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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 15 TO
FORM S-6
File No. 33-15290
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 of New York Account 8
B. Name of depositor: IDS LIFE INSURANCE COMPANY OF NEW YORK
C. Complete address of depositor's principal executive offices:
20 Madison Avenue Extension
Box 5144
Albany, New York 12205
D. Name and complete address of agent for service:
Mary Ellyn Minenko, Esq.
IDS Life Insurance Company of New York
IDS Tower 10
Minneapolis, Minnesota 55440-0010
E. Title and amount of securities being registered:
Flexible Premium 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 filing fee:
Registrant's Rule 24f-2 Notice for its most recent fiscal year
was filed on or about February 19, 1997.
H. Approximate date of proposed public offering:
It is proposed that this filing will become effective
(check appropriate space)
immediately upon filing pursuant to paragraph (b)
X on April 30, 1997 pursuant to paragraph (b)
60 days after filing pursuant to paragraph (a)(1)
on (date) pursuant to paragraph (a)(1) of Rule 485
this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
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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 of New York
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; 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; The trust
12............................The fund; The trust; Cover page
13............................Loads, fees, and charges
14............................Purchasing your policy; Application
15............................Premiums; Payment of premiums;
Transfers between the fixed account
and the subaccounts; The fund, The
trust
16............................Premiums; Payment of premiums;
Transfers between the fixed account
and the subaccounts; The fund; The
trust
17............................Two ways to request a transfer, loan
or surrender; Policy surrenders
18............................The fund; The trust
19............................Reports
20............................Not applicable
21............................Policy loans; Two ways to request a
transfer, loan or surrender
22............................Not applicable
23............................Management of IDS Life of New York
24............................Policy value; Death benefits; Payment
of policy proceeds
25............................IDS Life of New York
26............................Not applicable
27............................IDS Life of New York
28............................Management of IDS Life of New York
29............................Ownership
30............................Not applicable
31............................Not applicable
32............................Not applicable
33............................Not applicable
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34............................Not applicable
35............................Not applicable
36............................Not applicable
37............................Not applicable
38............................Distribution of the policy
39............................IDS Life of New York; Distribution of
the policy
40............................Not applicable
41............................Distribution of the policy; IDS Life
of New York
42............................Management of IDS Life of New York
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 of New York
49............................Not applicable
50............................Not applicable
51............................The variable account
52............................Substitution of investments
53............................IDS Life of New York's tax status
54............................Not applicable
55............................Not applicable
56............................Not applicable
57............................Not applicable
58............................Not applicable
59............................Not applicable
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Flexible Premium Variable Life Insurance Policy
Prospectus April 30, 1997
The Flexible Premium Variable Life Insurance Policy described in this prospectus
is designed to provide life insurance coverage on the insured named in the
policy and flexibility of premium payments and death benefits. This flexibility
allows you to meet changing insurance needs with a single insurance policy. 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 nine subaccounts of IDS Life of
New York Account 8 (Variable Account). Six subaccounts invest in the portfolios
of IDS Life Series Fund: Equity, Income, Money Market, Managed, Government
Securities and International Equity. One subaccount invests in the AIM V.I.
Growth and Income Fund. One subaccount invests in Putnam VT New Opportunities
Fund. One subaccount invests in the Smith Barney Inc. Stripped ("Zero Coupon")
U.S. Treasury Securities Fund, Series A. 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 of New York.
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 of 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 the death
benefit guarantee in effect are paid. The death benefit guarantee may remain in
effect until the insured reaches attained insurance age 65 or the policy has
been in effect for five years, whichever is later.
This prospectus contains detailed information about these and other policy
features, including certain restrictions and limitations that apply. This
prospectus also discusses how the investment return earned by the policy can
affect the policy's death benefit and cash surrender value.
As in the case of other life insurance policies, it may not be advantageous to
purchase flexible premium variable life insurance as a replacement for, or in
addition to an existing flexible premium variable or other life insurance
policy.
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IDS Life of New York Account 8
Flexible Premium Variable Life Insurance Policy
Issued and sold by: IDS Life Insurance Company of New York (IDS
Life of New York), 20 Madison Avenue Extension, Albany, New York
12203. Telephone: (518) 869-8613
This prospectus is valid only when accompanied or preceded by the prospectuses
of the IDS Life Series Fund, Inc., AIM Variable Insurance Funds, Inc., Putnam
Variable Trust, and of the Smith Barney Inc. Stripped ("Zero Coupon") U.S.
Treasury Securities Fund, Series A. All prospectuses should be retained for
future reference. This policy is only offered in New York.
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 GUARANTTED 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.
web site address: http://www.americanexpress.com/advisors
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Table of contents
Key terms
The policy in brief
The variable account
The funds
IDS Life Series Fund-Equity Portfolio
IDS Life Series Fund-Income Portfolio
IDS Life Series Fund-Money Market Portfolio
IDS Life Series Fund-Managed Portfolio
IDS Life Series Fund-Government Securities Portfolio
IDS Life Series Fund-International Equity Portfolio
AIM V.I. Growth and Income Fund
Putnam VT New Opportunities Fund
Fund objectives
Relationship between funds and subaccounts
Rates of return of the funds and subaccounts
The trust
Objectives and major investments
Estimated rates of return
Trust maturity
Roles of Smith Barney Inc. and IDS Life of New York
The fixed account
Purchasing your policy
Application
Right to examine policy
Premiums
Loads, fees and charges
Premium expense charge
Monthly deduction
Surrender charge
Partial surrender fee
Mortality and expense risk charge Transaction charge Fund expenses Death
benefit guarantee Grace period Reinstatement
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
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Policy surrenders
Total surrenders
Partial surrenders
Allocations of partial surrenders
Effects of partial surrenders
Taxes
Optional insurance benefits
Waiver of monthly deduction
Accidental death benefit
Other insured rider
Children's insurance rider
Payment of policy proceeds
Federal taxes
IDS Life of New York's tax status Taxation of policy proceeds Modified
endowment contracts Other tax considerations
Ownership
State Regulation
Distribution of the policy
Legal proceedings
Experts
IDS Life of New York
Ownership
State regulator
Distribution of the policy
Legal proceedings
Experts
Management of IDS Life of New York
A I M Advisors, Inc., Putnam Investment Management, Inc. and Smith
Barney Inc.
Other information
Substitution of investments
Voting rights
Reports
Policy illustrations
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Key terms
These terms can help you understand details about your policy
Accumulation unit - An accounting unit used to calculate the policy value of the
subaccounts prior to the insured's death. It is a measure of the net investment
results of each of the subaccounts.
Attained insurance age - The 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
matures, equal to the policy value minus any indebtedness and 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 4
p.m., Eastern time.
Death benefit guarantee - A feature of the policy guaranteeing that the policy
will not lapse before the insured's attained insurance age 65 (or five policy
years, if later). The guarantee is in effect if, on each monthly anniversary,
total premiums paid, minus any partial surrenders and any indebtedness, equal or
exceed the total required minimum monthly premium payments specified in the
policy.
