED FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Year 2000 (continued)
During the third quarter of 1999 our plans for targeted integrated testing of
systems that support our most critical business functions, and independent
validation of such testing, were completed. At this point, the Company is in the
process of finalizing specific Y2K contingency plans and establishing plans to
address our year-end activities related to Y2K. Our contingency planning effort,
which addresses all critical systems and, to a lesser extent, certain
non-critical systems, is a full-scale initiative that includes both internal and
external experts under the guidance of a Company-wide steering committee. Our
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 setting up manual back-up processes.
Our Y2K contingency plans have been developed generally in accordance with
guidelines established by the Federal Financial Institutions Examination
Council. This effort is divided into four phases: (i) establishing
organizational planning guidelines, (ii) completing a business impact analysis,
(iii) developing the contingency plans and (iv) validating and verifying the
contingency plans. These phases are to be followed by a detailed year-end plan.*
All four of the above phases have essentially been completed, and have
identified and assessed the need for, and developed, Y2K contingency plans for
the Company's most critical core business functions. Such functions include, but
are not limited to, credit authorization, Cardmember billing, merchant payment,
client investments, funds transfer, securities settlement and travel
reservations. These contingency plans also address third party systems that the
Company's businesses interface with and rely upon, such as international
telecommunications networks and utilities, global financial payment and clearing
systems, and airline and other travel systems.
Going forward, our primary focus will be on planning year-end activities related
to Y2K.* Such activities include the establishment of global command centers;
scheduling the availability of key personnel; establishing additional roll-over
management procedures, including proactive monitoring of select critical
functions and assets; the development of Y2K incident tracking and reporting
tools; and the establishment of specific Y2K-related communications.*
Additionally, rehearsals of these year-end activities will be conducted during
the fourth quarter of 1999.*
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF CONSOLIDATED FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Year 2000 (continued)
The Company will continue to refine its contingency and year-end planning
activities throughout 1999 as additional information related to our exposures is
gathered.* To the extent that there are Y2K failures that affect major internal
processes or third party systems that the Company relies upon, including but not
limited to those described above, such failures could have a material impact on
the Company and its businesses or subsidiaries through business interruption or
shutdown, financial loss, regulatory actions, reputational damage and legal
liability to third parties.* At this point it appears that some of the major
industries in certain countries outside the United States, such as
telecommunications and utilities, have made less progress in the Y2K compliance
effort and, as a result, may present a somewhat greater exposure to the
Company.*
For additional information relating to the Y2K issue, see pages eleven through
thirteen of the Company's 1998 annual report to shareholders, which is
incorporated by reference in the Company's 1998 10-K report, and the Company's
10-Q reports for the quarterly periods ended March 31, 1999 and June 30, 1999.
* 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 the Company to successfully identify
all systems containing two-digit codes, the nature and amount of programming and
other resources required to fix and test the affected systems, the costs of
labor and consultants related to such efforts as well as those involving the
development and implementation of contingency plans, the continued availability
of such personnel, the ability of third parties that interface with the Company
to successfully address their Y2K issues, and the ability of the Company to
assess potential internal and external Y2K exposures and develop effective
contingency plans in connection therewith.
<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 September 30,
1999.
Item 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
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 Non-tax qualified 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 Non-tax qualified 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 4.5 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
electronically 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 September 30, 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 November 11, 1999
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