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For use in New York only
(icon of) four squares with a circle in the middle.
Smith Barney LifeVest(sm)
Smith
Barney
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Annual Financial Information
Report of Independent Auditors
The Board of Directors
IDS Life Insurance Company of New York
We have audited the accompanying individual and combined statements
of net assets of the segregated asset subaccounts of IDS Life of
New York Account 7 for Single Premium Variable Life Insurance as of
December 31, 1995, and the related statements of operations and
changes in net assets for each of the three years in the period
then ended, except for the N95 subaccount which is for the period
January 1, 1993 to November 15, 1995 (date of maturity of
securities in the Trust). These financial statements are the
responsibility of the management of IDS Life Insurance Company of
New York. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require we plan and perform
the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. Our
procedures included confirmation of securities owned at December
31, 1995 with the affiliated mutual fund manager and the unit
investment trust sponsor. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable
basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the individual and combined
financial position of the segregated asset subaccounts of IDS Life
of New York Account 7 for Single Premium Variable Life Insurance at
December 31, 1995 and the individual and combined results of their
operations and the changes in their net assets for the periods
described above in conformity with generally accepted accounting
principles.
ERNST & YOUNG LLP
Minneapolis, Minnesota
March 15, 1996
<PAGE>
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<TABLE>
<CAPTION>
IDS Life of New York Account 7
Statements of Net Assets Dec. 31, 1995
Combined
Segregated Asset Subaccounts Variable
Assets NAP NMM NHI NTR NGO N04 Account
<S> <C> <C> <C> <C> <C> <C> <C>
Investments in shares of mutual fund
portfolios and units of the trusts,
at market value:
IDS Life Series Fund Equity
Portfolio -- 34,477 shares
at net asset value of $25.71
per share (cost $439,071).. $886,259 $ -- $ -- $ -- $ -- $ -- $ 886,259
IDS Life Series Fund Money
Market Portfolio -- 112,223
shares at net asset value of
$1.00 per share
(cost $112,218)............ -- 112,213 -- -- -- -- 112,213
IDS Life Series Fund Income
Portfolio -- 20,311
shares at net asset
value of $10.50 per share
(cost $202,125)............ -- -- 213,304 -- -- -- 213,304
IDS Life Series Fund
Managed Portfolio --
8,089 shares at net asset
value of $16.10 per share
(cost $110,563)............ -- -- -- 130,251 -- -- 130,251
IDS Life Series Fund
Government Securities
Portfolio -- 8,262 shares
at net asset value of
$10.57 per share
(cost $83,478)............. -- -- -- -- 87,357 -- 87,357
Smith Barney Inc. Stripped
("Zero Coupon") U.S. Treasury
Securities Fund, Series A
2004 Trust -- 68,141 units at
net asset value of $0.61 per unit
(cost $20,357).............. -- -- -- -- -- 41,902 41,902
886,259 112,213 213,304 130,251 87,357 41,902 1,471,286
Dividends receivable........ -- 425 1,141 -- 396 -- 1,962
Total assets................ 886,259 112,638 214,445 130,251 87,753 41,902 1,473,248
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Segregated Asset Subaccounts Variable
NAP NMM NHI NTR NGO N04 Account
Liabilities
Payable to IDS Life of New York for:
Mortality and expense risk
charge...................... 3,280 205 403 480 160 19 4,547
Minimum death benefit
guarantee risk charge....... -- -- -- -- -- 13 13
Issue and administrative
expense charge.............. -- -- -- -- -- 13 13
Distribution expense charge.. -- -- -- -- -- 10 10
Mortality charge............ -- -- -- -- -- 16 16
State premium tax charge.... -- -- -- -- -- 3 3
Transaction charge.......... -- -- -- -- -- 8 8
Payable to mutual fund
portfolios for investments
purchased................... -- 220 739 -- 237 -- 1,196
Total liabilities........... 3,280 425 1,142 480 397 82 5,806
Net assets applicable to
Variable Life contracts
in accumulation period...... $882,979 $112,213 $213,303 $129,771 $87,356 $41,820 $1,467,442
Accumulation units
outstanding................. 274,198 87,438 157,173 58,036 52,748 17,938
Net asset value per
accumulation unit........... $ 3.22 $ 1.28 $ 1.36 $ 2.24 $ 1.66 $ 2.33
See accompanying notes to financial statements.
</TABLE>
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<TABLE>
<CAPTION>
IDS Life of New York Account 7
Statements of Operations For the year ended Dec. 31, 1995
Combined
Segregated Asset Subaccounts Variable
NAP NMM NHI NTR NGO N95* N04 Account
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Investment income (loss):
Dividend income from mutual
fund portfolios............ $ 18,104 $ 9,023 $ 18,799 $ 6,655 $ 2,513 $ -- $ -- $ 55,094
Expenses:
Mortality and expense risk
charge (Note 4)............ 4,680 1,030 1,661 841 249 166 224 8,851
Minimum death benefit
guarantee risk charge
(Note 5)................... 3,120 687 1,107 561 166 110 150 5,901
Issue and administrative
expense charge (Note 6).... 3,120 687 1,107 561 166 110 150 5,901
Distribution expense
charge (Note 8)............ 2,331 513 827 419 124 83 113 4,410
Mortality charge (Note 3).. 3,891 856 1,381 699 207 138 188 7,360
State premium tax charge
(Note 7)................... 789 174 280 142 42 28 38 1,493
Transaction charge
(Note 9)................... -- -- -- -- -- 69 94 163
Total expenses............. 17,931 3,947 6,363 3,223 954 704 957 34,079
Investment income (loss)
-- net..................... 173 5,076 12,436 3,432 1,559 (704) (957) 21,015
Realized and Unrealized Gain (Loss) on Investments -- Net
Net realized gain (loss) on sales
of investments in mutual fund
portfolios and in the trusts:
Proceeds from sales........ 55,575 172,639 274,510 58,977 12,751 40,339 944 615,735
Cost of investments sold... 29,800 172,648 276,207 53,762 12,482 22,694 527 568,120
Net realized gain (loss) on
investments................ 25,775 (9) (1,697) 5,215 269 17,645 417 47,615
Net change in unrealized
appreciation or depreciation
of investments............. 202,797 9 35,402 11,563 4,007 (15,804) 9,664 247,638
Net gain on
investments................ 228,572 -- 33,705 16,778 4,276 1,841 10,081 295,253
Net increase in net
assets resulting
from operations............ $228,745 $ 5,076 $ 46,141 $20,210 $ 5,835 $ 1,137 $ 9,124 $316,268
* For the period Jan. 1, 1995 to Nov. 15, 1995, date of maturity of securities in the 1995 Trust.
See accompanying notes to financial statements.
</TABLE>
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<TABLE>
<CAPTION>
IDS Life of New York Account 7
Statements of Operations For the year ended Dec. 31, 1994
Combined
Segregated Asset Subaccounts Variable
NAP NMM NHI NTR NGO N95 N04 Account
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Investment income (loss):
Dividend income from mutual
fund portfolios............ $ 77,985 $9,414 $ 23,096 $21,475 $ 1,970 $ -- $ -- $133,940
Expenses:
Mortality and expense risk
charge (Note 4)............ 4,275 1,560 1,944 1,107 175 250 352 9,663
Minimum death benefit
guarantee risk charge
(Note 5)................... 2,850 1,040 1,296 738 117 163 234 6,438
Issue and administrative
expense charge (Note 6).... 2,850 1,040 1,296 738 117 170 235 6,446
Distribution expense
charge (Note 8)............ 2,129 777 968 551 87 125 176 4,813
Mortality charge (Note 3).. 3,554 1,297 1,641 920 146 209 293 8,060
State premium tax charge
(Note 7)................... 721 263 302 187 30 42 58 1,603
Transaction charge
(Note 9)................... -- -- -- -- -- 104 146 250
Total expenses............. 16,379 5,977 7,447 4,241 672 1,063 1,494 37,273
Investment income (loss)
-- net..................... 61,606 3,437 15,649 17,234 1,298 (1,063) (1,494) 96,667
Realized and Unrealized Gain (Loss) on Investments -- Net
Net realized gain (loss) on sales
of investments in mutual fund
portfolios and in the trusts:
Proceeds from sales........ 143,379 -- 129,125 96,801 223 15,692 32,169 417,389
Cost of investments sold... 93,014 -- 129,765 84,062 216 9,558 21,194 337,809
Net realized gain (loss) on
investments................ 50,365 -- (640) 12,739 7 6,134 10,975 79,580
Net change in unrealized
appreciation or depreciation
of investments............. (115,937) (14) (35,670) (31,699) (3,475) (5,526) (18,314) (210,635)
Net gain (loss) on
investments................ (65,572) (14) (36,310) (18,960) (3,468) 608 (7,339) (131,055)
Net increase (decrease) in net
assets resulting
from operations............ $ (3,966) $3,423 $(20,661) $(1,726) $(2,170) $ (455) $(8,833) $(34,388)
See accompanying notes to financial statements.