Fixed account - The general investment account of IDS Life of New York. The
fixed account is made up of all of IDS Life of New York'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.
Funds - Mutual funds or portfolios, each with a different
investment objective. You may allocate your premiums into variable
subaccounts investing in shares of any or all of these funds. The
following funds are available:
o Under the IDS Life Series Fund, Inc. - Equity Portfolio, Income
Portfolio, Money Market Portfolio, Managed Portfolio, Government
Securities Portfolio and International Equity Portfolio;
o Under the AIM Variable Insurance Funds, Inc. - AIM V.I. Growth
and Income Fund;
o Under the Putnam Variable Trust - Putnam VT New Opportunities
Fund.
IDS Life of New York - In this prospectus, "we," "us," "our" and "IDS Life of
New York" refer to IDS Life Insurance Company of New York.
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Indebtedness - All existing loans on the policy plus interest that has either
been accrued or added to the policy loan.
Insurance age - The age of the insured, based upon his or her nearest birthday
on the date of the application.
Insured - The person whose life is insured by the policy.
Maturity date - The insured's attained insurance age 100, if living.
Minimum monthly premium - A monthly premium amount specified in the policy that
determines the total payment required to keep the death benefit guarantee in
effect. The initial minimum monthly premium, determined by IDS Life of New York
when the policy is issued, depends on the insured's sex, insurance age, rate
classification, optional insurance benefits added by rider, and the initial
specified amount. An increase or decrease in specified amount, or the addition,
change or termination of a policy rider will change the minimum monthly premium.
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 portion of a premium that is credited to the policy, equal to
the premium you pay minus a charge of 2.5% to cover sales loads and a charge of
1% to cover state premium taxes.
Owner - The entity to which, or individual 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 insured, proceeds will be the death benefit
under the death benefit option in effect as of the date of the
insured's death, minus any indebtedness.
o On the maturity date, proceeds will be the cash surrender
value.
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o On surrender of the policy prior to the maturity date,
the proceeds will be the cash surrender value.
Rate classification - A group of insureds that IDS Life of New York expects will
have similar mortality experience.
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. Under Option 1, it is the death benefit originally
applied for. Under Option 2, it is the initial net amount at risk. 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 or trust.
Surrender charge - A contingent deferred issue and administrative expense charge
and a contingent deferred sales charge assessed against the policy value at the
time of surrender during the first 10 years of the policy and for 10 years after
an increase in coverage.
Trust - A unit investment trust, which is part of Smith Barney Inc. Stripped
("Zero Coupon") U.S. Treasury Securities Fund, Series A. One subaccount of the
variable account invests in the trust, which contains certain debt obligations
of the United States.
Valuation date - A normal business day, Monday through Friday, on which the New
York Stock Exchange is open. The value of each subaccount is set at the close of
business on each valuation date.
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 of New York Account 8 is a separate account of IDS
Life of New York. Each subaccount invests in a particular fund or unit
investment trust. The policy value in each subaccount depends on the performance
of the particular fund or trust.
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 Variable Life Insurance Policy (the policy) is designed to
provide insurance protection on the life of the insured and to build cash value.
Like other life insurance, the policy provides a death benefit that is payable
to the beneficiary upon the insured's death. Unlike traditional, fixed-premium
life insurance, the policy allows you, as the policy owner, to allocate your
premiums (payments), or transfer policy value, to:
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The variable account, consisting of subaccounts, each of which invests
in a fund or unit investment trust with a particular investment
objective. You may direct premiums to any or all of nine of these
subaccounts. Your policy's value may increase or decrease daily,
depending on the investment return. No minimum amount is guaranteed, as
it would be in a traditional life insurance policy. (p.)
The fixed account, which earns interest at rates that are adjusted
periodically by IDS Life of New York. This rate will never be lower than
4.5%. (p.)
The funds: Six subaccounts of the variable account invest in IDS
Life Series Fund, Inc. which includes Equity, Income, Money Market,
Managed, Government Securities and International Equity Portfolios.
One subaccount invests in AIM Variable Insurance Funds, Inc.-AIM
V.I. Growth and Income Fund. One subaccount invests in Putnam
Variable Trust-Putnam VT New Opportunities Fund. (p.)
The trust: One subaccount of the variable account invests in units
of the Smith Barney Inc. Stripped ("Zero Coupon") U.S. Treasury
Securities Fund, Series A, consisting of a unit investment trust.
(p.)
Purchasing your policy: To apply, send a completed application and premium
payment to IDS Life of New York's home office. For your application to be
accepted, you will need to meet certain conditions stated in the application
form and to supply medical and other evidence that the person you propose to
insure (yourself or someone else) is insurable according to 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 also make additional, unscheduled premium
payments in any amount from $25 to $500,000. We may refuse
premiums in order to comply with the Code. (p.)
Loads, fees and charges: Your policy is subject to the following charges, which
compensate IDS Life of New York for administering and distributing the policy as
well as paying policy benefits and assuming related risks:
o Premium expense charge -- 2.5% sales charge and 1% premium tax charge for a
total of 3.5% of each premium payment. This charge pays some distribution
expenses and state and local premium taxes.
o Monthly deduction -- charged against the value of your policy each month,
covering the cost of insurance, cost of issuing the policy, certain
administrative expenses, a death benefit guarantee charge and optional insurance
benefits.
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o Surrender charge -- applies if you surrender your policy for its full cash
surrender value, or the policy lapses, during the first 10 years and for 10
years after requesting an increase in the specified amount (the minimum death
benefit specified in your application). The surrender charge consists of a
deferred charge for costs of issuing the policy and a deferred sales charge. It
is based on the initial specified amount and on any increase in the 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, if 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 Transaction charge -- applies only to subaccounts that invest in the trusts;
equals, on an annual basis, 0.25% of their average daily net asset value.
o Fund expenses -- applies only to the funds. The investment management fee
equals, on an annual basis, 0.5% of the average daily net assets of the IDS Life
Series Fund-Money Market Portfolio; 0.95% of the average daily net assets of IDS
Life Series Fund-International Equity Portfolio; 0.63% of the average daily net
assets of Putnam VT New Opportunities Fund; 0.65% of the average daily net
assets of the AIM V.I. Growth and Income Fund and 0.7% of the average daily net
assets of the IDS Life Series Fund-Equity, Income, Managed and Government
Securities Portfolios. The fund also pay taxes, brokerage commissions and
nonadvisory expenses. IDS Life has agreed to a voluntary limit of 0.1%, on an
annual basis, of the average daily net assets of each IDS Life Series Fund
portfolio for these nonadvisory expenses. (p.)
Death benefit guarantee: Your policy will not lapse regardless of investment
performance if the death benefit guarantee is in effect. To keep the death
benefit guarantee in effect, you must pay the minimum monthly premiums specified
in the policy. The death benefit guarantee applies only until the insured
reaches attained insurance age 65 or the policy has been in effect for five
years, whichever is later. (p.)
