<PAGE>
PAGE 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
REGISTRATION STATEMENT TO
FORM S-6
FOR REGISTRATION UNDER THE SECURITIES ACT
OF 1933 OF SECURITIES OF UNIT INVESTMENT
TRUSTS REGISTERED ON FORM N-8B-2
A. Exact name of trust: IDS Life Variable Life Separate Account
B. Name of depositor: IDS LIFE INSURANCE COMPANY
C. Complete address of depositor's principal executive offices:
IDS Tower 10, Minneapolis, Minnesota 55440-0010
D. Name and complete address of agent for service:
Copies to:
Mary Ellyn Minenko, Esq.
IDS Life Insurance Company
IDS Tower 10
Minneapolis, Minnesota 55440-0010
It is proposed that this filing will become effective (check
appropriate space)
immediately upon filing pursuant to paragraph (b) of Rule 486
on (date), pursuant to paragraph (b) of Rule 486
60 days after filing pursuant to paragraph (a)i of Rule 486
X on Aug. 15, 1995 pursuant to paragraph (a)i of Rule 485
This post-effective amendment designates a new effective date
for a previously filed post-effect amendment.
E. Title and amount of securities being registered:
Flexible Premium Survivorship Variable Life Insurance
Policy
F. Proposed maximum aggregate offering price to the public of the
securities being registered.
Registration of Indefinite Amount of Securities Pursuant
to Rule 24f-2 under the Investment Company Act of 1940.
G. Amount of initial filing fee: NA
H. Approximate date of proposed public offering:
Check space if it is proposed that this filing will become
effective on (date) at (time) pursuant to Rule 487
<PAGE>
PAGE 2
CROSS REFERENCE TO ITEMS REQUIRED
BY FORM N-8B-2
N-8B-2 Item Caption in Prospectus
1.............................Cover Page; The variable account
2.............................IDS Life
3.............................Not applicable
4.............................Distribution of the policy
5.............................The variable account
6.............................The variable account
7.............................Not applicable
8.............................Not applicable
9.............................Not applicable
10............................Surrender charge; Total surrenders;
Partial surrenders; Taxation of
policy proceeds; Reinstatement;
Transfers between the fixed account
and the subaccounts; Keeping the
policy in force; Grace period;
Voting rights; Substitution of
investments; Payment of premiums;
The fixed account; Allocation of
premiums; Transfers between the
fixed account and the subaccounts;
Right to examine policy
11............................The fund
12............................The fund; Cover page
13............................Loads, fees, and charges; Keeping the
policy in force
14............................Purchasing your policy; Application
15............................Premiums; Payment of premiums;
Transfers between the fixed account
and the subaccounts; The fund
16............................Premiums; Payment of premiums;
Transfers between the fixed account
and the subaccounts; The fund
17............................Two ways to request a transfer, loan
or surrender; Policy surrenders
18............................The fund
19............................Reports
20............................Not applicable
21............................Policy loans; fixed account and
subaccounts; Two ways to request a
transfer, loan or surrender
22............................Not applicable
23............................Management of IDS Life
24............................Policy value; Death benefits; Payment
of policy proceeds
25............................IDS Life
26............................Not applicable
27............................IDS Life
28............................Management of IDS Life
29............................Ownership
30............................Not applicable
31............................Not applicable
32............................Not applicable<PAGE>
PAGE 3
33............................Not applicable
34............................Not applicable
35............................Not applicable
36............................Not applicable
37............................Not applicable
38............................Distribution of the policy
39............................IDS Life; Distribution of the policy
40............................Not applicable
41............................Distribution of the policy; IDS Life
42............................Management of IDS Life
43............................Not applicable
44............................Premiums; Transfers between the fixed
account and subaccounts; Subaccount
values
45............................Not applicable
46............................Subaccount values
47............................Not applicable
48............................IDS Life
49............................Not applicable
50............................Not applicable
51............................The variable account
52............................Substitution of investments
53............................IDS Life's tax status
54............................Not applicable
55............................Not applicable
56............................Not applicable
57............................Not applicable
58............................Not applicable
59............................Not applicable
<PAGE>
PAGE 4
Flexible Premium Survivorship Variable Life Insurance Policy
Prospectus August 15, 1995
The Flexible Premium Survivorship Variable Life Insurance Policy
described in this prospectus is designed to provide life insurance
coverage on two insureds, with a death benefit payable when the
last surviving insured dies while the policy is in force. The
policy is intended to qualify as a life insurance policy under
Sections 72, 101 and 7702 of the Internal Revenue Code.
You may allocate policy value to one or more of six subaccounts of
IDS Life Variable Life Separate Account. The subaccounts invest in
the portfolios of IDS Life Series Fund: Equity, Income, Money
Market, Managed, Government Securities, and International Equity.
Policy values increase and decrease with investment experience, and
reflect certain deductions and charges. There is no guaranteed
minimum policy value with respect to the subaccounts, and you bear
the entire investment risk. You may also allocate policy value to
the fixed account which earns at least a guaranteed minimum
interest rate. The fixed account is the general investment account
of IDS Life Insurance Company (IDS Life).
You may withdraw a portion of the policy's cash surrender value
after the first policy year or surrender it in full at any time for
its cash surrender value. Surrender charges are described under
"Loads, fees and charges". You may also take out policy loans.
The frequency and amount of premium payments are flexible, subject
to certain restrictions and conditions. Payment of the scheduled
premium will not necessarily keep a policy from lapsing if the cash
surrender value is less than the amount needed to pay the monthly
deduction (see "Loads, fees and charges"). However, a policy will
not lapse if the premiums needed to keep either the death benefit
guarantee to age 85 (DBG-85) or the death benefit guarantee to age
100 (DBG-100) in effect, are paid.
This prospectus contains detailed information about these and other
policy features, including certain restrictions and limitations
that apply. As in the case of other life insurance policies, it
may not be advantageous to purchase flexible premium survivorship
variable life insurance as a replacement for, or in addition to an
existing flexible premium variable or other life insurance policy.
<PAGE>
PAGE 5
IDS Life Variable Life Separate Account
Flexible Premium Survivorship Variable Life Insurance Policy
Issued and sold by: IDS Life Insurance Company, IDS Tower 10,
Minneapolis, MN 55440 Telephone: (612) 671-3131
THIS PROSPECTUS IS VALID ONLY WHEN ACCOMPANIED OR PRECEDED BY THE
PROSPECTUS OF THE IDS LIFE SERIES FUND, INC. ALL PROSPECTUSES
SHOULD BE RETAINED FOR FUTURE REFERENCE.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
IDS LIFE IS NOT A FINANCIAL INSTITUTION, AND THE SECURITIES IT
OFFERS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY ANY FINANCIAL INSTITUTION NOR ARE THEY INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR
ANY OTHER AGENCY. INVESTMENTS IN THIS POLICY INVOLVE INVESTMENT
RISK INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
<PAGE>
PAGE 6
Table of contents
Key terms
The policy in brief
The variable account
The fund
Equity Portfolio
Income Portfolio
Money Market Portfolio
Managed Portfolio
Government Securities Portfolio
International Equity Portfolio
Portfolio objectives
Relationship between portfolios and subaccounts
Rates of return of the fund and subaccounts
The fixed account
Purchasing your policy
Application
Right to examine policy
Premiums
Keeping the policy in force
Death benefit guarantee to age 85
Death benefit guarantee to age 100
Grace period
Reinstatement
Loads, fees and charges
Premium expense charge
Monthly deduction
Surrender charge
Partial surrender fee
Mortality and expense risk charge
Fund investment management fee
Policy value
Fixed account value
Subaccount values
Death benefits
Change in death benefit option
Changes in specified amount
Misstatement of age or sex
Suicide
Beneficiary
Transfers between the fixed account and subaccounts
Fixed account transfer policies
Minimum transfer amounts
Maximum transfer amounts
Maximum number of transfers per year
Two ways to request a transfer, loan or surrender
Automated transfers
Automated dollar-cost averaging
Policy loans
Policy surrenders
Total surrenders
Partial surrenders
Allocations of partial surrenders
Effects of partial surrenders
Taxes
<PAGE>
PAGE 7
Optional insurance benefits
Policy Split Option Rider
Four-Year Term Insurance Rider
Payment of policy proceeds
Federal taxes
IDS Life's tax status
Taxation of policy proceeds
Modified endowment contracts
Other tax considerations
IDS Life
Management of IDS Life
Other information
Substitution of investments
Voting rights
Reports
Policy illustrations
<PAGE>
PAGE 8
Key terms
Accumulation unit: An accounting unit used to calculate the policy
value of the subaccounts. It is a measure of the net investment
results of each of the subaccounts.
Attained insurance age: Each insured's insurance age plus the
number of policy anniversaries since the policy date. Attained
insurance age changes only on a policy anniversary.
Cash surrender value: Proceeds received if the policy is
surrendered in full, or the amount payable if the last surviving
insured's death occurs on or after the youngest insured's attained
insurance age 100. The cash surrender value equals the policy
value minus indebtedness, minus any applicable surrender charges.
Code: The Internal Revenue Code of 1986, as amended.
Close of business: Closing time of the New York Stock Exchange,
normally 3 p.m., Central time.
Death benefit guarantee to age 85 (DBG-85): A feature of the policy
guaranteeing that the policy will not lapse before the youngest
insured's attained insurance age 85 (or 15 policy years, if later).
This feature is in effect if you meet certain premium payment
requirements.
Death benefit guarantee to age 85 (DBG-85) premium: The premium
required to keep the DBG-85 in effect. The DBG-85 premium is shown
in your policy. It depends on each insured's sex, insurance age,
risk classification, optional insurance benefits added by rider,
and the initial specified amount.
Death benefit guarantee to age 100 (DBG-100): A feature of the
policy guaranteeing that the policy will not lapse before the
youngest insured's attained insurance age 100. This feature is in
effect if you meet certain premium payment requirements.
Death benefit guarantee to age 100 (DBG-100) premium: The premium
required to keep the DBG-100 in effect. The DBG-100 premium is
shown in your policy. It depends on each insured's sex, insurance
age, risk classification, optional insurance benefits added by
rider, and the initial specified amount.
Fixed account: The general investment account of IDS Life. The
fixed account is made up of all of IDS Life's assets other than
those held in any separate account.
Fixed account value: The portion of the policy value that is
allocated to the fixed account, including indebtedness.
Fund: IDS Life Series Fund, Inc., a diversified open-end management
investment company intended to meet a wide range of investment
goals with its six separate portfolios: Equity Portfolio, Income
Portfolio, Money Market Portfolio, Managed Portfolio, Government
<PAGE>
PAGE 9
Securities Portfolio, and International Equity Portfolio. Each of
six subaccounts of the variable account invests in a specific one
of these portfolios.
IDS Life: In this prospectus, "we," "us," "our," and "IDS Life"
refer to IDS Life Insurance Company.
Indebtedness: All existing loans on the policy plus interest that
has either been accrued or added to the policy loan.
Insurance age: Each insured's age based upon his or her last
birthday on the date of the application.
Insureds: The persons whose lives are insured by the policy.
Monthly date: The same day each month as the policy date. If there
is no monthly date in a calendar month, the monthly date is the
first day of the next calendar month.
Net amount at risk: A portion of the death benefit, equal to the
total current death benefit minus the policy value. This is the
amount to which cost of insurance rates are applied in determining
the monthly cost of insurance.
Net premium: The premium paid minus the premium expense charge.
Owner: The entity(ies) to which, or individual(s) to whom, the
policy is issued, or to whom ownership is subsequently transferred.
In the prospectus "you" and "your" refer to the owner.
Policy anniversary: The same day and month as the policy date each
year the policy remains in force.
Policy date: The date the policy is issued and from which policy
anniversaries, policy years and policy months are determined.
Policy value: The sum of the fixed account value plus the variable
account value.
Proceeds: The amount payable under the policy as follows:
o Upon death of the last surviving insured prior to the
youngest insured's attained insurance age 100, proceeds
will be the death benefit in effect as of the date of
that insured's death, minus any indebtedness.
o Upon the death of the last surviving insured on or after
the youngest insured's attained insurance age 100,
proceeds will be the cash surrender value.
o On surrender of the policy the proceeds will be the cash
surrender value.
Risk classification: A group of insureds that IDS Life expects will
have similar mortality experience.
<PAGE>
PAGE 10
Scheduled premium: A premium, selected by the owner at the time of
application, of a level amount, at a fixed interval of time.
Specified amount: An amount used to determine the death benefit and
the proceeds payable upon death of the last surviving insured prior
to the youngest insured's attained insurance age 100. The initial
specified amount is shown in your policy.
Subaccount(s): One or more of the investment divisions of the
variable account, each of which invests in a particular fund
portfolio.
Surrender charge: A contingent deferred issue and administration
expense charge assessed against the policy value at the time of
surrender during the first 15 years of the policy.
Valuation date: A normal business day, Monday through Friday, on
which the New York Stock Exchange is open.
Valuation period: The interval commencing at the close of business
on each valuation date and ending at the close of business on the
next valuation date.
Variable account: IDS Life Variable Life Separate Account
consisting of subaccounts, each of which invests in a particular
mutual fund portfolio. The policy value in each subaccount depends
on the performance of the particular portfolio.
Variable account value: The sum of the values that are allocated to
the subaccounts of the variable account.
The policy in brief
The Flexible Premium Survivorship Variable Life Insurance Policy
(the policy) is designed to provide insurance protection on two
insureds and to build policy value. The policy provides a death
benefit that is payable to the beneficiary upon the last surviving
insured's death. The policy allows you, as the owner, to allocate
your net premiums, or transfer policy value, to:
The variable account, consisting of subaccounts, each of which
invests in a mutual fund portfolio with a particular
investment objective. You may direct premiums to any or all
of six of these subaccounts. Your policy's value may increase
or decrease daily, depending on the investment return. No
minimum amount is guaranteed. (p. )
The fixed account, which earns interest at rates that are
adjusted periodically by IDS Life. This rate will never be
lower than 4%. (p. )
The fund: Six subaccounts of the variable account invest in IDS
Life Series Fund, Inc., a series mutual fund for which IDS Life is
investment manager. The fund includes Equity, Income, Money
Market, Managed, Government Securities and International Equity
portfolios. (p. )
<PAGE>
PAGE 11
Purchasing your policy: To apply, send a completed application and
premium payment to IDS Life's home office. For your application to
be accepted, you will need to provide medical and other evidence
that the persons you propose to insure meet the requirements of our
underwriting rules. (p. )
Right to examine policy: You may return your policy for any reason
and receive a full refund of your premiums by mailing us the policy
and a written request for cancellation within a specified period.
(p. )
Premiums: In applying for your policy, you state how much you
intend to pay, and whether you will pay quarterly, semiannually or
annually. You may make additional unscheduled premium payments
subject to certain limits. No premium payments can be made on or
after the youngest insured's attained insurance age 100. We may
refuse premiums in order to comply with the Code. (p. )
DBG-85: A feature of the policy guaranteeing that the policy will
not lapse before the youngest insured's attained insurance age 85
(or 15 policy years, if later). This feature is in effect if you
meet certain premium payment requirements. (p. )
DBG-100: A feature of the policy guaranteeing that the policy will
not lapse before the youngest insured's attained insurance age 100.
This feature is in effect if you meet certain premium payment
requirements. (p. )
Grace period: If the cash surrender value of your policy becomes
less than the amount needed to pay the monthly deduction, and the
DBG-85 or DBG-100 is not in effect, you will have 61 days to pay a
premium that raises the cash surrender value to an amount
sufficient to pay the monthly deduction. If you don't, the policy
will lapse. (p. )
Reinstatement: If your policy lapses, it can be reinstated within
five years. The reinstatement is subject to certain conditions
including evidence of insurability satisfactory to IDS Life and the
payment of a sufficient premium. Neither the DBG-85 nor DBG-100 can
be reinstated.
Loads, fees and charges: Your policy is subject to the following
charges, which compensate IDS Life for administering and
distributing the policy as well as paying policy benefits and
assuming related risks:
o Premium expense charge -- charge deducted from each premium
payment to cover some distribution expenses, state and local
premium taxes, and federal taxes.
o Monthly deduction -- charged against the value of your policy
each month (prior to the youngest insured's attained insurance age
100), covering the cost of insurance, certain administrative
expenses, and optional insurance benefits.
<PAGE>
PAGE 12
o Surrender charge -- applies if you surrender your policy for its
full cash value, or the policy lapses, during the first 15 years.
The surrender charge is a deferred charge for costs of issuing the
policy. It is based on the initial specified amount.
o Partial surrender fee -- applies if you surrender part of the
value of your policy; equals $25 or 2% of the amount surrendered,
whichever is less.
o Mortality and expense risk charge -- applies only to the
subaccounts; equals, on an annual basis, 0.9% of the average daily
net asset value of the subaccounts.
o Fund investment management fee -- applies only to the fund
portfolios; equals, on an annual basis, 0.5% of the average daily
net assets of the Money Market Portfolio, 0.95% of International
Equity Portfolio and 0.7% of the average daily net assets of the
other portfolios. (p. )
Death benefits: Prior to the youngest insured's attained insurance
age 100, your policy's death benefit can never be less than
the specified amount in your policy application, unless you change
that amount or your policy has outstanding indebtedness. The
relationship between the policy value and the death benefit depends
on which of two options you choose:
o Option 1 level amount: The death benefit is the greater of the
specified amount or a percentage of policy value.
o Option 2 variable amount: The death benefit is the greater of
the specified amount plus the policy value, or a percentage of
policy value.
You may change the death benefit option or specified amount within
certain limits; doing so will generally affect policy charges.
On or after the youngest insured's attained insurance age 100, the
proceeds payable upon the death of the last surviving insured will
be the cash surrender value.
(p. )
Transfers between the fixed account and subaccounts: You may, at
no charge, transfer policy value from one subaccount to another or
between subaccounts and the fixed account. (Certain restrictions
apply to transfers involving the fixed account.) We reserve the
right to limit transfers to no more than 5 transfers per year by
phone or mail. You can also arrange for automated transfers on a
monthly, quarterly, semiannual or annual basis. (p. )
Policy loans: You may borrow against your policy's cash surrender
value. A policy loan, even if repaid, can have a permanent effect
on the death benefit and policy value. A loan may also have tax
consequences if your policy lapses or you surrender it. (p. )
<PAGE>
PAGE 13
Policy surrenders: You may cancel this policy while it is in force
and receive its cash surrender value. The cash surrender value is
the policy value minus indebtedness, minus any applicable surrender
charges. (p. )
Exchange right: For two years after the policy is issued, you can
exchange it for one that provides benefits that do not vary with
the investment return of the subaccounts. Because the policy
itself offers a fixed return option, all you need do is transfer
all of the policy value in the subaccounts to the fixed account.
(p. )
Payment of policy proceeds: Proceeds will be paid when you
surrender the policy or the last surviving insured dies. You or
the beneficiary may choose whether payment is to be made in a lump
sum or under one or more of certain options. (p. )
Federal taxes: The death benefit is not considered part of the
beneficiary's income and thus is not subject to federal income
taxes. Part or all of any proceeds received through full or
partial surrender, lapse, policy loan or assignment of policy value
may be subject to federal income tax as ordinary income. Proceeds
other than death benefits from certain policies, classified as
"modified endowments," are taxed differently from proceeds of
conventional life insurance contracts and may also be subject to an
additional 10% IRS penalty tax if you are younger than 59 1/2. A
policy is considered to be a modified endowment if it was applied
for or materially changed after June 21, 1988, and premiums paid in
the early years exceed certain modified endowment limits. (p. )
The variable account
You can direct your premiums to any or all of six subaccounts of
the variable account. These subaccounts invest in portfolios of
IDS Life Series Fund, Inc.:
Subaccount invests exclusively in shares of
U Equity Portfolio
V Income Portfolio
W Money Market Portfolio
X Managed Portfolio
Y Government Securities Portfolio
IL International Equity Portfolio
The variable account was established on Oct. 16, 1985, under
Minnesota law and is registered as a single unit investment trust
under the Investment Company Act of 1940. Such registration does
not involve any SEC supervision of the account's management or
investment practices or policies. Subaccount IL was added to the
variable account on October 28, 1994.
The variable account meets the definition of a "separate account"
under federal securities laws. Income, capital gains or capital
losses of each subaccount are credited to or charged against the
<PAGE>
PAGE 14
assets of that subaccount alone. No subaccount will be charged
with liabilities of any other subaccount or of any other business
conducted by IDS Life.
At all times IDS Life will maintain assets in the subaccounts with
total market value at least equal to the reserves and other
liabilities required to cover insurance benefits under all
contracts participating in the subaccount.
The fund
IDS Life Series Fund, Inc., a Minnesota corporation, is a
diversified, open-end management investment company incorporated on
May 8, 1985. The International Equity portfolio was added to the
fund on October 28, 1994. The fund now consists of six portfolios:
Equity Portfolio
Objective: capital appreciation. Invests primarily in common
stocks listed on national securities exchanges and other securities
convertible into common stock.
Income Portfolio
Objective: to maximize current income while attempting to conserve
the value of the investment and to continue the high level of
income for the longest period of time. At least 50% of net assets
will normally be invested in high-quality, lower-risk corporate
bonds, unrated corporate bonds believed to have the same investment
qualities, and government bonds. Other investments may include
lower-rated corporate bonds, bonds and common stocks sold together
as a unit, preferred stock and foreign securities.
Money Market Portfolio
Objective: to provide maximum current income consistent with
liquidity and conservation of capital. Invests in relatively
short-term money market securities, such as marketable debt
securities issued or guaranteed as to principal and interest by the
U.S. government or its agencies or instrumentalities, bank
certificates of deposit, bankers' acceptances, letters of credit
and high-grade commercial paper.
Managed Portfolio
Objective: to maximize total investment return through a
combination of capital appreciation and current income. If the
investment manager believes the stock market will be moving higher,
it can emphasize stocks that offer potential for appreciation. At
other times, the manager may increase the portfolio's holdings in
bonds and money-market securities providing high current income.
<PAGE>
PAGE 15
Government Securities Portfolio
Objective: to provide a high current return and safety of
principal. Invests primarily in debt obligations issued or
guaranteed as to principal and interest by the U.S. government, its
agencies and instrumentalities.
International Equity Portfolio
Objective: capital appreciation. Invests primarily in common
stocks of foreign issuers and foreign securities convertible into
common stock. Other investments may include certain international
bonds if the portfolio manager believes they have greater potential
for capital appreciation than equities.
Portfolio objectives
Portfolio objectives can be changed only if holders of a majority
of outstanding shares agree. Because portfolio investments are
subject to the risk of changing economic conditions and the ability
of the investment manager to anticipate such changes, there can be
no guarantee that the investment objectives of a portfolio will be
achieved.
Relationship between portfolios and subaccounts
Shares of each portfolio are sold to the appropriate subaccount at
net asset value without a sales charge. Dividends and capital gain
distributions from a portfolio are reinvested at net asset value
without a sales charge and retained as an asset of the appropriate
subaccount. Portfolio shares will be redeemed by the appropriate
subaccount, without fee to the subaccount, to the extent necessary
to make death benefit or other payments under the policy.
Portfolio shares are sold only to fund life insurance benefits
under variable life insurance policies issued by IDS Life and IDS
Life Insurance Company of New York. Currently shares are sold only
to:
o the respective subaccounts of the variable account;
o IDS Life Variable Account for Smith Barney;
o IDS Life of New York Account 7; and
o IDS Life of New York Account 8.
Also, there are additional subaccounts of the variable account,
which fund other insurance policies issued by IDS Life and are not
discussed here.
Shares may, in the future, be sold to other separate accounts to
fund benefits of other variable life insurance policies and
variable annuity contracts.
IDS Life acts as the investment manager of the fund and receives a
fee for its services as described under "Loads, fees and charges."
American Express Trust Company acts as custodian of the fund's
investments.
<PAGE>
PAGE 16
Detailed information about the fund, its investment objectives,
policies and risks, and its separate investment portfolios may be
found in its prospectus.
Diversification: The Internal Revenue Service (IRS) has issued
final regulations relating to the diversification requirements
under Section 817(h) of the Code. Each fund portfolio intends to
comply with these requirements.
Ownership rules: The U.S. Treasury and the IRS have indicated they
may provide additional guidance concerning how many subaccounts may
be offered and how many exchanges among subaccounts may be allowed
before the owner is considered to have investment control and thus
is currently taxed on income earned within subaccount assets. We
do not know at this time what the additional guidance will be or
when action will be taken. We reserve the right to modify the
policy, as necessary, to ensure that the owner will not be subject
to current taxation as the owner of the subaccount assets.
Rates of return of the fund and subaccounts
This section presents actual rates of return first for the six
portfolios of the fund, and then for the six corresponding
subaccounts. Rates of return are different in the two cases
because those of the subaccounts reflect additional expenses. All
expenses mentioned in the section are explained fully under "Loads,
fees and charges."
Rates of return of fund portfolios
In the following table are average annual rates of return based on
the actual investment performance of the fund portfolios after
deduction of applicable portfolio expenses (including the
investment management fees) for the periods indicated. These rates
do not reflect expenses that apply to the subaccounts or the policy
and therefore do not illustrate how actual investment performance
will affect policy benefits. Moreover, these rates of return are
not an estimate or guarantee of future performance.
Period ending __/__/__
Portfolio 1 year 3 years 5 years Since inception*
Equity
Income
Money Market
Managed
Government Securities
International Equity
*The portfolios of the fund commenced operations on January 20,
1986. International Equity Portfolio commenced operations on
October 28, 1994.
<PAGE>
PAGE 17
Rates of return of subaccounts
Average annual rates of return in the following table reflect all
expenses incurred by the portfolios and charges against the
subaccounts (including the mortality and expense risk charge). The
rates do not reflect the premium expense charge, surrender charge
or monthly deduction.
<TABLE><CAPTION>
Subaccount Investment 1 year 3 years 5 years Since inception*
<S> <C>
U Equity
V Income
W Money Market
X Managed
Y Government Securities
IL International Equity
*The subaccounts commenced operations on June 17, 1987. Subaccount IL investing in
International Equity portfolio commenced operations on October 28, 1994.
</TABLE>
The fixed account
You can allocate premiums to the fixed account or transfer policy
value from the subaccounts to the fixed account (with certain
restrictions, explained in "Transfers between the fixed account and
subaccounts").
The fixed account is the general investment account of IDS Life.
It includes all assets owned by IDS Life other than those in the
variable account and other separate accounts. Subject to
applicable law, IDS Life has sole discretion to decide how assets
of the fixed account will be invested.
Placing policy value in the fixed account does not entitle you to
share in the fixed account's investment experience, nor does it
expose you to the account's investment risk. Instead, IDS Life
guarantees that the policy value you place in the fixed account
will accrue interest at an effective annual rate of at least 4%,
independent of the actual investment experience of the account.
IDS Life bears the full investment risk for amounts allocated to
the fixed account.
IDS Life is not obligated to credit interest at any rate higher
than 4%, although we may do so at our sole discretion.
Interest in excess of 4% will not be credited on any portion of
policy value in the fixed account against which you have a policy
loan outstanding.
Because of exemptive and exclusionary provisions, interests in the
fixed account have not been registered under the Securities Act of
1933, and the fixed account has not been registered as an
investment company under the Investment Company Act of 1940.