</TABLE>
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PAGE 7
<TABLE>
<CAPTION>
IDS Life of New York Account 7
Statements of Operations For the year ended Dec. 31, 1993
Combined
Segregated Asset Subaccounts Variable
NAP NMM NHI NTR NGO N95 N04 Account
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Investment income (loss):
Dividend income from mutual
fund portfolios............ $21,785 $5,320 $29,084 $25,269 $ 2,329 $ -- $ -- $ 83,787
Expenses:
Mortality and expense risk
charge (Note 4)............ 4,221 1,213 2,486 1,458 211 413 427 10,429
Minimum death benefit
guarantee risk charge
(Note 5)................... 2,814 809 1,642 972 141 275 285 6,938
Issue and administrative
expense charge (Note 6).... 2,814 809 1,642 972 141 275 285 6,938
Distribution expense
charge (Note 8)............ 2,103 604 1,227 726 105 206 213 5,184
Mortality charge (Note 3).. 3,510 1,008 2,047 1,212 176 344 355 8,652
State premium tax charge
(Note 7)................... 712 204 415 246 36 69 72 1,754
Transaction charge
(Note 9)................... -- -- -- -- -- 172 178 350
Total expenses............. 16,174 4,647 9,459 5,586 810 1,754 1,815 40,245
Investment income (loss)
-- net..................... 5,611 673 19,625 19,683 1,519 (1,754) (1,815) 43,542
Realized and Unrealized Gain (Loss) on Investments -- Net
Net realized gain on sales
of investments in mutual fund
portfolios and in the trusts:
Proceeds from sales........ 15,306 -- 53,928 28,628 11,777 38,926 -- 148,565
Cost of investments sold... 8,510 -- 53,107 26,530 10,551 24,604 -- 123,302
Net realized gain on
investments................ 6,796 -- 821 2,098 1,226 14,322 -- 25,263
Net change in unrealized
appreciation or depreciation
of investments............. 63,916 (1) 26,642 15,594 683 (9,047) 13,439 111,226
Net gain (loss) on
investments................ 70,712 (1) 27,463 17,692 1,909 5,275 13,439 136,489
Net increase in net assets
resulting from operations.. $76,323 $ 672 $47,088 $37,375 $ 3,428 $ 3,521 $11,624 $180,031
See accompanying notes to financial statements.
</TABLE>
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<TABLE>
<CAPTION>
IDS Life of New York Account 7
Statements of Changes in Net Assets For the year ended Dec. 31, 1995
Combined
Segregated Asset Subaccounts Variable
Operations NAP NMM NHI NTR NGO N95** N04 Account
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Investment income (loss)
-- net.................... $ 173 $ 5,076 $ 12,436 $ 3,432 $ 1,559 $ (704) $ (957) $ 21,015
Net realized gain (loss) on
investments............... 25,775 (9) (1,697) 5,215 269 17,645 417 47,615
Net change in unrealized
appreciation or depreciation
of investments............ 202,797 9 35,402 11,563 4,007 (15,804) 9,664 247,638
Net increase in net assets
resulting from operations.. 228,745 5,076 46,141 20,210 5,835 1,137 9,124 316,268
Contract Transactions
Net transfers*............. 54,733 (70,719) 4,086 (17,680) 65,719 (36,134) -- 5
Transfers for policy loans.. (23,671) 9,728 21,632 (346) (192) (3,417) -- 3,734
Contract terminations:
Surrender benefits
(Note 10)................... (13,600) (101,920) (195,631) (22,494) (12,559) -- -- (346,204)
Death benefits.............. -- -- -- -- -- -- -- --
Increase (decrease) from
contract transactions....... 17,462 (162,911) (169,913) (40,520) 52,968 (39,551) -- (342,465)
Net assets at beginning
of year..................... 636,772 270,048 337,075 150,081 28,553 38,414 32,696 1,493,639
Net assets at end of year... $882,979 $ 112,213 $ 213,303 $129,771 $ 87,356 $ -- $41,820 $1,467,442
Accumulation Unit Activity
Units outstanding at
beginning of year........... 267,688 216,641 293,305 78,087 19,887 24,516 17,938
Net transfers*.............. 19,680 (55,401) 3,102 (9,314) 40,807 (22,392) --
Transfers for policy loans.. (8,213) 7,709 18,285 (162) (120) (2,124) --
Contract terminations:
Surrender benefits.......... (4,957) (81,511) (157,519) (10,575) (7,826) -- --
Death benefits.............. -- -- -- -- -- -- --
Units outstanding at end
of year..................... 274,198 87,438 157,173 58,036 52,748 -- 17,938
* Includes transfer activity from (to) other subaccounts.
**For the period Jan. 1, 1995 to Nov. 15, 1995, date of maturity of securities in the 1995 Trust.
See accompanying notes to financial statements.
</TABLE>
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<TABLE>
<CAPTION>
IDS Life of New York Account 7
Statements of Changes in Net Assets For the year ended Dec. 31, 1994
Combined
Segregated Asset Subaccounts Variable
Operations NAP NMM NHI NTR NGO N95 N04 Account
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Investment income (loss)
-- net.................... $ 61,606 $ 3,437 $ 15,649 $ 17,234 $ 1,298 $ (1,063) $ (1,494) $ 96,667
Net realized gain (loss) on
investments............... 50,365 -- (640) 12,739 7 6,134 10,975 79,580
Net change in unrealized
appreciation or depreciation
of investments............ (115,937) (14) (35,670) (31,699) (3,475) (5,526) (18,314) (210,635)
Net increase (decrease) in
net assets resulting from
operations (3,966) 3,423 (20,661) (1,726) (2,170) (455) (8,833) (34,388)
Contract Transactions
Net transfers*............. (34,339) 63,374 66,508 (63,374) -- -- (32,169) --
Transfers for policy loans.. (18,576) -- (6,218) (18,221) (223) -- -- (43,238)
Contract terminations:
Surrender benefits
(Note 10)................... (76,184) -- (56,090) (15,205) -- (15,692) -- (163,171)
Death benefits.............. -- -- (47,842) -- -- -- -- (47,842)
Increase (decrease) from
contract transactions....... (129,099) 63,374 (43,642) (96,800) (223) (15,692) (32,169) (254,251)
Net assets at beginning
of year..................... 769,837 203,251 401,378 248,607 30,946 54,561 73,698 1,782,278
Net assets at end of year... $ 636,772 $270,048 $337,075 $150,081 $28,553 $ 38,414 $ 32,696 $1,493,639
Accumulation Unit Activity
Units outstanding at
beginning of year........... 325,066 165,172 326,343 127,239 20,040 34,520 35,764
Net transfers*.............. (15,001) 51,469 57,439 (31,384) -- -- (17,826)
Transfers for policy loans.. (8,912) -- (5,001) (9,765) (153) -- --
Contract terminations:
Surrender benefits.......... (33,465) -- (45,199) (8,003) -- (10,004) --
Death benefits.............. -- -- (40,277) -- -- -- --
Units outstanding at end
of year..................... 267,688 216,641 293,305 78,087 19,887 24,516 17,938
* Includes transfer activity from (to) other subaccounts.
See accompanying notes to financial statements.
</TABLE>
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<TABLE>
<CAPTION>
IDS Life of New York Account 7
Statements of Changes in Net Assets For the year ended Dec. 31, 1993
Combined
Segregated Asset Subaccounts Variable
Operations NAP NMM NHI NTR NGO N95 N04 Account
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Investment income (loss)
-- net.................... $ 5,611 $ 673 $ 19,625 $ 19,683 $ 1,519 $ (1,754) $(1,815) $ 43,542
Net realized gain on
investments............... 6,796 -- 821 2,098 1,226 14,322 -- 25,263
Net change in unrealized
appreciation or depreciation
of investments............ 63,916 (1) 26,642 15,594 683 (9,047) 13,439 111,226
Net increase in net assets
resulting from operations.. 76,323 672 47,088 37,375 3,428 3,521 11,624 180,031
Contract Transactions
Net transfers*............. 31,722 -- (1,011) -- -- (30,709) -- 2
Transfers for policy loans.. (8,499) -- (37,414) (19,230) (11,776) (8,217) -- (85,136)
Contract terminations:
Surrender benefits
(Note 10)................... (6,807) -- -- (9,398) -- -- -- (16,205)
Increase (decrease) from
contract transactions....... 16,416 -- (38,425) (28,628) (11,776) (38,926) -- (101,339)
Net assets at beginning
of year..................... 677,098 202,579 392,715 239,860 39,294 89,966 62,074 1,703,586
Net assets at end of year... $769,837 $203,251 $401,378 $248,607 $ 30,946 $ 54,561 $73,698 $1,782,278
Accumulation Unit Activity
Units outstanding at
beginning of year........... 316,807 165,172 358,491 143,816 27,897 59,372 35,764
Net transfers*.............. 15,001 -- -- -- -- (19,597) --
Transfers for policy loans.. (3,852) -- (32,148) (11,211) (7,857) (5,255) --
Contract terminations:
Surrender benefits.......... (2,890) -- -- (5,366) -- -- -
Units outstanding at end
of year..................... 325,066 165,172 326,343 127,239 20,040 34,520 35,764
* Includes transfer activity from (to) other subaccounts.
See accompanying notes to financial statements.
</TABLE>
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PAGE 11
IDS Life of New York Account 7
Notes to Financial Statements
___________________________________________________________________
1. Organization
IDS Life of New York Account 7 (the Variable Account) was
established on Sept. 12, 1985 as a segregated asset account of IDS
Life Insurance Company of New York (IDS Life of New York) under New
York law and is registered as a single unit investment trust under
the Investment Company Act of 1940. Operations of the Variable
Account commenced on April 15, 1987.
The Variable Account is comprised of six subaccounts. Prior to
Nov. 15, 1995, the date of maturity of securities in the 1995
Trust, the Variable Account was comprised of seven subaccounts.
The assets of each subaccount of the Variable Account are not
chargeable with liabilities arising out of the business conducted
by any other subaccount, account or by IDS Life of New York. The
assets of the Variable Account shall be available, however, to
cover the liabilities of IDS Life of New York to the extent the
assets of the Variable Account exceed its liabilities arising under
the policies supported by it. Five of the subaccounts invest in
shares of the corresponding portfolios of the IDS Life Series Fund,
Inc. (the mutual fund). The other subaccount invests in units of
the Smith Barney Inc. Stripped ("Zero Coupon") U.S. Treasury
Securities Fund (the Trust). Policy owners allocate their premium
payment to one or more of the six subaccounts. Such funds are then
invested in shares of five portfolios of IDS Life Series Fund, Inc.
or in units of one Trust of Smith Barney Inc. Stripped ("Zero
Coupon") U.S. Treasury Securities Fund, Series A. Organizational
expenses for the Variable Account were paid by IDS Life of New
York. The 1995 Trust matured on Nov. 15, 1995 and is no longer
available for investment.