Grace period: If the cash surrender value of your policy becomes less than the
amount needed to pay the monthly deduction and the death benefit guarantee 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, if you make certain payments and present evidence
satisfactory to IDS Life of New York that the insured remains
insurable. The death benefit guarantee cannot be reinstated.
(p.)
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PAGE 13
Death benefits: 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. (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.) You can request up to five 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.)
Policy surrenders: You may cancel the policy while the insured is living 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,
the insured dies or the policy matures, which occurs when the insured reaches
attained insurance age 100. 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, maturity, 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
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PAGE 14
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 nine subaccounts of the variable
account. These subaccounts invest in the following funds:
<TABLE>
<CAPTION>
<S> <C>
Subaccount invests exclusively in shares of
Equity IDS Life Series Fund Equity Portfolio
Income IDS Life Series Fund Income Portfolio
Money Market IDS Life Series Fund Money Market Portfolio
Managed IDS Life Series Fund Managed Portfolio
Government Securities IDS Life Series Fund Government Securities Portfolio
International Equity IDS Life Series Fund International Equity Portfolio
YGI AIM V.I. Growth and Income Fund
YNO Putnam VT New Opportunities Fund
</TABLE>
One subaccount invests in units of the Smith Barney Inc. Stripped
("Zero Coupon") U.S. Securities Fund, Series A, a unit investment
trust:
Subaccount invests in a trust with maturity date of
2004 Nov. 15, 2004
The variable account was established on Sept. 12, 1985, under New York 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. International Equity subaccount
was added to the variable account on Oct. 28, 1994. YGI and YNO subaccounts were
added to the variable account on Nov. 22, 1996.
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 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 of New York.
At all times, IDS Life of New York 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 funds
IDS Life Series Fund, Inc., a Minnesota corporation, is a diversified, open-end
management investment company incorporated on May 8, 1985. IDS Life Series Fund
consists of six portfolios:
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PAGE 15
IDS Life Series Fund-Equity Portfolio
Objective: capital appreciation. Invests primarily in common
stocks and other securities convertible into common stock.
IDS Life Series Fund-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.
IDS Life Series Fund-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.
IDS Life Series Fund-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.
IDS Life Series Fund-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.
IDS Life Series Fund-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.
AIM Variable Insurance Funds, Inc., a Maryland corporation, is an open-end,
series, management investment company incorporated on January 22, 1993. The
variable account invests in the following fund:
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PAGE 16
AIM V.I. Growth and Income Fund
Objective: to seek growth of capital, with current income as a secondary
objective. The Fund seeks to achieve its objective by generally investing at
least 65% of its net assets in stocks of companies believed by management to
have the potential for above average growth in revenues and earnings.
Putnam Variable Trust is a Massachusetts business trust organized on September
24, 1987. The variable account invests in the following fund:
Putnam VT New Opportunities Fund
Objective: seeks long term capital appreciation by investing
principally in common stocks of companies in sectors of the economy
which Putnam Investment Management, Inc. ("Putnam Management")
management believes possesses above-average long-term growth
potential.
Fund objectives
Fund objectives for all funds except Putnam VT New Opportunities Fund can be
changed only if holders of a majority of outstanding shares agree. The objective
of Putnam VT New Opportunities Fund may be changed by the Trustees without a
vote of the shareholders, but as a matter of policy, the Trustees would not
materially change the fund's objectives without shareholder approval. Because
fund 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 fund will be achieved.
Relationship between funds and subaccounts
Shares of each fund are sold to the appropriate subaccount at net asset value
without a sales charge. Dividends and capital gain distributions from a fund are
reinvested at net asset value without a sales charge and retained as an asset of
the appropriate subaccount. Fund 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.
Currently, shares of the IDS Life Series Fund portfolios are available to serve
as the underlying investment for variable life insurance. Shares of AIM V.I.
Growth and Income Fund and Putnam VT New Opportunities Fund are available to
serve as the underlying investment for variable life insurance contracts,
variable annuities and qualified plans. In the future, shares of the IDS Life
Series Fund portfolios may be available to serve as the underlying investment
for variable life insurance contracts, variable annuities and qualified plans.
It is conceivable that in the future it may be disadvantageous for variable life
insurance separate accounts, variable annuity separate accounts and/or
<PAGE>
PAGE 17
qualified plans to invest in the available funds simultaneously. Although IDS
Life and the funds do not currently foresee any such disadvantages, the boards
of directors or trustees of the appropriate funds will monitor events in order
to identify any material conflicts between such policy owners, contract owners
and qualified plans to determine what action, if any, should be taken in
response to a conflict. If a board were to conclude that separate funds should
be established for variable life insurance, variable annuity and qualified plan
separate accounts, the variable life insurance policyholders would not bear any
expenses associated with establishing separate accounts.
IDS Life acts as the investment manager and American Express Financial
Corporation acts as investment advisor of the IDS Life Series Fund, Inc.
American Express Trust Company acts as custodian of the IDS Life Series Fund
Inc.'s investments.
AIM Advisors, Inc. acts as the investment advisor for AIM V.I.
Growth and Income Fund. Putnam Management acts as the investment
manager for Putnam VT New Opportunities Fund.
The investment managers or advisors receive fees for their services as described
under "Loads, fees and charges."
Detailed information about the funds, their investment objectives, policies and
risks, may be found in the fund prospectuses.
Diversification: The Internal Revenue Service (IRS) has issued final regulations
relating to the diversification requirements under Section 817(h) of the Code.
Each fund 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 funds and subaccounts
This section presents rates of return first for the funds, and then for the
corresponding subaccounts. Rates of return are different in the two cases
because those of the subaccounts reflect additional charges. This section shows
the actual rates of return for the six IDS Life Series Fund portfolios and
subaccounts. This section shows hypothetical rates of return for the AIM V.I.
Growth and Income Fund and the Putnam VT New Opportunities Fund until November
22, 1996 when the subaccounts began investing in those funds. After this date,
the section shows actual rates of return. All expenses mentioned in the section
are explained fully under "Loads, fees and charges".
<PAGE>
PAGE 18
Rates of return of the funds:
In the following table are average annual rates of return based on the actual
investment performance of the funds after deduction of applicable fund expenses
(including the investment management fees) for the periods indicated. These
rates do not reflect charges 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 12/31/96
<TABLE>
<CAPTION>
10 years or
Fund 1 year 3 years 5 years Since inception*
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
IDS Life Series Fund-Equity (Beta 0.88**) 19.91% 19.47% 15.25% 16.81%
IDS Life Series Fund-Income 3.46 6.19 8.57 7.86
IDS Life Series Fund-Money Market 4.83 4.55 3.93 5.45
IDS Life Series Fund-Managed (Beta 0.66**) 14.52 11.12 12.66 14.48
IDS Life Series Fund-Government Securities 1.47 4.43 6.39 7.02
IDS Life Series Fund-International Equity 23.85 -- -- 31.68
AIM V.I. Growth and Income Fund 19.95 -- -- 19.43
Putnam VT New Opportunities Fund 10.17 -- -- 22.71
- -----------------------------------------------------------------------------
</TABLE>
*IDS Life Series Fund - Equity, Income, Money Market, Managed and Government
Securities Portfolios commenced operations on January 20, 1986. IDS Life Series
Fund - International Equity Portfolio commenced operations on October 28, 1994.