Accordingly, neither the fixed account nor any interests in it are
subject to the provisions of these Acts, and the staff of the SEC
has not reviewed the disclosures in this prospectus relating to the
fixed account. Disclosures regarding the fixed account may,
<PAGE>
PAGE 18
however, be subject to certain generally applicable provisions of
the federal securities laws relating to the accuracy and
completeness of statements made in prospectuses.
Purchasing your policy
Application
To apply for coverage, complete an application and send it with
your premium payment to IDS Life's home office. In your
application, you:
o select a specified amount of insurance;
o select a death benefit option;
o designate a beneficiary; and
o state how premiums are to be allocated among the fixed
account and/or the subaccounts.
Insurability: Before issuing your policy, IDS Life requires
satisfactory evidence of the insurability of the persons whose
lives you propose to insure. Our underwriting department will
review your application and any medical information or other data
required to determine whether the proposed individuals are
insurable under our underwriting rules. Your application may be
declined if a person fails to meet the underwriting requirements
and any premiums you have paid will be returned.
Age limit: IDS Life generally will not issue a policy to persons
over the insurance age of 85. It may, however, do so at its sole
discretion.
Risk classification: The risk classification for each insured is
based on that insured's health, occupation, or other relevant
underwriting standards. This classification will affect the
monthly deduction. (See "Loads, fees and charges" and "Optional
insurance benefits.")
Other conditions: In addition to proving insurability, you and the
insureds must also meet certain conditions, stated in the
application form, before coverage will become effective and your
policy is issued to you. The lives insured may be covered under
the terms of a conditional insurance agreement prior to a policy
being issued.
Incontestability: IDS Life will have two years from the effective
date of your policy to contest the truth of statements or
representations in your application. After the policy has been in
force during the lifetimes of both insureds for two years from the
policy date, IDS Life cannot contest the policy.
Right to examine policy
You may return your policy for any reason, and receive a full
refund of all premiums paid. To do so you must mail or deliver the
policy to IDS Life or your financial advisor, with a written
request for cancellation, by the latest of:
<PAGE>
PAGE 19
o the 10th day after you receive it;
o the 10th day after IDS Life mails or personally delivers a
written notice of withdrawal right; or
o the 45th day after you sign your application.
On the date your request is postmarked or received, the policy will
immediately be considered void from the start.
Premiums
Payment of premiums:
In applying for your policy, you decide how much you intend to pay
and how often you will make payments. During the early policy
years until the policy value is sufficient to cover the surrender
charge, IDS Life requires that you pay the premiums sufficient to
keep the DBG-85 in effect.
You may schedule payments annually, semiannually, or quarterly.
(Payment at any other interval must be approved by IDS Life.) This
premium schedule is shown in your policy.
The scheduled premium serves only as an indication of your intent
as to the frequency and amount of future premium payments. You may
skip scheduled premium payments at any time if your cash surrender
value is sufficient to pay the monthly deduction, or if you have
paid sufficient premium to keep the DBG-85 or the DBG-100 in
effect.
You may also change the amount and frequency of scheduled premium
payments by written request. IDS Life reserves the right to limit
the amount of such changes. Any change in the premium amount is
subject to applicable tax laws and regulations.
Although you have flexibility in paying premiums, the amount and
frequency of your payments will affect the policy value, cash
surrender value and length of time your policy will remain in
force, as well as affect whether the DBG-85 or DBG-100 remain in
effect.
Premium limitations:
You may make unscheduled premium payments at any time and in an
amount of at least $50. IDS Life reserves the right to limit the
number and amount of unscheduled premium payments.
No premium payments, scheduled or unscheduled, are allowed on or
after the youngest insured's attained insurance age 100.
Also, in order to receive favorable tax treatment under the Code,
premiums paid during the life of the policy must not exceed certain
limitations. To comply with the Code, IDS Life can either refuse
excess premiums as they are paid, or refund excess premiums with
interest no later than 60 days after the end of the policy year in
which they were paid.
<PAGE>
PAGE 20
Allocation of premiums:
Until your application is approved by IDS Life, we hold all
premiums in the fixed account, and we credit interest on the net
premiums (gross premiums minus premium expense charge) at the
current fixed account rate. As of the date your application is
approved, we will allocate the net premiums plus accrued interest
to the account(s) you have selected in your application. At that
time, we will begin to assess the various loads, fees, charges and
expenses.
Any amount allocated to a subaccount is converted into accumulation
units of that subaccount, as explained under "Policy value."
Similarly, when transferring value between subaccounts,
accumulation units in one subaccount are converted into a cash
value, which is then converted into accumulation units of the
second subaccount.
Keeping the policy in force
This section includes a description of the policy provisions that
determine if the policy will remain in force or lapse (terminate).
It is important that you understand them so the appropriate premium
payments are made to ensure that insurance coverage meets your
objectives.
If you wish to have a guarantee that the policy will remain in
force until the youngest insured's attained insurance age 100
regardless of investment performance, you should pay at least the
DBG-100 premiums.
If you wish to pay a lower premium and are satisfied to have a
guarantee that the policy will remain in force until the youngest
insured's attained insurance age 85 (or 15 policy years, if later)
regardless of investment performance, you should pay at least the
DBG-85 premiums.
If you wish to pay yet a lower premium and are not concerned with a
long-term guarantee that the policy will remain in force regardless
of investment performance, you can pay premiums so that the cash
surrender value on each monthly date is sufficient to pay the
monthly deduction. However, during the early policy years, you
must pay at least the DBG-85 premiums until the policy value is
greater than the surrender charge and the cash surrender value is
sufficient to pay the monthly deduction. At that time you may be
able to reduce your premiums as long as the cash surrender value
continues to be sufficient to pay the monthly deduction.
Death benefit guarantee to age 85
The DBG-85 provides that your policy will remain in force until the
youngest insured reaches attained insurance age 85 (or 15 policy
years, if later) even if the cash surrender value is insufficient
to pay the monthly deduction. The DBG-85 will remain in effect, as
long as:
<PAGE>
PAGE 21
the sum of premiums paid - partial surrenders - outstanding
indebtedness
equals or exceeds
the DBG-85 premiums due since the policy date.
The DBG-85 premium is shown in the policy.
If, on a monthly date, you have not paid enough premiums to keep
the DBG-85 in effect, we will mail a notice to your last known
address, asking you to pay a premium sufficient to bring your total
up to the required minimum. If you do not pay this amount within
61 days, the DBG-85 will terminate. Your policy will also lapse
(terminate) if the cash surrender value is less than the amount
needed to pay the monthly deduction. Although the policy can be
reinstated as explained below, the DBG-85 cannot be reinstated.
Death benefit guarantee to age 100
The DBG-100 provides that your policy will remain in force until
the youngest insured's attained insurance age 100 even if the cash
surrender value is insufficient to pay the monthly deduction. The
DBG-100 will remain in effect, as long as:
the sum of premiums paid - partial surrenders - outstanding
indebtedness
equals or exceeds
the DBG-100 premiums due since the policy date.
The DBG-100 premium is shown in the policy.
If, on a monthly date, you have not paid enough premiums to keep
the DBG-100 in effect, we will mail a notice to your last known
address, asking you to pay a premium sufficient to bring your total
up to the required minimum. If you do not pay this amount within
61 days, the DBG-100 will terminate. If you have paid sufficient
premium, the DBG-85 will be in effect. If the DBG-85 and DBG-100
are not in effect, your policy will lapse (terminate) if the cash
surrender value is less than the amount needed to pay the monthly
deduction. Although the policy can be reinstated as explained
below, the DBG-100 cannot be reinstated.
Grace period
If your DBG-85 and DBG-100 are not in effect and if on a monthly
date the cash surrender value of your policy is less than the
amount needed to pay the next monthly deduction, your policy will
still remain in force for at least 61 days.
IDS Life will mail a notice to your last known address, requesting
payment of a premium that will raise the cash surrender value to an
amount sufficient to pay the next three monthly deductions. If we
receive this premium before the end of the 61-day grace period, we
<PAGE>
PAGE 22
will use the payment to pay all monthly deductions and any other
charges then due. Any balance will be added to the policy
value and allocated in the same manner as other premium payments.
If a policy lapses with outstanding indebtedness, any excess of the
outstanding indebtedness over the premium paid generally will be
taxable to the owner (See "Federal taxes"). If the last surviving
insured dies during the grace period, any overdue monthly
deductions will be deducted from the death benefit.
Reinstatement
Your policy may be reinstated within five years after it lapses,
unless you surrendered it for cash. To reinstate, IDS Life will
require:
o a written request;
o evidence satisfactory to IDS Life that both insureds remain
insurable or evidence for the last surviving insured and due
proof that the first death occurred before the date of
lapse;
o payment of a premium that will keep the policy in force for
at least three months;
o payment of the monthly deductions that were not collected
during the grace period; and
o payment or reinstatement of any indebtedness.
The effective date of a reinstated policy will be the monthly date
on or next following the day IDS Life accepts your application for
reinstatement. The suicide period (see "Death benefits") will
apply from the effective date of reinstatement. Surrender charges
will also be reinstated.
IDS Life will have two years from the effective date of
reinstatement to contest the truth of statements or representations
in the reinstatement application.
Loads, fees and charges
Policy charges compensate IDS Life for:
o providing the insurance benefits of the policy;
o administering the policy;
o assuming certain risks in connection with the policy; and
o distributing the policy.
Some of these charges are deducted from your premium payments.
Others are deducted periodically from your policy value in the
fixed account and/or subaccounts. You may also be assessed a
charge if you surrender your policy or the policy lapses.
<PAGE>
PAGE 23
Premium expense charge
We deduct this charge from each premium payment. The amount
remaining after the deduction, called the net premium, is credited
to the account(s) you have selected. The premium expense charge
has three parts:
Sales charge: 30% of the premiums paid up to the first DBG-100
premium and 6% of all additional premiums. Partially compensates
IDS Life for expenses in distributing the policy, including
agents'commissions, advertising and printing of prospectuses and
sales literature.
Premium tax charge: 2.5% of each premium payment. Compensates
IDS Life for paying taxes imposed by certain states and
governmental subdivisions on premiums received by insurance
companies. All policies in all states are charged the average rate
of 2.5% even though state premium taxes vary from 2.0% to 3.5%.
This 2.5% rate may be different than the actual premium tax IDS
Life expects to pay in your state.
Federal tax charge: 1.25% of each premium payment. Compensates IDS
Life for paying Federal taxes resulting from the sale of the policy
and is a reasonable charge in relation to IDS Life's federal tax
burden. IDS Life reserves the right to change the amount of this
charge if applicable federal law changes IDS Life's federal tax
burden.
Monthly deduction
On each monthly date we deduct from the value of your policy in the
fixed account and/or subaccounts an amount equal to the sum of:
1. the cost of insurance for the policy month;
2. the policy fee shown in your policy; and
3. charges for any optional insurance benefits provided by
rider for the policy month.
Each of the three components is explained below.
You specify, in your policy application, what percentage of the
monthly deduction from 0% to 100% will be taken from the fixed
account and from each of the subaccounts. You may change these
percentages for future monthly deductions by written request.
Monthly deductions will be taken from the fixed account and the
subaccounts on a pro rata basis if:
o you do not specify the accounts from which the monthly
deduction is to be taken;
o the value in the fixed account or any subaccount is
insufficient to pay the portion of the monthly deduction you
have specified; or
o you purchased the policy in Texas.
<PAGE>
PAGE 24
If the cash surrender value of your policy is not enough to pay the
monthly deduction on a monthly anniversary, the policy may lapse.
However, the policy will not lapse if the DBG-85 or DBG-100 is in
effect. (See "Death benefit guarantee to age 85, Death benefit
guarantee to age 100"; also "Grace period" and "Reinstatement").
Components of the monthly deduction:
1. Cost of insurance: the cost providing the death benefit under
your policy.
The cost of insurance for a policy month is calculated as:
[a x (b - c)] + d
where:
(a) is the monthly cost of insurance rate based on each insureds
attained insurance age, duration of coverage, sex (unless unisex
rates are required by law) and risk classification. Generally the
cost of insurance rate will increase as the attained insurance age
of each insured increases.
Rates are set by IDS Life, based on its expectations as to future
mortality experience. We may change the rates from time to time;
any change will apply to all individuals of the same risk
classification. However, rates will not exceed the Guaranteed
Maximum Cost of Insurance Rates shown in your policy, which are
based on the 1980 Commissioners Standard Ordinary Smoker or
Nonsmoker Mortality Tables, Age Last Birthday.
(b) is the death benefit on the monthly date divided by 1.0032737
(which reduces IDS Life's net amount at risk, solely for computing
the cost of insurance, by taking into account assumed monthly
earnings at an annual rate of 4%);
(c) is the policy value on the monthly date. At this point, the
policy value has been reduced by the policy fee, and any charges
for optional riders;
(d) is any flat extra insurance charges assessed as a result of
special underwriting considerations.
2. Policy fee: $20 per month for the first 15 policy years. This
charge reimburses IDS Life for expenses of administering the
policy, such as processing claims, maintaining records, making
policy changes and communicating with owners. IDS Life does not
expect to make any profit on this charge. We reserve the right to
change the charge in the future, but guarantee that it will never
exceed $30 per month.
3. Optional insurance benefit charges: charges for any optional
benefits added to the policy by rider. See "Optional insurance
benefits."
<PAGE>
PAGE 25
Surrender charge
If you surrender your policy or the policy lapses during the first
15 policy years a surrender charge will be assessed. The surrender
charge is a contingent deferred issue and administration expense
charge. It reimburses IDS Life for costs of issuing the policy,
such as processing the application (primarily underwriting) and
setting up computer records. IDS Life does not expect to make a
profit on this charge. This charge is $4 per thousand dollars of
initial specified amount. It remains level during the first five
policy years and then decreases monthly until it is zero at the end
of 15 policy years.
Partial surrender fee
If you surrender part of the value of your policy, you will be
charged $25 (or 2% of the amount surrendered, if less). This fee
is guaranteed not to increase for the duration of your policy. IDS
Life does not expect to make a profit on this fee.
Mortality and expense risk charge
This charge applies only to the subaccounts and not to the fixed
account. It is equal, on an annual basis, to 0.9% of the daily net
asset value of the subaccounts -- a level guaranteed for the life
of the policy. Computed daily, the charge compensates IDS Life
for:
o Mortality risk -- the risk that the cost of insurance
charge will be insufficient to meet actual claims.
o Expense risk -- the risk that the policy fee and the
contingent deferred issue and administration expense
charge (described above) may be insufficient to cover the
cost of administering the policy.
IDS Life may profit from the mortality and expense risk charge.
Any such profit would be available to IDS Life for any proper
corporate purpose including, among others, payment of sales and
distribution expenses, which we do not expect to be covered by the
sales charge discussed earlier. Any further deficit will have to
be made up from IDS Life's general assets.
Fund investment management fee
IDS Life receives a fee for its services as investment manager of
the fund. The fund also reimburses IDS Life for certain
nonadvisory expenses, such as custodian and trustee fees,
registration fees for shares, postage, fidelity and security bond
costs, legal fees and other miscellaneous fees and charges.
This fee is deducted from the fund portfolios daily and paid to IDS
Life monthly.
The investment management fee equals, on an annual basis:
<PAGE>
PAGE 26
o Money Market Portfolio -- 0.5% of aggregate average daily
net assets
o Equity, Income, Managed and Government Securities Portfolios
-- 0.7% of aggregate average daily net assets
o International Equity Portfolio -- 0.95% of aggregate average
daily net assets
Other information on charges
IDS Life may reduce or eliminate various fees and charges when we
incur lower sales costs and/or perform fewer administrative
services than usual.
Policy value
The value of your policy is the sum of values in the fixed account
and each subaccount of the variable account.
Fixed account value
The value in the fixed account on the policy date (when the policy
is issued) equals the portion of your initial net premium that you
have allocated to the fixed account, plus interest accrued before
the policy date, minus the portion of the monthly deduction for the
first policy month that you have allocated to the fixed account.
On any later date, the value in the fixed account equals:
o the value on the previous monthly date; plus
o net premiums allocated to the fixed account since the last
monthly date; plus
o any transfers to the fixed account from the subaccounts,
including loan transfers, since the last monthly date; plus
o accrued interest on all of the above; minus
o any transfers from the fixed account to the subaccounts,
including loan repayment transfers, since the last monthly
date; minus
o any partial surrenders or partial surrender fees allocated
to the fixed account since the last monthly date; minus
o interest on any transfers or partial surrenders, from the
date of the transfer or surrender to the date of
calculation; minus
o any portion of the monthly deduction for the coming month
that is allocated to the fixed account if the date of
calculation is a monthly date.
Subaccount values
The value in each subaccount changes daily, depending on the
investment performance of the fund portfolio in which that
subaccount invests and on other factors detailed below. There is
no guaranteed minimum subaccount value. You as owner bear the
entire investment risk.
Calculation of subaccount value: The value of each subaccount on
each valuation date equals:
<PAGE>
PAGE 27
o the value of the subaccount on the preceding valuation date,
multiplied by the net investment factor for the current valuation
period (explained below); plus
o net premiums received and allocated to the subaccount during the
current valuation period; plus
o any transfers to the subaccount (from the fixed account or
other subaccounts, including loan repayment transfers) during the
period; minus
o any transfers from the subaccount including loan transfers
during the current valuation period; minus
o any partial surrenders and partial surrender fees allocated to
the subaccount during the period; minus
o any portion of the monthly deduction allocated to the subaccount
during the period.
The net investment factor measures the investment performance of a
subaccount from one valuation period to the next. Because
performance may fluctuate, the value of a subaccount may increase
or decrease from day to day.
Accumulation units: The policy value allocated to each subaccount
is converted into accumulation units. Each time you direct a
premium payment or transfer policy value into one of the
subaccounts, a certain number of accumulation units are credited to
your policy for that subaccount. Conversely, each time you take a
partial surrender or transfer value out of a subaccount, a certain
number of accumulation units are subtracted.
Accumulation units are the true measure of investment value in each
subaccount. For subaccounts investing in the fund portfolios,
they're related to, but not the same as, the net asset value of the
corresponding fund portfolio. The dollar value of each
accumulation unit can rise or fall daily, depending on the
investment performance of the underlying fund portfolio, and on
certain charges. Here's how unit values are calculated:
Number of units: To calculate the number of units for a particular
subaccount, we divide your investment (net premium or transfer
amount) by the current accumulation unit value.
Accumulation unit value: The current value for each subaccount
equals the last value times the current net investment factor.
Net investment factor: Determined at the end of each valuation
period, this factor equals (a divided by b) - c, where:
(a) equals:
o net asset value per share of the portfolio; plus
o per-share amount of any dividend or capital gain distribution
made by the relevant fund portfolio to the subaccount; plus
o any credit or minus any charge for reserves to cover any tax
liability resulting from the investment operations of the
subaccount.
<PAGE>
PAGE 28
(b) equals:
o net asset value per share of the portfolio at the end of the
preceding valuation period; plus
o any credit or minus any charge for reserves to cover any tax
liability in the preceding valuation period.
(c) is a percentage factor representing the mortality and expense
risk charge, as described in "Loads, fees and charges," above.
Factors that affect subaccount accumulation units:
Accumulation units may change in two ways; in number and in value.
Here are the factors that influence those changes:
The number of accumulation units you own may fluctuate due to:
o additional purchase payments allocated to the subaccounts;
o transfers into or out of the subaccount(s);
o partial surrenders and partial surrender fees;
o surrender charges; and/or
o monthly deductions
Accumulation unit values may fluctuate due to:
o changes in underlying fund portfolio(s) net asset value;
o dividends distributed to the subaccount(s);
o capital gains or losses of underlying fund portfolios;
o fund portfolio operating expenses; and/or
o mortality and expense risk fees.
Death benefits
We will pay a benefit to the beneficiary of the policy when the
last surviving insured dies. If that death is prior to the
youngest insured's attained insurance age 100, the amount payable
is based on the specified amount and death benefit option you have
selected, as described below, less any indebtedness.
If the last surviving insured's death is on or after the youngest
insured's attained insurance age 100, the amount payable is the
cash surrender value.
Option 1 (level amount): Under this option, the policy's value is
part of the specified amount. The Option 1 death benefit is the
greater of:
o the specified amount on the date of the last surviving
insured's death; or
o the applicable percentage of the policy value on the date of
the last surviving insured's death, if that death occurs on
a valuation date, or on the next valuation date following
the date of death. (See table below.)
<PAGE>
PAGE 29
Youngest insured's attained insurance age in the table below refers
to the youngest life insured or the age such person would have
reached.
Applicable percentage table
Youngest Applicable Youngest Applicable
Insured's percentage of Insured's percentage of
attained policy attained policy
insurance value insurance value
age age
40 or younger 250% 61 128%
41 243 62 126
42 236 63 124
43 229 64 122
44 222 65 120
45 215 66 119
46 209 67 118
47 203 68 117
48 197 69 116
49 191 70 115
50 185 71 113
51 178 72 111
52 171 73 109
53 164 74 107
54 157 75-95 105
55 150 96 104
56 146 97 103
57 142 98 102
58 138 99 101
59 134 100 100
60 130
The percentage is designed to ensure that the policy meets the
provisions of Federal tax law which require a minimum death benefit
in relation to policy value for your policy to qualify as life
insurance.
Option 2 (variable amount): Under this option, the policy value is
added to the specified amount. The Option 2 death benefit is the
greater of:
o the policy value plus the specified amount; or
o the applicable percentage of policy value on the date of the
last surviving insured's death, if that death occurs on a
valuation date, or on the next valuation date following the
date of death. (see table above.)
<PAGE>
PAGE 30
Examples: Option 1 Option 2
specified amount $1,000,000 $1,000,000
policy value $50,000 $50,000
death benefit $1,000,000 $1,050,000
policy value increases to $80,000 $80,000
death benefit $1,000,000 $1,080,000
policy value decreases to $30,000 $30,000
death benefit $1,000,000 $1,030,000
If you want to have premium payments and favorable investment
performance reflected partly in the form of an increasing death
benefit, you should consider Option 2. If you are satisfied with
the specified amount of insurance protection and prefer to have
premium payments and favorable investment performance reflected to
the maximum extent in the policy value, you should consider Option
1. Under Option 1, the cost of insurance is lower because IDS
Life's net amount at risk is generally lower; for this reason the
monthly deduction is less, and a larger portion of your premiums
and investment returns is retained in the policy value.
Change in death benefit option
You may make a written request to change the death benefit option
once per policy year. A change in the death benefit option also
will change the specified amount. You do not need to provide
additional evidence of insurability.
If you change from Option 1 to Option 2: The specified amount will
decrease by an amount equal to the policy value on the effective
date of the change. You cannot change from Option 1 to Option 2 if
the resulting specified amount would fall below the minimum
specified amount shown in policy.
If you change from Option 2 to Option 1: The specified amount will
increase by an amount equal to the policy value on the effective
date of the change.
An increase or decrease in specified amount resulting from a change
in the death benefit option will affect the monthly deduction
because the cost of insurance charge depends on the specified
amount. The charge for certain optional insurance benefits may
also change. The surrender charge, however, will not be affected.
Changes in specified amount
Subject to certain limitations, you may make a written request to
decrease the specified amount once each policy year after the
first. Decreases in specified amount may have tax implications,
discussed in the section "Modified endowment contracts" under
"Federal taxes."
Decreases: Any decrease in specified amount will take effect on the
monthly anniversary on or next following our receipt of your
written request. The specified amount remaining after the decrease
may not be less than the minimum specified amount shown in the
<PAGE>
PAGE 31
policy. If, following a decrease in specified amount, the policy
would no longer qualify as life insurance under federal tax law,
the decrease may be limited to the extent necessary to meet these
requirements.
A decrease in specified amount will affect your costs as follows:
o Your monthly deduction will decrease because the cost of
insurance charge depends on the specified amount.
o Charges for certain optional insurance benefits may
decrease.
o The surrender charge will not change.
No surrender charge is imposed when you request a decrease in the
specified amount.
Misstatement of age or sex
If an insured's age or sex has been misstated, the proceeds payable
upon the last surviving insured's death will be:
o the policy value on the date of death; plus
o the amount of insurance that would have been purchased by
the cost of insurance deducted for the policy month
during which death occurred, if that cost had been
calculated using rates for the correct age and sex; minus
o the amount of any outstanding indebtedness on the date of
death.
Suicide
If either of the insureds dies by suicide while sane or insane
within two years from the policy date, the only amount payable will
be the premiums paid, minus the amount of any outstanding
indebtedness. The policy will terminate as of the date of the
first death by suicide.
In Colorado and North Dakota, the suicide period is shortened to
one year. In Missouri, IDS Life must prove that the insured
intended to commit suicide at the time he or she applied for
coverage.
Beneficiary
Initially the beneficiary will be the person you designate in your
application for the policy. You may change the beneficiary by
giving written notice to IDS Life, subject to requirements and
restrictions stated in the policy. If you do not designate a
beneficiary, or if the designated beneficiary dies before the last
surviving insured, the beneficiary will be you or your estate.
Transfers between the fixed account and subaccounts
You may transfer policy values from one subaccount to another or
between subaccounts and the fixed account. For most transfers, if
we receive your request before the close of business, we will
process it that day. Requests received after the close of business
<PAGE>
PAGE 32
will be processed the next business day. There is no charge for
transfers. Before transferring policy value, you should consider
the risks involved in switching investments.
We may suspend or modify the transfer privilege at any time.
Transfers involving the fixed account are subject to the
restrictions below.
Fixed account transfer policies
o Transfers from the fixed account must be made during a 30-day
period starting on a policy anniversary, except for automated
transfers, which can be set up for monthly, quarterly or semiannual
transfer periods.
o If we receive your request to transfer funds from the fixed
account within 30 days before the policy anniversary, the transfer
will become effective on the anniversary.
o If we receive your request on or within 30 days after the policy
anniversary, the transfer will be effective on the day we receive
it.
o We will not accept requests for transfers from the fixed account
at any other time.
o If you have made a transfer from the fixed account to one or more
subaccounts, you may not make a transfer from any subaccount back
to the fixed account until the next policy anniversary. We will
waive this limitation once during the first two policy years if you
exercise the policy's right to exchange provision. See "Exchange
right."
Minimum transfer amounts
From a subaccount to another subaccount or the fixed account: For
mail and phone transfers, $250 or the entire subaccount balance,
whichever is less. For automated transfers, $50.
From the fixed account to a subaccount: $250 or the entire fixed
account balance minus any outstanding indebtedness, whichever is
less. For automated transfers, $50.
Maximum transfer amounts
From a subaccount to another subaccount or the fixed account: None.
From the fixed account to a subaccount: Entire fixed account
balance minus any outstanding indebtedness.
Maximum number of transfers per year
We reserve the right to limit mail and telephone transfers to five
per policy year. Twelve automated transfers per policy year are
allowed.
<PAGE>
PAGE 33
Two ways to request a transfer, loan or surrender
Provide your name, policy number, Social Security Number or
Taxpayer Identification Number when you request a transfer, loan or
partial surrender.