The mutual fund, which commenced operations Jan. 20, 1986, is
registered under the Investment Company Act of 1940 as a
diversified, open-end management investment company. Funds
allocated to Subaccount NAP are invested in the shares of the
Equity Portfolio; Subaccount NMM invests in the shares of the Money
Market Portfolio; Subaccount NHI invests in the shares of the
Income Portfolio; Subaccount NTR invests in the shares of the
Managed Portfolio; and Subaccount NGO invests in the shares of the
Government Securities Portfolio.
The Trusts, which commenced operations Aug. 4, 1986, are registered
under the Investment Company Act of 1940 as a unit investment
trust. Funds allocated to the 1995 subaccount (N95) were invested
in units of the 1995 Trust, and the 2004 subaccount (N04) invests
in the 2004 Trust.
Prior to Dec. 28, 1990, the subaccounts invested in the shares of
the Shearson Lehman Series Fund, which was formed on April 18,
1986. It is registered under the Investment Company Act of 1940 as
a diversified, open-end management investment company and commenced
operations on Nov. 3, 1986. Prior to Dec. 28, 1990, funds
allocated to Subaccount NAP were invested in the shares of the<PAGE>
PAGE 12
___________________________________________________________________
1. Organization (continued)
Appreciation Portfolio; Subaccount NMM invested in the shares of
the Money Market Portfolio; Subaccount NHI invested in the shares
of the High Income Bond Portfolio; Subaccount NTR invested in the
shares of the Total Return Portfolio; and Subaccount NGO invested
in the shares of the Government Securities Portfolio.
IDS Life Insurance Company (IDS Life), parent company of IDS Life
of New York, serves as manager and investment adviser for the
Variable Account and the mutual fund. Smith Barney Inc. serves as
sponsor for the Trusts.
___________________________________________________________________
2. Summary of Significant Accounting Policies
Investments in Mutual Fund
Investments in shares of the mutual fund portfolios are stated at
market value which is the net asset value per share as determined
by the respective portfolios. Investment transactions are
accounted for on the date the shares are purchased and sold. The
cost of investments sold and redeemed is determined on the average
cost method. Dividend distributions received from the portfolios
are reinvested, net of any expenses payable to IDS Life, in
additional shares of the portfolios and recorded as income by the
subaccounts on the ex-dividend date.
Unrealized appreciation or depreciation of investments in the
accompanying financial statements represents the subaccounts' share
of the portfolios' undistributed net investment income,
undistributed realized gain or loss and the unrealized appreciation
or depreciation on their investment securities.
Investments in Trust
Investments in units of the Trust are stated at market value which
is the net asset value per unit as determined by the respective
trust. Investment transactions are accounted for on the date the
units are purchased and sold. The cost of investments sold and
redeemed is determined on the average cost method.
Unrealized appreciation or depreciation of investments in the
accompanying financial statements represents the subaccounts' share
of the Trusts' undistributed net investment income, undistributed
realized gain or loss and the unrealized appreciation or
depreciation on their investment securities.
Federal Income Taxes
IDS Life of New York is taxed as a life insurance company. The
Variable Account is treated as part of IDS Life of New York for
federal income tax purposes.
Under existing federal income tax law, IDS Life of New York is not
subject to income taxes with respect to any investment income of
the Variable Account.
<PAGE>
PAGE 13
___________________________________________________________________
3. Mortality Charge
IDS Life of New York deducts a mortality charge equal (except as
explained below), on an annual basis, to 0.5 percent of the daily
net asset value of the Variable Account. Prior to the maturity
date of the policy the death benefit will always be higher than the
policy value. This deduction will enable IDS Life of New York to
pay this additional amount. Although IDS Life of New York does not
expect to charge more than the rate mentioned above, its charge for
providing life insurance protection could be greater. IDS Life of
New York guarantees that its charge will never be greater than an
amount based upon the 1958 Commissioners' Standard Ordinary
Mortality Table.
___________________________________________________________________
4. Mortality and Expense Risk Charge
IDS Life of New York makes contractual assurances to the Variable
Account that possible future adverse changes in administrative
expenses and mortality experience of the policy owners and
beneficiaries will not affect the Variable Account. The mortality
and expense risk fee paid to IDS Life of New York is computed daily
and is equal, on an annual basis, to 0.6 percent of the daily net
asset value of the Variable Account.
___________________________________________________________________
5. Minimum Death Benefit Guarantee Risk Charge
IDS Life of New York deducts a minimum death benefit guarantee risk
charge equal, on an annual basis, to 0.4 percent of the daily net
asset value of the Variable Account. This deduction is made to
compensate IDS Life of New York for the risk it assumes by
providing a guaranteed minimum death benefit. The deduction will
be made from the Variable Account and computed on a daily basis.
This charge is guaranteed for the life of the contract and may not
be increased.
___________________________________________________________________
6. Issue and Administrative Expense Charge
IDS Life of New York deducts a charge to compensate it for expenses
it incurs in administering the policy, such as the costs of
underwriting the policy, conducting any medical examinations,
establishing and maintaining records, and providing reports to
policy owners. This charge is deducted daily and is equivalent, on
an annual basis, to 0.4 percent of the daily net asset value of the
Variable Account during the first 10 years of the policy, and to
0.3 percent thereafter. There is not necessarily a relationship
between the amount of the charge imposed on a particular policy and
the amount of administrative expenses that may be attributable to
that policy.
<PAGE>
PAGE 14
___________________________________________________________________
7. State Premium Tax Charge
To cover the premium taxes assessed by the state of New York and to
compensate IDS Life of New York for the average premium tax expense
it incurs when issuing the policy, IDS Life of New York deducts a
charge equivalent, on an annual basis, to 0.1 percent of the daily
net asset value of the Variable Account during the first 10 policy
years, and 0 percent thereafter.
___________________________________________________________________
8. Distribution Expense Charge
IDS Life of New York incurs certain sales and other distribution
expenses at the time the policies are issued. This charge is
equal, on an annual basis, to 0.3 percent of the daily average net
asset value of the Variable Account for the first 10 policy years
and 0 percent thereafter. IDS Life of New York anticipates that
this charge, together with any applicable surrender charge, will
cover the expected costs of distributing the policies. In no event
will the sum of the surrender charge deducted on surrender and
cumulative distribution expense charges previously deducted exceed
9 percent of the single premium paid.
___________________________________________________________________
9. Transaction Charge
IDS Life of New York makes a daily charge against the assets of
each subaccount investing in the Trusts. This charge is intended
to reimburse IDS Life of New York for the transaction charge paid
directly by IDS Life of New York to Smith Barney Inc. on the sale
of the Trust units to the Variable Account. IDS Life of New York
pays these amounts from its general account assets. The amount of
the asset charge is equivalent to an effective annual rate of 0.25
percent of the account value invested in the Trusts. This amount
may be increased in the future but in no event will it exceed an
effective annual rate of 0.5 percent of the account value. The
charge will be cost-based (taking into account a loss of interest)
with no anticipated element of profit for IDS Life of New York.
This charge also varies directly with the size of the account
value.
___________________________________________________________________
10. Surrender Charge
IDS Life of New York will use a surrender charge to help it recover
certain selling expenses. The surrender charge will be deducted
during the first eight policy years. Further, IDS Life of New York
guarantees that the total cumulative distribution expense charges
and the surrender charge will never exceed 9 percent of the single
premium. Charges by IDS Life of New York for surrenders are not
available on an individual segregated asset account basis. Charges
for all segregated asset accounts amounted to $464,724 in 1995,
$269,275 in 1994 and 151,536 in 1993. Such charges are not an
expense of the subaccounts or Variable Account. They are deducted
from contract surrender benefits paid by IDS Life of New York.
<PAGE>
PAGE 15
__________________________________________________________________
11. Investment Transactions
The subaccounts' purchases of portfolio shares or trust units (net
of charges), including reinvestment of dividend distributions,
were as follows:
<TABLE>
<CAPTION>
Year Ended Dec.31,
Subaccount Investment 1995 1994 1993
<S> <C> <C> <C> <C>
NAP Equity Portfolio.................. $ 73,918 $ 75,389 $37,762
NMM Money Market Portfolio............ 14,805 66,810 673
NHI Income Portfolio.................. 117,032 101,134 35,128
NTR Managed Portfolio................. 21,771 16,846 19,735
NGO Government Securities Portfolio... 67,278 1,299 1,520
N95* 1995 Trust........................ -- (1,099) (1,828)
N04 2004 Trust........................ -- (1,586) (1,789)
$294,804 $258,793 $91,201
* For the period Jan. 1, 1993 to Nov. 15, 1995, date of maturity of securities in the 1995 Trust.