AIM V.I. Growth and Income Fund and Putnam VT New Opportunities Fund each
commenced operations on May 2, 1994.
**Beta is a volatility measure based on calculations of the fund's monthly
returns compared to the S&P 500 Index. A beta less than 1 indicates performance
that is less volatile than the market; a beta more than 1 indicates performance
that is more volatile than the market.
Rates of return of subaccounts
Average annual rates of return in the following table reflect all charges
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>
10 years or
Subaccount Investment 1 year 3 years 5 years Since Inception*
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Equity 18.83% 18.40% 14.22% 13.14%
Income 2.59 5.27 7.62 8.34
Money Market 3.99 3.69 3.05 4.48
Managed 13.50 10.11 11.64 12.46
Government Securities 0.57 3.51 5.45 7.44
International Equity 22.95 -- -- 26.52
YGI** 18.87 -- -- 18.33
YNO** 9.18 -- -- 21.60
</TABLE>
<PAGE>
PAGE 19
*Equity, Income, Money Market, Managed and Government Securities
subaccounts commenced operations on Aug. 31, 1987. International
Equity subaccount commenced operations on Oct. 28, 1994. YGI and
YNO subaccounts each commenced operations on Nov. 22, 1996.
**For subaccounts YGI and YNO, the performance figures are calculated based on
the historical performance of the funds, which commenced operations on May 2,
1994. The figures show what performance of the subaccounts would have been if
these subaccounts had existed during the illustrated periods.
The trust
Smith Barney Inc. Stripped ("Zero Coupon") U.S. Treasury Securities
Fund, Series A, consists of a unit investment trust. Currently one
is available for investment which matures in 2004.
Objectives and major investments
The objective of the trust is to provide safety of capital and income through
investment in a portfolio consisting primarily of:
o bearer debt obligations issued by the United States that have been
stripped of their unmatured interest coupons,
o coupons stripped from debt obligations of the United States,
and
o receipts and certificates for such stripped debt obligations
and coupons.
The trust will also contain a Treasury note or notes providing interest income
to pay anticipated expenses of the trust.
U.S. Treasury securities that have been stripped of their unmatured interest
coupons are essentially bonds or notes that pay no interest. For this reason
they are purchased at a deep discount from their face value and, if held to
maturity, return the full face value.
Before maturity, the value of trust units will be more volatile than would the
value of units of a trust containing unstripped U.S. Treasury securities of
comparable maturities. The value may affect death benefits and policy value,
which will fluctuate accordingly.
Estimated rates of return
Because amounts invested in stripped U.S. Treasury securities will grow to their
face values if held to maturity, we can estimate the compound rate of growth to
maturity, based on certain assumptions about trust expenses. The net rate of
return to maturity is calculated based on the estimated compound rate of growth
in the units and these charges. Since the value of the trust's units will
<PAGE>
PAGE 20
vary daily, reflecting the market value of the underlying securities, the
compound rate of growth to maturity and net rate of return to maturity will also
vary daily. Estimated net rates of return from March 31, 1997 to maturity for
the trust, taking account of anticipated expenses are:
Trust maturity date Net rate of return to maturity
Nov. 15, 2004 6.92%
Rates of return to owners will be less than rates of return for trust units
themselves because the units are held in subaccounts of the variable account,
which are subject to policy charges not reflected in the above estimates. (See
"Loads, fees, and charges" for a full discussion of applicable charges.)
Trust maturity
On the maturity date of a particular trust, the policy value allocated to the
subaccount that invests in the trust will automatically be reallocated to the
Money Market subaccount, which invests in the Money Market Portfolio, unless you
give us other directions in writing at least seven days before the maturity
date. We will notify you in writing 30 days before the trust matures.
Roles of Smith Barney Inc. and IDS Life of New York
Smith Barney sponsors the trust and sells units to the subaccounts. Because the
trust invests in a specified portfolio, there is no investment manager.
The price of the trust's units includes a transaction charge, paid directly by
IDS Life of New York to Smith Barney out of IDS Life of New York's general
account assets. This charge is limited by agreement between IDS Life of New York
and Smith Barney and will not be greater than that ordinarily paid by a dealer
for similar securities. We will seek reimbursement for the amounts paid through
a daily asset charge, described under "Loads, fees and charges."
Trust units will be sold to the extent necessary for IDS Life of New York to
provide benefits and make reallocation under the policies. Units will be sold to
Smith Barney, which has undertaken to maintain a secondary market in units of
the trust.
IDS Life of New York and Smith Barney reserve the right to discontinue the sale
of new units of a trust and to create additional trusts in the future.
More detailed information may be found in the current prospectus
for the Smith Barney Inc. Stripped ("Zero Coupon") U.S. Treasury
Securities Fund, Series A.
<PAGE>
PAGE 21
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 of New York. It
includes all assets owned by IDS Life of New York other than those in the
variable account and other separate accounts. Subject to applicable law, IDS
Life of New York 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 of New York guarantees that the policy value
you place in the fixed account will accrue interest at an effective annual rate
of at least 4.5%, independent of the actual investment experience of the
account. IDS Life of New York bears the full investment risk for amounts
allocated to the fixed account.
IDS Life of New York is not obligated to credit interest at any rate higher than
4.5%, although we may do so at our sole discretion. In recent years interest was
credited as follows:
1987 8.75 to 9.25%
1988 8.0 to 9.25%
1989 8.25 to 9.5%
1990 8.25 to 9.2%
1991 7.55 to 8.55%
1992 6.5 to 8.05%
1993 5.7 to 7.4%
1994 5.7 to 7.6%
1995 5.75 to 7.6%
1996 5.5 to 7.2%
These rates are not indicative of future interest rates. The rate of return to
you as owner will be less than the rate credited because policy charges
(described under "Loads, fees and charges") reduce your net return.
Interest in excess of 4.5% 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
<PAGE>
PAGE 22
has not reviewed the disclosures in this prospectus relating to the fixed
account. Disclosures regarding the fixed account may, 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 of New York'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 of New York requires
satisfactory evidence of the insurability of the person whose life you propose
to insure (yourself or someone else). Our underwriting department will review
your application and any medical information or other data required to determine
whether the proposed individual is insurable under our underwriting rules. Your
application may be declined if IDS Life of New York determines the individual is
not insurable and any premium you have paid will be returned.
Age limit: IDS Life of New York generally will not issue a policy to persons
over the insurance age of 75. It may, however, do so at its sole discretion.
Rate classification: The rate classification is based on the insured's health,
occupation or other relevant underwriting standards. This classification will
affect your monthly deduction and may affect the cost of certain optional
insurance benefits. (See "Loads, fees and charges" and "Optional insurance
benefits.")