1 By letter
Regular mail:
IDS Life Insurance Company
P.O. Box 499
Minneapolis MN 55440-0499
Express mail:
IDS Life Insurance Company
733 Marquette Ave.
Minneapolis MN 55402
2 By phone
Call between 7 a.m. and 6 p.m. Central Time:
1-800-437-0602 (toll free) or
(612) 671-4738 (Minneapolis/St. Paul area)
TTY service for the hearing impaired:
1-800-285-8846 (toll free)
o We answer phone requests promptly, but you may experience
delays when call volume is unusually high. If you are unable
to get through, use mail procedure as an alternative.
o We will honor any telephone transfer, loan or partial
surrender requests believed to be authentic and will use
reasonable procedures to confirm that they are. These include
asking identifying questions and tape recording calls. As
long as the procedures are followed, neither IDS Life nor its
affiliates will be liable for any loss resulting from
fraudulent requests.
o Telephone transfers, loans and partial surrenders are
automatically available. You may request that telephone
transfers, loans and partial surrenders not be authorized from
your account by writing IDS Life.
Automated transfers
In addition to written and phone requests, you can arrange to have
policy value transferred from one account to another automatically.
Your financial advisor can help you set up an automated transfer.
Automated transfer policies:
o Minimum automated transfer: $50
<PAGE>
PAGE 34
o Frequency: monthly, quarterly, semiannually or annually
o Only one automated transfer arrangement can be in effect at any
time. Policy values may be transferred to one or more subaccounts
and the fixed account but can be transferred from only one account.
o You can start or stop this service by written request. You must
allow seven days for us to change any instructions that are
currently in place.
o Automated transfers from the fixed account may not exceed an
amount that, if continued, would deplete the fixed account within
12 months.
o If you have made a transfer from the fixed account to one or more
subaccounts, you may not make a transfer from any subaccount back
to the fixed account until the next policy anniversary.
o If your request is submitted with an application for a policy, it
will not take effect until the policy is issued.
o If the value of the account from which policy value is being
transferred is less than the $50 minimum, the transfer arrangement
will automatically be stopped.
o Automated transfers are subject to all other policy provisions
and terms including provisions relating to the transfer of money
between the fixed account and the subaccounts.
Automated dollar-cost averaging
You can use automated transfers to take advantage of dollar-cost
averaging -- investing a fixed amount at regular intervals. For
example, you might have a set amount transferred monthly from a
relatively conservative subaccount to a more aggressive one, or to
several others.
This systematic approach can help you benefit from fluctuations in
accumulation unit value, caused by fluctuations in the market
value(s) of the underlying fund portfolio. Since you invest the
same amount each period, you automatically acquire more units when
the market value falls, fewer units when it rises. The potential
effect is to lower your average cost per unit.
<PAGE>
PAGE 35
How dollar-cost averaging works
Amount Accumulation Number of units
Month invested unit value purchased
Jan $100 $20 5.00
Feb 100 16 6.25
Mar 100 9 11.25
Apr 100 5 20.00
May 100 7 14.29
June 100 10 10.00
July 100 15 6.67
Aug 100 20 5.00
Sept 100 17 5.88
Oct 100 12 8.33
(footnotes to table) By investing an equal number of dollars each
month...
(arrow in table pointing to April) you automatically buy more units
when the per unit market price is low.
(arrow in table pointing to August) and fewer units when the per
unit market price is high.
You have paid an average price of only $10.81 per unit over the 10
months, while the average market price actually was $13.10.
Dollar-cost averaging does not guarantee that any subaccount will
gain in value, nor will it protect against a decline in value if
market prices fall. However, if you can continue to invest
regularly throughout changing market conditions, it can be an
effective strategy to help meet your long-term goals.
Policy loans
You may borrow against your policy by written or telephone request.
(See chart under "Transfers between the fixed account and
subaccounts" for address and phone numbers for your requests.) A
loan request received before close of business will be processed
the same day. A request received after close of business will be
processed the following business day. (Loans by telephone are
limited to $50,000).
Interest rate: The interest rate for policy loans is 6% per year.
After the policy's 10th anniversary we expect to reduce the loan
interest rate to 4% per year. Interest is charged daily and due at
the end of the policy year.
Minimum loan: $500 ($200 for Connecticut residents) or the
remaining loan value, whichever is less.
Maximum loan:
o In Texas, 100% of the policy value in the fixed account,
minus a pro rata portion of surrender charges.
<PAGE>
PAGE 36
o In Virginia, 90% of the policy value minus surrender
charges.
o In all other states, 85% of the policy value minus surrender
charges.
We will compute the maximum loan value as of the end of the
valuation period during which we receive your loan request. In
doing so, we reserve the right to deduct from the loan value
interest for the period until the next policy anniversary and
monthly deductions that will be taken until the next policy
anniversary.
Payment of loaned funds: Generally, we will pay loans within seven
days after we receive your request (with certain exceptions -- see
"Deferral of payments," under "Payment of policy proceeds").
Allocation of loans to accounts: If you do not specify whether the
loan is to come from the fixed account or the subaccounts, it will
be made from the subaccounts and the fixed account in proportion to
their values, minus indebtedness. When a loan is made from a
subaccount, accumulation units are redeemed and the proceeds
transferred into the fixed account. We will credit the policy
value loaned with 4% annual interest.
Repayments: Loan repayments will be allocated to subaccounts and/or
the fixed account using the premium allocation percentages in
effect unless you tell us otherwise. Repayments must be in amounts
of at least $25.
Overdue interest: If accrued interest is not paid when due, we will
increase the amount of indebtedness in the fixed account to cover
the amount due. Interest added to a policy loan will be charged
the same interest rate as the loan itself. We will take such
interest from the fixed account and/or subaccounts, using the
monthly deduction allocation percentages. If the value in the
fixed account or any subaccount is not enough to pay the interest
so allocated, all of the interest will be taken from all of the
accounts in proportion to their value, minus indebtedness.
Effects of policy loans: If you do not repay your loan, it will
reduce the death benefit and policy value. Even if you do repay
it, your loan can have a permanent effect on death benefits and
policy values, because money borrowed against the subaccounts will
not share in the investment results of the relevant portfolio(s).
A loan may terminate the DBG-85 or the DBG-100. The loan amount is
deducted from total premiums paid, which may reduce the total below
the level required to keep the DBG-85 or the DBG-100 in effect.
Taxes: If your policy lapses or you surrender it with an
outstanding indebtedness, and the amount of outstanding
indebtedness plus the cash surrender value is more than the sum of
premiums you paid, you will generally be liable for taxes on the
excess. (See "Federal taxes.")
<PAGE>
PAGE 37
Policy surrenders
You may surrender your policy in full or in part by written or
telephone request. (See chart under "Transfers between the fixed
account and subaccounts.") A surrender request received before
close of business will be processed the same day. A request
received after close of business will be processed the following
business day. We may require that you return your policy.
We will normally process your payment within seven days; however,
we reserve the right to defer payment (see "Deferral of payments,"
under "Payment of policy proceeds").
Total surrenders: If you surrender your policy totally, you receive
its cash surrender value -- the policy value minus outstanding
indebtedness and applicable surrender charges (see "Loads, fees and
charges). We will compute the value of each subaccount as of the
end of the valuation period during which your request is received.
Partial surrenders: After the first policy year, you may surrender
any amount from $500 up to 85% of the policy's cash surrender
value. (Partial surrenders by telephone are limited to $50,000.)
You will be charged a partial surrender fee, described under
"Loads, fees and charges."
Allocation of partial surrenders: Unless you specify otherwise, IDS
Life will make partial surrenders from the fixed account and
subaccounts in proportion to their values at the end of the
valuation period during which your request is received. In
determining these proportions, we first subtract the amount of any
outstanding indebtedness from the fixed account value.
Effects of partial surrenders:
o The policy value will be reduced by the amount of the partial
surrender and fee.
o The death benefit will be reduced by the amount of the partial
surrender and fee, or, if the death benefit is based on the
applicable percentage of policy value, by an amount equal to
the applicable percentage times the amount of the partial
surrender.
o A partial surrender may terminate the DBG-85 or the DBG-100.
The surrender amount is deducted from total premiums paid,
which may reduce the total below the level required to keep
the DBG-85 or the DBG-100 in effect.
o If Option 1 is in effect, the specified amount will be reduced
by the amount of the partial surrender and fee.
Because they reduce the specified amount, partial surrenders may
affect the cost of insurance. IDS Life will not allow a partial
surrender if it would reduce the specified amount below the
required minimum. (See "Decreases" under "Death benefits.")
<PAGE>
PAGE 38
o If Option 2 is in effect, a partial surrender does not affect the
specified amount.
Taxes: Upon surrender, you will generally be liable for taxes on
any excess of the cash surrender value plus outstanding
indebtedness over the premium paid. (See "Federal taxes.")
Exchange right
For two years after the policy is issued, you can exchange it for
one that provides benefits that do not vary with the investment
return of the subaccounts. Because the policy itself offers a
fixed return option, all you need to do is transfer all of the
policy value in the subaccounts to the fixed account. We will
automatically credit all future premium payments to the fixed
account unless you request a different allocation.
Such transfer will not count against the five-transfers-per-year
limit. Also, any restrictions on transfers into the fixed account
will be waived.
There will be no effect on the policy's death benefit, specified
amount, net amount at risk, risk classification(s) or issue age.
Only the method of funding the policy value will be affected.
Optional insurance benefits
You may choose to add the following benefits to your policy at an
additional cost, in the form of riders (if certain requirements are
met). More detailed information on these benefits are in your
policy.
Four-Year Term Insurance Rider (FYT): FYT provides four-year term
insurance. An additional death benefit is paid if both insureds
die during the first 4 years of the policy.
Policy Split Option Rider (PSO): PSO permits a policy to be split
into two individual permanent plans of life insurance then offered
by IDS Life for exchange, one on the life of each insured, upon the
occurrence of a divorce of the insureds or certain changes in
federal estate tax law. (see "Federal taxes.")
Payment of policy proceeds
Proceeds will be paid when:
o you surrender the policy; or
o the last surviving insured dies.
All proceeds will be paid by check. We will compute the amount of
the death benefit and pay it in a single sum unless you select one
of the payment options below. We will pay interest at a rate not
less than 4% per year on single sum death proceeds, from the date
of the last surviving insured's death to the settlement date (the
date on which proceeds are paid in a lump sum or first placed under
a payment option).
<PAGE>
PAGE 39
Payment options:
During an insured's lifetime, you may request in writing that we
pay policy proceeds under one or more of the three payment options
below. (The beneficiary may also select a payment option, unless
you say that he or she can't.) You decide how much of the proceeds
will be placed under each option (minimum: $5,000). Any such
amount will be transferred to IDS Life's general account. Unless
we agree otherwise, payments under all options must be made to a
natural person.
You may also, by written request, change a prior choice of payment
option, or elect a payment option other than the three below if we
agree.
If you elect a payment option for pre-death proceeds, payments
under this option may be subject to federal income tax as ordinary
income. If you elect Option A, the full pre-death proceeds will be
taxed as a full surrender as described in "Taxation of policy
proceeds" and may also be subject to an additional 10% penalty tax
if the policy is a modified endowment. The interest paid under
Option A will be ordinary income subject to income tax in the year
earned. The interest payments will not be subject to the 10%
penalty tax.
If you elect Option B or Option C for payment of pre-death
proceeds, any indebtedness at the time of election will be taxed as
a partial surrender as described in "Taxation of policy proceeds"
and may also be subject to an additional 10% penalty tax if the
policy is a modified endowment. The remainder of the proceeds will
be used to make payments under the option elected. A portion of
each payment will be taxed as ordinary income, and a portion of
each payment will be considered a return of the investment in the
policy and will not be taxed. An owner's investment in the policy
is described in "Taxation of policy proceeds." All payments made
after the investment in the policy is fully recovered will be
subject to tax. Amounts paid under Option B or Option C that are
subject to tax may also be subject to an additional 10% penalty tax
(see "Penalty tax").
Death benefit proceeds applied to any payment option are not
considered part of the beneficiary's income and thus are not
subject to federal income tax. Payments of interest under Option A
will be ordinary income subject to tax. Under Option B or Option
C, a portion of each payment will be ordinary income, subject to
tax and a portion of each payment will be considered a return of
the beneficiary's investment in the policy. The beneficiary's
investment in the policy is the death benefit proceeds applied to
the payment option. All payments made after the investment in the
policy is fully recovered will be subject to tax.
Option A -- Interest payments: We will pay interest on any proceeds
placed under this option at a rate of 4% per year compounded
annually, at regular intervals and for a period that is agreeable
to both you and us. At the end of any payment interval, you may
<PAGE>
PAGE 40
withdraw proceeds in amounts of at least $100. At any time, you
may withdraw all of the proceeds that remain, or you may place them
under a different payment option approved by us.
Option B -- Payments for a specified period: We will make fixed
monthly payments for any number of years you specify. Here are
examples of monthly payments for each $1,000 placed under this
option:
Payment period Monthly payment per $1,000
(years) placed under Option B
5 $18.32
10 10.06
15 7.34
20 6.00
25 5.22
30 4.72
Monthly amounts for other payment periods will be furnished at your
request, free of charge.
Option C -- Lifetime income: We will make monthly payments for the
life of the person (payee) who is to receive the income. Payment
will be guaranteed for 10, 15 or 20 years. The amount of each
monthly payment per $1,000 placed under this option will be based
on the table of settlement rates in effect at the time of the first
payment. The amount depends on the sex and adjusted age of the
payee on that date. Adjusted age means the age of the payee (on
the payee's last birthday) minus an adjustment as follows:
Calendar year of Adjustment Calendar year of Adjustment
payee's birth payee's birth
Before 1920 0 1945-1949 6
1920-1924 1 1950-1959 7
1925-1929 2 1960-1969 8
1930-1934 3 1970-1979 9
1935-1939 4 1980-1989 10
1940-1944 5 After 1989 11
The amount of each monthly payment per $1,000 placed under this
option will not be less than amounts shown in the next table.
Monthly amounts for any adjusted age not shown will be furnished at
your request, without charge.
<PAGE>
PAGE 41
Adjusted
age Life income per $1,000 with
payee payments guaranteed for
10 years 15 years 20 years
Male Female Male Female Male Female
50 $4.81 $4.47 $4.74 $4.45 $4.65 $4.40
55 5.20 4.80 5.09 4.74 4.94 4.67
60 5.70 5.22 5.51 5.12 5.25 4.98
65 6.35 5.77 5.98 5.58 5.54 5.32
70 7.14 6.50 6.47 6.12 5.77 5.63
75 8.00 7.40 6.87 6.64 5.91 5.85
Deferral of payments:
We reserve the right to defer payments of cash surrender value,
policy loans, or variable death benefits in excess of the specified
amount if:
o the payments derive from a premium payment made by a check that
has not cleared the banking system (good payment has not been
collected);
o the NYSE is closed (other than customary weekend and holiday
closings);
o in accordance with SEC rules, trading on the NYSE is restricted
or, because of an emergency, it is not practical to dispose of
securities held in the subaccount or determine the value of the
subaccount's net assets.
Any loans or surrenders from the fixed account may be delayed up to
six months from the date we receive the request. If we postpone
the payment of surrender proceeds more than 30 days, we will pay
you interest on the amount surrendered at an annual rate of 3% for
the period of postponement.
Federal taxes
The following is a general discussion of the policy's federal
income tax implications. It is not intended as tax advice.
Because the effect of taxes on the value and benefits of your
policy depends on your individual situation as well as IDS Life's
tax status, YOU SHOULD CONSULT A TAX ADVISOR TO FIND OUT HOW THESE
GENERAL CONSIDERATIONS APPLY TO YOU. The discussion is based on
our understanding of federal income tax laws as currently
interpreted by the Internal Revenue Service (IRS); both the laws
and their interpretation may change.
The policy is intended to qualify as a life insurance policy for
federal income tax purposes. To that end, the provisions of the
policy are to be interpreted to ensure or maintain this tax
qualification. IDS Life reserves the right to change the policy in
order to ensure that it will continue to qualify as life insurance
for tax purposes. We will send you a copy of any changes.
<PAGE>
PAGE 42
IDS Life's tax status
IDS Life is taxed as a life insurance company under the Code. For
federal income tax purposes, the subaccounts are considered a part
of IDS Life, although their operations are treated separately in
accounting and financial statements. Investment income from the
subaccounts is reinvested and becomes part of the subaccounts'
value. This investment income, including realized capital gains,
is not taxed to IDS Life, and therefore no charge is made against
the subaccounts for our federal income taxes. IDS Life reserves
the right to make such a charge in the future if there is a change
in the tax treatment of variable life insurance contracts or in IDS
Life's tax status as we currently understand it.
Taxation of policy proceeds
The death benefit is not considered part of the beneficiary's
income and thus is not subject to federal income taxes. When the
proceeds are paid after the youngest insured's attained insurance
age 100, if the amount received plus any indebtedness exceeds your
investment in the policy, the excess may be taxable as ordinary
income. Part or all of any pre-death proceeds received through
full surrender, lapse, partial surrender, policy loan or assignment
of policy value, or payment options may be subject to federal
income tax as ordinary income. (See the following table.) In some
cases the tax liability depends on whether the policy is a modified
endowment (explained following the table). The taxable amount may
also be subject to an additional 10 % penalty tax if the policy is
a modified endowment.
Source of proceeds Taxable portion of pre-death proceeds
Full surrender: Amount received plus any
indebtedness, minus your
investment in the policy.*
Lapse: Any outstanding indebtedness minus
your investment in the policy.*
Partial surrenders Lesser of:
(modified endowments): the amount received or policy
value minus your investment in the
policy.*
Policy loans and Lesser of:
assignments the amount of the loan/assignment
(modified endowments): or policy value minus your
investment in the policy.*
Partial surrenders Generally, if the amount received
(other policies): is greater than your investment in
the policy,* the amount in excess
of your investment is taxable.
However, during the first 15
policy years, a different amount
may be taxable if the partial
<PAGE>
PAGE 43
surrender results in or is
necessitated by a reduction in
benefits.
Policy loans and None
assignments
(other policies):
Payment options: If proceeds of the policy will be
paid under one of the payment
options, see the "Payment option"
section for tax information.
* The owner's investment is equal to premiums paid, minus the
nontaxable portion of any previous partial surrenders, plus the
taxable portion of any previous policy loans.
Modified endowment contracts
In 1988 Congress created a new class of life insurance policies
called "Modified Endowment Contracts," which are taxed differently
from conventional life insurance contracts. Policies applied for,
or materially changed, on or after June 21, 1988, are considered to
be modified endowments if premiums paid in the first seven years of
the policy, or the first seven years following a material change,
exceed certain limits. (Also, any life insurance policy received in
exchange for a modified endowment is itself a modified endowment.)
We have established procedures for monitoring whether a contract
may become a modified endowment contract.
Modified endowment limits are calculated when the policy is issued,
and are based on the benefits provided and on the risk
classification of the insureds. They are later recalculated if
certain reductions in benefits occur.
Reductions in benefits: When benefits are reduced, the limits are
recalculated as if the reduced level of benefits had always been in
effect. In most cases, this recalculation will further restrict
the amount of premium that can be paid without exceeding modified
endowment limits. If premiums already paid exceed the recalculated
limits, the policy becomes a modified endowment even if no further
premiums are paid.
Distributions affected: Modified endowment rules apply to
distributions in the year the policy becomes a modified endowment
and in all subsequent years. In addition, the rules apply to
distributions taken two years before the policy becomes a modified
endowment, which are presumed to be taken in anticipation of that
event.
Serial purchase of modified endowments: All modified endowments
issued by the same insurer (or affiliated companies of the insurer)
to the same owner during any calendar year are treated as one
policy in determining the amount of any loan or distribution that
is taxable.
<PAGE>
PAGE 44
Penalty tax: If a policy is a modified endowment, the taxable
portion of pre-death proceeds from a full surrender, lapse, partial
surrender, policy loan or assignment of policy value, or certain
payment options may be subject to a 10% penalty tax unless:
o the distribution occurs after the owner attains age
59-1/2;
o the distribution is attributable to the owner becoming
disabled (within the meaning of Code Section 72(m)(7);
or
o the distribution is part of a series of substantially
equal periodic payments made at least once a year over
the life (or life expectancy) of the owner or over the
joint lives (or life expectancies) of the owner and the
owner's beneficiary.
Other tax considerations
Policy Split Option Rider: The Policy Split Option Rider permits a
policy to be split into two individual permanent plans of insurance
then offered by IDS Life for exchange, one on the life of each
insured, upon the occurrence of a divorce of the insureds or
certain changes in federal estate tax law. A policy split could
have adverse tax consequences; for example, it is not clear whether
a policy split will be treated as a nontaxable exchange under
Sections 1031 through 1043 of the Code. If a policy split is not
treated as a nontaxable exchange, a split could result in the
recognition of taxable income in an amount up to any gain in the
policy at the time of the split. In addition, it is not clear
whether, in all circumstances, the individual contracts that result
from a policy split would be treated as life insurance contracts
for federal income tax purposes and, if so treated, whether the
individual contract would be classified as modified endowment
contracts. Before you exercise rights provided by the policy split
option, it is important that you consult with a competent tax
advisor regarding the possible consequences of a policy split.
Interest paid on policy loans: If the loan is used for personal
purposes, such interest is not tax-deductible. Other rules apply
if the loan is used for trade or business or investment purposes,
or if the policy is owned by a business or a corporation.
Policy changes: Changing ownership, exchanging or assigning the
policy may have tax consequences, depending on the circumstances.
Other taxes: Federal estate tax, state and local estate tax,
inheritance tax, gift tax and other tax consequences of ownership
or receipt of policy proceeds will also depend on the
circumstances.
Qualified retirement plans: The policy may be used in conjunction
with certain qualified plans. Since the rules governing such use
are complex, a purchaser should consult a competent pension
consultant.
<PAGE>
PAGE 45
On July 6, 1983, the Supreme Court held in Arizona Governing
Committee v. Norris that optional annuity benefits provided under
an employee's deferred compensation plan could not, under Title VII
of the Civil Rights Act of 1964, vary between men and women on the
basis of sex. Since the policy's cost of insurance rates and
purchase rates for certain settlement options distinguish between
men and women, employers and employee organizations should consult
with legal counsel before purchasing the policy for any
employment-related insurance or benefit program.
IDS Life
IDS Life is a stock life insurance company organized under the laws
of the State of Minnesota in 1957. Our address is IDS Tower 10,
Minneapolis, MN 55440.
IDS Life conducts a conventional life insurance business in the
District of Columbia and all states except New York. A wholly
owned subsidiary of IDS Life, IDS Life Insurance Company of New
York, conducts a substantially identical business in New York.
IDS Life has been in the variable annuity business since 1968 and
has sold a number of different variable annuity contracts and
variable life insurance policies, utilizing other separate
accounts, unit investment trusts and mutual funds.
Ownership
IDS Life is a wholly owned subsidiary of American Express Financial
Corporation; American Express Financial Corporation, a Delaware
corporation, is a wholly owned subsidiary of American Express
Company.
State regulation
IDS Life is subject to the laws of Minnesota governing insurance
companies and to regulation by the Minnesota Department of
Commerce. In addition, IDS Life is subject to regulation under the
insurance laws of other jurisdictions in which it may operate. An
annual statement in a prescribed form is filed with Minnesota's
Department of Commerce and in each state in which IDS Life does
business. IDS Life's books and accounts are subject to review by
the Minnesota Department of Commerce at all times, and a full
examination of its operations is conducted periodically. Such
regulation does not, however, involve any supervision of management
or investment practices or policies.
Distribution of the policy
IDS Life is the sole distributor of the policy. IDS Life is
registered as a broker-dealer under the Securities Exchange Act of
1934 and is a member of the National Association of Securities
Dealers, Inc. (NASD). Representatives of IDS Life are licensed
insurance and annuity agents, and are registered with the NASD as
representatives of IDS Life.
<PAGE>
PAGE 46
IDS Life pays its representatives a commission of up to [xx%] of
the initial target premium (annualized) when the policy is
sold, plus [x%] of all premiums in excess of the target premium.
Each year, IDS Life pays a service fee not greater than [xx%] of
the policy value, net of indebtedness. IDS Life also pays
approximately [xx%] of the total representative's commission to the
division and district sales managers of the selling representative.
Legal proceedings
As an insurance company, IDS Life is involved in a number of items
of litigation. We believe that these items are not material and we
do not expect to incur significant losses resulting from the
litigation.
Experts
The financial statement of IDS Life and of the segregated asset
subaccounts of IDS Life Variable Life Separate Account appearing in
this prospectus have been audited by Ernst & Young LLP, independent
auditors, as set forth in their reports thereon appearing elsewhere
herein, and are included in reliance upon such reports given upon
the authority of such firm as experts in accounting and auditing.
Actuarial matters included in the prospectus have been examined by
James M. Jensen, F.S.A., M.A.A.A., Director, Insurance Product
Development, as stated in his opinion filed as an exhibit to the
Registration Statement.
Management of IDS Life
Directors
Louis C. Fornetti, 45
Director since March 1994; senior vice president and director,
American Express Financial Corporation, since February 1985.
David R. Hubers, 52
Director since September 1989; president and chief executive
officer, American Express Financial Corporation, since August 1993,
and director, IDS, since January 1984. Senior vice president,
finance and chief financial officer, American Express Financial
Corporation, 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. Vice President, American Express Financial
Corporation, since January 1988. Director of IDS Life Series Fund,
Inc. and manager of IDS Life Variable Annuity Funds A & B.
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, American Express Financial Corporation, since January
1987.
<PAGE>
PAGE 47
Peter A. Lefferts, 53
Director and executive vice president, Marketing since March 1994;
senior vice president and director, American Express Financial
Corporation, since February 1986.
Janis E. Miller, 43
Director and executive vice president, Variable Assets since March
1994; vice president, American Express Financial Corporation, since
June 1990. Director, Mutual Funds Product Development and
Marketing, American Express Financial Corporation, from May 1987 to
May 1990. Director of IDS Life Series Fund, Inc. and manager of
IDS Life Variable Annuity Funds A & B.
James A. Mitchell, 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, American Express
Financial Corporation, since March 1994; director, American Express
Financial Corporation, since July 1984; senior vice president,
American Express Financial Corporation, 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, American Express Financial Corporation, 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; vice president, American Express
Financial Corporation, since September 1991; chief accounting
officer, American Express Financial Corporation, from July 1988 to
September 1991.
Officers Other Than Directors
Morris Goodwin Jr., 43
Vice president and treasurer since March 1994; vice president and
corporate treasurer, American Express Financial Corporation, since
July 1989; chief financial officer and treasurer, IDS Bank & Trust,
from January 1988 to July 1989.
William A. Stoltzmann, 46
Vice president, general counsel and secretary since 1985.
The address for all of the directors and principal officers is:
IDS Tower 10, Minneapolis, MN 55440.
<PAGE>
PAGE 48
The officers, employees and sales force of IDS Life are bonded, in
the amount of $10 million, by virtue of a blanket fidelity bond
issued by United Pacific Insurance Company to IDS Life's parent,
American Express Financial Corporation. An additional $12 million
in fidelity coverage is extended by a second policy issued by
Lloyd's of London to the directors, officers and employees of IDS
Life. An additional $10 million in fidelity coverage is extended
by a third policy issued by Federal Insurance Company to the
directors, officers and employees of IDS Life.
Other information
A registration statement has been filed with the Securities and
Exchange Commission (SEC) under the Securities Act of 1933, as
amended. For further information concerning the policy, its
separate account (the variable account) and IDS Life, please refer
to the registration statement, as amended, with exhibits.