</TABLE>
<PAGE>
PAGE 16
<TABLE>
<CAPTION>
Condensed Financial Information (unaudited) Period from
April 15 to
Year Ended Dec. 31, Dec. 31,
1995 1994 1993 1992 1991 1990 1989 1988 1987*
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Subaccount NAP (invests in Equity Portfolio)
Accumulation unit value at beginning of
period.................................... $2.38 $2.37 $2.14 $2.08 $1.28 $1.31 $1.02 $0.94 $1.00
Accumulation unit value at end of period.. $3.22 $2.38 $2.37 $2.14 $2.08 $1.28 $1.31 $1.02 $0.94
Number of accumulation units outstanding
at end of period (000 omitted)............ 274 268 325 317 307 362 395 386 409
Subaccount NMM (invests in Money Market Portfolio)
Accumulation unit value at beginning of
period.................................... $1.25 $1.23 $1.23 $1.21 $1.18 $1.12 $1.06 $1.02 $1.00
Accumulation unit value at end of period.. $1.28 $1.25 $1.23 $1.23 $1.21 $1.18 $1.12 $1.06 $1.02
Number of accumulation units outstanding
at end of period (000 omitted)............ 87 217 165 165 247 219 243 228 198
Subaccount NHI (invests in Income Portfolio)
Accumulation unit value at beginning of
period.................................... $1.15 $1.23 $1.10 $1.02 $0.90 $1.12 $1.16 $1.05 $1.00
Accumulation unit value at end of period.. $1.36 $1.15 $1.23 $1.10 $1.02 $0.90 $1.12 $1.16 $1.05
Number of accumulation units outstanding
at end of period (000 omitted)............ 157 293 326 358 358 148 610 742 397
Subaccount NTR (invests in Managed Portfolio)
Accumulation unit value at beginning of
period.................................... $1.92 $1.95 $1.67 $1.55 $1.20 $1.21 $1.06 $0.92 $1.00
Accumulation unit value at end of period.. $2.24 $1.92 $1.95 $1.67 $1.55 $1.20 $1.21 $1.06 $0.92
Number of accumulation units outstanding
at end of period (000 omitted)............ 58 78 127 144 109 94 145 101 91
Subaccount NGO (invests in Government Securities Portfolio)
Accumulation unit value at beginning of
period.................................... $1.44 $1.54 $1.41 $1.35 $1.19 $1.13 $1.05 $1.02 $1.00
Accumulation unit value at end of period.. $1.66 $1.44 $1.54 $1.41 $1.35 $1.19 $1.13 $1.05 $1.02
Number of accumulation units outstanding
at end of period (000 omitted)............ 53 20 20 28 65 50 10 20 19
Subaccount N95 (invests in 1995 Trust)***
Accumulation unit value at beginning of
period.................................... $1.57 $1.58 $1.52 $1.45 $1.28 $1.19 $1.05 $1.00 $1.00
Accumulation unit value at end of period.. $ -- $1.57 $1.58 $1.52 $1.45 $1.28 $1.19 $1.05 $1.00
Number of accumulation units outstanding
at end of period (000 omitted)............ -- 25 35 59 69 50 55 59 33
Subaccount N04 (invests in 2004 Trust)**
Accumulation unit value at beginning of
period.................................... $1.82 $2.06 $1.74 $1.63 $1.38 $1.36 $1.13 $1.00 --
Accumulation unit value at end of period.. $2.33 $1.82 $2.06 $1.74 $1.63 $1.38 $1.36 $1.13 --
Number of accumulation units outstanding
at end of period (000 omitted)........... 18 18 36 36 36 12 12 12 --
* Operations commenced on April 15, 1987.
** Subaccount N04 commenced operations on July 19, 1988.
***The 1995 Trust matured on Nov. 15, 1995.
</TABLE>
<PAGE>
PAGE 17
IDS Life of New York Financial Information
The financial statements shown below are those of the insurance
company and not those of any other entity. They are included in
the prospectus for the purpose of informing investors as to the
financial condition of the insurance company and its ability to
carry out its obligations under its variable contracts.
<TABLE>
<CAPTION>
IDS Life Insurance Company of New York
Balance Sheets Dec. 31, 1995 Dec. 31, 1994
Assets (thousands)
<S> <C> <C>
Investments:
Fixed maturities:
Held to maturity, at amortized cost
(Fair value: 1995, $683,147; 1994, $653,080) $ 642,580 $ 686,483
Available for sale, at fair value
(Amortized cost: 1995, $577,068;
1994, $474,599) 601,298 455,103
1,243,878 1,141,586
Mortgage loans on real estate
(Fair value: 1995, $168,194; 1994, $157,085) 158,730 164,916
Policy loans 18,035 14,899
Other investments 1,915 1,524
Total investments 1,422,558 1,322,925
Cash and cash equivalents -- 5,262
Accrued investment income 22,572 21,517
Deferred policy acquisition costs 109,800 100,078
Other assets 2,108 1,584
Separate account assets 724,212 506,208
Total assets $2,281,250 $1,957,574
Liabilities and Stockholder's Equity
Liabilities:
Fixed annuities - future policy benefits $1,109,167 $1,087,367
Universal life-type insurance - future
policy benefits 136,475 127,871
Traditional life, disability income and
long-term care insurance - future policy
benefits 42,477 40,546
Policy claims and other policyholders' funds 3,644 3,217
Deferred income taxes 15,663 2,044
Amounts due to brokers 10,000 --
Other liabilities 21,029 18,600
Separate account liabilities 724,212 506,208
Total liabilities 2,062,667 1,785,853
Stockholder's equity:
Capital stock, $10 par value per share; 200,000
shares authorized, issued and outstanding 2,000 2,000
Additional paid-in capital 49,000 49,000
Net unrealized gain (loss) on investments 15,341 (12,369)
Retained earnings 152,242 133,090
Total stockholder's equity 218,583 171,721
Total liabilities and stockholder's equity $2,281,250 $1,957,574
Commitments and contingencies (Note 7)
See accompanying notes.
</TABLE>
<PAGE>
PAGE 18
<TABLE>
<CAPTION>
____________________________________________________________________________
Statements of Income Years ended Dec. 31,
1995 1994 1993
(thousands)
____________________________________________________________________________
<S> <C> <C> <C>
Revenues:
Traditional life, disability income and
long-term care insurance premiums $ 9,280 $ 7,846 $ 7,110
Policyholder and contractholder charges 13,216 11,607 9,634
Mortality and expense risk fees 6,213 4,562 2,904
Net investment income 110,924 108,143 110,147
Net realized gain on investments 1,548 957 1,334
Total revenues 141,181 133,115 131,129
Benefits and expenses:
Death and other benefits - traditional
life, disability income and long-term
care insurance 3,354 6,016 5,715
Death and other benefits - universal
life-type insurance and investment contracts 4,548 3,773 2,465
Increase (decrease) in liabilities for future
policy benefits for traditional life,
disability income and long-term care insurance 1,958 506 (1,343)
Interest credited on universal life-type
insurance and investment contracts 68,630 65,018 68,987
Amortization of deferred policy
acquisition costs 13,085 12,994 10,434
Other insurance and operating expenses 7,474 8,359 7,652
Total benefits and expenses 99,049 96,666 93,910
Income before income taxes 42,132 36,449 37,219
Income taxes 14,745 12,794 13,335
Net income $ 27,387 $ 23,655 $ 23,884
See accompanying notes.
<PAGE>
PAGE 19
__________________________________________________________________________
Statements of Cash Flows Years ended Dec. 31,
1995 1994 1993
(thousands)
Cash flows from operating activities:
Net income $ 27,387 $ 23,655 $ 23,884
Adjustments to reconcile net income to net
cash provided by operating activities:
Issuance - policy loans, excluding
universal life-type insurance (2,093) (1,365) (1,044)
Repayment - policy loans, excluding
universal life-type insurance 881 849 455
Change in accrued investment income (1,055) (175) (1,476)
Change in deferred policy acquisition
costs, net (11,017) (11,522) (10,622)
Change in liabilities for future policy
benefits for traditional life, disability
income and long-term care insurance 1,931 501 (939)
Change in policy claims and other
policyholders' funds 427 870 282
Change in deferred income taxes (1,301) (4,321) (449)
Change in other liabilities 2,429 (1,711) 4,348
Amortization of premium (accretion
of discount), net (480) 2,464 (1,598)
Net realized gain on investments (1,548) (957) (1,334)
Premiums related to universal life-type
insurance 21,694 19,522 15,141
Surrenders and death benefits related to
universal life-type insurance (13,164) (13,208) (9,785)
Interest credited to account balances related
to universal life-type insurance 7,036 6,640 6,892
Policyholder and contractholder
charges, non-cash (6,962) (6,000) (5,663)
Other, net (508) 689 (780)
Net cash provided by operating activities $ 23,657 $ 15,931 $ 17,312
Cash flows from investing activities:
Fixed maturities held to maturity:
Purchases $ (37,540) $ (36,560)$ --
Maturities, sinking fund payments and calls 34,216 78,757 --
Sales 28,905 2,649 --
Fixed maturities available for sale:
Purchases (133,503) (117,965) --
Maturities, sinking fund payments and calls 44,234 70,316 --
Sales 8,839 14,533 --
Investment securities:
Purchases -- -- (331,900)
Maturities, sinking fund payments and calls -- -- 265,059
Sales -- -- 28,519
Other investments, excluding policy loans:
Purchases (1,939) (47,353) (65,202)
Sales 5,993 2,975 2,568
Change in amounts due to brokers 10,000 (4,952) (10,448)
Net cash used in investing activities (40,795) (37,600) (111,404)
Cash flows from financing activities:
Activity related to investment contracts:
Considerations received 137,737 168,947 149,269
Surrenders and death benefits (177,531) (198,963) (119,158)
Interest credited to account balances 61,594 58,378 62,250
Issuance - policy loans, universal life-type
insurance (4,870) (3,907) (3,403)
Repayment - policy loans, universal life-type
insurance 2,946 2,476 1,886
Cash dividend to parent (8,000) -- --
Net cash provided by financing activities 11,876 26,931 90,844
Net (decrease) increase in cash and cash
equivalents (5,262) 5,262 (3,248)
Cash and cash equivalents at beginning
of year 5,262 - 3,248
Cash and cash equivalents at end of year $ -- $ 5,262 $ --
See accompanying notes.
</TABLE>
<PAGE>
PAGE 20
IDS Life Insurance Company of New York
Notes to Financial Statements ($ thousands)
1. Summary of significant accounting policies
Nature of business
IDS Life Insurance Company of New York (the Company) is engaged in
the insurance and annuity business in the state of New York. The
Company's principal products are deferred annuities and universal
life insurance which are issued primarily to individuals. It
offers single premium and annual premium deferred annuities on both
a fixed and variable dollar basis. Immediate annuities are offered
as well. The Company's insurance products include universal life
(fixed and variable), whole life, single premium life and term
products (including waiver of premium and accidental death
benefits). The Company also markets disability income and long-
term care insurance.