Other conditions: In addition to proving insurability, you and the insured must
also meet certain conditions, stated in the application form, before coverage
will become effective and your policy will be delivered to you.
Death of the insured: If the insured dies before the policy is issued and:
o if all conditions stated in the application have not been met,
IDS Life of New York's sole liability will be to return the
premium paid plus any interest earned.
o if all conditions stated in the application have been met, IDS
Life of New York's liability will be the lesser of the death
benefit applied for or $150,000.
<PAGE>
PAGE 23
Incontestability: IDS Life of New York 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 insured's
lifetime for two years from the policy date, IDS Life of New York 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 of New
York or your financial advisor with a written request for cancellation, by the
latest of:
o the 10th day after you receive it;
o the 10th day after IDS Life of New York 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 first several policy years, IDS Life of New
York requires that premiums sufficient to keep the death benefit guarantee in
effect be paid to
keep the policy in force.
You may schedule payments annually, semiannually or quarterly. (Payment at any
other interval must be approved by IDS Life of New York.) 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 the death benefit guarantee will remain in effect.
You may also change the amount and frequency of scheduled premium payments by
written request. IDS Life of New York 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 death benefit guarantee remains in effect.
<PAGE>
PAGE 24
Premium limitations:
You may make unscheduled premium payments at any time and in any amount from $25
to $500,000. IDS Life of New York reserves the right to limit the number and
amount of unscheduled premium payments.
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 of New York 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.
Allocation of premiums:
Until your application is approved by IDS Life of New York, 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.
Your ability to allocate policy value to the trust may be limited by the
availability of trust units.
Loads, fees and charges
Policy charges compensate IDS Life of New York for:
o providing the insurance benefits of the policy;
o issuing 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 and/or subaccounts.
You may also be assessed a charge if you surrender your policy or the policy
lapses.
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 two parts:
<PAGE>
PAGE 25
Sales charge: 2.5% of each premium payment. Partially compensates IDS Life of
New York for expenses in distributing the policy, including agents' commissions,
advertising and printing of prospectuses and sales literature. (These expenses
also may be partially compensated by the contingent deferred sales charge,
discussed under "Surrender charge," below.)
Premium tax charge: 1% of each premium payment. Compensates IDS Life of New York
for paying taxes imposed by the state of New York on premiums received by
insurance companies.
Monthly deduction
On each monthly date we deduct from the value of your policy in the fixed 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;
3. the death benefit guarantee charge shown in your policy;
and
4. charges for any optional insurance benefits provided by
rider for the policy month.
Each of the four 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; or
o the value in the fixed account or any subaccount is
insufficient to pay the portion of the monthly deduction you
have specified.
If the cash surrender value of your policy is not enough to cover the monthly
deduction on a monthly anniversary, the policy may lapse. However, the policy
will not lapse if the death benefit guarantee is in effect. (See "Death benefit
guarantee"; also "Grace period" and "Reinstatement" at the end of this section
on policy costs.)
<PAGE>
PAGE 26
Components of the monthly deduction:
1. Cost of insurance: primarily, the cost of providing the death
benefit under your policy, which depends on:
o the amount of the death benefit;
o the policy value; and
o the statistical risk that the insured will die in a
given period.
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, which reflects the insured's
statistical mortality risk, based on his or her sex, attained insurance age (age
at last policy anniversary) and rate classification. Generally, the cost of
insurance rate will increase as the insured's attained insurance age increases.
Rates are set by IDS Life of New York, 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 rate classification. However, rates will
not exceed the Guaranteed Maximum Monthly Cost of Insurance Rates shown in your
policy, which are based on the 1980 Commissioners Standard Ordinary Smoker and
Nonsmoker Mortality Tables, Age Nearest Birthday.
Policies purchased on or after May 1, 1991 with an initial specified amount of
$350,000 or greater qualify for lower cost of insurance rates than policies
purchased with a specified amount less than $350,000. In addition, all policies
purchased on or after May 1, 1993 qualify for lower cost of insurance rates than
policies purchased earlier.
(b) is the death benefit on the monthly date divided by 1.0036748 (which reduces
IDS Life of New York's net amount at risk, solely for computing the cost of
insurance, by taking into account assumed monthly earnings at an annual rate of
4.5%);
(c) is the policy value on the monthly date. At this point, the
policy value has been reduced by the policy fee, death benefit
guarantee charge and any charges for optional riders;
(d) is any flat extra insurance charges assessed as a result of
special underwriting considerations.
2. Policy fee: $5 per month. This charge reimburses IDS Life of New York for
expenses of issuing the policy, such as processing the application (primarily
underwriting) and setting up computer records; and of administering the policy,
such as processing claims, maintaining records, making policy changes and
communicating with owners.
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PAGE 27
3. Death benefit guarantee charge: 1 cent per $1,000 of the current specified
amount and 1 cent per $1,000 of coverage under any other insured rider. This
charge compensates IDS Life of New York for the risk assumed in providing the
death benefit guarantee. The charge is included in the monthly deduction in the
first five policy years or until the insured's attained insurance age 65,
whichever is later. The charge will not be deducted if the death benefit
guarantee is no longer in effect. For any policy month in which the monthly
deduction is paid by a waiver of monthly deduction rider, the minimum monthly
premium will be zero. (See "Death benefit guarantee," later in this section for
an explanation of the minimum monthly premium and "Other insured rider," under
"Optional insurance benefits.")
4. Optional insurance benefit charges: charges for any optional
benefits added to the policy by rider. See "Optional insurance
benefits".
Surrender charge
If you surrender your policy or the policy lapses during the first
10 policy years and in the 10 years following an increase in
specified amount a surrender charge will be assessed. The
surrender charge is the sum of two parts:
Contingent deferred issue and administrative expense charge: Reimburses IDS Life
of New York for costs of issuing the policy, such as processing the application
(primarily underwriting) and setting up computer records. For the initial
specified amount, 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 10 policy years. If the specified amount of the
policy is increased, an additional charge will apply. The additional charge will
be $4 per thousand dollars of increase in specified amount. It remains level
during the first five years following the effective date of the increase and
then decreases monthly until it is zero at the end of the 10th year following
the increase.
Contingent deferred sales charge:
Partially compensates IDS Life of New York for expenses of distributing the
policy, including financial advisors' commissions, advertising and printing the
prospectus and sales literature. For the initial specified amount, this charge
is the sum of 27.5% of premium payments up to a maximum amount shown in the
policy plus 6.5% of all other premium payments. The maximum amount shown in the
policy will be based on the insured's insurance age, sex, rate classification
and initial specified amount. If the specified amount of the policy is
increased, an additional charge will apply.
<PAGE>
PAGE 28
The additional charge will be 6.5% of all premium payments
attributable to the increase. Premiums attributable to the
increase are calculated as
a x (b + c)
where:
(a) is the amount of the increase in the specified amount divided by the total
specified amount after the increase;
(b) is the policy value on the date of the increase; and
(c) is all premium payments paid on or after the date of the
increase.