Substitution of investments
If shares of any fund portfolio are unavailable for purchase by the
appropriate subaccount or if, in the judgment of IDS Life's
management, further investment in such shares is no longer
appropriate, shares of another registered, open-end
management investment company may be substituted.
If deemed by IDS Life to be in the best interest of persons having
voting rights under the policy, the variable account may be
operated as a management company under the Investment Company Act
of 1940, or it may be deregistered under the Act if such
registration is no longer required.
In the event of any such substitution or change, IDS Life may,
without the consent or approval of owners, amend the policy and
take whatever action is necessary and appropriate. However, no
such substitution or change will be made without any necessary
approval of the SEC or state insurance departments. IDS Life will
notify owners within five days of any substitution or change.
Voting rights
All shares issued by the fund are the same class (kind) -- capital
stock. They are fully paid and nonassessable and can be redeemed
or transferred. They can be issued as full shares or fractions.
All shares have equal voting rights; a fraction of a share has the
same kind of rights and privileges as a full share.
Each of the fund's six portfolios issues its own series of common
stock. The shares of each portfolio represent an interest only in
that portfolio's assets (and profits or losses) and in the event of
liquidation, each share of a portfolio would have the same rights
to dividends and assets as every other share of that portfolio.
Each share of a portfolio has one vote. On some issues, such as
election of directors, all shares of the fund vote together as one
series. When electing directors, all shares have cumulative voting
<PAGE>
PAGE 49
rights. Cumulative voting means that shareholders are entitled to
a number of votes equal to the number of shares they hold
multiplied by the number of directors to be elected, and they have
the right to divide votes among candidates.
On an issue affecting only one portfolio -- for example, a
fundamental investment restriction pertaining only to that
portfolio -- its shares vote as a separate series. If shareholders
of a particular portfolio vote approval of the Investment
Management and Services Agreement, the agreement becomes effective
with respect to that portfolio, whether or not it is approved by
shareholders of the other portfolios.
IDS Life is the owner of all fund shares and as such holds all
voting rights. However, IDS Life will vote the shares of each
portfolio in accordance with instructions received from owners. If
we do not receive timely instructions from you, we will vote your
shares in the same proportion as the shares for which instructions
are received. Fund shares that are not otherwise attributable to
owners will also be voted by IDS Life in the same proportion as
those shares in that subaccount for which instructions are
received.
We determine the number of fund shares in each subaccount for which
you may give instructions by applying your percentage interest in
the subaccount to the total number of votes attributable to the
subaccount. The number will be determined as of a date chosen by
IDS Life, but not more than 60 days before the meeting of the fund.
Fractional votes are counted. You will receive notice of each
shareholder meeting, together with any proxy solicitation materials
and a statement of the number of votes for which you are entitled
to give instructions.
If required by state insurance officials, IDS Life may disregard
voting instructions that would change the goals of one or more of
the fund's portfolios, or would result in approval or disapproval
of an investment advisory contract. In addition, IDS Life itself
may disregard voting instructions that would require changes in the
investment policy or investment advisor of one or more of the
fund's portfolios, if IDS Life reasonably disapproves such changes
in accordance with applicable federal regulations. If IDS Life
does disregard voting instructions, it will, in its next report to
owners, advise them of that action and the reasons for it.
Reports
At least once a year IDS Life will mail to you, at your last known
address of record, a report containing all information required by
law or regulation, including a statement showing the current policy
value.
<PAGE>
PAGE 50
Policy illustrations
The following tables illustrate how policy values, cash surrender
values and death benefits may change with the investment experience
of the subaccount. The tables show how these amounts might vary,
for a male insurance age 55 and a female insurance age 55, both
nonsmokers, if:
o the annual rate of return of the fund is 0%, 6% or 12%.
o the cost of insurance rates are current rates or guaranteed
rates.
Any such illustration involves a number of detailed assumptions
(see chart, "Understanding the illustrations"). To the extent that
your own circumstances differ from those assumed in the
illustrations, your expected results would also differ.
Upon request, you will be furnished with comparable tables
illustrating death benefits, policy values, and cash surrender
values based on the actual ages of the persons you propose to
insure and on an initial specified amount and premium payment
schedule. In addition, after you have purchased a policy, you may
request illustrations based on policy values at the time of
request.
Understanding the illustrations:
Rates of return: assumed to be uniform, gross, after-tax, annual
rates of 0%, 6%, or 12% for the fund. Results would differ
depending on allocations among the subaccounts, if returns averaged
0%, 6% and 12% for the fund as a whole but differed across
portfolios.
Insureds: assumed to be a male insurance age 55 and a female
insurance age 55, in a standard risk classification, qualifying for
the nonsmoker rate. Results would be lower if one or both of the
insureds were in a substandard risk classification or did not
qualify for the non-smoker rate.
Premiums: A $15,000 premium is assumed to be paid in full at the
beginning of each policy year. Results would differ if premiums
were paid on a different schedule.
Policy loans and partial withdrawals: It is assumed that none have
been made. (Since indebtedness is assumed to be zero, the cash
surrender value in all cases equals the policy value minus the
surrender charge.)
Effect of expenses and charges: The net investment return of the
subaccounts, shown in the tables, is lower than the gross,
after-tax return of the fund because expenses paid by the fund and
charges made against the subaccounts have been deducted. These
include:
<PAGE>
PAGE 51
o the daily investment management fee paid by the fund, assumed to
be equivalent to an annual rate of 0.6% of the fund's aggregate
average daily net assets;
o the daily mortality and expense risk charge, equivalent to 0.9%
of the daily net asset value of the subaccounts annually; and
o an annual charge of 0.1% of the fund's aggregate average daily
net assets for direct expenses incurred by the fund.
The latter charge is capped by IDS Life at 0.1%, even though actual
expenses have been higher, ranging from 0.6% to 0.8% of the average
daily net assets of the different portfolios in the year ended
April 30, 1994. Although IDS Life reserves the right to
discontinue capping these expenses, our present intent is to
continue the cap indefinitely until actual expenses are less than
the cap. Should IDS Life discontinue the cap prior to that time,
the policy values and death benefits in the tables generally would
be less.
<TABLE><CAPTION>
Illustration
Initial specified amount $1,000,000 Male - Insurance age 55 - Nonsmoker Current costs assumed
Death benefit Option 1 Female - Insurance age 55 - Nonsmoker annual premium $15,000
Premium Death benefit (1)(2) Policy value (1)(2) Cash surrender value (1)(2)
accumulated assuming hypothetical gross assuming hypothetical gross assuming hypothetical gross
End of with annual annual investment return of annual investment return of annual investment return Of
policy interest
year at 5% 0% 6% 12% 0% 6% 12% 0% 6% 12%
<S> <C>
1 15750
2 32288
3 49652
4 67884
5 87029
6 107130
7 128237
8 150398
9 173668
10 198102
11 223757
12 250695
13 278979
14 308678
15 339862
16 372605
17 406986
18 443085
19 480989
20 520789
25 751702
(1) Assumes no policy loans or partial withdrawals have been made.
(2) Assumes a $15,000 premium is paid at the beginning of each policy year. Values will be different if premiums are paid in
different amounts or with a different frequency.
(After deduction of the above expenses and charges, the illustrated gross annual investment rates of return of 0%, 6%, and 12%
correspond to approximate net annual rates of 1.59%, 4.32%, and 10.22%, respectively.)
Taxes: Results shown in the tables reflect the fact that IDS Life does not currently charge the subaccounts for federal income
tax. If such a charge is taken in the future, the portfolios will have to earn more than they do now in order to produce the death
benefits and policy values illustrated.
The above hypothetical investment results are illustrative only and should not be deemed a representation of past or future
investment results. Actual investment results may be more or less than those shown. The death benefit, policy value and cash
surrender value would be different from those shown if returns averaged 0%, 6%, and 12% over a period of years, but fluctuated
above and below those averages for individual policy years. No representation can be made that these hypothetical rates of return
can be achieved for any one year or sustained over any period of time.
/TABLE
<PAGE>
PAGE 51
<TABLE><CAPTION>
Illustration
_____________________________________________________________________________________________________________________________
Initial specified amount $1,000,000 Male - Insurance age 55 - Nonsmoker Guaranteed costs assumed
Death benefit Option 1 Female - Insurance age 55 - Nonsmoker annual premium $15,000
_____________________________________________________________________________________________________________________________
Premium Death benefit (1)(2) Policy value (1)(2) Cash surrender value (1)(2)
accumulated assuming hypothetical gross assuming hypothetical gross assuming hypothetical gross
End of with annual annual investment return of annual investment return of annual investment return Of
policy interest
year at 5% 0% 6% 12% 0% 6% 12% 0% 6% 12%
_____________________________________________________________________________________________________________________________
<S> <C>
1 15750
2 32288
3 49652
4 67884
5 87029
6 107130
7 128237
8 150398
9 173668
10 198102
11 223757
12 250695
13 278979
14 308678
15 339862
16 372605
17 406986
18 443085
19 480989
20 520789
25 751702
(1) Assumes no policy loans or partial withdrawals have been made.
(2) Assumes a $15,000 premium is paid at the beginning of each policy year. Values will be different if premiums are paid in
different amounts or with a different frequency.
(After deduction of the above expenses and charges, the illustrated gross annual investment rates of return of 0%, 6%, and 12%
correspond to approximate net annual rates of 1.59%, 4.32%, and 10.22%, respectively.)
Taxes: Results shown in the tables reflect the fact that IDS Life does not currently charge the subaccounts for federal income
tax. If such a charge is taken in the future, the portfolios will have to earn more than they do now in order to produce the death
benefits and policy values illustrated.
The above hypothetical investment results are illustrative only and should not be deemed a representation of past or future
investment results. Actual investment results may be more or less than those shown. The death benefit, policy value and cash
surrender value would be different from those shown if returns averaged 0%, 6%, and 12% over a period of years, but fluctuated
above and below those averages for individual policy years. No representation can be made that these hypothetical rates of return
can be achieved for any one year or sustained over any period of time.
/TABLE
<PAGE>
PAGE 53
<TABLE><CAPTION>
Illustration
_____________________________________________________________________________________________________________________________
Initial specified amount $1,000,000 Male - Insurance age 55 - Nonsmoker Current costs assumed
Death benefit Option 2 Female - Insurance age 55 - Nonsmoker annual premium $15,000
_____________________________________________________________________________________________________________________________
Premium Death benefit (1)(2) Policy value (1)(2) Cash surrender value (1)(2)
accumulated assuming hypothetical gross assuming hypothetical gross assuming hypothetical gross
End of with annual annual investment return of annual investment return of annual investment return Of
policy interest
year at 5% 0% 6% 12% 0% 6% 12% 0% 6% 12%
_____________________________________________________________________________________________________________________________
<S> <C>
1 15750
2 32288
3 49652
4 67884
5 87029
6 107130
7 128237
8 150398
9 173668
10 198102
11 223757
12 250695
13 278979
14 308678
15 339862
16 372605
17 406986
18 443085
19 480989
20 520789
25 751702
(1) Assumes no policy loans or partial withdrawals have been made.
(2) Assumes a $15,000 premium is paid at the beginning of each policy year. Values will be different if premiums are paid in
different amounts or with a different frequency.
(After deduction of the above expenses and charges, the illustrated gross annual investment rates of return of 0%, 6%, and 12%
correspond to approximate net annual rates of 1.59%, 4.32%, and 10.22%, respectively.)
Taxes: Results shown in the tables reflect the fact that IDS Life does not currently charge the subaccounts for federal income
tax. If such a charge is taken in the future, the portfolios will have to earn more than they do now in order to produce the death
benefits and policy values illustrated.
The above hypothetical investment results are illustrative only and should not be deemed a representation of past or future
investment results. Actual investment results may be more or less than those shown. The death benefit, policy value and cash
surrender value would be different from those shown if returns averaged 0%, 6%, and 12% over a period of years, but fluctuated
above and below those averages for individual policy years. No representation can be made that these hypothetical rates of return
can be achieved for any one year or sustained over any period of time.
/TABLE
<PAGE>
PAGE 54
<TABLE><CAPTION>
Illustration
_____________________________________________________________________________________________________________________________
Initial specified amount $1,000,000 Male - Insurance age 55 - Nonsmoker Guaranteed costs assumed
Death benefit Option 2 Female - Insurance age 55 - Nonsmoker annual premium $15,000
_____________________________________________________________________________________________________________________________
Premium Death benefit (1)(2) Policy value (1)(2) Cash surrender value (1)(2)
accumulated assuming hypothetical gross assuming hypothetical gross assuming hypothetical gross
End of with annual annual investment return of annual investment return of annual investment return Of
policy interest
year at 5% 0% 6% 12% 0% 6% 12% 0% 6% 12%
_____________________________________________________________________________________________________________________________
<S> <C>
1 15750
2 32288
3 49652
4 67884
5 87029
6 107130
7 128237
8 150398
9 173668
10 198102
11 223757
12 250695
13 278979
14 308678
15 339862
16 372605
17 406986
18 443085
19 480989
20 520789
25 751702
(1) Assumes no policy loans or partial withdrawals have been made.
(2) Assumes a $15,000 premium is paid at the beginning of each policy year. Values will be different if premiums are paid in
different amounts or with a different frequency.
(After deduction of the above expenses and charges, the illustrated gross annual investment rates of return of 0%, 6%, and 12%
correspond to approximate net annual rates of 1.59%, 4.32%, and 10.22%, respectively.)
Taxes: Results shown in the tables reflect the fact that IDS Life does not currently charge the subaccounts for federal income
tax. If such a charge is taken in the future, the portfolios will have to earn more than they do now in order to produce the death
benefits and policy values illustrated.
The above hypothetical investment results are illustrative only and should not be deemed a representation of past or future
investment results. Actual investment results may be more or less than those shown. The death benefit, policy value and cash
surrender value would be different from those shown if returns averaged 0%, 6%, and 12% over a period of years, but fluctuated
above and below those averages for individual policy years. No representation can be made that these hypothetical rates of return
can be achieved for any one year or sustained over any period of time.
</TABLE>
<PAGE>
PAGE 55
(REG2)
PART II
UNDERTAKINGS TO FILE REPORTS
Subject to the terms and conditions of Section 15(d) of the
Securities Exchange Act of 1934, the undersigned registrant hereby
undertakes to file with the Securities and Exchange Commission such
supplementary and periodic information, documents, and reports as
may be prescribed by any rule or regulation of the Commission
hereto or hereafter duly adopted pursuant to authority conferred in
that section.
RULE 484 UNDERTAKING
The By-Laws of IDS Life Insurance Company provide that:
The Corporation shall indemnify any person who was or is a party or
is threatened to be made a party, by reason of the fact that he is
or was a Manager of Variable Annuity Funds A and B, director,
officer, employee or agent of this Corporation, or is or was
serving at the direction of the Corporation as a Manager of
Variable Annuity Funds A and B, director, officer, employee or
agent of another corporation, partnership, joint venture, trust or
other enterprise, to any threatened, pending or completed action,
suit or proceeding, wherever brought, to the fullest extent
permitted by the laws of the State of Minnesota, as now existing or
hereafter amended, provided that this Article shall not indemnify
or protect any such Manager of Variable Annuity Funds A and B,
director, officer, employee or agent against any liability to the
Corporation or its security holders to which he would otherwise be
subject by reason of willful misfeasance, bad faith, or gross
negligence, in the performance of his duties or by reason of his
reckless disregard of his obligations and duties.
Insofar as indemnification for liability 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.
<PAGE>
PAGE 56
REPRESENTATIONS PURSUANT TO RULE 6e-3(T)
This filing is made pursuant to Rule 6c-3 and 6e-3(T) under the
Investment Company Act of 1940. Registrant elects to be governed
by Rule 6e-3(T)(b)(13)(i)(A).
Registrant makes the following representations:
(1) Section 6e-3(T)(b)(13)(ii)(F) has been relied upon.
(2) The level of the Mortality and Expense Risk Charge is within
the range of industry practice for comparable flexible premium
survivorship variable life insurance policies. The
methodology used to support this representation is based on an
analysis of other policies registered under the Securities Act
of 1933, including the level of other expense charges, and
uncertainties in terms of expense and mortality factors.
Registrant undertakes to keep and make available to the
Commission upon request the documents used to support this
representation.
(3) Registrant has concluded that there is a reasonable likelihood
that the distribution financing arrangement of the Separate
Accounts comprising the Registrant will benefit the Separate
Accounts and Owners and the Registrant will keep and make
available to the Commission on request a memorandum setting
forth the basis for this representation.
(4) The Separate Accounts comprising the Registrant will invest
only in management investment companies which have undertaken
to have a board of directors, a majority of whom are not
interested persons of the company, formulate and approve any
plan under Rule 12b-1 to finance distribution expenses.
CONTENTS OF THE REGISTRATION STATEMENT
This Registration Statement comprises the following papers and
documents:
The facing sheet.
The prospectus consisting of 53 pages.
The undertaking to file reports.
Rule 484 undertaking.
Representations pursuant to Rule 6e-3(T)
The signatures.
The following exhibits:
1. A. Copies of all exhibits required by paragraph A of
instructions for Exhibits in Form N-8B-2 to the
Registration Statement.
<PAGE>
PAGE 57
(1) (a) Resolution of Board of Directors of IDS Life
Insurance Company establishing the Trust,
adopted May 9, 1985, is filed electronically
herewith.
(b) Resolution of Board of Directors of IDS Life
Insurance Company reconstituting the Trust,
adopted October 16, 1985, is filed
electronically herewith.
(2) Not applicable.
(3) (a) Not applicable.
(b) (1) Form of Division Vice President's
Employment Agreement dated November 1991,
is filed electronically herewith.
(2) Form of District Manager's Rider to IDS
Life Insurance Company, Personal Financial
Planner's Agreement dated November 1986,
is filed electronically herewith.
(3) Form of Personal Financial Planner's
Agreement dated November 1986, is filed
electronically herewith.
(c) Schedules of Sales Commissions to be filed
electronically by amendment.
(4) Not applicable.
(5) Flexible Premium Survivorship Variable Life
Insurance Policy to be filed by amendment.
(6) (a) Certificate of Incorporation of IDS Life
Insurance Company, dated July 23, 1957, is
filed electronically herewith.
(b) Amended By-Laws of IDS Life Insurance Company,
is filed electronically herewith.
(7) Not applicable.
(8) (a) Form of Investment Management and Services
Agreement dated December 17, 1985, between IDS
Life and IDS Life Series Fund, Inc. is filed
electronically herewith.
(b) Form of Investment Advisory Agreement dated
July 11, 1984, between IDS Life and IDS
Financial Services Inc. relating to the
Variable Account is filed electronically
herewith.
(9) None.
<PAGE>
PAGE 58
(10) Application form for the Flexible Premium
Survivorship Variable Life Insurance Policy to be
filed by amendment.
B. (1) Not applicable.
(2) Not applicable.
C. Not applicable.
2. Opinion of Counsel and consent to its use as to the legality
of the securities registered is filed electronically herewith.
3. No financial statement will be omitted from the prospectus
pursuant to Instruction 1(b) or (c) of Part I.
4. Not applicable.
5. Financial Data Schedule is not applicable at this time.
6. Actuarial Opinion in support of the 1.25% federal tax charge
is filed electronically herewith.
7. Opinion of James M. Jensen, F.S.A., M.A.A.A., to be filed
electronically by amendment
8. Written consent of James M. Jensen, F.S.A., M.A.A.A. to be
filed electronically by amendment.
9. Written consent of Ernst & Young LLP to be filed
electronically by amendment.
10. Directors' Power of Attorney dated February 28, 1995, is filed
electronically herewith.
11. IDS Life Insurance Company's Description of Transfer and
Redemption Procedures and Method of Conversion to Fixed
Benefit Policies is filed electronically herewith.
<PAGE>
PAGE 59
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940 IDS Life Insurance Company on behalf
of the Registrant, certifies that it meets requirements for
effectiveness of this Amendment to its Registration Statement
pursuant to Rule 485(a) under the Securities Act of 1933 and 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 3rd day of
March, 1995.
IDS Life Variable Life Separate Account
(Registrant)
By IDS Life Insurance Company
(Sponsor)
By/s/ Richard W. Kling*
Richard W. Kling
By: /s/ Mary Ellyn Minenko
Mary Ellyn Minenko
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following Officers
and Directors of IDS Life Insurance Company in the capacities
indicated on the 3rd day of March, 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
<PAGE>
PAGE 60
Signature Title
/s/ Janis E. Miller* Director and Executive Vice
Janis E. Miller President, Variable Assets
/s/ Barry J. Murphy* Director and Executive Vice
Barry J. Murphy President, Client Service
/s/ Stuart A. Sedlacek* Director and Executive Vice
Stuart A. Sedlacek President, Assured Assets
/s/ Melinda S. Urion* Director, Executive Vice
Melinda S. Urion President and Controller
*Signed pursuant to Power of Attorney dated February 28, 1995,
filed electronically herewith as Exhibit No. 10 to Registration
Statement.
By:
/s/ Mary Ellyn Minenko
Mary Ellyn Minenko
<PAGE>
PAGE 1
IDS LIFE VARIABLE LIFE SEPARATE ACCOUNT
Registration Number 811-4298
EXHIBIT INDEX
Exhibit A1(a) Resolution of Board of Directors of IDS Life,
dated May 9, 1985.
Exhibit A1(b) Resolution of Board of Directors of IDS Life,
dated October 16, 1985.
Exhibit A3(b)(1) Form of Division Vice President's Employment
Agreement dated November, 1991.
Exhibit A3(b)(2) Form of District Manager's Rider to IDS Life
Insurance Company, Personal Financial Planner's
Agreement dated November, 1986.
Exhibit A3(b)(3) Form of Personal Financial Planner's Agreement
dated November, 1986.
Exhibit A6(a) Certificate of Incorporation of IDS Life
Insurance Company, dated July 23, 1957.
Exhibit A6(b) Amended By-Laws of IDS Life Insurance Company.
Exhibit A8(a) Form of Investment Management and Services
Agreement between IDS Life and IDS Life Series
Fund, Inc., dated December 17, 1985.
Exhibit A8(b) Form of Investment Advisory Agreement between
IDS Life and IDS Financial Services Inc., dated
July 11, 1984.
Exhibit 2 Opinion of Counsel and consent.
Exhibit 6 Actuarial Opinion.
Exhibit 10 Directors' Power of Attorney, dated February
28, 1995.
Exhibit 11 IDS Life Insurance Company's Description of
Transfer and Redemption Procedures and Method
of Conversion to Fixed Benefit Policies.
<PAGE>
PAGE 1
IDS LIFE INSURANCE COMPANY
MINUTES OF A MEETING OF THE BOARD OF DIRECTORS
MAY 9, 1985
A meeting of the Board of Directors of IDS Life Insurance Company,
a Minnesota corporation, was held at 1:30 p.m., on Thursday, May 9,
1985, at the offices of the Corporation, IDS Tower, Minneapolis,
Minnesota, pursuant to notice duly given.
Mr. James A. Mitchell, President, called the meeting to order and
presided as Chairman, Mr. Paul D. Sabby, Assistant Secretary of the
Corporation, acted as Secretary of the meeting.
The Chairman stated that the first item of business was the
establishment of five separate accounts to invest in portfolios of
IDS Life Series Fund, Inc., and, after discussion the following
resolutions were duly adopted:
WHEREAS, This Board of Directors has determined that it is
desireable for the Corporation to provide for the acquisition
of shares of the Portfolios of IDS Life Series Fund, Inc.
under its variable life policies, now, therefore, be it
RESOLVED, That the five separate accounts set forth below are
hereby established in accordance with Section 61A.14,
Minnesota Statutes:
IDS Life Account P to invest in shares of the Equity
Portfolio of IDS Life Series Fund, Inc.
IDS Life Account Q, to invest in shares of the Income
Portfolio of IDS Life Series Fund, Inc.
IDS Life Account R to invest in shares of the Moneymarket
Portfolio of IDS Life Series Fund, Inc.
IDS Life Account S to invest in shares of the Managed
Portfolio of IDS Life Series Fund, Inc.
IDS Life Account T to invest in shares of the Government
Securities Portfolio of IDS Life Series Fund, Inc.
RESOLVED FURTHER, That the proper officers of the Corporation
are hereby authorized and directed to accomplish all filings
and registrations necessary to carry the foregoing into
effect.
The Chairman stated that the next item to consider was approval of
authorization of officers to open and maintain an account with
Merrill Lynch Commodities for the purchase and sale of commodities
and commodity<PAGE>
<PAGE>
PAGE 1
IDS LIFE INSURANCE COMPANY
SPECIAL MEETING OF THE BOARD OF DIRECTORS
A special meeting of the Board of Directors of IDS Life Insurance
Company, a Minnesota corporation, was held at the offices of the
corporation, IDS Tower, Minneapolis, Minnesota, on October 16, 1985
at 10:30 a.m.
All directors were present except Paul F. Kolkman, James A.
Mitchell, the Chairman of the meeting, announced that a quorum of
the directors was present, and that the meeting was ready to
proceed with its business.
The Chairman stated that the purpose of the meeting was the
establishment of the separate account named IDS Life Variable Life
Separate Account by the reconstituting of the Separate Accounts P,
Q, R, S and T. Upon motion duly made, seconded and unanimously
passed, the following resolution was duly adopted:
WHEREAS, This Board of Directors has determined that it is
desirable for the Corporation to provide for the acquisition
of shares of the portfolios of IDS Life Series Fund, Inc.
under its variable life policies; and,
WHEREAS, the Corporation has previously established five
separate accounts, IDS Life Accounts P, Q, R, S and T, which
accounts have not been funded. Now, therefore, be it
RESOLVED, That the five separate accounts, IDS Life Accounts
P, Q, R, S and T, established in accordance with Section
61A.14, Minnesota Statutes at a meeting of the Board of
Directors of the Corporation on May 9, 1985, are hereby
collectively reconstituted as IDS Life Variable Life Separate
Account (comprised currently of five subaccounts) which the
Board establishes as a Successor Issuer under Rule 414 of the
Securities Act of 1933:
Subaccount P to invest in shares of the Equity Portfolio of
IDS Life Series Fund, Inc.
Subaccount Q, to invest in shares of the Income Portfolio of
IDS Life Series Fund, Inc.
Subaccount R to invest in shares of the Moneymarket Portfolio
of IDS Life Series Fund, Inc.
Subaccount S to invest in shares of the Managed Portfolio of
IDS Life Series Fund, Inc.
Subaccount T to invest in shares of the Government Securities
Portfolio of IDS Life Series Fund, Inc.; and
<PAGE>
<PAGE>
PAGE 1
IDS Life Insurance Company
Division Vice President's Agreement
This is an Agreement, made at Minneapolis, Minnesota, by and
between IDS Life Insurance Company and you,
______________________________________
(Print Full Name)
executed and effective as of the date shown on the last line of
this Agreement. It defines your relationship with Company as a
Division Vice President. Both you and Company promise to comply
with the terms of this Agreement and any properly executed Riders
to this Agreement.
Section I - Definitions
For purposes of this Agreement, the terms listed below have the
special meanings shown.
(a) "Company" means IDS Life Insurance Company.
(b) "Affiliate" means any partnership, business, trust, company or
corporation affiliated with Company at any time while this
Agreement is in effect.
(c) "Personal Financial Planner or Planner" means Personal
Financial Planner and Sales Representative.