The Company's principal annuity product in terms of amount in force
is the fixed deferred annuity. The annuity contract guarantees a
minimum interest rate during the accumulation period (the time
before annuity payments begin), although the Company normally pays
a higher rate reflective of current market rates. The fixed
annuity provides for a surrender charge during the first seven to
ten years after a purchase payment is made. The Company has also
adopted a practice whereby the higher current rate is guaranteed
for a specified period. The Company also offers a variable annuity
product under the name Flexible Annuity. This is a fixed/variable
annuity offering the purchasers a choice among mutual funds with
portfolios of equities, bonds, managed assets and/or short-term
securities, and the Company's general account, as the underlying
investment vehicles. With respect to funds applied to the variable
portion of the annuity, the purchaser, rather than the Company,
assumes the investment risks and receives the rewards inherent in
the ownership of the underlying investment. The Flexible Annuity
provides for a surrender charge during the first six years after a
purchase payment is made.
The Company's principal insurance product is the flexible-premium,
adjustable-benefit universal life insurance policy. In this type
of insurance policy, each premium payment accumulates interest in a
cash value account. The policyholder has access to the cash
surrender value in whole or in part after the first year. The size
of the cash value of the fund can also be controlled by the
policyholder by increasing or decreasing premiums, subject only to
maintaining a required minimum to keep the policy in force.
Monthly deductions from the cash value of the policy are made for
the cost of insurance, expense charges and any policy riders.
Basis of presentation
The Company is a wholly owned subsidiary of IDS Life Insurance
Company (IDS Life), which is a wholly owned subsidiary of American
Express Financial Corporation, which is a wholly owned subsidiary
of American Express Company. The accompanying financial
statements have been prepared in conformity with generally accepted
<PAGE>
PAGE 21
1. Summary of significant accounting policies (continued)
accounting principles which vary in certain respects from reporting
practices prescribed or permitted by the New York Department of
Insurance as reconciled in Note 11.
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
Investments
Fixed maturities that the Company has both the positive intent and
the ability to hold to maturity are classified as held to maturity
and carried at amortized cost. All other fixed maturities and all
marketable equity securities are classified as available for sale
and carried at fair value. Unrealized gains and losses on
securities classified as available for sale are carried as a
separate component of stockholder's equity.
Management determines the appropriate classification of fixed
maturities at the time of purchase and reevaluates the
classification at each balance sheet date.
Mortgage loans on real estate are carried principally at the unpaid
principal balances of the related loans. Policy loans are carried
at the aggregate of the unpaid loan balances which do not exceed
the cash surrender values of the related policies. Other
investments include interest rate caps and equity securities. When
evidence indicates a decline in the underlying value or earning
power of individual investments which is other than temporary such
investments are written down to fair value by a charge to income.
Equity securities are carried at market value and the related net
unrealized appreciation or depreciation is reported as a credit or
charge to stockholder's equity.
Realized investment gain or loss is determined on an identified
cost basis.
Prepayments are anticipated on certain investments in mortgage-
backed securities in determining the constant effective yield used
to recognize interest income. Prepayment estimates are based on
information received from brokers who deal in mortgage-backed
securities.
Statements of cash flows
The Company considers investments with a maturity at the date of
their acquisition of three months or less to be cash equivalents.
These securities are carried principally at amortized cost which
approximates fair value.
<PAGE>
PAGE 22
1. Summary of significant accounting policies (continued)
Supplementary information to the statements of cash flows for the
years ended Dec. 31 is summarized as follows:
1995 1994 1993
Cash paid during the year for:
Income taxes $15,026 $17,386 $14,138
Interest on borrowings 742 147 235
Recognition of profits on fixed annuity contracts and insurance
policies
The Company issues single premium deferred annuity contracts that
provide for a service fee (surrender charge) at annually decreasing
rates upon withdrawal of the annuity accumulation value by the
contract owner. No sales fee is deducted from the contract
considerations received on these contracts ("no load" annuities).
All of the Company's single premium deferred annuity contracts
provide for crediting the contract owners' accumulations at
specified rates of interest. Such rates are revised by the Company
from time to time based on changes in the market investment yield
rates for fixed-income securities.
Profits on single premium deferred annuities and installment
annuities are recognized by the Company over the lives of the
contracts and represent the excess of investment income earned from
investment of contract considerations over interest credited to
contract owners and other expenses.
The retrospective deposit method is used in accounting for
universal life-type insurance. This method recognizes profits over
the lives of the policies in proportion to the estimated gross
profits expected to be realized.
Premiums on traditional life, disability income and long-term care
insurance policies are recognized as revenue when collected or due,
and related benefits and expenses are associated with premium
revenue in a manner that results in recognition of profits over the
lives of the insurance policies. This association is accomplished
by means of the provision for future policy benefits and the
deferral and subsequent amortization of policy acquisition costs.
Deferred policy acquisition costs
The costs of acquiring new business, principally sales
compensation, policy issue costs, underwriting and certain sales
expenses, have been deferred on insurance and annuity contracts.
The deferred acquisition costs for single premium deferred
annuities and installment annuities are amortized based upon
surrender charge revenue and a portion of the excess of investment
income earned from investment of the contract considerations over
the interest credited to contract owners. The costs for universal
life-type insurance are amortized over the lives of the policies as
a percentage of the estimated gross profits expected to be realized
on the policies. For traditional life, disability income and long-
term care insurance policies, the costs are amortized over an
appropriate period in proportion to premium revenue.<PAGE>
PAGE 23
1. Summary of significant accounting policies (continued)
Liabilities for future policy benefits
Liabilities for universal life-type insurance, single premium
deferred annuities and installment annuities are accumulation
values.
Liabilities for fixed annuities in a benefit status are based on
the Progressive Annuity Table with interest at 5 percent, the 1971
Individual Annuity Table with interest at 7 percent or 8.25
percent, or the 1983a Table with various interest rates ranging
from 5.5 percent to 9.5 percent, depending on year of issue.
Liabilities for future benefits on traditional life insurance have
been computed principally by the net level premium method, based on
anticipated rates of mortality (approximating the 1965-1970 Select
and Ultimate Basic Table for policies issued after 1980 and the
1955-1960 Select and Ultimate Basic Table for policies issued prior
to 1981 and the 1975-1980 Select and Ultimate Basic Table for term
insurance policies issued after 1986), policy persistency derived
from IDS Life's experience data (first-year rates ranging from
approximately 70 percent to 90 percent and increasing rates
thereafter), and estimated future investment yields of 4 percent
for policies issued before 1974 and 5.25 percent for policies
issued from 1974 to 1980. Cash value plans issued in 1980 and
later assume future investment rates that grade from 9.5 percent to
5 percent over 20 years. Term insurance issued from 1981 to 1984
assumes an 8 percent level investment rate, and term insurance
issued from 1985 to 1994 assumes investment rates that grade from
10 percent to 6 percent over 20 years, and term insurance issued
after 1994 assumes investment rates that grade from 8 percent to
6.5 percent over 7 years.
Liabilities for future disability income policy benefits have been
computed principally by the net level premium method, based on the
1964 Commissioners Disability Table with the 1958 Commissioners
Standard Ordinary Mortality Table at 3 percent interest for persons
disabled in 1980 and prior, 8 percent interest for persons disabled
from 1981 to 1991, 7 percent interest for persons disabled in 1992
and 6 percent interest for persons disabled after 1992.
Liabilities for future benefits on long-term care insurance have
been computed principally by the net level premium method, using
morbidity rates based on the 1985 National Nursing Home Survey and
mortality rates based on the 1983a Table. The interest rate basis
is 9.5 percent grading to 7 percent over ten years for policies
issued from 1989 to 1992, 7.75 percent grading to 7 percent over
four years for policies issued after 1992, 8 percent for claims
incurred in 1989 to 1991, 7 percent for claims incurred in 1992 and
6 percent for claims incurred after 1992.
Reinsurance
The maximum amount of life insurance risk retained by the Company
on any one life is $750 of life and waiver of premium benefits plus
$50 of accidental death benefits. The maximum amount of disability
income risk retained by the Company on any one life is $6 of
<PAGE>
PAGE 24
1. Summary of significant accounting policies (continued)
monthly benefit for benefit periods longer than three years. The
excesses are reinsured with other life insurance companies on a
yearly renewable term basis.
Federal income taxes
The Company's taxable income is included in the consolidated
federal income tax return of American Express Company. The Company
provides for income taxes on a separate return basis, except that,
under an agreement between American Express Financial Corporation
and American Express Company, tax benefit is recognized for losses
to the extent they can be used on the consolidated tax return. It
is the policy of American Express Financial Corporation to
reimburse a subsidiary for any tax benefit.
Included in other liabilities at Dec. 31, 1995 and 1994 are $3,971
and $3,161, respectively, payable to IDS Life for federal income
taxes.
Separate account business
The separate account assets and liabilities represent funds held
for the exclusive benefit of the variable annuity and variable life
insurance contract owners. The Company receives a monthly cost of
insurance charge and receives a minimum death benefit guarantee fee
from variable life insurance separate accounts and a mortality and
expense assurance fee from the variable annuity and variable life
insurance separate accounts.
The Company makes contractual mortality assurances to the variable
annuity contract owners that the net assets of the separate
accounts will not be affected by future variations in the actual
life expectancy experience of the annuitants and the beneficiaries
from the mortality assumptions implicit in the annuity contracts.
The Company makes periodic fund transfers to, or withdrawals from,
the separate accounts for such actuarial adjustments for variable
annuities that are in the benefit payment period. The Company
guarantees, for the variable life insurance policyholders, the
contractual insurance rate and that the death benefit will never be
less than the death benefit at the date of issuance.
Accounting changes
The Financial Accounting Standards Board's (FASB) SFAS No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-
Lived Assets to Be Disposed Of," is effective Jan. 1, 1996. The
new rule is not expected to have a material impact on the Company's
results of operations or financial condition.
The Company's adoption of SFAS No. 114 as of Jan. 1, 1995 is
discussed in Note 2.
The Company adopted SFAS No. 115, "Accounting for Certain
Investments in Debt and Equity Securities." The effect of adopting
the new rule was to increase stockholder's equity by approximately
$12 million, net of tax, as of Jan. 1, 1994, but the adoption had
no impact on the Company's net income.<PAGE>
PAGE 25
1. Summary of significant accounting policies (continued)
Reclassification
Certain 1994 and 1993 amounts have been reclassified to conform to
the 1995 presentation.