Maximum surrender charge:
The total surrender charge is subject to an overall upper limit or "maximum
surrender charge." The "maximum surrender charge" for the initial specified
amount will be shown in the policy. It is based on the insured's insurance age,
sex, rate classification and initial specified amount. The "maximum surrender
charge" for the initial specified amount will remain level during the first five
policy years and then decrease monthly until it is zero at the end of 10 policy
years. If the specified amount is increased, an "additional maximum surrender
charge" will apply. The "additional maximum surrender charge" will be shown in a
revised policy. It will be based on the insured's attained insurance age, sex,
rate classification and the amount of the increase. The "additional maximum
surrender charge" will remain level during the first five years following the
effective date of the increase and then decrease monthly until it is zero at the
end of the 10th year following the increase.
If premium payments are equal to or somewhat higher than the premiums needed to
keep the death benefit guarantee in effect, for several years the surrender
charge will generally be the charge described in the "Contingent deferred issue
and administrative expense charge" and "Contingent deferred sales charge"
sections above. After that, the "Maximum surrender charge" will generally apply.
If premium payments are paid at a significantly higher level, the "Maximum
surrender charge" will generally apply in all 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.
<PAGE>
PAGE 29
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. The subaccounts
pay this fee at the time that dividends are distributed from the funds in which
they invest. Computed daily, the charge compensates IDS Life of New York 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 administrative expense charge (described
above) may be insufficient to cover the cost of administering the
policy.
Any profit from the mortality and expense risk charge would be available to IDS
Life of New York 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 and surrender charges discussed earlier. Any further deficit will
have to be made up from IDS Life of New York's general assets.
Transaction charge
IDS Life of New York makes a daily charge against the assets of the subaccount
that invests in the trust. This charge is intended to reimburse us for the
transaction fee we pay from our general account assets to Smith Barney Inc. on
the sale of the trust units to the subaccounts.
The asset charge is equivalent to an effective annual rate of 0.25% of the value
of the subaccounts investing in the trust. This amount may be increased in the
future but will not exceed an effective annual rate of 0.5% of the value of
these subaccounts. The charge will be based on our costs (taking into account
the interest we lose on the amounts paid to Smith Barney).
Fund expenses
The investment managers receive fees for their services to the funds. The funds
also pay taxes, brokerage commissions and 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. IDS
Life has agreed to a voluntary limit of 0.1%, on an annual basis, of the average
daily net assets of each of the IDS Life Series Fund Portfolios for these
nonadvisory expenses, even though actual expenses on IDS Life Series
Fund-Government Securities Portfolio ranged up to 0.18%, IDS Life Series
Fund-Money Market Portfolios ranged up to 0.23% and IDS Life Series
Fund-International Equity
<PAGE>
PAGE 30
Portfolio ranged up to 0.37%. IDS Life reserves the right to discontinue
limiting these nonadvisory expenses at 0.1%. However, its present intention is
to continue to limit until the time that actual expenses are less than the
limit. Other expenses for the year ended Dec. 31, 1996 were 0.09% for Putnam VT
New Opportunities Fund. For AIM V.I. Growth and Income Fund other expenses
(annualized) were 0.13% for the period ended Dec. 31, 1996.
The investment management fee is deducted from the IDS Life Series Fund -
Equity, Income, Money Market, Managed, Government Securities, International
Equity Portfolios and Putnam VT New Opportunities Fund and the AIM V.I. Growth
and Income Fund daily.
The investment management fee equals, on an annual basis:
o IDS Life Series Fund-Money Market Portfolio -- 0.5% of
average daily net assets
o Putnam VT New Opportunites Fund -- 0.63% of average daily
net assets
o AIM V.I. Growth and Income Fund -- 0.65% of average daily
net assets
o IDS Life Series Fund-Equity, Income, Managed and Government Securities
Portfolios -- 0.7% of average daily net assets
o IDS Life Series Fund-International Equity Portfolio -- 0.95%
of average daily net assets
IDS Life of New York has entered into certain agreements under which it is
compensated by the advisors and/or distributors of the AIM V.I. Growth and
Income Fund and the Putnam VT New Opportunities Fund for the administrative
services it provides to these funds.
Other information on charges:
IDS Life of New York may reduce or eliminate various fees and charges when we
incur lower sales costs and/or perform fewer administrative services than usual.
The two most common cases are:
o Policies made available by an employer to a group of
employees.
o Policies purchased on or after May 1, 1991 with an initial specified
amount of $350,000 or greater.
Death benefit guarantee
Your policy will remain in force even if the cash surrender value is
insufficient to cover the monthly deduction if you have paid the minimum monthly
premiums shown in the policy. Although the minimum premium is specified as a
monthly amount, you may pay on any schedule you choose, as long as:
the sum of premiums paid - partial surrenders - outstanding
indebtedness
equals or exceeds
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minimum monthly premium x number of months since policy date
(including the current month)
This guarantee applies only until the insured reaches attained insurance age 65
or the policy has been in force for five years, whichever is later. For factors
affecting the minimum monthly premium, see "Changes in specified amount" under
"Death benefit" and "Optional insurance benefits."
If, on a monthly date, you have not paid enough premiums to keep the death
benefit guarantee 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, 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 death benefit guarantee cannot be reinstated.
Grace period
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 of New York 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 cover the next three monthly deductions. If we receive this
premium before the end of the 61-day grace period, we will use the payment to
cover 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 you do not pay the premium, the policy will lapse without value,
unless the death benefit guarantee described above is in effect.
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 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 of New York will require:
o a written request;
o evidence satisfactory to IDS Life of New York that the
insured remains insurable;
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.
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The effective date of a reinstated policy will be the monthly date on or next
following the day IDS Life of New York 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 of New York will have two years from the effective date of
reinstatement to contest the truth of statements or representations in the
reinstatement application.
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.
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Subaccount values
The value in each subaccount changes daily, depending on the investment
performance of the fund or trust 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:
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 funds, they're related to, but not the same as,
the net asset value of the corresponding fund. The dollar value of each
accumulation unit can rise or fall daily, depending on the investment
performance of the underlying fund, on any change in the value of trust units
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.
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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 fund or value of a unit of
the trust; plus
o per-share amount of any dividend or capital gain distribution
made by the relevant fund 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.
(b) equals:
o net asset value per share of the fund or value of a unit of
the trust 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
and, for the subaccount investing in the trust, the transaction 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(s) net asset value or the
value of the trust;
o dividends distributed to the subaccount(s);
o capital gains or losses of underlying funds;
o fund operating expenses;
o mortality and expense risk charges; and/or
o the transaction charge for the subaccount investing in the trust.
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Death benefits
When you purchase your policy, you decide on the minimum amount of protection
you want for the beneficiary if the insured dies. This amount is called the
specified amount. Your policy's death benefit can never be less than this amount
unless you change it or unless your policy has an outstanding indebtedness.