(d) "District Manager" means a person who has executed a District
Manager's Rider to a Planner's Agreement with Company.
(e) "Services" means financial planning, advisory, securities
brokerage, tax or other financial Services.
(f) "Products" means Certificates, Stock, other securities or
investments, lending products, life insurance and annuity
policies and contracts, and other insurance products.
(g) "Records and Materials" means all records, files, manuals,
blanks, forms, materials, supplies, stationery, literature,
seminar materials, computer software, licenses, papers and
books that Company or an Affiliate furnishes or leases to you
for use, with or without charge, or that you create or
prepare, including notes, memos and works of authorship, in
connection with the performance of this Agreement.
(h) "Sales Compensation Plan" means the rules, policies and
schedules as amended and published from time to time that are
related to items (1), (2) and (3) below and to other matters.
1. the assignment or reassignment of territory or Client
accounts,
2. the payment of overwriting, commissions, and other fees
or compensation, and
3. the imposition of charge-backs
<PAGE>
PAGE 2
(i) "Client" means a person or entity who (1) purchases or holds a
Product or Service acquired from or through Company or an
Affiliate or one of their Planners with the consent of Company
or the Affiliate, or (2) authorized Company, an Affiliate or
one of their Planners to make personal financial planning
presentations to it or its employees or members, or (3) is a
member of a Client's household.
Section II - Appointment of Manager
Company hires you as a Division Vice President to supervise the
Company sales force of Personal Financial Planners and District
Managers in the territory assigned to you in connection with the
sale and servicing of insurance policies and annuity contracts and
any other policy or contract offered for sale by Company to Clients
and the servicing of such Company Clients in the territory assigned
to you, but without exclusive rights in that territory.
Section III - Business Activities of Manager
You agree to devote all of your working time and effort, to the
best of your abilities, to performing your duties as a Division
Vice President under this Agreement with Company and under any
similar agreement with any Affiliate. You will recruit, train,
maintain and supervise a sales force of Personal Financial
Planners and District Managers operating under agreements with
Company. You will also act as an instructor at any training school
designated by Company and provide such other services as may be
requested by Company. You will, during your employment under this
Agreement, act and perform your duties and responsibilities in line
with the directions of Company. You will not exercise nor attempt
to exercise any greater control over the Planners and District
Managers of Company than is authorized by Company.
Section IV - Status of Manager
You are an employee of Company, but nothing contained in this
Agreement can be interpreted as creating an employer-employee
relationship or an agency relationship between you and any Planner
or District Manager of Company. You will pay all your expenses and
will comply with all applicable laws and regulations. You will
secure all licenses or registrations required by law or Company and
obtain a surety or fidelity bond satisfactory to Company. This
Agreement will terminate upon cancellation or non-renewal of any
license, registration or bond which you are required to have by the
terms of this Agreement.
Section V - Undertakings by Manager
(a) Violation of Company's Interests. You will not, without the
written consent of Company, use any information you acquired
while this Agreement was in force in a manner adverse to the
interests of Company or an Affiliate. You also will not:
1. Do any act to damage the goodwill of Company or an
Affiliate;
<PAGE>
PAGE 3
2. Encourage or induce any person to terminate an agreement
with Company or an Affiliate without Company's consent;
3. Encourage or induce any annuity or policyholder to give
up a policy or contract;
4. Do any act which may cause a Client or prospective Client
of an insurance policy or annuity contract to refrain
from purchasing or making purchase payments thereon.
All of the above provisions apply while the Agreement is in
effect and after it ends.
(b) Bonds, Licenses and Registration. You will not allow any
Planner or District Manager to seek any applications or any
Clients for insurance policies or annuity contracts until
Planner or District Manager has secured all licenses or
registrations required by law or Company, obtained a surety or
fidelity bond satisfactory to Company and complied with all
other requirements of Company or its Affiliates that relate to
their activities under their agreement.
(c) Full Disclosure. In dealing with Clients or prospective
Clients, you will fully explain the terms of any insurance
policy or annuity contract, not make any untrue statements and
state all relevant facts. You will also take steps to prevent
and promptly advise Company of the failure of a Planner or
District Manager to make a full disclosure.
(d) Policies of Company. You will comply with all rules,
regulations and policies of Company or an Affiliate that apply
to your activities under this Agreement.
(e) Reports, Collections and Remittances.
(1) Promptly deliver premium receipts and policies or
contracts originating from applications solicited for
life insurance and annuities, but only when applicant
appears to be in good health and the initial premium (if
required) has been duly paid, and other receipts and
policies or contracts as required by Company.
(2) Collect and immediately report and remit to Company any
initial premiums and any payments you receive for
applications you obtain and any other money or property
you receive on behalf of Company.
(3) Send the payments, money or property you collect to
Company without commingling it with your own money or
property.
(f) You will take steps to prevent any activity or practice on the
part of a Planner or District Manager that is in violation of
that Planner's or District Manager's agreement
<PAGE>
PAGE 4
with Company or with Company's rules, policies or procedures.
You also will promptly notify Company about any such activity
or practice.
(g) Authority Limited. You cannot alter or change the provisions
of any insurance policy or annuity contract distributed by
Company. You also cannot incur any liability or expense on
behalf of Company.
(h) Any application for an insurance policy or annuity contract
that you submit is subject to acceptance or rejection by the
home office of Company in Minneapolis, Minnesota.
(i) In consideration for your receiving overwriting on Planners
and District Managers assigned to you, you will be responsible
for such proportionate share, as set forth in the Sales
Compensation Plan, of any training-period salary (including
any salary as a temporary employee) and other recruiting and
first-year training expenses incurred with respect to Personal
Financial Planners of Company assigned to your supervision.
(j) Debit Balance of a Planner or District Manager. You will be
responsible for such proportionate share, as set forth in the
Sales Compensation Plan, of any debit balance of, or advance
or loan made to, a Planner or District Manager who terminates
and who was subject to your supervision pursuant to this
Agreement, if Company is unable to recoup same from such a
Planner or District Manager.
Section VI - Compensation
(a) Overwriting and Fees. Except as hereinafter provided in this
Agreement, you will be entitled to overwriting or fees on the
sale, by a Company Planner or District Manager subject to your
supervision, of an insurance policy or annuity contract to a
Client within the territory to which you are assigned by
Company, in accordance with commission rules and policies set
forth in the Sales Compensation Plan at the time of such sale,
and on such other basis as Company will designate from time to
time. Overwriting or fees paid pursuant to this Agreement and
any riders to it will constitute payment in full for all
services rendered to Company under this Agreement and will be
subject to all applicable provisions of this Agreement. Any
expenses in rendering such services will be paid by you unless
the contrary is specifically authorized in writing by an
officer of Company. Except as provided by the Sales
Compensation Plan, no fees or overwriting will be paid for any
applications or business if:
(1) It is obtained outside the territory assigned to you; or
(2) The Client's account is assigned to some Planner or
District Manager of Company or an Affiliate who is not
under your supervision.
<PAGE>
PAGE 5
(b) Special Services Compensation. From time to time, Company may
direct you to act as an instructor at a training school, as a
field trainer or perform other occasional services. These
services must be carried out at the times and places Company
designates, under Company direction and control. Additional
compensation, if any, for such services will be set forth in
the Sales Compensation Plan. In the event of termination of
this Agreement for any reason, you will receive no such
additional compensation with respect to the period subsequent
to such termination.
(c) Marginal Representatives. Company has, or may from time to
time, determine that a Planner's earnings from Company and any
companies associated with Company should, depending upon
length of association with Company, be at a certain level or
Company will consider the Planner marginal. Any such rules as
to marginal earnings will be set forth in the Sales
Compensation Plan. If a Planner assigned to your division is
considered to be marginal under such rules and that marginal
status continues for a period of time as established by the
Sales Compensation Plan, your account will be charged
periodically with a dollar amount as set forth by the Sales
Compensation Plan. In applying this provision, Company will
take into consideration any time that the Planner was
disabled.
(d) You are not entitled to receive any compensation for any
period of overwriting on business sold during any period for
which you:
(1) Received benefits under Company's Disability Income
Insurance Plan for Division Vice Presidents, or
(2) Would have received benefits if you had been covered by
the Plan.
Company will determine whether your disability is temporary or
total and permanent based on proof submitted.
(e) Overwriting After Termination. If this Agreement is
terminated, you will not be entitled to any overwriting on
premium or purchase payments thereafter received with respect
to any insurance policies or annuity contracts, except as
provided in the Sales Compensation Plan at the date of such
termination.
(f) Advances. Company may charge to your account any amounts
advanced to or paid on your behalf by Company.
(g) Right of Offset. Company has the right to apply any amount
payable by Company to you against any debt you owe to Company
or an Affiliate
(h) You hereby agree to and authorize the assignment of any debt
you owe Company to any Affiliate. You also agree to repay any
assigned debt to the assignee.
<PAGE>
PAGE 6
(i) Commission Statements. Except for clerical error and
undisclosed material facts, the regular compensation statement
Company issues to you is considered to be an accurate and
complete record of:
(1) All the amounts Company owes you, and
(2) All accounts between you and Company purporting to be
covered by that statement.
(j) Settlement on the basis of these regular statements
constitutes full satisfaction and agreement between you and
Company about the amounts and accounts defined just above. The
only exceptions occur in the case of a claim to the contrary
made within 120 days after the statement is issued, clerical
error or undisclosed material fact.
Section VII - Charges to Manager's Account and Loss and
Limitations of Overwriting or Other Compensation
(a) Unfair Competition. You will not be entitled to receive any
overwriting, fees or other amounts you would otherwise have
been entitled to receive if you engage in "unfair competition"
while this Agreement is in effect or thereafter. For purposes
of this provision, you are considered to be engaging in unfair
competition if, without the consent of Company, you commit any
of the following acts, directly or indirectly, while a
Division Vice President for Company or within one year
thereafter in any territory where you or a Planner or a
District Manager subject to your supervision sought
applications for insurance policies or annuity contracts under
this or any other agreement with Company or an Affiliate:
(1) Offer for sale, sell or seek an offer to buy any
insurance policy or annuity contract issued by any
company to or from a Client. This provision applies to
any Client whom you contacted or dealt with or learned
about because you represented Company or an Affiliate.
(2) Try to encourage anyone to terminate an agreement with
Company or an Affiliate.
(3) Disclose any trade secret or other proprietary
information of Company or an Affiliate or use any trade
secret or other proprietary information in competition
with Company or an Affiliate.
(b) You understand and agree that information about Clients,
including Client identities, is confidential information and a
trade secret. This Client information is the sole and
exclusive property of Company and its Affiliates.
(c) Claims, Controversies and Settlements. If any of the events
listed below should occur, Company may withhold any amounts
that you are entitled to receive or may become entitled to
receive:
<PAGE>
PAGE 7
(1) Any claims of misrepresentation or of the use of unfair
or inequitable methods in the sale of any insurance
policies or annuity contracts.
(2) Your failure to send any payments you collect to Company.
(3) Any controversy between you and Company.
(4) You violate this Agreement, or
(5) You are suspended while Company investigates whether
cause for terminating this Agreement exists.
Company may withhold such amounts to the extent it believes
necessary. The withholding may continue until the violation
has been corrected or the situation has been resolved.
(d) If you are found to be guilty of wrongdoing Company may retain
or charge you for the following amounts as damages: the amount
of its loss, plus the expenses it incurred in connection with
the loss including the costs of investigation.
(e) If Company will for any reason deem it proper to rescind or
cancel a policy and return any part of a premium, no
overwriting will be payable thereon and you will repay to
Company upon demand any overwriting already paid on such
returned premium.
(f) Company or an Affiliate may make a settlement with a Client in
accordance with its business judgement and refund in whole or
in part any sum paid by such a Client. Upon the making of a
settlement or refund, whether or not a claim of
misrepresentation was made, Company shall be entitled to
charge back to you the whole or such proportionate part of the
overwriting and fees paid, credited to or retained by you.
You may not make any settlement with or refund to a Client
without the written approval of Company.
(g) Annualized Overwriting Any fees or overwriting paid or
credited to you for business accepted by Company may be
charged back to you if those amounts are due to:
(1) A dishonored check or draft; or
(2) An uncompleted plan for the systematic payment on or for
the purchase of insurance policies and annuity contracts.
Section VIII - Restrictions on Manager's Activities
(a) You will not, without the written consent of Company, use any
information you acquired while this Agreement was in force in
a manner adverse to the interests of Company or an Affiliate.
You also will not:
<PAGE>
PAGE 8
(1) Encourage or induce anyone to terminate an agreement with
Company or an Affiliate without Company's consent.
(2) Encourage or induce any annuity or policyholder to give
up a policy or contract.
(3) Promote or make unwarranted claims against Company or an
Affiliate.
All of the above provisions apply while the Agreement is in
effect and after it ends.
(b) All Records and Materials are the property of Company or an
Affiliate. All rights to Records and Materials that you
prepare or create in connection with the performance of this
Agreement are hereby assigned to Company. You agree that you
will not reproduce or allow the reproduction of the Records
and Materials in any manner whatsoever, except pursuant to
written policy or consent of Company.
(c) You are responsible for the safekeeping of these items. Such
Records and Materials are open to inspection by Company at any
time. You must deliver them and all copies of them to Company
at any time on request. When this Agreement ends, all of
these items remain Company property. You must deliver all of
them, together with any licenses you have or control, without
demand or compensation.
(d) While this Agreement is in effect and after it ends, you agree
that you will not reveal the contents of any Company property
or allow them to be revealed, except in connection with
carrying out your duties under this Agreement. You will not
reveal any names and addresses of Company Clients or any other
information about them, including financial information. You
will also not reveal any of this information about potential
Clients, to whom a presentation has been made by a Company
Planner, who might reasonably be expected to do business with
Company or an Affiliate. You will not allow any of this
information about Clients or potential Clients to be revealed.
(e) You agree that the identity of Clients and potential Clients
is confidential information. For one year after this
Agreement ends, you agree not to use any such information in
connection with any business in competition with Company or an
Affiliate.
(f) For one year after this Agreement ends, you will not directly
or indirect offer for sale, sell or seek an application for
any life insurance or disability income policy or annuity
contract issued by any company to or from a Client you
contacted, dealt with or learned about while you represented
Company or an Affiliate or because of that representation. You
are excepted from this restriction only if you carry out these
activities as a Planner or Manager of Company or with the
written consent of the Company.
<PAGE>
PAGE 9
(g) You agree that:
(1) The violation of the provisions set forth in this section
will result in damage to Company that cannot be
determined exactly and for which Company has no adequate
remedy under the law; and that
(2) Company has the specific right to enforce these
provisions; and that
(3) Company is entitled to an injunction to keep you from
violating the provisions or to enforce them.
(h) If a dispute involving this Agreement is submitted for
arbitration under the Code of Arbitration Procedure of the
National Association of Securities Dealers or otherwise, you
agree that Company is entitled to an injunction by a court of
competent jurisdiction to keep you from violating these
restrictions while the arbitration is pending
Section IX - Other Restrictions
(a) Sales Literature. You must have written approval from Company
or an Affiliate before you issue or use in any way material
about insurance policies or annuity contracts distributed by
Company or an Affiliate or about them. You will also take
steps to prevent and promptly advise Company of the u~e of
unapproved material by a Planner or District Manager in your
territory.
(b) You will not attempt to cancel or rescind any insurance policy
or annuity contract nor make any refunds to a policy or
contractholder without the written approval of Company.
Section X - Termination
(a) This Agreement terminates in the event of
(1) Your death or retirement.
(2) Your total and permanent disability. You shall be deemed
to be disabled if, by reason of a physical or mental
condition, you are unable to perform this Agreement.
Whether such disability is considered temporary or total
and permanent will be determined by Company in its sole
discretion.
(3) Cancellation or non-renewal of any license, registration
or bond you are required to have by the terms of this
Agreement.
(4) A violation of any provision of this Agreement. If you
violate any part of the Agreement, you will not be
entitled to receive any payment from Company that you
otherwise would have been entitled to receive.
<PAGE>
PAGE 10
(5) You have entered into or will enter into Division Vice
President's Agreements with one or both of the following:
a. IDS Financial services Inc (formerly IDS Marketing
Corporation).
b. IDS Insurance Agencies.
If any of the above agreements are entered into and later
terminated, this Agreement terminates on the same date,
unless Company waives the termination of this Agreement.
Duplicate notice of termination is not required.
(b) Termination by Parties. This Agreement may be terminated by
either party without cause upon 30 days' written notice to the
other party and for cause may be terminated immediately by
Company.
(c) Suspension of Rights of Manager. If Company believes it may
have the right to terminate this Agreement for cause, Company
can notify you that it is investigating whether cause for
termination exists. This suspension can be given instead of
terminating the Agreement, in order to provide time for
determining the facts. Until the notice is retracted, it has
the same effect on your rights as a notice of termination for
cause. When the investigation has been completed, if not
before, Company will notify you whether your suspension is
lifted or the Agreement is terminated for cause. If the
Agreement is terminated, the termination takes effect on the
date you received the notice of suspension.
(d) Debit Balance of Manager. When this Agreement ends, you must
pay on demand any debt you owe Company, including any amount
owed in your compensation account. Payment is required
whether the debt is for charges made before or after Agreement
termination.
Section XI - Termination Claims
If the Agreement ends, you have no claim for profits, anticipated
profits or earnings other than accrued and accruing overwriting due
you under the terms of this Agreement. You also have no claim for
a refund or reimbursement of any funds you have advanced or
expenses you have paid or incurred in connection with your
responsibilities under this Agreement or for any reason. The only
exception occurs if Company specifically authorizes reimbursement
in writing before termination of the Agreement.
Section XII - Prior Agreements
This Agreement terminates and supersedes any existing agreements
between the parties whether executed effective the same date as
this Agreement or otherwise. However, this provision does not
<PAGE>
PAGE 11
impair your right to any commissions or overwriting payable under
such an agreement for business written under that agreement or your
right to any compensation earned and unpaid under that agreement.
Section XIII - Miscellaneous
(a) This Agreement may be amended only in writing The amendment
must be signed by you and an authorized officer of Company.
(b) This Agreement is a Minnesota contract, governed by Minnesota
law. All of the payment you make to Company are payable in
Hennepin County, Minnesota. You expressly waive any
privileges contrary to this provision. You agree to the
jurisdiction of State of Minnesota courts for determining any
controversy in connection with this Agreement.
(c) If Company waives any provision of this Agreement, the waiver
applies only to that provision, not to any other parts of the
Agreement. A waiver is effective only when it is in writing
and signed by an authorized Company officer.
(d) If the laws of any state prohibit any provision of this
Agreement, the laws apply to only that provision. They do not
invalidate the remaining portion of the Agreement.
(e) Any notice to be given to Company under this Agreement shall
be given to the home office of Company in Minneapolis,
Minnesota. Any notice given to you under this Agreement is
considered to have been given if it is delivered to you in
person or mailed to your last known address on file with the
Company home office in Minneapolis.
(f) You and Company both acknowledge that no oral or written
representations were made about this Agreement or about the
relationship between you and Company that are not set forth in
this Agreement. Your rights and Company's rights are governed
only by this Agreement and by any other subsequent written
agreements or riders entered into between you and Company that
are signed by an authorized officer of the Company.
(g) You hereby authorize Company to utilize the cumulative method
of federal income tax withholding as long as you are an
employee of Company.
(h) "Compliance with Law"
(1) You represent and warrant that:
(a) You will comply with all the laws and regulations
applicable to your activities under this Agreement.
(b) In carrying out your responsibilities under this
Agreement, you will not directly or indirectly make
or promise any illegal payments or engage in any
illegal conduct in order to:
<PAGE>
PAGE 12
(i) Obtain or keep business.
(ii) Influence Clients or governmental entities
(including their officers or employees) to
perform their official function improperly, not
perform that function at all, or influence
legislation.
(2) Company may believe that it should disclose the existence
of this Agreement and its terms and conditions if a
governmental authority or agency should make a proper
inquiry or in other situations. You authorize any
disclosure Company may make in its discretion.
(i) "Greater Force"
(1) If an act or condition beyond your or Company's
reasonable control prevents, restricts or interferes with
fulfilling the terms of this Agreement, the obligation to
fulfill the Agreement will be suspended to the extent
appropriate. State or government action and national
disaster are examples of acts or conditions beyond
reasonable control.
(2) For suspensions of the Agreement to occur, the party
affected must:
(a) Notify the other party promptly about the act or
condition and its effect.
(b) Make its best effort to avoid or remove the cause of
the suspension.
(c) Promptly continue fulfilling the terms of the
Agreement when the cause of the suspension is
removed.
Section XIV - Nonassignable
You may not assign this Agreement or any payment or benefit you
become entitled to receive under it without Company's written
consent.
Section XV - Effective Date
In witness of the provisions of this Agreement as described above,
you and Company have entered into this Agreement with the
understanding that it becomes effective on ______________, 19__.
IDS Life Insurance Company
_________________________ By __________________________
Division Vice President Assistant Secretary
<PAGE>
PAGE 13
DO Number __________________________
Planner Number _________________________
(To be executed in duplicate - one copy to be returned to Division
Vice President.)<PAGE>
<PAGE>
PAGE 1
District Manager's Rider To
IDS Life Insurance Company
Personal Financial Planner's Agreement
This agreement, made at Minneapolis, Minnesota, by and between IDS
Life Insurance Company and you,
_____________________________
Print Full Name)
is a Rider to the Personal Financial Planner's Agreement between
you and IDS Life. That Planners Agreement with any other Riders to
it, as modified by this Rider, continues in full force and effect.
This Rider takes effect on the date shown in Section VII.
As parties to this Rider, you and IDS Life agree as follows:
Section I - Appointment
1. IDS Life appoints you, as an independent contractor, to act as
a District Manager in the territory assigned to you from time
to time, in connection with the sale and servicing of
insurance policies and annuity contracts offered or
distributed by IDS Life, and the servicing of IDS Life
Clients.
Section II - Business Activities
1. In addition to your duties under your Planners Agreement with
IDS Life, you must devote your best efforts to recruiting,
establishing, training, maintaining and assisting a unit of
Planners operating under agreements with IDS Life and,
consistent with the independent contractor status of any such
Planners and your independent contractor status, to supervise
their business activities to assure that they have complied
with the laws, rules and regulations applicable to the sale or
offering of Products or Services by or through IDS Life,
including but not limited to the rules and regulations of the
National Association of Securities Dealers and IDS Life rules
designed to assure such compliance.
Section III - Your Status
1. You are an independent contractor, not an IDS Life employee.
Nothing in this Rider can be interpreted as creating an
employer-employee relationship between you and IDS Life or
between you and any Planner. In addition, nothing in the
Rider can be interpreted as creating an agency relationship
between you and any IDS Life Planner.
2. Your undertakings outlined in this section are in addition to
your undertakings and obligations outlined in the Planners
Agreement between you and IDS Life.
<PAGE>
PAGE 2
3. (a) If IDS Life is unable to obtain repayment of the items in
(1) and (2) below from a Planner assigned to your
district who terminates, you are responsible for a
proportionate share of that item as set forth in the
Sales Compensation Plan.
(1) Any debit balance of that Planner.
(2) Any advance or loan made to that Planner with your
approval.
(b) You are responsible for a share, as set forth in the
Sales Compensation Plan, of the following Training Period
expenses with respect to any IDS Life Planner assigned to
your district:
(1) Any salary, including salary as a temporary
employee.
(2) Any other recruiting or training expenses.
4. You must take steps to prevent any activity or practice on the
part of a Planner that is in violation of that Planners
Agreement with IDS Life or with IDS Life's rules, policies or
procedures. You also must promptly notify IDS Life about any
such activity or practice.
5. You assume these responsibilities in consideration for your
receiving overwriting on Planners assigned to you.
6. If, on the effective date of this Rider, you are in your
Training Period, your Training Period is ended and you are an
independent contractor as a Planner and a District Manager.
Section IV - Overwriting
1. You will receive overwriting in accordance with the Sales
Compensation Plan and your Planners Agreement, as modified by
this and any other Riders, on the sale of an insurance policy
or annuity contract by a Planner to a person whose current
address is in your open territory if the Planner is assigned
to your district and is entitled to a commission, fee or
production credit on that sale. Your open territory is your
territory and any other territory that IDS Life opens from
time to time to the Planners assigned to your district.
Overwriting commissions, service fees and assignment fees paid
under this Rider and your Planners Agreement with IDS Life and
any other Riders thereto constitute full payment for all
services rendered to IDS Life and are subject to all
provisions of your Planners Agreement as so modified.
2. You are not entitled to receive overwriting on business sold
during any time for which you:
(a) Received benefits under IDS Life's Disability Income
Insurance Plan, or
<PAGE>
PAGE 3
(b) Would have received benefits if you had been covered by
the Plan.
IDS Life will determine whether your disability is temporary
or total and permanent based on proof submitted.
Section V - Termination
1. Either you or IDS Life may terminate this Rider without cause,
with 15 days' written notice. For cause, IDS Life may
terminate the Rider immediately without written notice This
Rider also terminates if you violate any of its provisions and
is subject to the suspension and termination provisions of
Paragraph 3 of Section VI of your Planners Agreement.
2. If your Planners Agreement is suspended or terminated, this
Rider is suspended or terminated on the same date.
3. You have entered into District Managers Riders to Personal
Financial Planners Agreements you have with one or both of the
following:
(a) IDS Financial Services Inc.
(b) IDS Insurance Agencies.
If any such Rider is terminated, this Rider terminates as of
the same date. Duplicate notice of termination is not
required.
4. IDS Life may ask you to refrain from or limit your selling
activities as a Personal Financial Planner and to devote all
or most of your efforts to your duties under this Rider. If
you refuse to comply with any such request, IDS Life may
terminate this Rider.
Section VI - Nonassignability
1. Without IDS Life's written consent, you may not assign this
Rider or any payment or benefit you may become entitled to
receive under the Rider.
Section VII - Effective Date
1. In witness of the provisions of this Rider as described above,
you and IDS Life have entered into this Rider with the
understanding that it becomes effective on
____________________, 19__.
IDS Life Insurance Company
_________________________ By __________________________
District Manager Assistant Secretary
<PAGE>
PAGE 4
D.O. Number _____________________
Planner Number __________________
(To be executed in duplicate - one copy to be returned to District
Manager.)
<PAGE>
<PAGE>
PAGE 1
IDS Life Insurance Company
Personal Financial Planner's Agreement
This is an agreement, made at Minneapolis, Minnesota, by and
between IDS Life Insurance Company and you,
_________________________________
(Print Full Name)
executed and effective as of the date shown on the last line of
this Agreement. It defines your relationship with IDS Life as a
Personal Financial Planner. Both you and IDS Life promise to comply
with the terms of this Agreement and any properly executed Riders
to this Agreement.
Section I - Definitions
1. For purposes of this Agreement, the terms listed below have
the special meanings shown.
(a) "IDS Life" means IDS Life Insurance Company.
(b) "IDS NY" means IDS Life Insurance Company of New York}.
(c) "Affiliate" means any partnership, business, trust,
company or corporation affiliated with IDS Life at any
time while this Agreement is in effect.