2. Investments
Fair values of investments in fixed maturities represent quoted
market prices and estimated values when quoted prices are not
available. Estimated values are determined by established
procedures involving, among other things, review of market indices,
price levels of current offerings of comparable issues, price
estimates and market data from independent brokers and financial
files.
Changes in net unrealized appreciation (depreciation) of
investments for the years ended Dec. 31 are summarized as follows:
1995 1994 1993
Fixed maturities:
Held to maturity $73,970 $(84,244) $ --
Available for sale 43,726 (38,226) --
Investment securities -- -- 25,350
Net realized gain (loss) on investments for the years ended Dec. 31
is summarized as follows:
1995 1994 1993
Fixed maturities $1,997 $948 $1,316
Other investments (449) 9 18
$1,548 $957 $1,334
The amortized cost, gross unrealized gains and losses and fair
value of investments in fixed maturities and equity securities at
Dec. 31, 1995 are as follows:
<TABLE>
<CAPTION>
Gross Gross
Amortized Unrealized Unrealized Fair
Held to maturity Cost Gains Losses Value
<S> <C> <C> <C> <C>
U.S. Government agency
obligations $ 5,003 $ 199 $ -- $ 5,202
State and municipal
obligations 150 -- 2 148
Corporate bonds and
obligations 578,253 41,939 2,027 618,165
Mortgage-backed securities 59,174 846 388 59,632
$642,580 $42,984 $2,417 $683,147
<PAGE>
PAGE 26
2. Investments (continued)
Gross Gross
Amortized Unrealized Unrealized Fair
Available for sale Cost Gains Losses Value
State and municipal
obligations $ 105 $ 10 $ -- $ 115
Corporate bonds and
obligations 248,973 17,470 497 265,946
Mortgage-backed securities 327,990 9,157 1,910 335,237
Total fixed maturities 577,068 26,637 2,407 601,298
Equity securities 10 -- -- 10
$577,078 $26,637 $2,407 $601,308
</TABLE>
The change in net unrealized gain (loss) on available for sale
securities included as a separate component of stockholder's equity
was $27,710 in 1995.
The amortized cost, gross unrealized gains and losses and fair
value of investments in fixed maturities and equity securities at
Dec. 31, 1994 are as follows:
<TABLE>
<CAPTION>
Gross Gross
Amortized Unrealized Unrealized Fair
Held to maturity Cost Gains Losses Value
<S> <C> <C> <C> <C>
U.S. Government agency
obligations $ 398 $ 2 $ 18 $ 382
Corporate bonds and
obligations 622,422 6,564 33,976 595,010
Mortgage-backed securities 63,663 580 6,555 57,688
$686,483 $7,146 $40,549 $653,080
Gross Gross
Amortized Unrealized Unrealized Fair
Available for sale Cost Gains Losses Value
U.S. Government agency
obligations $ 10,000 $ -- $ 135 $ 9,865
State and municipal
obligations 104 1 -- 105
Corporate bonds and
obligations 142,447 2,632 2,447 142,632
Mortgage-backed securities 322,048 381 19,928 302,501
Total fixed maturities 474,599 3,014 22,510 455,103
Equity securities 332 -- 197 135
$474,931 $3,014 $22,707 $455,238
</TABLE>
The change in net unrealized gain (loss) on available for sale
securities included as a separate component of stockholder's equity
was $(12,393) in 1994.
The amortized cost and fair value of investments in fixed
maturities at Dec. 31, 1995 by contractual maturity are shown
below. Expected maturities will differ from contractual
maturities because borrowers may have the right to call or prepay
obligations with or without call or prepayment penalties.
<PAGE>
PAGE 27
2. Investments (continued)
Amortized Fair
Held to maturity Cost Value
Due in one year or less $ 18,748 $ 19,136
Due from one to five years 99,486 105,747
Due from five to ten years 367,875 392,671
Due in more than ten years 97,297 105,961
Mortgage-backed securities 59,174 59,632
$642,580 $683,147
Amortized Fair
Available for sale Cost Value
Due in one year or less $ 15,296 $ 15,473
Due from one to five years 80,249 85,561
Due from five to ten years 108,127 114,937
Due in more than ten years 45,406 50,090
Mortgage-backed securities 327,990 335,237
$577,068 $601,298
During the year ended Dec. 31, 1995, fixed maturities classified as
held to maturity were sold with proceeds of $28,905 and gross
realized gains and losses on such sales were $1,055 and $121,
respectively. The sale of these fixed maturities was due to
significant deterioration in the issuers' creditworthiness. As a
result of adopting the FASB Special Report, "A Guide to
Implementation of Statement 115 on Accounting for Certain
Investments in Debt and Equity Securities," the Company
reclassified securities with a book value of $15,607 and net
unrealized gains of $144 from held to maturity to available for
sale in December 1995.
In addition, fixed maturities available for sale were sold during
1995 with proceeds of $8,839 and gross realized gains and losses on
such sales were $nil and $74, respectively.
During the year ended Dec. 31, 1994, fixed maturities classified as
held to maturity were sold with proceeds of $2,649 and gross
realized gains and losses on such sales were $nil and $86,
respectively. The sale of these fixed maturities was due to
significant deterioration in the issuers' creditworthiness.
In addition, fixed maturities available for sale were sold during
1994 with proceeds of $14,533 and gross realized gains and losses
on such sales were $181 and $308, respectively.
At Dec. 31, 1995, bonds carried at $262 were on deposit with the
state of New York as required by law.
Net investment income for the years ended Dec. 31 is summarized as
follows:
<PAGE>
PAGE 28
2. Investments (continued)
1995 1994 1993
Interest on fixed maturities $ 97,092 $ 93,800 $100,940
Interest on mortgage loans 13,888 13,226 8,424
Other investment income 1,291 1,219 1,220
Interest on cash equivalents 186 363 63
112,457 108,608 110,647
Less investment expenses 1,533 465 500
$110,924 $108,143 $110,147
At Dec. 31, 1995, investments in fixed maturities comprised 87
percent of the Company's total invested assets. Securities are
rated by Moody's and Standard & Poor's (S&P), except for securities
carried at approximately $144 million which are rated by American
Express Financial Corporation internal analysts using criteria
similar to Moody's and S&P. A summary of investments in fixed
maturities, at amortized cost, by rating on Dec. 31 is as follows:
Rating 1995 1994
Aaa/AAA $ 391,321 $ 393,736
Aa/AA 17,572 18,857
Aa/A 9,950 9,710
A/A 209,483 191,694
A/BBB 61,912 57,206
Baa/BBB 357,445 340,271
Baa/BB 46,029 48,552
Below investment grade 125,936 101,056
$1,219,648 $1,161,082
At Dec. 31, 1995, 90 percent of the securities rated Aaa/AAA are
GNMA, FNMA and FHLMC mortgage-backed securities. No holdings of
any other issuer are greater than 1 percent of the Company's total
investments in fixed maturities.
At Dec. 31, 1995, approximately 11.2 percent of the Company's
invested assets were mortgage loans on real estate. Summaries of
mortgage loans by region and by type of real estate are as follows:
<TABLE>
<CAPTION>
Dec. 31, 1995 Dec. 31, 1994
On Balance Commitments On Balance Commitments
Region Sheet to Purchase Sheet to Purchase
<S> <C> <C> <C> <C>
West North Central $ 23,705 $ -- $ 26,660 $--
East North Central 34,207 -- 35,018 --
South Atlantic 38,802 2,033 39,516 18
Middle Atlantic 23,502 -- 24,061 --
Pacific 13,150 -- 13,297 --
Mountain 14,937 5,084 15,218 --
New England 8,982 -- 9,674 --
East South Central 1,613 7,407 1,629 --
West South Central 277 -- 288 --
159,175 14,524 165,361 18
Less allowance for losses 445 -- 445 --
$158,730 $14,524 $164,916 $18
<PAGE>
PAGE 29
2. Investments (continued)
Dec. 31, 1995 Dec. 31, 1994
On Balance Commitments On Balance Commitments
Property type Sheet to Purchase Sheet to Purchase
Apartments $ 64,136 $ 7,988 $ 65,389 $18
Department/retail stores 55,308 -- 57,608 --
Office buildings 12,367 6,536 13,107 --
Industrial buildings 13,255 -- 13,583 --
Medical buildings 5,255 -- 6,704 --
Nursing/retirement 6,565 -- 6,644 --
Other 2,012 -- 2,038 --
Hotels/motels 277 -- 288 --
159,175 14,524 165,361 18
Less allowance for losses 445 -- 445 --
$158,730 $14,524 $164,916 $18
</TABLE>
Mortgage loan fundings are restricted by state insurance regulatory
authority to 80 percent or less of the market value of the real
estate at the time of origination of the loan. The Company holds
the mortgage document, which gives the right to take possession of
the property if the borrower fails to perform according to the
terms of the agreement. The fair value of the mortgage loans is
determined by a discounted cash flow analysis using mortgage
interest rates currently offered for mortgages of similar
maturities. Commitments to purchase mortgages are made in the
ordinary course of business. The fair value of the mortgage
commitments is $nil.
As of Jan. 1, 1995, the Company adopted Statement of Financial
Accounting Standards No. 114, "Accounting by Creditors for
Impairment of a Loan" (SFAS No. 114), as amended by Statement of
Financial Accounting Standards No. 118, "Accounting by Creditors
for Impairment of a Loan - Income Recognition and Disclosures".
The adoption of the new rules did not have a material impact on the
Company's results of operations or financial condition.
SFAS No. 114 applies to all loans except for smaller-balance
homogeneous loans, that are collectively evaluated for impairment.
Impairment is measured as the excess of the loan's recorded
investment over its present value of expected principal and
interest payments discounted at the loan's effective interest rate,
or the fair value of collateral. The amount of the impairment is
recorded as a reserve for investment losses.