You also choose one of two death benefit options, which determines how the
policy's value will affect the amount paid to the beneficiary if the insured
dies while the policy is in force:
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 insured's death; or
o the applicable percentage of the policy value on the date of
death, if death occurs on a valuation date, or on the next valuation date
following the date of death. (See table below.)
Thus, the death benefit remains level -- at the specified amount -- as long as
the applicable percentage of policy value is less than or equal to that amount.
Only when the applicable percentage of policy value exceeds the specified amount
will the death benefit vary with the policy value. After attained insurance age
40, the applicable percentage decreases as the insured's age increases.
Applicable percentage table
Insured's Applicable Insured's Applicable
attained percentage of attained percentage of
insurance policy insurance policy
age value age value
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
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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 (from the
preceding table) on the date of death, if death occurs on a valuation
date, or on the next valuation date following the date of death.
Under Option 2 the death benefit will always vary as the policy value varies.
The death benefit will equal the sum of the specified amount plus the policy
value until the applicable percentage of the policy value exceeds that sum.
Examples: Option 1 Option 2
- --------- -------- --------
specified amount $100,000 $100,000
policy value $ 5,000 $ 5,000
death benefit $100,000 $105,000
policy value increases to $ 8,000 $ 8,000
death benefit $100,000 $108,000
policy value decreases to $ 3,000 $ 3,000
death benefit $100,000 $103,000
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 of New York'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 (currently $50,000 for the first two
policy years, $40,000 in years three through 10 and $25,000 thereafter).
The minimum specified amount for policies purchased on or after May 1, 1991 with
an initial specified amount of $350,000 or more is $350,000 in the first policy
year, $325,000 in years two to five, $300,000 in years six to 10 and $275,000
thereafter.
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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
and the death benefit guarantee charge both depend upon 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 increase or
decrease the specified amount once each policy year after the first. Changes in
specified amount may have tax implications, discussed in the section "Modified
endowment contracts" under "Federal taxes."
Increases: If you increase the specified amount, additional evidence of
insurability that is satisfactory to IDS Life of New York may be required. The
effective date of the increase will be the monthly anniversary on or next
following our approval of the increase. The increase may not be less than
$10,000, and no increase will be permitted after the insured's attained
insurance age 75.
An increase in the specified amount will have the following effects on policy
charges:
o Your monthly deduction will increase because the cost of insurance and
the death benefit guarantee charge both depend upon the specified amount.
o Charges for certain optional insurance benefits will
increase.
o The minimum monthly premium will increase if the death benefit guarantee
is in effect.
o The surrender charge will increase.
At the time of the increase in specified amount, the cash surrender value of
your policy must be sufficient to pay the monthly deduction on the next monthly
anniversary. The increased surrender charge will reduce the cash surrender
value. If the remaining cash surrender value is not sufficient to cover the
monthly deduction, we will require you to pay additional premiums within the
61-day grace period. If you do not, the policy will lapse unless the death
benefit guarantee is in effect. Because the minimum monthly premium will
increase, additional premiums may also be required to keep the death benefit
guarantee in effect.
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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 (currently $50,000 for the first two policy years, $40,000 in
years three through 10, and $25,000 thereafter). 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.
The minimum specified amount for policies purchased on or after May 1, 1991 with
an initial specified amount of $350,000 or more is $350,000 in the first policy
year, $325,000 in years two to five, $300,000 in years six to 10 and $275,000
thereafter.
A decrease in specified amount will affect your costs as follows:
o Your monthly deduction will decrease because the cost of insurance and
the death benefit guarantee charge both depend upon the specified amount.
o Charges for certain optional insurance benefits will
decrease.
o The minimum monthly premium will decrease if the death benefit guarantee
is in effect.
o The surrender charge will not change.
No surrender charge is imposed when you request a decrease in the specified
amount.
Decreases in the specified amount will be deducted from the current specified
amount in this order:
1. First from the portion due to the most recent increase;
2. Next from portions due to the next most recent increases
successively; and
3. Then from the initial specified amount when the policy was
issued.
This procedure may affect the cost of insurance if different rate
classifications have been applied to the current specified amount. The rate
classification applicable to the most recent increase in the specified amount
will be eliminated first, then the rate classification applicable to the next
most recent increase, and so on.
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Misstatement of age or sex
If the insured's age or sex has been misstated, the proceeds payable upon 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
Suicide by the insured, whether sane or insane, within two years from the policy
date is not covered by the policy. If suicide occurs, the only amount payable to
the beneficiary will be the premiums paid, minus the amount of any outstanding
indebtedness.
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 of New York, subject to requirements and restrictions stated in the policy.
If you do not designate a beneficiary, or if the designated beneficiary dies
before the 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 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 amounts from the fixed account within
30 days before the policy anniversary, the transfer will become effective on the
anniversary.
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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
Five for mail and phone transfers. Twelve for automated transfers.
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.
1 By letter
Regular mail:
IDS Life Insurance Company of New York
P.O. Box 5144
Albany, NY 12205
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Express mail:
IDS Life Insurance Company of New York
20 Madison Ave. Extension
Albany, NY 12203
2 By phone
Call between 8 a.m. and 6 p.m. Eastern Time:
1-800-541-2251 (toll free) or
(518) 869-8613 (Albany area)
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 or surrender request 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 these
procedures are followed, neither IDS Life of New York nor its affiliates will be
liable for any loss resulting from fraudulent requests.
o Telephone transfers are automatically available. You may request that
telephone transfers not be authorized from your account by writing IDS Life of
New York.
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
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 subaccount.
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.
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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. 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.
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 11.11
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 $10.81 per unit over the 10 months, while the
average market price actually was $13.10.
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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. Because
this strategy involves continuous investing, your success with dollar-cost
averaging will depend upon your willingness to continue to invest regularly
through periods of low price levels. Dollar-cost averaging can be an effective
way 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.) Loans by telephone are limited to $50,000. 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.
Interest rate: 6.1% payable in advance, which is equivalent to a 6.5% effective
rate. For policies purchased on or after May 1, 1993, we expect to reduce the
loan interest rate after a policy's 10th anniversary to 4.3% payable in advance,
equivalent to a 4.5% effective rate.
Minimum loan: $200 or the remaining loan value, whichever is less.
Maximum loan: 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 will deduct from the
loan value interest for the period 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
loaned amount with 4.5% 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.
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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
fund(s) or trust.
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.")
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 $200 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 of New
York 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.
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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 death benefit guarantee. The surrender
amount is deducted from total premiums paid, which may reduce the total below
the level required to keep the death benefit guarantee in effect.
o If Option 1 is in effect, the specified amount will be reduced by the amount
of the partial surrender and fee. IDS Life of New York will deduct this decrease
from the current specified amount in this order:
1. First from the specified amount provided by the most recent
increase;
2. Next from the next most recent increases successively;
3. Then from the initial specified amount when the policy was
issued.
Because they reduce the specified amount, partial surrenders may affect the cost
of insurance. IDS Life of New York will not allow a partial surrender if it
would reduce the specified amount below the required minimum. (See "Decreases"
under "Death benefits".)