(d) "Personal Financial Planner or Planners" means Personal
Financial Planner and Sales Representative
(e) "Service Date" is _____________________________
(f) "Services" means financial planning, advisory, securities
brokerage, tax or other financial Services
(g) "Products" means certificates stock, other securities or
investments, lending products, life insurance and annuity
policies and contracts, and other insurance products
(h) "Records and Materials" means any records, files,
manuals, blank forms, materials, supplies, stationery,
literature, seminar materials, computer software,
licenses, papers and books that IDS Life or an Affiliate
furnishes or leases to you for use, with or without
charge, or that you create or prepare, including notes,
memos and works of authorship, in connection with the
performance of this Agreement.
(i) "Service Period" means any two week period coinciding
with IDS Life's regular biweekly commission period for
Personal Financial Planners.
(j) "Training Period" means the time while you are being
trained by IDS Life. It begins on your Service Date.
Unless IDS Life extends your Training Period, it ends
<PAGE>
PAGE 2
after completion of the 26th Service Period following
your Service Date - or at the termination of this
Agreement, if that occurs first. IDS Life may disregard
any time that you are disabled in determining the end of
your Training Period.
(k) "Sales Compensation Plan" means the rules, policies and
schedules as amended and published from time to time that
are related to items (1), (2) and (3) below and to other
matters.
(1) The assignment or reassignment of territory or
Client accounts;
(2) The payment of commissions, assignment fees, service
fees, Training Period salaries and expense
allowances, and other fees or compensation; and
(3) The imposition of assignment fee and service fee
penalties and charge backs.
(l) "Basic Earnings Requirements" means any requirements you
must meet to remain on salary during the Training Period,
as they appear in the sales Compensation Plan.
(m) "Client" means a person or entity who (1) purchases or
holds a Product or Service acquired from or through IDS
Life or an Affiliate or one of their Planners with the
consent of IDS Life or the Affiliate, or (2) authorized
IDS Life, an Affiliate or one of their Planners to make
personal financial planning presentations to it or its
employees or members or (3) is a member of a Client's
household.
Section IIA - Appointment
1. Through this Agreement, IDS Life appoints you to seek
applications for insurance and annuity policies offered by IDS
Life in the territory assigned to you, but without exclusive
right in that territory. You also are appointed to collect
payments on those policies and annuities. You accept this
appointment and will:
(a) Before seeking any applications, obtain any licenses or
registrations required by law or IDS Life and a surety or
fidelity bond satisfactory to IDS Life and maintain them
in force until this Agreement is terminated.
(b) In dealing with Clients or prospective Client, fully
explain the terms of any insurance policy or annuity
contract; make no untrue statements; and state all
relevant facts.
(c) Comply with all laws, ordinances, regulations and company
policies that apply to your activities under the
Agreement.
<PAGE>
PAGE 3
(d) Promptly deliver premium receipts and policies or
contracts originating from applications solicited for
life insurance and annuities, but only when the applicant
appears to be in good health and the initial premium (if
required) has been duly paid, and other receipts and
policies or contracts as required by IDS Life.
(e) Collect and immediately report and remit to IDS Life any
initial premiums or any payments you receive for
applications you obtain and any other money or property
you receive on behalf of IDS Life.
(f) Send the payments, money or property you collect to IDS
Life without commingling it with your own money or
property.
(g) Pay all expenses and fees you incur while carrying out
the terms of this Agreement.
2. You cannot alter or change the provisions of any insurance
policy or annuity contract distributed by IDS Life. You also
cannot incur any liability or expense on behalf of IDS Life.
3. Any application that you submit is subject to acceptance or
rejection by the home office of IDS Life in Minneapolis,
Minnesota.
Section IIB - Employee Status During Training Period
1. During your Training Period, you are an employee of IDS Life.
You agree to devote all of your working time and effort, to
the best of your abilities, to performing your duties under
this Agreement for IDS Life and any agreement with an
Affiliate. You also agree not to engage in any other
employment, occupation or business enterprise unless it is
with an Affiliate.
2. As long as your Training Period continues, you will carry out
your duties and responsibilities in line with instructions and
directions from IDS Life. You will be required to:
(a) Attend any training school, weekly training classes and
sales meetings at the time and places set by IDS Life;
and complete the training courses IDS Life designates.
(b) File daily work plans, weekly activity reports and any
other reports IDS Life designates.
(c) Perform any other duties IDS Life assigns.
3. As long as you are an IDS Life employee during the Training
Period, you authorize IDS Life to use the cumulative method of
federal income tax withholding. This provision also applies
during any time you provide other occasional services as an
employee of IDS Life.
<PAGE>
PAGE 4
Section IIC - Independent Contact After Training Period
1. When your Training Period ends, you are no longer an employee
and unless this Agreement has already been terminated, you are
engaged by IDS Life as an independent contractor to seek
applications for insurance and annuity policies offered by IDS
Life in the territory assigned to you without exclusive right
therein.
2. From time to time, IDS Life may ask you to perform other
special services as an independent contractor. You will be
paid for those special services in accordance with the rules
and policies that IDS Life establishes periodically.
3. After the Training Period ends, you are an independent
contractor, rather than an employee, for all purposes,
including but not limited to state or federal income tax,
Social Security, worker's compensation, unemployment
compensation or similar laws.
4. You must not take any position that is contrary to your status
as an independent contractor. Nothing in this Agreement can be
interpreted as creating an employer-employee relationship
between any IDS Life representative and you or, except as
provided in Sections IIB and IID, between IDS Life and you.
You agree to accept any responsibilities placed on an
independent contractor by any statute, regulation, rule of
law, or otherwise.
5. You decide whom to choose as business prospects and when and
where to conduct your working activities. You acknowledge
that you set your business hours.
6. As an independent contractor, you are responsible for paying
all taxes, duties, assessments and other government charges
that are related to items (a) and (b) below. This provision
applies to taxes, duties, assessments and other government
charges imposed now or in the future by any government
authority or agency.
(a) Carrying out your obligations under this Agreement; or
(b) Any payment IDS Life makes to you in connection with this
Agreement.
Section IID - Additional Services as an Employee
1. From time to time, IDS Life may employ you for occasional
services as an employee. These services must be carried out
at the times and places IDS Life designates, under IDS Life
direction and control. You will be paid for your services as
an employee in line with the terms of the Sales Compensation
Plan.
<PAGE>
PAGE 5
Section III - Compensation
1. "Salary"
(a) During that part of the Training Period beginning on or
after the effective date of this Agreement, you will be
paid a biweekly salary and expense allowance and other
compensation, if any, in line with this Agreement and the
Sales Compensation Plan. Payment is made at the end of
each Service Period, unless the Basic Earnings
Requirements set forth in the Sales Compensation Plan
apply to you, and your salary is discontinued because
your performance falls below the Basic Earnings
Requirements. If you are paid for less than a full
Service Period, your salary and expense allowance will be
prorated.
2. "Commissions and Fees"
(a) After the Training Period ends, IDS Life will pay you
commissions, fees and overwriting in accordance with the
provisions of this Agreement, any Riders to this
Agreement and the Sales Compensation Plan. Except as
otherwise provided by the Sales Compensation Plan or
Riders to this Agreement, no commissions or fees are
paid, during or after the Training Period, for any
applications or business obtained by you if:
(1) You obtain it outside the territory assigned to you;
or
(2) The Client's account is assigned to some other
Personal Financial Planner of IDS Life or of an
Affiliate.
(b) Any commissions, fees or overwriting paid or credited to
you for business accepted by IDS Life may be charged back
to you if those commissions are due to:
(1) A dishonored check or draft; or
(2) An uncompleted plan for the systematic payment on or
for the purchase of insurance policies or annuity
contracts.
(c) When this Agreement terminates you will not, except as
provided by the Sales Compensation Plan, be entitled to:
(1) Any commissions, fees or overwriting on payments
made after the termination for any insurance policy
or annuity contract; or
(2) Any further commissions, fees, overwriting or other
compensation.
<PAGE>
PAGE 6
4. "Charges and Payment"
(a) If IDS Life believes it is appropriate to make an
adjustment or take back or cancel a policy or contract
and return any part of a payment or premium, no
commission, fee or overwriting will be paid on the
payment or premium returned on that policy or contract.
You will be required, on demand, to repay IDS Life for
any commission, fee or overwriting already paid on the
payment or premium returned.
(b) Based on its business judgment, IDS Life may make a
settlement with a Client on a sale you have made and
refund all or any part of any payment that a Client has
made. When the settlement or refund is made, IDS Life is
entitled to charge you for items (1) and (2) below. IDS
Life may make the charge whether or not the Client claims
misrepresentation.
(1) All or any part of its loss because of the
settlement or refund; and
(2) Any part of a related commission, fee or other
amount paid or credited to you or that you have
obtained.
(c) If any of the events listed below should occur, IDS Life
may withhold any amount that you are entitled to receive
or may become entitled to receive:
(1) Any claims of misrepresentation or of the use of
unfair or inequitable methods in the sale of any
insurance policy or annuity contract.
(2) Your failure to send any payments you collect to IDS
Life.
(3) Any controversy between you and IDS Life.
(4) You violate this Agreement, or
(5) Your suspension while IDS Life investigates whether
cause for terminating this Agreement exists.
IDS Life may withhold such amounts to the extent it
believes necessary. The withholding may continue
until the violation has been corrected or the
situation has been resolved.
(d) If you are found to be guilty of wrongdoing, IDS Life may
retain or charge you for the following amounts as
damages: the amount of its loss, plus the expenses it
incurred in connection with the loss, including the costs
of investigation.
<PAGE>
PAGE 7
(e) You will not be entitled to receive any commissions,
assignment fees or other amounts you would otherwise have
been entitled to receive if you engage in "unfair
competition" while this Agreement is in effect or
thereafter. For purposes of this provision, you are
considered to be engaging in unfair competition if,
without the consent of IDS Life, you commit any of the
following acts, directly or indirectly, while an IDS Life
Planner or within one year thereafter in any territory
where you sought applications for insurance policies or
annuity contracts under this or any other agreement with
IDS Life or an Affiliate:
(1) Offer for sale, sell or seek an offer to buy any
insurance policy or annuity contract issued by any
company to or from a Client. This provision applies
to any Client that you contacted or dealt with or
learned about because you represented IDS Life or an
Affiliate.
(2) Try to encourage anyone to terminate an agreement
with IDS Life or an Affiliate.
(3) Disclose any trade secret or other proprietary
information of IDS Life or an Affiliate or use any
trade secret or other proprietary information in
competition with IDS Life or an Affiliate
(f) You understand and agree that information about Clients,
including Client identities, is confidential information
and a trade secret. This Client information is the sole
and exclusive property of IDS Life and its Affiliates.
(g) In addition to other appropriate legal remedies, IDS Life
has the right to apply any amount payable to you by IDS
Life against any debt you owe IDS Life or an Affiliate.
(h) IDS Life may charge you and your compensation and
commission account for any amounts advanced to you, any
amounts paid on your behalf or any amounts charged to you
under this Agreement.
(i) When this Agreement ends, you must pay, on demand, any
debt you owe IDS Life, including any amount owed in your
compensation or commission account. Payment is required
whether the debt is for charges made before or after
Agreement termination.
5. "Assignment of Debt"
(a) You agree to and authorize the assignment of any debt you
owe IDS Life to any Affiliate. You Also agree to repay
any assigned debt to the assignee.
<PAGE>
PAGE 8
6. "Commission Statements"
(a) Except for clerical error and undisclosed material facts,
the regular compensation or commission statement IDS Life
issues to you is considered to be an accurate and
complete record of:
(1) All the amounts IDS Life owes you, and
(2) All accounts between you and IDS Life purporting to
be covered by that statement.
(b) Settlement on the basis of these regular statements
constitutes full satisfaction and agreement between you
and IDS Life about the amounts and accounts defined just
above. The only exceptions occur in the case of a claim
to the contrary made within 120 days after the statement
is issued, clerical error or undisclosed material fact.
Section IV - Restrictions on Your activities
1. "Using Information You Acquire"
(a) You must not, without the written consent of IDS Life use
any information you acquired while this Agreement was in
force in a manner adverse to the interests of IDS Life or
an Affiliate. You also must not:
(1) Encourage or induce anyone to terminate an agreement
with IDS Life without IDS Life's consent;
(2) Encourage or induce any annuity or policy holder to
give up a policy or contract;
(3) Promote or make unwarranted claims against IDS Life.
(b) All of the above provisions apply while the Agreement is
in effect and after it ends
(c) All Records and Materials are the property of IDS Life,
an Affiliate or one of their associated companies. All
rights to Records and Materials that you prepare or
create in connection with the performance of this
Agreement are hereby assigned to IDS Life. You agree that
you will not reproduce or allow the reproduction of the
Records and Materials in any manner whatsoever, except
pursuant to written policy or consent of IDS Life.
(d) You re responsible for the safekeeping of these items.
Such Records and Materials are open to inspection by IDS
Life at any time during your normal business hours. You
must return them and all copies of them to IDS Life at
any time on request. When this agreement ends, all
<PAGE>
PAGE 9
of these items remain IDS Life property. You must return
all of them, together with any licenses you have or
control, without demand or compensation.
(e) While this Agreement is in effect and after it ends, you
agree that you will not reveal the contents of any IDS
Life property or allow them to be revealed, except in
connection with carrying out your duties under the
Agreement. You will not reveal the names and addresses of
IDS Life Clients or any other information about them,
including financial information. You also will not reveal
any of this information about potential Clients, to whom
a presentation has been made by an IDS Life Planner, who
might reasonably be expected to do business with IDS Life
or an Affiliate. You will not allow any of this
information about Clients or potential Clients to be
revealed.
(f) You agree that the identity of Clients and potential
Clients is confidential information. For one year after
this Agreement ends, you agree not to use any such
information in connection with any business in
competition with IDS Life or an Affiliate.
(g) For one year after this Agreement ends, you agree that
you will not, in the territory where you sought
applications for Products or Services under this or any
other agreement with IDS Life or an Affiliate, directly
or indirectly offer for sale, sell or seek an application
for any Product or Service issued or provided by any
company to or from a Client you contacted, dealt with or
learned about while you represented IDS Life or an
Affiliate or because of that representation. You are
excepted from this restriction only if you carry out
these activities as a Planner or manager of IDS Life or
with the written consent of IDS Life.
2. "Using the IDS Life Name and Logo"
(a) As long as this Agreement is in effect, you have a
limited license to use the IDS Life name and logo in
advertising and in telephone directories or listings to
indicate your association with IDS Life as a Personal
Financial Planner. You must use the name or logo in line
with IDS Life rules and policies. IDS Life is not
obligated for any costs connected with your use of the
name or logo.
(b) When this Agreement ends, IDS Life has the exclusive
right either to use or cancel the service of any such
telephone number listed or to become listed in any
directory or in any advertising that would associate the
telephone number with IDS Life. You are responsible for
executing and delivering to IDS Life the documents needed
to transfer or cancel the service, without demand and
without compensation.
<PAGE>
PAGE 10
3. "Violation of These Restrictions"
(a) You agree that:
(1) The violation of the provisions in this section will
result in damage to IDS Life that cannot be
determined exactly and for which mm Life has no
adequate remedy under the law; and that
(2) IDS Life has the specific right to enforce these
provisions; and that
(3) IDS Life is entitled to an injunction to keep you
from violating the provisions or to enforce them.
(b) If a dispute involving this Agreement is submitted for
arbitration under the Code of Arbitration Procedure of
the National Association of Securities Dealers or
otherwise, you agree that IDS Life is entitled to an
injunction from a court of competent jurisdiction to keep
you from violating these restrictions while the
arbitration is pending.
Section V - Other Restrictions
l. You must have written approval from IDS Life or an Affiliate
before you issue or use in any way any material about Products
and Services distributed by IDS Life or an Affiliate, or about
them.
2. As noted earlier, you must not interview business prospects;
seek business; act as an insurance agent; or negotiate, obtain
or seek business or applications until you have the licenses,
registrations and agent appointments required by law or IDS
Life and have obtained a surety or fidelity bond satisfactory
to IDS Life.
3. Without written approval from IDS Life, you must not:
(a) Try to cancel or rescind any IDS Life insurance policy or
annuity contract;
(b) Make any settlement with a Client; or
(c) Make any refund to a Client.
4. You must not do anything to damage the goodwill of md Life or
an Affiliate.
Section VI - Termination
1. During the Training Period, either you or IDS Life may
terminate this Agreement without cause, with written notice.
The termination takes effect on the date specified in the
notice. For cause, IDS Life may terminate the Agreement
immediately without written notice.
<PAGE>
PAGE 11
2. After the Training Period ends, the Agreement may be
terminated without cause with 15 days' written notice. For
cause, it may be terminated immediately without written
notice.
3. If IDS Life believes it may have the right to terminate this
Agreement for cause, IDS Life can notify you that it is
investigating whether cause for termination exists. This
suspension can be given instead of terminating the Agreement,
in order to provide time for determining the facts. Until the
notice is retracted, it has the same effect on your rights as
a notice of termination for cause. When the investigation has
been completed, if not before, IDS Life will notify you
whether your suspension is lifted or the Agreement is
terminated for cause. If the Agreement is terminated, the
termination takes effect on the date you received the notice
of suspension.
4. If the Basic Earnings Requirements imposed by the Sales
Compensation Plan during the Training Period apply to you, the
Agreement will end if you do not meet the Basic Earnings
Requirements for a period of time during the Training Period
as established by the Sales Compensation Plan.
5. This Agreement terminates in the event of:
(a) Your death or retirement.
(b) Your total and permanent disability. You shall be
considered disabled if, by reason of a physical or mental
condition, you are unable to perform this Agreement.
Whether such disability is considered temporary or total
and permanent will be determined by IDS Life in its sole
discretion.
(c) Cancellation or non-renewal of any license, registration
or bond you are required to have by the terms of this
Agreement.
(d) A violation of any provision of this Agreement. If you
violate any part of the Agreement, you will not be
entitled to receive any payment from IDS Life that you
otherwise would have been entitled to receive.
(e) You have entered into or will enter into Planner's
Agreements with some or all of the following:
(1) IDS Financial Services Inc. (formerly IDS Marketing
Corporation)
(2) IDS Life Insurance Company of New York.
(3) IDS Insurance Agencies
<PAGE>
PAGE 12
If any of the above agreements are entered into and later
terminated, this Agreement terminates on the same date
unless IDS Life waives the termination of this Agreement.
Duplicate notice of termination is not required.
6. If the Agreement ends, you have no claim for profits,
anticipated profits or earnings other than the commissions,
fees or overwriting that you are entitled to receive under the
terms of this Agreement. You also have no claim for a refund
or reimbursement of any funds you have advanced or expenses
you have paid or incurred in connection with your
responsibilities under this Agreement or for any other reason.
The only exception occurs. if IDS Life specifically
authorizes reimbursement, in writing, before termination of
the Agreement.
Section VII - Amendment and Miscellaneous Provisions.
1. This Agreement may be amended only in writing. The amendment
must be signed by you and an authorized officer of IDS Life.
This Agreement terminates and supersedes any agreement between
the parties which was in effect immediately prior to the
effective date of this Agreement. However, this provision does
not impair your right to any commissions or overwriting
payable under such an agreement for business written under
that agreement or your right to any compensation earned and
unpaid under that agreement. You may not assign this Agreement
or any payment or benefit you become entitled to receive under
it without IDS Life's written consent.
2. This Agreement is a Minnesota contract, governed by Minnesota
law. All of the payments you make to IDS Life are payable in
Hennepin County, Minnesota. You expressly waive any privileges
contrary to this provision. You agree to the jurisdiction of
State of Minnesota courts for determining any controversy in
connection with this Agreement.
3. If IDS Life waives any provision of this Agreement, the waiver
applies only to that provision, not to any other parts of the
Agreement. A waiver is effective only when it is in writing
and signed by an authorized IDS Life officer.
4. If the laws of any state prohibit any provision of this
Agreement, the laws apply only to that provision. They do not
invalidate the remaining portion of the Agreement.
5. Any notice to IDS Life under this Agreement must be given to
the home office of IDS Life in Minneapolis, Minnesota. Any
notice given to you under this Agreement is considered to have
been given if it is delivered to you in person or mailed to
your last known address on file with the IDS Life home office
in Minneapolis.
6. You and IDS Life both acknowledge that no oral or written
representations were made about this Agreement or about the
relationship between you and IDS Life that are not set forth
<PAGE>
PAGE 13
in this Agreement. Your rights and IDS Life's rights are
governed only by this Agreement and by any other subsequent
written agreements between you and IDS Life that are signed by
an authorized officer of IDS Life.
7. "Compliance with Law"
(a) You represent and warrant that:
(1) You will comply with all the laws and regulations of
the territory assigned to you.
(2) In carrying out your responsibilities under this
Agreement, you will not directly or indirectly make
or promise any illegal payments or engage in any
illegal conduct in order to:
a. Obtain or keep business.
b. Influence Clients or governmental entities
(including their officers or employees) to
perform their official function improperly, not
perform that function all, or influence
legislation.
(b) IDS Life may believe that it should disclose the
existence of this Agreement and its terms and conditions
if a governmental authority or agency should make a
proper inquiry or in other situations. You authorize any
disclosure IDS Life may make in its discretion.
8. "Greater Force"
(a) If an act or condition beyond your or IDS Life's
reasonable control prevents, restricts or interferes with
fulfilling the terms of this Agreement, the obligation
to fulfill the Agreement will be suspended to the extent
appropriate. State or government action and national
disasters are examples of acts or conditions beyond
reasonable control.
(b) For suspension of the Agreement to occur, the party
affected must:
(1) Notify the other party promptly about the act or
condition and its effect.
(2) Make its best effort to avoid or remove the cause of
the suspension.
(3) Promptly continue fulfilling the terms of the
Agreement when the cause of the suspension is
removed.
<PAGE>
PAGE 14
In witness of the provisions of this Agreement as described above,
you and IDS Life have entered into this Agreement with the
understanding that it becomes effective on _______________, 19__
IDS Life Insurance Company
________________________ By _______________________
Planner Assistant Secretary
D.O. Number _______________________
Planner Number ____________________
(To be executed in duplicate - one copy to be returned to Planner.)
<PAGE>
<PAGE>
PAGE 1
CERTIFICATE OF INCORPORATION
OF
IDS LIFE INSURANCE COMPANY
We, the undersigned, for the purpose of forming an insurance
corporation under and pursuant to the provisions of the Minnesota
Statutes, Chapter 300 relating thereto, and of any amendments
thereof, do hereby associate ourselves as a body corporate and do
hereby adopt the following Articles of Incorporation:
ARTICLE I
The name of this Corporation shall be IDS Life Insurance
Company.
ARTICLE II
The purposes of and general nature of its business shall be:
(a) To engage in the general business of a life insurance
company, and to effect all forms, types, variations and
combinations of life insurance, endowment or annuity
contracts or policies, on a group or individual basis,
for the payment of money in a single sum or in
installments upon the contingencies of death, disability
or survivorship. To provide in such policies or
contracts supplemental thereto, for additional benefits
in the event of the death of the insured by accidental
means, total and permenent [sic] disability of the
insured, or specific dismemberment or disablement
suffered by the insured.
(b) To engage in the general business of an accident and
health insurance company, for the purpose of effecting
insurance against loss or damage by the sickness, bodily
injury or death by accident of the assured or his
dependents, on a group or individual basis; to effect all
forms, types, variations and combinations of policies or
contracts of insurance providing for indemnities in the
event of death, sickness or disability.
(c) To effect contracts of reinsurance or co-insurance of any
individual or group risk underwritten by this
Corporation, to reinsure risks of this Corporation or any
part thereof with any other company or to reinsure the
whole of or any portion of the risks of any other
company.
(d) To effect all other contracts of insurance authorized by
clauses (4) and (5)(a) of subdivision 1 of Section 60.29
of Minnesota Statutes.
(e) To have one or more offices and to conduct business in
this state or elsewhere.
<PAGE>
PAGE 2
(f) To acquire, hold and dispose of shares of stock, notes,
bonds or other evidences of indebtedness or securities of
any other corporation or corporations.
(g) To transact all business and to do all other things
necessary or incidental to the foregoing purposes.
ARTICLE III
The duration of this Corporation shall be perpetual.
ARTICLE IV
The principal place of transacting the business of this
Corporation shall be the City of Minneapolis, State of Minnesota.
ARTICLE V
2/9/72
10/18/85
The capital stock of this Corporation shall consist of One
Hundred Thousand (100,000) shares of stock with a par value of
Thirty Dollars ($30.00) per share. The amount of stated capital of
this Corporation shall be Three Million Dollars ($3,000,000).
ARTICLE VI
(1) The general management of this Corporation shall be
vested in a Board of Directors.
(2) The names and post office addresses of the members of the
first Board of Directors are respectively as follows:
Joseph M. Fitzsimmons 800 Investors Building
Minneapolis 2, Minnesota
John W. McCartin 800 Investors Building
Minneapolis 2, Minnesota
Virgil C. Sullivan 800 Investors Building
Minneapolis 2, Minnesota
A. Edward Archibald 800 Investors Building
Minneapolis 2, Minnesota
Harold E. Miller, M.D. 1531 Medical Arts Building
Minneapolis 2, Minnesota
Said named Directors shall serve as such until the first
annual meeting of the shareholders of the Corporation and until
their successors have been duly elected and qualified.
ARTICLE VII
The first Board of Directors of this Corporation shall have
full power and authority to make and adopt By-Laws for the
government of this Corporation and its affairs as they may deem
advisable or necessary and as shall not be inconsistent with the <PAGE>
PAGE 3
provisions of these Articles. The By-Laws may be amended or
altered by the shareholders at any regular or special meeting
called therefor.
ARTICLE VIII
These Articles of Incorporation may be amended by the
affirmative vote of the holders of a majority of the voting power
of the capital stock.
ARTICLE IX
The first meeting of the Corporation shall be a meeting of the
Incorporators and Subscribers to the capital stock of the
Corporation. Three days' written notice of such meeting shall be
given unless there is a written Waiver of Notice.
ARTICLE X
The names and post office addresses of the Incorporators are
as follows:
Lloyd J. Muehlberg 800 Investors Building
Minneapolis 2, Minnesota
Joseph F. Grinnell 800 Investors Building
Minneapolis 2, Minnesota
Edward M. Burke 800 Investors Building
Minneapolis 2, Minnesota
IN TESTIMONY WHEREOF we have set our hands this 23rd day of July,
1957.
IN PRESENCE OF: Lloyd J. Muehlberg
M. Gould Joseph F. Grinnell
D. Fairchild Edward M. Burke
State of Minnesota )
) SS.
County of Hennepin )
On this 23rd day of July, 1957, before me, a Notary Public,
personally appeared Lloyd J. Muehlberg, Joseph F. Grinnell, and
Edward M. Burke, to me known to be the persons named in and who
executed the foregoing instrument, and they acknowledged to me that
they executed the same as their free act and deed and for the uses
and purposes therein expressed.
(Notarial seal) Helen M. Bochnak
Helen M. Bochnak
Notary Public, Hennepin County, Minn.
My Commission Expired Nov. 12, 1958
<PAGE>
PAGE 4
APPROVAL OF COMMISSIONER OF INSURANCE
The foregoing Certificate of Incorporation of Investors
Syndicate Life Insurance and Annuity Company is hereby approved
this 24th day of July, 1957.
Cyril C. Sheehan
Commissioner of Insurance
State of Minnesota
J.O.M.