Based on management's judgment as to the ultimate collectibility of
principal, interest payments received are either recognized as
income or applied to the recorded investment in the loan until it
has been recovered. Once the recorded investment has been
recovered, any additional payments are recognized as interest
income.
The reserve for investment losses is maintained at a level that
management believes is adequate to absorb estimated credit losses
in the portfolio. The level of the reserve account is determined
based on several factors, including historical experience, expected
future principal and interest payments, estimated collateral
values, and current and anticipated economic and political
conditions. Management regularly evaluates the adequacy of the
reserve for investment losses.
<PAGE>
PAGE 30
2. Investments (continued)
At Dec. 31, 1995, the Company's recorded investment in impaired
loans was $2,052 with a reserve of $445. During the year, the
average recorded investment in impaired loans was $3,003. There
was no change in the reserve for investment losses from the prior
year.
The Company recognized $204 of interest income related to impaired
loans for the year ended Dec. 31, 1995.
3. Income taxes
The Company qualifies as a life insurance company for federal
income tax purposes. As such, the Company is subject to the
Internal Revenue Code provisions applicable to life insurance
companies.
Income tax expense consists of the following:
1995 1994 1993
Federal income taxes:
Current $15,146 $16,419 $13,164
Deferred (1,301) (4,320) (449)
13,845 12,099 12,715
State income taxes-current 900 695 620
Income tax expense $14,745 $22,794 $13,335
Increases (decreases) to the federal tax provision applicable to
pretax income based on the statutory rate are attributable to:
<TABLE>
<CAPTION>
1995 1994 1993
Provision Rate Provision Rate Provision Rate
<S> <C> <C> <C> <C> <C> <C>
Federal income taxes based
on the statutory rate $14,746 35.0% $12,757 35.0% $13,026 35.0%
Increases (decreases) are
attributable to:
Tax-excluded interest
and dividend income (464) (1.1) (554) (1.5) (557) (1.5)
Other, net (437) (1.0) (104) (0.3) 246 0.7
Federal income taxes $13,845 32.9% $12,099 33.2% $12,715 34.2%
</TABLE>
A portion of life insurance company income earned prior to 1984 was
not subject to current taxation but was accumulated, for tax
purposes, in a "policyholders' surplus account." At Dec. 31, 1995,
the Company had a policyholders' surplus account balance of $798.
The policyholders' surplus account is only taxable if dividends to
the stockholder exceed the stockholder's surplus account or if the
Company is liquidated. Deferred income taxes of $279 have not been
established because no distributions of such amounts are
contemplated.
Significant components of the Company's deferred tax assets and
liabilities as of Dec. 31 are as follows:
<PAGE>
PAGE 31
3. Income taxes (continued)
1995 1994
Deferred tax assets:
Policy reserves $ 26,237 $21,567
Investments -- 3,331
Other 2,791 2,991
Total deferred tax assets 29,028 27,889
Deferred tax liabilities:
Deferred policy acquisition costs 33,001 29,933
Investments 11,690 --
Total deferred tax liabilities 44,691 29,933
Net deferred tax liabilities $(15,663) $(2,044)
The Company is required to establish a "valuation allowance" for
any portion of the deferred tax assets that management believes
will not be realized. In the opinion of management, it is more
likely than not that the Company will realize the benefit of the
deferred tax assets, and, therefore, no such valuation allowance
has been established.
4. Stockholder's equity
Retained earnings available for distribution as dividends to the
parent are limited to the Company's surplus as determined in
accordance with accounting practices prescribed by the New York
Department of Insurance. Statutory unassigned surplus aggregated
$85,964 as of Dec. 31, 1995 and $70,974 as of Dec. 31, 1994 (see
Note 3 with respect to the income tax effect of certain
distributions).
Dividends paid to parent were $8,000 in 1995, $nil in 1994 and $nil
in 1993.
During 1995, the Company incurred a loss of $235 on the sale of an
interest rate cap to IDS Life. This loss has been reflected as a
direct charge to stockholder's equity in the accompanying financial
statements.
5. Retirement plan and services
Until July 1, 1995, the Company participated in the IDS Retirement
Plan of American Express Financial Corporation which covered all
permanent employees age 21 and over who had met certain employment
requirements. Effective July 1, 1995, the IDS Retirement Plan was
merged with American Express Company's American Express Retirement
Plan, which simultaneously was amended to include a cash balance
formula and a lump sum distribution option. Employer contributions
to the plan are based on participants' age, years of service and
total compensation for the year. Funding of retirement costs for
this plan complies with the applicable minimum funding requirements
specified by ERISA. The Company's share of the total net periodic
pension cost was $nil in 1995, 1994 and 1993.
<PAGE>
PAGE 32
5. Retirement plan and services (continued)
The Company has a "Sales Benefit Plan" which is an unfunded,
noncontributory retirement plan for all eligible financial
advisors. Total plan costs for 1995, 1994 and 1993, which are
calculated on the basis of commission earnings of the individual
financial advisors, were $1,392, $1,372 and $1,042, respectively.
Such costs are included in deferred policy acquisition costs.
The Company also participates in defined contribution pension plans
of American Express Company which cover all employees who have met
certain employment requirements. Company contributions to the
plans are a percent of either each employee's eligible compensation
or basic contributions. Costs of these plans charged to operations
in 1995, 1994 and 1993 were $231, $251 and $201, respectively.
The Company participates in defined benefit health care plans of
American Express Financial Corporation that provide health care and
life insurance benefits to retired employees and retired financial
advisors. The plans include participant contributions and service-
related eligibility requirements. Upon retirement, such employees
are considered to have been employees of American Express Financial
Corporation. American Express Financial Corporation expenses these
benefits and allocates the expenses to its subsidiaries.
Accordingly, costs of such benefits to the Company are included in
employee compensation and benefits and cannot be identified on a
separate company basis. At Dec. 31, 1995, the total accumulated
post retirement benefit obligation, has been recorded as a
liability by American Express Financial Corporation.
6. Incentive plan and operating expenses
The Company maintains a "Persistency Payment Plan." Under the
terms of this plan, financial advisors earn additional compensation
based on the volume and persistency of insurance sales. The total
costs for the plan for 1995, 1994 and 1993 were $1,720, $1,287 and
$1,387, respectively. Such costs are included in deferred policy
acquisition costs.
Charges by IDS Life and American Express Financial Corporation for
the use of joint facilities, marketing services and other services
aggregated $12,122, $9,314 and $7,421 for 1995, 1994 and 1993,
respectively. Certain of the costs assessed to the Company are
included in deferred policy acquisition costs.
7. Commitments and contingencies
At Dec. 31, 1995 and 1994, traditional life insurance and universal
life-type insurance in force aggregated $3,502,851 and $3,155,571,
respectively, of which $163,462 and $162,956 were reinsured at the
respective year ends.
In addition, the Company has a stop loss reinsurance agreement with
IDS Life covering ordinary life benefits. IDS Life agrees to pay
all death benefits incurred each year which exceed 125 percent of
normal claims, where normal claims are defined in the agreement as
.095 percent of the mean retained life insurance in force.
<PAGE>
PAGE 33
7. Commitments and contingencies (continued)
Premiums ceded to IDS Life amounted to $85, $76 and $67 for the
years ended Dec. 31, 1995, 1994 and 1993, respectively. Claim
recoveries under the terms of this reinsurance agreement were $nil
in 1995, 1994 and 1993.
Premiums ceded to reinsurers other than IDS Life amounted to $269,
$721 and $741 for the years ended Dec. 31, 1995, 1994 and 1993,
respectively. Reinsurance recovered from reinsurers other than IDS
Life amounted to $576, $14 and $379 for the years ended Dec. 31,
1995, 1994 and 1993.
Reinsurance contracts do not relieve the Company from its primary
obligations to policyholders.
The Company has an agreement to assume a block of extended term
life insurance business. The amount of insurance in force related
to this agreement was $392,106 and $447,317 at Dec. 31, 1995 and
1994, respectively. The accompanying statement of income includes
premiums of $nil for the years ended Dec. 31, 1995, 1994 and 1993,
and decrease in liabilities for future policy benefits of $2,039,
2,538 and $3,032 related to this agreement for the years ended Dec.
31, 1995, 1994 and 1993, respectively.
8. Lines of credit
The Company has available lines of credit with two banks
aggregating $30,000 at 40 to 80 basis points over each bank's cost
of funds. Outstanding borrowings under these agreements were $nil
at Dec. 31, 1995 and 1994.
9. Derivative financial instruments
The Company enters into transactions involving derivative
financial instruments to manage its exposure to interest rate risk,
including hedging specific transactions. The Company manages risks
associated with these instruments as described below. The Company
does not hold derivative instruments for trading purposes.
Market risk is the possibility that the value of the derivative
financial instruments will change due to fluctuations in a factor
from which the instrument derives its value, primarily an interest
rate. The Company is not impacted by market risk related to
derivatives held for non-trading purposes beyond that inherent in
cash market transactions. Derivatives held for purposes other than
trading are largely used to manage risk and, therefore, the cash
flow and income effects of the derivatives are inverse to the
effects of the underlying transactions.
Credit risk is the possibility that the counterparty will not
fulfill the terms of the contract. The Company monitors credit
exposure related to derivative financial instruments through
established approval procedures, including setting concentration
limits by counterparty and industry, and requiring collateral,
where appropriate. A vast majority of the Company's counterparties
are rated A or better by Moody's and Standard & Poor's.
<PAGE>
PAGE 34
9. Derivative financial instruments (continued)
The notional or contract amount of a derivative financial
instrument is generally used to calculate the cash flows that are
received or paid over the life of the agreement. Notional amounts
are not recorded on the balance sheet. Notional amounts far exceed
the related credit exposure.
Credit exposure related to interest rate caps is measured by
replacement cost of the contracts. The replacement cost represents
the fair value of the instruments.
<TABLE>
<CAPTION>
Notional Carrying Fair Total Credit
Dec. 31, 1995 Amount Value Value Exposure
<S> <C> <C> <C> <C>
Assets:
Interest rate caps $300,000 $1,905 $745 $745
Dec. 31, 1994
Assets:
Interest rate caps $200,000 $1,389 $828 $828
</TABLE>
The fair values of derivative financial instruments are based on
market values, dealer quotes or pricing models. The interest rate
caps expire on various dates from 1997 to 2000.
Interest rate caps are used to manage the Company's exposure to
rising interest rates. These instruments are used primarily to
protect the margin between interest rates earned on investments and
the interest rates credited to related annuity contract holders.
The cost of interest rate caps is amortized to interest expense
over the life of the contracts and payments received as a result
of these agreements are recorded as a reduction of interest expense
when realized. The amortized cost of interest rate cap contracts
is included in other investments.
10. Fair values of financial instruments
The Company discloses fair value information for most on- and off-
balance sheet financial instruments for which it is practical to
estimate that value. Fair values of life insurance obligations,
receivables and all non-financial instruments, such as deferred
acquisition costs are excluded. Off-balance sheet intangible
assets, such as the value the field force, are also excluded.
Management believes the value of excluded assets is significant.
The fair value of the Company, therefore, cannot be estimated by
aggregating the amounts presented.
<PAGE>
PAGE 35
10. Fair values of financial instruments (continued)
<TABLE>
<CAPTION>
1995 1994
Carrying Fair Carrying Fair
Financial Assets Value Value Value Value
<S> <C> <C> <C> <C>
Investments:
Fixed maturities (Note 2):
Held to maturity $ 642,580 $ 683,147 $ 686,483 $ 653,080
Available for sale 601,298 601,298 455,103 455,103
Mortgage loans on real
estate (Note 2) 158,730 168,194 164,916 157,085
Other:
Equity securities (Note 2) 10 10 135 135
Derivative financial
instruments (Note 9) 1,905 745 1,389 828
Cash and cash equivalents
(Note 1) -- -- 5,262 5,262
Separate accounts assets
(Note 1) 724,212 724,212 506,208 506,208
Financial Liabilities
Future policy benefits for
fixed annuities 1,038,431 1,005,004 1,025,881 991,358
Separate account liabilitie 678,263 645,389 474,958 448,665
</TABLE>
At Dec. 31, 1995 and 1994, the carrying amount and fair value of
future policy benefits for fixed annuities exclude life insurance-
related contracts carried at $67,843 and $59,803, respectively,
and policy loans of $2,893 and $1,683, respectively. The fair
value of these benefits is based on the status of the annuities at
Dec. 31, 1995 and 1994. The fair value of deferred annuities is
estimated as the carrying amount less any surrender charges and
related loans. The fair value for annuities in non-life contingent
payout status is estimated as the present value of projected
benefit payments at rates appropriate for contracts issued in 1995
and 1994.
At Dec. 31, 1995 and 1994, the fair value of liabilities related to
separate accounts is estimated as the carrying amount less
applicable surrender charges and less variable insurance contracts
carried at $45,949 and $31,250, respectively.
11. Statutory insurance accounting practices
Reconciliations of net income for 1995, 1994 and 1993 and
stockholder's equity at Dec. 31, 1995 and 1994, as shown in the
accompanying financial statements, to that determined using
statutory accounting practices are as follows:
<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Net income, per accompanying
financial statements $ 27,387 $23,655 $23,884
Deferred policy acquisition costs (9,722) (12,187) (10,622)
Adjustments of future policy
benefit liabilities (10,655) 13,741 13,597
Deferred federal income taxes (1,301) (4,321) (462)
Provision for losses on investments -- (1,652) 438
Separate account gains 20,769 142 2,708
Other, net (1,678) 755 (1,182)
Net income, on basis of
statutory accounting practices
$24,800 $20,133 $28,361
<PAGE>
PAGE 36
11. Statutory insurance accounting practices (continued)
1995 1994
Stockholder's equity, per
accompanying financial
statements $ 218,583 $ 171,721
Deferred policy acquisition costs (109,800) (100,078)
Adjustments of future policy
benefit liabilities 23,172 33,827
Deferred federal income taxes 15,663 2,044
Securities valuation reserve (18,029) (15,939)
Adjustments of separate account
liabilitiess 34,326 13,557
Net unrealized loss on
investments (24,231) 19,497
Premiums due 925 851
Deferred revenue liability 794 834
Allowance for losses 445 445
Non-admitted assets (578) (503)
Interest maintenance reserve (2,442) (2,110)
Other, net 347 249
Stockholder's equity, on basis
of statutory accounting
practices $ 139,175 $ 124,395
</TABLE>
<PAGE>
PAGE 37
Report of Independent Auditors
The Board of Directors
IDS Life Insurance Company of New York
We have audited the accompanying balance sheets of IDS Life
Insurance Company of New York (a wholly owned subsidiary of IDS
Life Insurance Company) as of December 31, 1995 and 1994, and the
related statements of income and cash flows for each of the three
years in the period ended December 31, 1995. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of IDS
Life Insurance Company of New York at December 31, 1995 and 1994,
and the results of its operations and its cash flows for each of
the three years in the period ended December 31, 1995, in
conformity with generally accepted accounting principles.
As discussed in Note 1 to the financial statements, the Company
changed its method of accounting for certain investments in debt
and equity securities in 1994.
Ernst & Young LLP
February 2, 1996
Minneapolis, Minnesota
<PAGE>
PAGE 38
[ARTICLE] 6
[NAME] IDS Life of New York Account 7
[FISCAL-YEAR-END] DEC-31-1995
[PERIOD-START] JAN-01-1995
[PERIOD-END] DEC-31-1995
[PERIOD-TYPE] YEAR
[EXCHANGE-RATE] 1
[INVESTMENTS-AT-COST] 967812
[INVESTMENTS-AT-VALUE] 1471286
[RECEIVABLES] 1962
[ASSETS-OTHER] 0
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 1473248
[PAYABLE-FOR-SECURITIES] 0
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] (5806)
[TOTAL-LIABILITIES] (5806)
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 0
[SHARES-COMMON-STOCK] 647532
[SHARES-COMMON-PRIOR] 918062
[ACCUMULATED-NII-CURRENT] 0
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 0
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 0
[NET-ASSETS] 1467442
[DIVIDEND-INCOME] 55094
[INTEREST-INCOME] 0
[OTHER-INCOME] 0
[EXPENSES-NET] (34079)
[NET-INVESTMENT-INCOME] 21015
[REALIZED-GAINS-CURRENT] 47615
[APPREC-INCREASE-CURRENT] 247638
[NET-CHANGE-FROM-OPS] 316268
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 0
[DISTRIBUTIONS-OF-GAINS] 0
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 89583
[NUMBER-OF-SHARES-REDEEMED] (360114)
[SHARES-REINVESTED] 0
[NET-CHANGE-IN-ASSETS] (26199)
[ACCUMULATED-NII-PRIOR] 0
[ACCUMULATED-GAINS-PRIOR] 0
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 0
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] (34079)
[AVERAGE-NET-ASSETS] 1480542
[PER-SHARE-NAV-BEGIN] 0
[PER-SHARE-NII] 0
[PER-SHARE-GAIN-APPREC] 0
[PER-SHARE-DIVIDEND] 0
[PER-SHARE-DISTRIBUTIONS] 0
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 0
<PAGE>
PAGE 39
[EXPENSE-RATIO] 0
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
<PAGE>
PAGE 40
[ARTICLE] 7
[LEGEND]
[CIK]
[NAME] IDS Life Insurance Company of New York
[MULTIPLIER] 1000
[CURRENCY] U.S. DOLLAR
[FISCAL-YEAR-END] DEC-31-1995 DEC-31-1994
[PERIOD-START] JAN-01-1995 JAN-01-1994
[PERIOD-END] DEC-31-1995 DEC-31-1994
[PERIOD-TYPE] YEAR YEAR
[EXCHANGE-RATE] 1 1
[DEBT-HELD-FOR-SALE] 601298 455103
[DEBT-CARRYING-VALUE] 642580 686483
[DEBT-MARKET-VALUE] 683147 653080
[EQUITIES] 10 135
[MORTGAGE] 158730 164916
<REAL-ESTATE 0 0
[TOTAL-INVEST] 1422558 1322925
[CASH] 0 5262
[RECOVER-REINSURE] 40 3
[DEFERRED-ACQUISITION] 109800 100078
[TOTAL-ASSETS] 2281250 1957574
[POLICY-LOSSES] 1288119 1255784
[UNEARNED-PREMIUMS] 0 0
[POLICY-OTHER] 0 0
[POLICY-HOLDER-FUNDS] 3644 3217
[NOTES-PAYABLE] 0 0
[COMMON] 2000 2000
[PREFERRED-MANDATORY] 0 0
[PREFERRED] 0 0
[OTHER-SE] 216583 169721
[TOTAL-LIABILITY-AND-EQUITY] 2281250 1957574
[PREMIUMS] 9280 7846
[INVESTMENT-INCOME] 110924 108143
[INVESTMENT-GAINS] 1548 957
[OTHER-INCOME] 19429 16170
[BENEFITS] 78490 75313
[UNDERWRITING-AMORTIZATION] 13085 12994
[UNDERWRITING-OTHER] 7474 8359
[INCOME-PRETAX] 42132 36449
[INCOME-TAX] 14745 12794
[INCOME-CONTINUING] 27387 23655
[DISCONTINUED] 0 0
[EXTRAORDINARY] 0 0
[CHANGES] 0 0
[NET-INCOME] 27387 23655
[EPS-PRIMARY] 0 0
[EPS-DILUTED] 0 0
[RESERVE-OPEN] 1702 450
[PROVISION-CURRENT] 7902 9789
[PROVISION-PRIOR] 0 0
[PAYMENTS-CURRENT] 8462 8537
[PAYMENTS-PRIOR] 0 0
[RESERVE-CLOSE] 1142 1702
[CUMULATIVE-DEFICIENCY] 0 0