<PAGE>
<PAGE>
PAGE 1
AMENDED BY-LAWS OF IDS LIFE INSURANCE COMPANY
ARTICLE I
OFFICES
Section 1. The principal place of transacting the business of
this Corporation shall be in the City of Minneapolis, State of
Minnesota.
Section 2. The Corporation may also have offices at such
other places, within or without the State, as the Board of
Directors may from time to time determine or the business of the
Corporation may require.
ARTICLE II
STOCKHOLDERS' MEETINGS
Section 1. All meetings of stockholders for the election of
Directors shall be held at the principal office of the Corporation
in the City of Minneapolis, Minnesota. Meetings of stockholders
for any other purpose may be held at such place, within or without
the State of Minnesota, and at such time as may be designated in
the call and notice thereof.
Section 2. The annual meeting of stockholders for the
election of Directors and the transaction of such other business as
may properly come before the meeting shall be held on the Wednesday
following the first Tuesday on or after the nineteenth day of April
in each year, at 10:30 o'clock A.M. Election of Directors shall be
by plurality vote.
Section 3. In the event the stockholders shall fail to hold
an annual meeting at the time specified therefor in Section 2 of
this Article, or the Directors are not elected thereat, Directors
may be elected at a special meeting held for that purpose upon call
and notice as hereinafter provided for a special meeting of
stockholders.
Section 4. Special meetings of stockholders may be called for
any purpose or purposes at any time by the President, the
Secretary, the Board of Directors, any two or more members of the
Board of Directors or in the manner hereinafter provided by one or
more stockholders holding not less than one-tenth of the issued and
outstanding stock entitled to vote. Upon request in writing by
registered mail or delivered in person to the President, any Vice
President, or Secretary, by any person or persons entitled to call
a meeting of stockholders, such officer shall forthwith cause
notice to be given to the stockholders entitled to vote at a
special meeting of stockholders to be held at such time and place
as such officer shall fix, not less than ten pr more than sixty
days after the receipt of such request. Any such request shall
state the purpose or purposes of the proposed meeting.
<PAGE>
PAGE 2
Section 5. Written notice of each meeting of stockholders,
stating the time and place, and in case of a special meeting the
purpose thereof, shall be served upon or mailed to each stockholder
of record entitled to vote thereat at such address as appears on
the stock register of the Corporation, at least ten days before
such meeting.
Section 6. Notice of the time, place and purpose of any
meeting of shareholders, whether required by statute, by the
Articles of Incorporation or by these By-Laws, may be waived in
writing by any stockholder. Such waiver may be given before or
after the meeting, and shall be filed with the Secretary or entered
upon the records of the meeting.
Section 7. Business transacted at all special meetings shall
be confined to the objects stated in the call.
Section 8. The presence, at any meeting of stockholders, in
person or by proxy of the holders of a majority of the stock
entitled to vote thereat shall constitute a quorum for the
transaction of business, except as otherwise provided by statute.
If, however, a quorum shall not be present at any meeting of the
stockholders, the stockholders present in person or by proxy shall
have power to adjourn the meeting from time to time, until a quorum
shall be present. If any meeting of stockholders be adjourned to
another time or place, whether for lack of quorum or otherwise, no
notice as to such adjourned meeting need be given other than by an
announcement, giving the time and place thereof, at the meeting at
which the adjournment is taken. At such adjourned meeting at which
a quorum shall be present, any business may be transacted which
might have been transacted at the meeting as originally noticed.
The stockholders present at a duly called or held meeting at which
a quorum is present may continue to transact business until final
adjournment, notwithstanding the withdrawal of enough stockholders
to leave less than a quorum.
Section 9. At each meeting of the stockholders, every
stockholder of record at the date fixed by the Board of Directors
as the record date for the determination of the persons entitled to
vote at a meeting of stockholders, or, of not date has been fixed,
then at the date of the meeting, shall be entitled at such meeting
to one vote for each share having voting power standing in his name
on the books of the Corporation. A stockholder may cast his vote
or votes in person or by proxy. The appointment of a proxy shall
be in writing filed with the Secretary at or before the meeting.
ARTICLE III
BOARD OF DIRECTORS
Section 1. The number of directors which shall constitute the
whole Board shall not be less than three nor more than fourteen, as
the stockholders may from time to time determine. The President of
the Corporation shall be a Director. Directors shall be elected at
the annual meeting of the stockholders of the Corporation, except
that if the number of directors is increased at any time other than
at an annual meeting of stockholders, an <PAGE>
PAGE 3
additional Director or Directors to fill the places on the Board
created by any such increase may be elected at a special meeting of
stockholders called for that purpose. Each Director shall be
elected to serve until the next annual meeting of the stockholders
and until his successor shall be elected and shall quality.
Section 2. Vacancies in the Board of Directors, not to exceed
one-third of the members of the Board in any one year, shall be
filled by the remaining members of the Board, though less than a
quorum, and each person so elected shall be a Director until his
successor is elected by the stockholders who may make such election
at their next annual meeting or at any special meeting called for
that purpose. A vacancy in the Board of Directors, which cannot be
filled by the remaining members of the Board, shall be filled by
the stockholders at any special meeting called for that purpose.
Section 3. The Board of Directors shall have the general
management, control and supervision of all business and affairs of
the Corporation, and shall fix and change, as it may from time to
time determine, by majority vote, the compensation to be paid
Directors, officers and agents of the Corporation, and do all such
lawful acts and things as are not by statue [sic] or by the
Articles of Incorporation or by the By-Laws directed or required to
be exercised or done by the stockholders.
ARTICLE IV
EXECUTIVE COMMITTEE
Section 1. The Board of Directors may, by affirmative action
of the entire Board, designate two or more of their number, one of
which shall be the President, to constitute an Executive Committee,
which, to the extent determined by affirmative action of the entire
Board, shall have and exercise the authority of the Board in the
management of the business or the Corporation. Any such Executive
Committee shall act only in the interval between meetings of the
Board, and shall be subject at all times to the control and
direction of the Board. The Executive Committee shall keep regular
minutes of its proceedings and report the same to the Board.
ARTICLE V
MEETINGS OF THE BOARD OF DIRECTORS
Section 1. The annual meeting of the Board of Directors of
the Corporation shall be held at its principal office in the City
of Minneapolis, Minnesota, as soon as practicable after the final
adjournment of the annual meeting of the stockholders in each year,
and no notice of such meeting shall be necessary to the newly
elected Directors in order to legally constitute the meeting
provided a quorum shall be present; except, however, that such
meeting may be held at such other place, whether in this state or
elsewhere, as a majority of the Board of Directors may have
previously determined.
<PAGE>
PAGE 4
Section 2. Regular meetings of the Board of Directors may be
held without notice at such time and place either within or without
the State of Minnesota, as shall from time to time have been
previously determined by the Board.
Section 3. Special meetings of the Board may be called by the
President on two days notice to each Director, either personally or
by mail or telegram; special meetings shall be called by the
President or Secretary in like manner and on like notice on the
written request of two Directors. Any Directors may, in writing,
either before or after the meeting, waive notice thereof; and,
without notice, any Director by his attendance at and participation
in the action taken at the meeting shall be deemed to have waived
notice.
Section 4. At all meetings of the Board of Directors, a
majority of the Directors shall be necessary and sufficient to
constitute a quorum for the transaction of business; and the acts
of a majority of the Directors present at a meeting at which a
quorum is present shall be the acts of the Board of Directors. If
a quorum shall not be present at any meeting of Directors, the
Directors present thereat may adjourn the meeting from time to
time, until a quorum shall be present. No notice of an adjourned
meeting, whether for lack of quorum or otherwise, need be given
other than by announcement, giving the time and place thereof, at
the meeting at which the adjournment is taken.
Section 5. Any action, which might be taken at a meeting of
the Board of Directors, may be taken without a meeting if done in
writing signed by all of the Directors.
ARTICLE VI
NOTICES
Section 1. Whenever under the provisions of statutes or of
the Articles of Incorporation or of the By-Laws, notice is required
to be given to any Directors or stockholder, it shall not be
construed to mean personal notice, but such notice may be given in
writing by depositing the same in a post office or letter box, in a
postpaid sealed wrapper, addressed to such Director or stockholder
at such address as appears on the stock register or books of this
Corporation, or, in default of address appearing in the stock
register of the Corporation or any known address, to such Director
or stockholder at the Main Post Office in the City of Minneapolis,
Minnesota, and such notice shall be deemed to be given at the time
when the same shall thus be mailed.
ARTICLE VII
OFFICERS
Section 1. The officers of the Corporation shall be a
Chairman of the Board, a President, one or more Vice Presidents
(the number thereof to be determined by the Board of Directors), a
Treasurer, a Secretary, a Medical Director, and such Assistant
Treasurers, Assistant Secretaries, and such other officers as the <PAGE>
PAGE 5
Board of Directors may deem necessary. All officers of the
Corporation shall exercise such powers and perform such duties and
shall be set forth in these By-Laws and as shall be determined from
time to time by the Board of Directors or by the President. Any
two of the offices, except those of President and Vice President,
Treasurer and Assistant Treasurer, and Secretary and Assistant
Secretary may be held by the same person.
Section 2. The Board of Directors, at its annual meeting,
shall elect a Chairman of the Board, a President, a Secretary, a
Treasurer, a Medical Director and such Executive Vice Presidents or
Senior Vice Presidents as the Board shall determine. Only the
Chairman of the Board and the President need be a member of the
Board. The President, or his designee, may appoint any other
officers permitted by Section 1 of this Article.
Section 3. The officers of the Corporation shall, except in
the event of death, resignation, or removal by the Board of
Directors, hold office until their successors are chosen and
quality in their stead. Any officer elected by the Board of
Directors may be removed at any time by the Board of Directors with
or without cause; such removal, however, shall be without prejudice
to the contract rights, if any, of the person so removed. When a
vacancy for any reason occurs among the officers, the Board of
Directors shall have the power to elect a successor to fill such
vacancy for the unexpired term.
Section 4. Chairman of the Board. The Chairman of the Board
shall preside at all meetings of the stockholders and of the Board
of Directors, and will perform such other duties as are assigned to
him by the Board of Directors.
Section 5. President. The President shall be the chief
executive officer of the Corporation. He shall have general and
active supervision and direction over the business affairs of the
Corporation and over its several officers, subject to the control
of the Board of Directors whose policies he shall execute. He
shall see that all lawful orders and resolutions of the Board of
Directors and of the Executive Committee are carried into effect
and he shall make or cause to be made timely and appropriate
reports to the Board of Directors of all matters which in the
interest of the Corporation are required to be brought to their
notice. He shall be a member of the Executive Committee and shall
preside at its meetings and he shall ex officio be a member of all
standing committees or other committees as may be from time to time
constituted or appointed by the Board of Directors.
Section 6. Secretary. The Secretary shall attend all
meetings of the Board of Directors and of the stockholders and
record their proceedings in a book to be kept for that purpose, and
shall perform like duties for the Executive Committee when
required. In case the Secretary shall be absent from any meeting,
the Chairman of the meeting may appoint a temporary secretary to
act at such meeting. The Secretary shall give, or cause to be
given, notice of all meetings of the stockholders and special
meetings of the Board of Directors. He shall have the custody of
<PAGE>
PAGE 6
the stock register, minute books and the seal of the Corporation,
and shall make such reports and perform such other duties as are
incident to this office or are properly required of him by the
Board of Directors.
Section 7. Treasurer. The Treasurer, unless otherwise
ordered by the Board of Directors, shall have the custody of all
the funds and securities of the Corporation, and shall deposit all
monies and valuables in the name of and to the credit of the
Corporation in such banks or depositories as the Board of Directors
may designate, and shall keep regular books of account, and shall
have custody of the books and records incident to his office and
such as the Board of Directors may direct, and he shall have such
other powers and shall perform such other duties as are incident to
his office or which are properly required of him by the Board of
Directors.
Section 8. Medical Director. The Medical Director shall,
under the direction of the Board of Directors, appoint all medical
examiners for this Corporation and shall have such other powers and
shall perform such other duties as are incident to his office or
which are properly required of him by the Board of Directors. In
his absence or inability to act, an assistant, designated by the
Executive Committee, may act for and in his stead.
Section 9. The powers and duties of all other officers shall
be such as are usual in like corporations under the direction and
control of the Board of Directors.
ARTICLE VIII
CLOSING OF TRANSFER BOOKS AND FIXING OF RECORD DATE
Section 1. The Board of Directors may fix a time, not less
than twenty nor more than forty days preceding the date of any
meeting of stockholders, as a record date for the determination of
the stockholders entitled to notice of any to vote at such meeting,
and in such case by stockholders of record on the date so fixed, or
their legal representatives, shall be entitled to notice of and to
vote at such meeting, notwithstanding any transfer of any shares on
the books of the Corporation after any record date so fixed. The
Board of Directors may close the books of the Corporation against
transfers of shares during the whole or any part of such period.
Section 2. The Board of Directors may fix a time not
exceeding forty days preceding the date fixed for the payment of
any dividend or distribution, or the date for the allotment of
rights, or, subject to contract rights with respect thereto, the
date when any change or conversion or exchange of shares shall be
made or go into effect, as a record date for the determination of
the stockholders entitled to receive payment of any such dividend,
distribution or allotment of rights or to exercise rights in
respect to any such change, conversion or exchange of shares, and
in such case only stockholders of record on the date so fixed shall
be entitled to receive payment of such dividend, distribution or
allotment of rights or to exercise such rights of change,
conversion or exchange of shares, as the case may be, <PAGE>
PAGE 7
notwithstanding any transfer of any shares on the books of the
Corporation after any record date fixed as aforesaid. The Board of
Directors may close the books of the Corporation against the
transfer of shares during the whole or any part of such period.
ARTICLE IX
MISCELLANEOUS
Section 1. The Corporation shall be entitled to treat the
holder of record of any share or shares of stock as the holder in
fact thereof, and, accordingly, shall not be found to recognize any
equitable or other claim to or interest in such share on the part
of any other person, whether or not it shall have express or other
notice thereof, except as expressly provided by the laws of the
State of Minnesota.
Section 2. The Corporation shall indemnify any person who was
or is a party or is threatened to be made a party, by reason of the
fact that he is or was a Manager of Variable Annuity Funds A and B,
director, officer, employee or agent of this Corporation, or is or
was serving at the direction of the Corporation as a Manager of
Variable Annuity Finds A and B, director, officer, employee or
agent of another corporation, partnership, joint venture, trust or
other enterprise, to any threatened, pending or completed action,
suit or proceeding, wherever brought, to the fullest extent
permitted by the laws of the State of Minnesota, as now existing or
hereafter amended, provided that this Article shall not indemnify
or protect any such Manager of Variable Annuity Funds A and B,
director, officer, employee or agent against any liability to the
Corporation or its security holders to which he would otherwise be
subject by reason of willful misfeasance, bad faith, or gross
negligence, in the performance of his duties or by reason of his
reckless disregard of his obligations and duties.
ARTICLE X
LOST STOCK CERTIFICATES
Section 1. The Board of Directors may direct a new
certificate or certificates to be issued in place of any
certificate or certificates theretofore issued by the Corporation
alleged to have been destroyed or lost upon the making of an
affidavit of that fact by the person claiming the certificate of
stock to be lost or destroyed, and the Board of Directors, when
authorizing such issue of a new certificate or certificates, may,
in its discretion and as a condition precedent to the issuance
thereof, require the owner of such lost or destroyed certificate or
certificates, or his legal representative, to advertise the same in
such manner as it shall require and/or give the Corporation a bond
in such sum as it may direct, to indemnify the Corporation against
any claim arising from the issues of such new certificate.
<PAGE>
PAGE 8 ARTICLE XI
POLICIES, CONTRACTS AND CONVEYANCES
Section 1. Subject to the provisions of Section 2 of the
Article, the President or any Vice President may with the Secretary
or any Assistant Secretary, sign, cause the corporate seal to be
affixed thereto when necessary, acknowledge and deliver all
conveyances, contracts, deeds, notes, mortgages, satisfactions,
leases, assignments, licenses, transfers, powers of attorney,
certificates for shares of stock, and all other similar and
dissimilar instruments.
The Board of Directors may by resolution authorize any officer or
officers alone or with another officer or officers, to sign, or
counter-sign, cause the corporate seal to be affixed thereto when
necessary, acknowledge and deliver any written instrument, or class
of written instruments, for and on behalf of this Corporation.
Section 2. All insurance, annuity or endowment policies or
contracts issued by this Corporation and all reinsurance agreements
of this Corporation shall be signed by the President or a Vice
President and the Secretary or an Assistant Secretary. The
signature of any of said officers, on the foregoing or any other
instrument may be a facsimile signature, if the same is
countersigned by an officer or employee duly authorized by the
Board of Directors or Executive Committee of this Corporation to
counter-sign the same.
Section 3. All checks, demands for money, and notes of the
Corporation shall be signed by such officer or officers or such
other person or persons as may from time to time be authorized by
the Board of Directors.
ARTICLE XII
AMENDMENTS OF BY-LAWS
Section 1. These By-Laws may be altered at any regular
meeting of the stockholders, or at any special meeting of the
stockholders at which a quorum is present or represented, provided
notice of the proposed alternation is contained in the notice of
such meeting, by the affirmative vote of the holders of a majority
of the shares issued and outstanding and entitled to vote at such
meeting and present or represented thereat.
<PAGE>
<PAGE>
PAGE 1
INVESTMENT MANAGEMENT AND SERVICES AGREEMENT Exhibit A
Agreement made the 17th day of December, 1985, by and between IDS
Life Series Fund, Inc. (the Fund), a Minnesota Corporation, and IDS
Life Insurance Company. (IDS Life), a Minnesota Corporation.
Part One: INVESTMENT MANAGEMENT AND OTHER SERVICES
(1) The Fund hereby retains IDS Life, and IDS Life hereby agrees,
for the period of this agreement and under the terms and conditions
hereinafter set forth, to furnish the Fund continuously with
suggested investment planning; to determine, consistent with the
Fund's investment objectives and policies, which securities in
IDS's discretion shall be purchased, held or sold and to execute or
cause the execution of purchase or sell orders; to prepare and make
available to the Fund all necessary research and statistical data
in connection therewith; to furnish the Fund all administrative,
accounting, clerical, statistical, correspondence, corporate and
all other services of whatever nature required in connection with
the administration of the affairs of the Fund, including transfer
agent and dividend disbursing agent services; and to pay such
expenses as may be provided for in Part Three hereof; subject
always to the direction and control of the Board of Directors, the
Executive Committee and the authorized officers of the Fund. IDS
Life agrees to maintain an adequate organization of competent
persons to provide the services and to perform the functions herein
mentioned. IDS Life agrees to meet with any persons at such times
as the Board of Directors deems appropriate for the purpose of
reviewing IDS Life's performance under this agreement.
(2) IDS Life agrees that the investment planning and investment
decisions will be in accordance with general investment policies of
the Fund as disclosed to IDS Life from time to time by the Fund and
as set forth in its prospectuses and registration statements filed
with the United States Securities and Exchange Commission.
(3) IDS Life agrees that it will maintain all required records,
memoranda, instructions or authorizations relating to the
acquisition or disposition of securities for the Fund.
(4) The Fund agrees that it will furnish to IDS Life any
information that the latter may reasonably request with respect to
the services performed or to be performed by IDS Life under this
agreement.
(5) IDS Life is authorized to select the brokers or dealers that
will execute the purchases and sales of portfolio securities for
the Fund and is directed to use its best efforts to obtain the best
available price and most favorable execution, except as prescribed
herein. Subject to prior authorization by the Fund's Board of
Directors of appropriate policies and procedures, and subject to
termination at any time by the Board of Directors, IDS Life may
also be authorized to effect individual securities transactions at
commission rates in excess of the minimum commission rates
available, to the extent authorized by law, if IDS Lifedetermines
in good faith that such amount of commission was reasonable in
relation to the value of the brokerage and research services
<PAGE>
PAGE 2
provided by such broker or dealer, viewed in terms of either that
particular transaction or IDS Life's overall responsibilities with
respect to the Fund and other investment companies advised by them
or either of them.
(6) It is understood and agreed that in furnishing the Fund with
the services as herein provided, neither IDS Life, nor any officer,
director or agent thereof shall be held liable to the Fund or its
creditors or shareholders for errors of judgment or for anything
except willful misfeasance, bad faith, or gross negligence in the
performance of its duties, or reckless disregard of its obligations
and duties under the terms of this agreement. It is further
understood and agreed that IDS Life may rely upon information
furnished to it reasonably believed to be accurate and reliable.
(7) The existence of an investment advisory agreement between IDS
Life and IDS Financial Services Inc. (IDS), a copy of which is
attached hereto as Exhibit B, is specifically acknowledged and
approved.
Part Two: COMPENSATION TO INVESTMENT MANAGER
(1) The Fund agrees to pay to IDS Life, and IDS Life covenants and
agrees to accept from the Fund in full payment for all the services
furnished, and for the use of all facilities and equipment, and for
all expenses paid or reimbursed by IDS Life hereunder, a fee for
each calendar day of each year equal to the total of 1/365th
(1/366th in each leap year) of:
.70 percent for the Equity Portfolio
.70 percent for the Income Portfolio
.70 percent for the Managed Portfolio
.70 percent for the Government Securities Portfolio; and
.50 percent for the Money Market Portfolio
to be computed for each day on the basis of net assets as of the
close of business of the full business day two (2) business days
prior to the day for which the computation is being made. In case
of the suspension of the computation of net asset value, the said
fee for each day during such suspension shall be computed as of the
close of business on the last full business day on which the net
assets were computed. As used herein, "net assets" as of the close
of a full business day shall include all transactions in shares of
the Fund recorded on the books of the Fund for that day.
(2) The foregoing fee shall be paid on a monthly basis and, in the
event of termination of this agreement, the fee accrued shall be
prorated on the basis of the number of days that this agreement is
in effect during the month with respect to which such payment is
made.
(3) The fee provided for hereunder shall be paid in cash by the
Fund to IDS Life within five (5) business days after the last day
of each month.
<PAGE>
PAGE 3
Part Three: ALLOCATION OF EXPENSES
(1) The Fund agrees to pay:
a. Fees payable to IDS Life for the latter's services under this
agreement.
b. All taxes of any kind payable by the Fund other than Federal
original issuance taxes on shares issued by the Fund.
c. All brokerage commissions and charges in the purchase and sale
of assets.
(2) IDS Life agrees to incur and pay for the cost of all services
described in Part One, Paragraph (1) of this agreement. The Fund
agrees in return to reimburse IDS Life for the aggregate cost of
the services listed below incurred by IDS Life in its operation of
the Fund.
a. All Custodian or Trustee fees, costs and expenses.
b. Costs and expenses in connection with the auditing and
certification of the records and accounts of the Fund by
independent certified public accountants.
c. Costs of obtaining and printing of dividend checks, reports to
shareholders, notices, proxies, proxy statements and tax notices to
shareholders, and also the cost of envelopes in which such are to
be mailed.
d. Postage on all communications, notices and statements to
brokers, dealers, and the Fund's shareholders.
e. All fees and expenses paid to directors of the Fund; however,
IDS Life will pay fees to directors who are officers or employees
of IDS Life or its affiliated companies.
f. Costs of fidelity and surety bonds covering officers, directors
and employees of the Fund.
g. All fees and expenses of attorneys and consultants who are not
officers or employees of IDS Life or any of its affiliates.
h. All fees paid for the qualification and registration for public
sales of the securities of the Fund under the laws of the United
States and of the several states of the United States in which the
securities of the Fund shall be offered for sale.
i. Cost of printing prospectuses and application forms for existing
shareholders, and any supplements thereto.
j. Any losses due to theft and defalcation of the assets of the
Fund, or due to judgments or adjustments not covered by surety or
fidelity bonds, and not covered by agreement or obligation.
<PAGE>
PAGE 4
k. All fees, costs, expenses and allowances payable to any person,
firm, or corporation for services under any agreement entered into
by the Fund covering the offering for sale, sale and distribution
of the Fund's shares.
l. Legal costs in conjunction with a claim asserted by the Board of
Directors of the Fund against IDS or IDS Life or their officers,
directors, employees or agents except that IDS Life shall reimburse
the Fund for reasonable legal costs incurred by the Fund if it is
ultimately determined by a court of competent jurisdiction or it is
agreed by IDS Life that it is liable in whole or in part to the
Fund and except further that if the Fund asserts a claim against a
third party which results in a recovery in whole or in part of
legal costs advanced by IDS Life, such recovery of costs shall be
refunded to IDS Life.
m. Filing fees and charges incurred by the Fund in connection with
filing any amendment to its articles of incorporation, or incurred
in filing any other document with the State of Minnesota or its
political subdivisions.
n. One-half of the Investment Company Institute membership dues
charged to IDS Life.
o. Organizational expenses of the Fund.
(3) IDS Life agrees to pay all other expenses associated with the
services it provides under the terms of this agreement. Further,
IDS Life agrees that, if at the end of any month the expenses of
the Fund, under this and any other agreement between the Fund and
IDS Life, but excluding those expenses set forth in (1)(b) and
(1)(c) of this Part Three exceed the most restrictive expense
limitations then in effect under any state securities law, or
regulations thereunder the Fund shall not pay those expenses set
forth in (1)(a) and (2) of this Part Three, and any expenses due
under any other agreement between the Fund and IDS Life, to the
extent necessary to keep the Fund's expenses from exceeding the
limitation, it being understood that IDS Life will assume all
unpaid expenses and bill the Fund for them in subsequent months but
in no event can the accumulation of unpaid expenses or billing be
carried past the end of the Fund's fiscal year.
Part Four: MISCELLANEOUS
(1) IDS Life shall be deemed to be an independent contractor and,
except as expressly provided or authorized in the agreement, shall
have no authority to act for or represent the Fund.
(2) A "full business day" shall be defined as a day with respect to
which the New York Stock Exchange is open for business, and "the
close of business" shall be defined as the time of closing of the
New York Stock Exchange.
(3) The Fund recognizes that IDS and IDS Life now render and may
continue to render investment advice and other services to other
investment companies which may or may not have investment policies
and investments similar to those of the Fund and that IDS and IDS
<PAGE>
PAGE 5
Life manages its own investments and those of its subsidiaries.
IDS and IDS Life shall be free to render such investment advice and
other services and the Fund hereby consents thereto.
(4) Neither this agreement nor any transaction had pursuant thereto
shall be invalidated or in anywise affected by the fact that
directors, officers, agents and/or shareholders of the Fund are or
may be interested in IDS or IDS Life, or any successor or assignee
thereof, as directors, officers, stockholders or otherwise; that
directors, officers, stockholders or agents of IDS or IDS Life are
or may be interested in the Fund as directors, officers,
shareholders, or otherwise; or that IDS or IDS Life, or any
successor or assignee, is or may be interested in the Fund as
shareholder or otherwise, provided, however, that neither IDS nor
IDS Life nor any officer, director or employee of IDS or IDS Life
or of the Fund shall sell to or buy from the Fund any property or
security other than shares issued by the Fund, except in accordance
with an applicable order of the United States Securities and
Exchange Commission.
(5) Any notice under this agreement shall be given in writing,
addressed, and delivered, or mailed postpaid to the party to this
agreement entitled to receive such, at such party's principal place
of business in Minneapolis, Minnesota, or to such other address as
either party may designate in writing mailed to the other.
(6) IDS Life agrees that no officer, director or employee of IDS
Life will deal for or on behalf of the Fund with himself as
principal or agent, or with any corporation or partnership in which
he may have a financial interest, except that this shall not
prohibit:
(a) Officers, directors or employees of IDS Life from having a
financial interest in the Fund or in IDS Life.
(b) The purchase of securities for the Fund, or the sale of
securities owned by the Fund, through a security broker or dealer,
one or more of whose partners, officers, directors or employees is
an officer, director or employee of IDS Life, provided such
transactions are handled in the capacity of broker only and
provided commissions charged do not exceed customary brokerage
charges for such services.
(c) Transactions with the Fund by a broker-dealer affiliate of IDS
Life if allowed by rule or order of the Securities and Exchange
Commission and if made pursuant to procedures adopted by the Fund's
Board of Directors.
(7) IDS Life agrees that, except as herein otherwise expressly
provided or as may be permitted consistent with the use of a broker
dealer affiliate of IDS Life under applicable provisions of the
Federal securities laws, neither it nor any of its officers,
directors or employees shall at any time during the period of this
agreement, make, accept or receive, directly or indirectly, any
fees, profits or emoluments of any character in connection with the
purchase or sale of securities (except shares issued by the Fund)
or other assets by or for the Fund.
<PAGE>
PAGE 6
Part Five: RENEWAL AND TERMINATION
(1) This agreement shall continue in effect until December 31, 1986
or until a new agreement is approved by a vote of the majority of
the outstanding shares of the Fund, and by vote of Directors
including the vote required by (b) of this paragraph and if no new
agreement is so approved, this agreement shall continue from year
to year thereafter unless and until terminated by either party as
hereinafter provided, except that such continuance shall be
specifically approved at least annually (a) by the Board of
Directors of the Fund or by a vote of the majority of the
outstanding shares of the Fund and (b) by the vote of a majority of
the Directors who are not parties to this agreement or interested
persons of any such party, cast in person at a meeting called for
the purpose of voting on such approval. As used in this paragraph,
the term "interested person" shall have the same meaning as set
forth in the Investment Company Act of 1940, as amended.
(2) This agreement may be terminated by either the Fund or IDS Life
at any time by giving the other party sixty days' previous written
notice of such intention to terminate, provided that any such
termination shall be made without the payment of any penalty, and
provided further that such termination may be effected either by
the Board of Directors of the Fund or by a vote of the majority of
the outstanding voting shares of the Fund. The vote of the
majority of the outstanding voting shares of the Fund for the
purpose of Part Five of the agreement shall be the vote at a
shareholders' annual meeting, or a special meeting duly called for
the purpose, of sixty-seven percent or more of such shares present
at such meeting if the holders of more than fifty percent of the
outstanding voting shares are present or represented by proxy, or
more than fifty percent of the outstanding voting shares of the
Fund, whichever is the less.
(3) This agreement shall terminate in the event of its assignment,
the term "assignment" for this purpose having the same meaning as
set forth in the Investment Company Act of 1940, as amended.
IN WITNESS THEREOF, the parties hereto have executed the foregoing
agreement on the day and year first above written.
IDS LIFE SERIES FUND, INC.
Attest_______________________ By____________________________
Secretary President
IDS LIFE INSURANCE COMPANY
Attest_______________________ By____________________________
Secretary Executive Vice President
<PAGE>
<PAGE>
PAGE 1
EXHIBIT A: INVESTMENT ADVISORY AGREEMENT
Agreement effective the 11th day of July, 1984, by and between IDS
Life Insurance Company (IDS Life) and IDS/American Express Inc.
(IDS).
Whereas IDS Life has heretofore organized five companies, and
such companies have been registered as investment companies under
the Investment Company Act of 1940 (such companies being referred
to collectively as the "Funds" and individually as the "Fund"), and
may in the future organize one or more additional Funds;
Whereas IDS has a staff of experienced investment personnel
and facilities for the kind of investment portfolio contemplated
for such Fund or Funds;
NOW THEREFORE, it is mutually agreed:
1. Funds to Which Applicable. This agreement shall only be
effective to any Fund in respect of which:
a. IDS Life has notified IDS in writing to include such Fund
under the terms of this agreement; and
b. IDS Life has an existing legal duty to provide investment
management for such Fund; and
c. To the extent required by the Investment Company Act of 1940,
this agreement has been approved by a vote of the persons
having an interest in such Fund or an exemptive order from
such requirement of approval has been obtained from the
Securities and Exchange Commission; and continuance of its
applicability is approved as required by the Investment
Company Act of 1940; and
d. The applicability of this agreement has not been terminated as
provided in paragraph 8 hereof.
2. Investment Advice. IDS will continuously keep under
observation the investment portfolio and investment objectives
of any Fund covered by the terms of this agreement and will,
with respect to each such Fund, continuously furnish to IDS
Life (1) assistance and advice in investment planning, (2)
recommendations as to particular purchases and sales of
securities, and (3) information as to economic and market
factors and other information relating to the investment plans
of and the particular investment held in any such Fund.
3. Information Furnished to IDS. IDS Life shall furnish such
information to IDS as to holdings, purchases, and sales of
securities under its management and investment portfolio
requirements as will reasonably enable IDS to furnish the
investment advice under this agreement.
<PAGE>
PAGE 2
4. Furnishing Advice, Information and Notices. The advice,
information, reports, etc., furnished under this agreement to
IDS Life and any notice under this agreement shall be
furnished to the President of IDS Life or to the person or
persons designated in writing by him or by a person to whom he
has delegated the authority to so designate. Any information
or notice provided to IDS under the terms of this agreement
shall be furnished to the President of IDS or to the person or
persons designated in writing by him or by a person to whom he
has delegated the authority to so designate.
5. Purchase and Sale of Securities. IDS Life may, in its
discretion, direct purchase or sale orders to IDS which will
then place any such order with a broker or brokers or
negotiate such executions. All transactions will be executed
in a manner and in accordance with the procedures and
standards as set forth in, or as established in accordance
with, the investment management agreement between IDS Life and
such Fund. IDS Life shall furnish IDS with information
concerning such procedures and standards, and any amendments
thereto; and IDS will maintain records to assure that such
transactions have been executed in accordance therewith. It
is understood that IDS Securities Corporation, a subsidiary of
IDS and a member firm of the Pacific Stock Exchange, may
participate in brokerage commissions generated by any security
transactions under this agreement, and that other broker
dealer affiliates of IDS may be used to the extent consistent
with Section 15(f) of the Investment Company Act of 1940 and
other applicable provisions of the Federal securities laws.
6. Compensation to IDS. The fee for the services provided by
this agreement will be determined as follows:
a. The Fund shall pay the Company a fee for each calendar day of
each year equal to the total of 1/365th (1/366th in each leap
year) of 0.25% of the net assets of the Fund, to be computed
for each such day on the basis of net assets as of the close
of business on the next preceding full business day. In the
case of the suspension of the computation of asset value, the
said fee for each day during such suspension shall be computed
as of the close of business on the last full business day on
which the net assets were computed. As used herein, "net
assets" as of the close of a full business day shall include
all transactions in shares of the Fund recorded on the books
of the Fund for that day.
b. The foregoing fee shall be paid on a monthly basis in cash by
IDS Life to IDS within five (5) business days after the last
day of each month.
7. Miscellaneous.
a. IDS Life recognizes that IDS now renders and may continue to
render investment advice and other services to other persons
which may or may not have investment policies and investments
similar to those of the Funds included herein, and that IDS
manages its own investment and those of certain subsidiaries.<PAGE>
PAGE 3
IDS shall be free to render such investment advice and other
services, and IDS Life hereby consents thereto. This
agreement is separate from any agreement IDS Life and IDS may
have concerning investment advice in respect of certain
separate accounts of IDS Life.
b. It is understood and agreed that in furnishing the investment
advice and other services as herein provided neither IDS, nor
any officer, director, employee, or agent thereof shall be
held liable to IDS Life or Funds included herein or creditors
for errors of judgment or for anything except willful
misfeasance, bad faith, or gross negligence in the performance
of its duties, or reckless disregard of its obligations and
duties under the terms of this agreement. It is further
understood and agreed that IDS may rely upon information
furnished to it reasonably believed to be accurate and
reliable and that, except as hereinabove provided, IDS shall
not be accountable for any loss suffered by IDS Life or Funds
included herein by the reason of the latter's action or
nonaction on the basis of any advice or recommendation of IDS,
its officers, directors or agents.
8. Renewal and Termination
a. As to any Fund which (1) is a registered investment company
under the Investment Company Act of 1940, and (2) this
agreement has become applicable as provided in Section 1
above, this agreement, unless terminated pursuant to paragraph
b,c, or d below, shall continue in effect from year to year,
provided its continued applicability is specifically approved
at least annually (i) by the Board of Directors of said Fund
or by a vote of the holders of a majority of the outstanding
votes of the Fund and (ii) by vote of a majority of the
Directors who are not parties to this agreement or interested
persons of any such party, cast in person at a meeting called
for the purpose of voting on such approval. As used in this
paragraph, the term "interested person" shall have the same
meaning as set forth in the Investment Company Act of 1940, as
amended.
b. The applicability of this agreement to any Fund which is a
registered investment company within the meaning of the
Investment Company Act of 1940 may be terminated by sixty
days' written notice to either IDS or IDS Life.
c. IDS or IDS Life may terminate this agreement or the
applicability of this agreement to any Fund by giving sixty
days' written notice to the other party.
d. This agreement shall terminate, as to any Fund which is a
registered investment company under the Investment Company Act
of 1940, in the event of its assignment, the term "assignment"
for this purpose having the same meaning set forth in the
investment Company Act of 1940, as amended.
<PAGE>
PAGE 4
IN WITNESS WHEREOF, the parties hereto have executed the foregoing
agreement on the day and year first above written.
IDS LIFE INSURANCE COMPANY
Attest_____________________ By______________________________
Secretary Vice President - Financial
IDS/AMERICAN EXPRESS INC.
Attest_____________________ By______________________________
Asst. Secretary Senior Vice President and
General Counsel
<PAGE>
<PAGE>
PAGE 1
March 1, 1995
Board of Directors
IDS Life Insurance Comapny
IDS Tower 10
Minneapolis, Minnesota 55440
Dear Members of the Board:
As General Counsel of IDS Life Insurance Company ("Company"), I am
familiar with the establishment of the IDS Life Variable Life
Separate Account which is a separate account of the Company
established by the Company's Board of Directors pursuant to Section
61A.14 of the Minnesota statutes. I am also familiar with the
Registration Statement Form S-6 filed by the Company on behalf of
the Account with the Securities and Exchange Commission with
respect to an indefinite amount of securities entitled Flexible
Premium Survivorship Variable Life Insurance Policy ("policy").
I have made such examination of law and examined such documents and
records as in my judgment are necessary and appropriate to enable
me to opine as follows:
1. IDS Life Variable Life Separate Account ("account") is a
separate account of the Company, duly established and validly
existing pursuant to Minnesota law, and is registered as a unit
investment trust under the Investment Company Act of 1940.
2. The policy, when issued, offered and sold in accordance with
the prospectus contained in the aforesaid Registration Statement
and, upon compliance with local law, will be legal and binding
obligation of the Company in accordance with its terms.
3. There is no limitation as to the number of units of the
account that may be issued.
4. Assets allocated to and held in the account pursuant to
Minnesota statutes in accordance with the Policy are not chargeable
with liabilities arising out of any other business the Company may
conduct.
There is no material pending or threatened litigation, claims or
assessments (including any unasserted claims or assessments)
against the account.
<PAGE>
PAGE 2
March 1, 1995
Please be advised you are correct in your understanding that I will
advise and consult with you concerning questions of disclosure and
the applicable requirements of Statements of Financial Accounting
Standards No. 5 if, and when, in the course of performing legal
services for the account with respect to a matter recognized by me
to involve an unasserted disclosure, I have formed a professional
conclusion that you must disclose or consider disclosure of any
such possible claim or assessment in your financial statements.
You may furnish a copy of this letter to your independent
accountants.
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Sincerely,
/s/ William A. Stoltzmann
William A. Stoltzmann
General Counsel<PAGE>
<PAGE>
PAGE 1
1 March 1995
Board of Directors
IDS Life Insurance Company
IDS Tower 10
Minneapolis, MN 55440
Dear Members of the Board:
In my capacity as Actuary of IDS Life Insurance Company ("IDS
Life"), I have provided actuarial advice concerning and
participated in the design of IDS Life's Flexible Premium
Survivorship Variable Life Insurance Policy ("the Policy"). I also
provided actuarial advice concerning the preparation of a
registration statement on form S-6 for filing with the Securities
and Exchange Commission under the Securities Act of 1933 in
connection with the Policy.
It is my professional opinion that the 1.25% premium expense
federal tax charge for deferred acquisition costs is reasonable in
relation to the increased tax liability to IDS Life as a result of
the enactment of Section 848 of the Internal Revenue Code of 1986
as amended. In addition, it is my professional opinion that the
10% rate of return, and the assumptions on which the rate is based,
are reasonable for IDS Life's insurance products. The factors
considered in setting the 10% rate of return are the appropriate
factors to consider in determining the rate.
I hereby consent to the filing of this opinion as an exhibit to the
above-mentioned registration statement and to the use of my name
under the heading 'Experts' in the prospectus.
Regards,
/s/ James M. Jensen
James M. Jensen, FSA, MAAA
Director, Insurance Product Development
IDS Life Insurance Company
<PAGE>
<PAGE>
PAGE 1
IDS LIFE INSURANCE COMPANY
DIRECTORS POWER OF ATTORNEY
City of Minneapolis
State of Minnesota
Each of the undersigned, as directors of IDS Life Insurance
Company, sponsor of the unit investment trust consisting of the IDS
Life Variable Life Separate Account, Flexible Premium Survivorship
Variable Life Insurance Policy, in connection with the filing of a
registration statement, pursuant to the requirements of the
Securities Act of 1933 and the Investment Company Act of 1940 with
the Securities and Exchange Commission, hereby constitutes and
appoints William A. Stoltzmann, Mary Ellyn Minenko and Colleen
Curran or either one of them, as her or his attorney-in-fact and
agent, to sign for her or him in her or his name, place and stead
any and all filings, applications (including applications for
exemptive relief), periodic reports, registration statements (with
all exhibits and other documents required or desirable in
connection therewith) other documents, and amendments thereto and
to file such filings, applications, periodic reports, registration
statements other documents, and amendments thereto with the
Securities and Exchange Commission, and any necessary states, and
grants to any or all of them the full power and authority to do and
perform each and every act required or necessary in connection
therewith.
Dated the 28th day of February, 1995.
/s/ Louis C. Fornetti /s/ Janis E. Miller
Louis C. Fornetti Janis E. Miller
/s/ David R. Hubers /s/ James A. Mitchell
David R. Hubers James A. Mitchell
/s/ Richard W. Kling /s/ Barry J. Murphy
Richard W. Kling Barry J. Murphy
/s/ Paul F. Kolkman /s/ Stuart A. Sedlacek
Paul F. Kolkman Stuart A. Sedlacek
/s/ Peter A. Lefferts /s/ Melinda S. Urion
Peter A. Lefferts Melinda S. Urion
<PAGE>
<PAGE>
PAGE 1
IDS LIFE INSURANCE COMPANY'S
DESCRIPTION OF TRANSFER AND REDEMPTION PROCEDURES AND
METHOD OF CONVERSION TO FIXED BENEFIT POLICIES
This document sets forth, as required by Rule
6e-3(T)(b)(12)(iii), the administrative procedures that will be
followed by IDS Life Insurance Company ("IDS Life") in connection
with the issuance of its flexible premium survivorship variable
life insurance policy ("Policy"), the transfer of assets held
thereunder, and the redemption by Policyowners of their interests
in said policies. The document also describes the method that IDS
Life will use when a Policy is exchanged for a fixed benefit
insurance policy pursuant to Rule 6e-3(T)(b)(13)(v)(B).
TRANSFER AND REDEMPTION PROCEDURES
I. Purchase and Related Transactions
A. Premium Schedules and Underwriting Standards
This Policy is a flexible premium policy. The Policyowner has
flexibility, subject to certain restrictions, in determining the
amount and frequency of premium payments. At the time of
application, the Policyowner will determine a Scheduled Premium.
The Scheduled Premium is a level amount at a fixed interval of
time. However, the Policyowner can change the Scheduled Premium,
skip premium payments or make additional premium payments.
Generally, the Policyowner may, subject to certain restrictions,
make premium payments in any amount and at any frequency.
Failure to pay a Scheduled Premium will not itself cause a
Policy to lapse. Payment of Scheduled Premiums, however, will not
guarantee that it will remain in force. (For further information
about when a Policy will lapse, see page 5.)
Each month, a deduction is made from the Policy Value for the
cost of insurance, policy fee and optional benefits. This
deduction is based on the age, sex and risk classification of each
Insured and the duration of the Policy.
The Policies will be offered and sold pursuant to established
underwriting standards, and in accordance with state insurance
laws, which prohibit unfair discrimination among Policyowners, but
recognize that insurance costs must be based upon factors such as
age, sex, health or occupation.
B. Application and Initial Premium Processing
Upon receipt of a completed application, IDS Life will follow
certain insurance underwriting (i.e., evaluation of risks)
procedures designed to determine whether the proposed Insureds are
insurable. This process may involve such verification procedures
as medical examinations and may require that further information be
provided by the proposed Insureds before a determination can be
made. A Policy will not be issued and consequently a Policy Date
established, until this underwriting procedure has been completed.
<PAGE>
PAGE 2
If a premium is submitted with the Policy application,
insurance coverage will begin immediately if the Insureds are
insurable under a conditional insurance agreement. Otherwise,
insurance coverage will not begin until coverage is approved by IDS
Life.
If a premium is not paid with the application, insurance
coverage will begin on the date the premium is received, if the
Insureds are insurable under a conditional insurance agreement, or
on the later of the date the premium is received or the date IDS
Life approves coverage if the Insureds are not insurable under a
conditional insurance agreement.
C. Premium Allocation
In the application for a Policy, the Policyowner can allocate
premiums to the Fixed Account and/or the subaccounts. Until the
date that an application is approved by IDS Life's underwriting
department, the premiums received by IDS Life are held in IDS
Life's Fixed Account and interest at the current Fixed Account rate
is credited on the net premiums. As of the date IDS Life's
underwriting department approves the application, the net premiums
plus interest accrued thereon will be allocated to the Fixed
Account and/or the subaccounts in accordance with the allocation
instructions received from the Policyowner in the application.
Future net premiums will be allocated to the Fixed Account and/or
the subaccounts, in accordance with the application allocation
instructions unless the Policyowner changes the allocation
instructions by written request. Net premiums received after the
date IDS Life receives the new instructions, will be allocated to
the Fixed Account and/or the subaccounts, based on the new
allocation instructions.
D. Repayment of Loan
A loan made under the policy will be subject to an interest
rate of 6% per year. IDS Life expects to reduce the loan interest
rate after the 10th policy anniversary to 4% per year. The
Policyowner can at any time make a loan repayment which must be at
least $25 or 100% of the amount of the outstanding loan, if less.
When a loan is made, any loan taken from the subaccounts will
be transferred to the Fixed Account. The portion of the Fixed
Account Value which equals indebtedness will be credited with
interest at a rate of 4%.
All loan repayments will be allocated to the Fixed Account
and/or the subaccounts, using the premium allocation percentages in
effect at the time of payment unless the Policyowner specifies that
the loan repayment is to be allocated in a different manner.
II. Transfer Among the Subaccounts and the Fixed Account
The Policy currently has a Fixed Account and six subaccounts.
The subaccounts invest in portfolios of IDS Life Series Fund, Inc.
<PAGE>
PAGE 3
Except as noted in the next paragraph, the Policyowner may
transfer at any time all or part of the value of a subaccount to
other subaccounts, or to the Fixed Account by written request or
other requests acceptable to IDS Life. Each transfer must be for a
minimum of $250 or, if the value of the subaccount is less than
$250, the value of the subaccount. The transfer will take effect
on the date the request is received by IDS Life. IDS Life reserves
the right to limit transfers to five each policy year.
The Policyowner may transfer from the Fixed Account to the
subaccounts once a year but only on a policy anniversary or within
30 days after such policy anniversary. If such a transfer is made,
the Policyowner cannot transfer from the subaccounts back to the
Fixed Account until the next policy anniversary. If IDS Life
receives a request within 30 days before a policy anniversary date,
the transfer will be effective on the anniversary date. If IDS
Life receives a request within 30 days after a policy anniversary
date, the transfer will be effective on the date the request is
received by IDS Life. The minimum transfer amount is $250 or the
Fixed Account Value less indebtedness, if less. The maximum
transfer amount is the Fixed Account Value less indebtedness.
The Policyowner may request a transfer by calling IDS Life.
IDS Life has the authority to honor any telephone transfer request
believed to be authentic. IDS Life is not responsible for
determining the authenticity of such calls. A transfer request
received before 3 p.m. Central time (which is 4 p.m. New York time)
will be processed the same day. If a call or written request is
received after 3 p.m. Central time, the request will be processed
the following business day.
Automated transfers are also available. Automated transfers
of at least $50 may be requested monthly, quarterly, semiannually
or annually. Only one automated transfer arrangement may be in
effect at any time. Policy values may be transferred to one or
more subaccounts and the Fixed Account but can be transferred from
only one account. Automated transfers from the Fixed Account may
not exceed an amount that, if continued, would deplete the Fixed
Account within 12 months. If transfers from the Fixed Account to
one or more of the subaccounts are made, transfers from the
subaccounts back to the Fixed Account will not be allowed until the
next policy anniversary.
III. "Redemption" Procedures: Surrender and Related Transactions
A. Surrender for Cash Value
At any time before the death of the last surviving Insured,
the Policyowner may completely surrender the Policy by written
request. Any surrender payment from the subaccounts will be made
within seven days after IDS Life receives the written request,
unless payment is postponed pursuant to the relevant provisions of
the Investment Company Act of 1940. Any surrender payment from the
Fixed Account may be postponed for up to 6 months. If IDS Life
postpones payment more than 30 days, interest at an annual rate of <PAGE>
PAGE 4
3 percent will be paid on the amount surrendered for the period of
postponement. The surrender payment will equal the Policyowner's
Policy Value minus Indebtedness and, during the first fifteen
policy years, the Surrender Charge.
After the first policy year, the Policyowner may also request
a partial surrender up to 85 percent of the Policy's Cash Surrender
Value by written request or by calling IDS Life. IDS Life has the
authority to honor any telephone surrender request believed to be
authentic. IDS Life is not responsible for determining the
authenticity of such calls. A surrender request received before
3 p.m. Central time (which is 4 p.m. New York time) will be
processed the same day. If the call or written request is received
after 3 p.m., the request will be processed the following business
day. A fee of $25, but not exceeding 2 percent of the amount
surrendered is assessed for each partial surrender. The amount of
any partial surrender must be at least $500.
B. Benefit Claims
As long as the Policy remains in force, IDS Life will pay a
death benefit to the named beneficiary after receipt of due proof
of death of the last surviving Insured unless the Policy is
contested. The amount of the death benefit will be determined as
of the date of death of the last surviving Insured. The death
benefit proceeds will include interest from that date of death
until the date of payment. The death benefit proceeds payable will
be reduced by any Loan Balance.
Prior to the youngest Insured's attained insurance age 100,the
Policy provides two Death Benefit Options - Option 1 (a level
amount option) and Option 2 (a variable amount option). The
Policyowner chooses which option applies.
Under Option 1, the death benefit is the greater of
1) the Specified Amount; or
2) the applicable percentage of the Policy Value.
Under Option 2, the death benefit is the greater of
1) the Policy Value plus the Specified Amount; or
2) the applicable percentage of the Policy Value.
In lieu of payment of the death benefit in a single sum, an
election may be made to apply all or a portion of the proceeds
under one of the fixed benefit settlement options described in the
Policy. The election may be made by the Policyowner during the
Insured's lifetime. The beneficiary may make an election unless
the Policyowner has already done so. The fixed benefit settlement
options are subject to the restrictions and limitations set forth
in the policy.
<PAGE>
PAGE 5
On or after the youngest Insured's attained insurance age 100, the
proceeds payable upon the death of the last surviving Insured will
be the Policy's Cash Surrender Value.
C. Policy Lapsation
A lapse will occur if, on a monthly date, the Cash Surrender
Value is less than the monthly deduction for the policy month
following such monthly date, and the Policy is not being continued
under either the Death Benefit Guarantee to Age 85 or the Death
Benefit Guarantee to Age 100 provision. If lapse is going to
occur, IDS Life will notify the Policyowner, and the Policyowner
will have a 61 day grace period to make a premium payment so that
the estimated Cash Surrender Value will be sufficient to cover the
next three monthly deductions.
The Death Benefit Guarantee to Age 85 provision provides that,
until the youngest Insured's attained insurance age 85 (or 15
policy years, if later), the Policy will not lapse even if the Cash
Surrender Value cannot cover the monthly deduction on a monthly
date if (a) equals or exceeds (b) where:
(a) is the sum of all premiums paid minus any partial
surrenders and minus any indebtedness, and
(b) is the Death Benefit Guarantee to Age 85 premiums shown
in the Policy that have been due since the Policy Date,
including the current month.
The Death Benefit Guarantee to Age 100 provision provides
that, until the youngest Insured's attained insurance age 100, the
Policy will not lapse even if the Cash Surrender Value cannot cover
the monthly deduction on a monthly date if (a) equals or exceeds
(b) where:
(a) is the sum of all premiums paid minus any partial
surrenders and minus any indebtedness, and
(b) is the Death Benefit Guarantee to Age 100 premiums shown
in the Policy that have been due since the Policy Date,
including the current month.
D. Loans
The Policyowner may take loans under the Policy at any time as
long as the resulting indebtedness (including any existing
indebtedness) does not exceed 85% of the Policy Value, less
surrender charges. The Policy is the only security for the loan.
The requested loan amount will be taken from the Fixed Account and
the subaccounts in proportion to their respective values on the
date of the loan, unless the Policyowner requests a different
allocation. Any loan taken from the subaccount will be transferred
to the Fixed Account. The minimum loan amount is $500. (For
further information about the loan provisions, see page 2.)
<PAGE>
PAGE 6
The Policyowner may obtain a loan by sending a written request
or calling IDS Life. IDS Life has the authority to honor any
telephone loan request believed to be authentic. IDS Life is not
responsible for determining the authenticity of such calls. A loan
request received before 3 p.m. Central time (which is 4 p.m. New
York time) will be processed the same day. If the call or written
request is received after 3 p.m., the request will be processed the
following business day.
CASH ADJUSTMENT UPON EXCHANGE OF CONTRACT
At any time within 24 months of the Policy's Policy Date, the
Policyowner may exchange the Policy for a Flexible Premium
Survivorship Life Insurance Policy which provides for benefits that
do not vary with the investment return of the Variable Account.
The exchange is accomplished by transferring all of the Policy
Value in the subaccounts to the Fixed Account.
POLICY SPLIT OPTION RIDER
The Policy can be split on a 50/50 basis into two individual
permanent plans of life insurance then offered by IDS Life for
exchange, one on the life of each Insured, upon the occurrence of a
divorce of the Insureds or certain changes in federal estate tax
laws. Evidence of insurability will not be required by IDS Life.
The Specified Amount and Policy Value minus policy loans and
accrued loan interest will be divided evenly between the two
policies.
<PAGE>