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.
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There will be no effect on the policy's death benefit, specified amount, net
amount at risk, rate classification(s) or issue age. Only the method of funding
the policy value will be affected.
Paid-up insurance option
You may request that the cash surrender value of the policy be used to purchase
an amount of paid-up insurance. Your request may be made in writing during the
30 days before any policy anniversary. The paid-up insurance policy will take
effect as of the policy anniversary and will mature on the original policy's
maturity date. You will forfeit all rights to make future premium payments and
all riders will terminate.
The amount and cash surrender value of the paid-up insurance will be based on
the cost of insurance rates guaranteed in the policy and on the fixed account
guaranteed interest rate. The paid-up policy's death benefit amount, minus its
cash surrender value, cannot be greater than your current policy's death
benefit, minus its policy value (both as of the date of the paid-up policy's
purchase). The amount of paid-up insurance will remain level and will not be
less than required by law.
Any cash surrender value that is not used to purchase the paid-up insurance
amount will be paid to you. At any time before the insured's death, you may
surrender the paid-up insurance for its cash surrender value.
Optional insurance benefits
You may choose to add the following benefits to your policy, in the form of
riders (if certain requirements are met):
Waiver of monthly deduction (WMD) Under WMD, we will waive the monthly deduction
if the insured becomes totally disabled for six months or longer prior to the
attained insurance age 60 policy anniversary. The waiver will not start until
the disability has continued for at least six months; however, once it starts,
monthly deductions taken from policy values during the six-month waiting period
will be credited back to the policy, using the premium allocation percentage
then in effect. Monthly deductions will then be waived as long as the insured
remains disabled. For any month in which the monthly deduction is covered by
this rider, the minimum monthly premium needed to keep the death benefit
guarantee in effect will be zero.
During disability the specified amount cannot be increased, the death benefit
option cannot be changed to Option 1 and any benefits provided by riders cannot
be increased.
Accidental death benefit (ADB) ADB provides an additional death benefit if the
insured's death is caused by accidental injury prior to the insured's attained
insurance age 70 policy anniversary.
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Other insured rider (OIR) OIR provides a level, adjustable death benefit on the
life of each other insured covered. The minimum face amount that can be issued
to each other insured is $25,000.
OIR does not develop policy value.
Coverage under OIR will terminate on the earliest of the following:
o The monthly anniversary date on or next following receipt of a written request
to end coverage.
o The date the basic policy matures, is surrendered or terminates for any reason
other than the insured's death.
o 31 days after the insured's death. No charge is made for
coverage during this period.
o The date of conversion of the coverage to an individual life insurance policy
on the life of the other insured. OIR is convertible to any level benefit,
level premium whole life or flexible premium adjustable whole life insurance
policy offered by us at the time of conversion.
o The date the other insured attains insurance age 70.
If the other insured's age or sex has been misstated, the amount payable upon
his or her death will be the amount of insurance that would have been purchased
by the cost of the OIR for the policy month during which death occurred, had the
cost been calculated using rates for the correct age and sex.
Children's insurance rider (CIR) Each unit of CIR provides $1,000 level term
insurance on each eligible child. To be eligible, children must:
o be insurable children, stepchildren or legally adopted children
of the insured;
o be named in the application for this rider;
o be members of the primary insured's household (actually living
with the insured) at the time of application; and
o be at least 15 days old and have not passed their 19th
birthday.
After the CIR is issued, it automatically insures children born to, legally
adopted by, or who become stepchildren of the insured after the date of the CIR
application, if they are at least 15 days old and have not passed their 19th
birthday. The maximum number of units for one family is 10.
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Insurance under CIR expires on the earlier of the child's 22nd birthday or the
primary insured's attained insurance age 65 policy anniversary. If the primary
insured parent dies, the insurance on each child will be changed to paid-up term
insurance, which will provide the same coverage as provided under the CIR and
will expire at the same time coverage under the CIR would have expired.
The coverage provided on each child may be converted, without evidence of
insurability, to level premium whole life or flexible premium adjustable whole
life insurance within 31 days before or after the earlier of the child's 22nd
birthday or the primary insured's attained insurance age 65 policy anniversary.
Up to five times the amount of insurance on each child may be converted.
Payment of policy proceeds
Proceeds will be paid when:
o you surrender the policy;
o the insured dies; or
o the policy maturity date is reached, which occurs when the insured
reaches attained insurance age 100.
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 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). You will be charged a fee if you request express mail delivery.
Payment options:
During the 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 of New York'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 or maturity 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.
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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 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.
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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 nearest 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.
Adjusted age of payee life income per $1,000 with payments guaranteed for:
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.
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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 10 days, we will pay you interest on the amount surrendered
at an annual rate of 4% 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 of New York'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 of New York 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.
IDS Life of New York's tax status
IDS Life of New York is taxed as a life insurance company under the Code. For
federal income tax purposes, the subaccounts are considered a part of IDS Life
of New York, 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 of New York and therefore no
charge is made against the subaccounts for our federal income taxes. IDS Life of
New York 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
of New York'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. Part or all of any pre-death proceeds
received through full surrender or maturity, 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.
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Source of proceeds Taxable portion of pre-death proceeds
Full surrender/maturity: 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 or
(modified endowments): policy value minus your investment in
the policy.*
Partial surrenders Generally, if the amount received is
(other policies): 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 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.
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PAGE 53
Modified endowment limits are calculated when the policy is issued and are based
on the benefits provided and on the risk classification of the insured. They are
later recalculated if certain increases or reductions in benefits occur.
Increases in benefits: Limits are recalculated when an increase is considered a
"material change," as are most increases requested by the owner, such as an
increase in specified amount, addition of a rider benefit or an increase in an
existing rider benefit. (Automatic increases under the terms of the policy, such
as an increase in death benefit due to operation of the applicable percentage
table described in the "Death benefits" section or to policy value growth under
Option 2, are generally not considered material changes.) A policy becomes a
modified endowment if premiums paid in the early years following a material
change exceed the recalculated limits.
Reductions in benefits: When benefits are reduced within seven years after issue
or after the most recent material change, 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.
Penalty tax: If a policy is a modified endowment, the taxable portion of
pre-death proceeds from a full surrender, maturity, 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.
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PAGE 54
Other tax considerations
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.
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 of New York
IDS Life of New York is a stock life insurance company organized under the laws
of the State of New York in 1972. Our address is 20 Madison Ave. Extension,
Albany, NY 12203.
IDS Life of New York is licensed in New York and North Dakota, and it conducts a
conventional life insurance business in the state of New York. All annuity
contracts and insurance policies issued by IDS Life of New York, including the
policy described in this prospectus, are non-participating.
Ownership
IDS Life of New York, a New York corporation, is a wholly-owned subsidiary of
IDS Life, a Minnesota corporation, which is a wholly-owned subsidiary of
American Express Financial Corporation (AEFC). AEFC, a Delaware corporation, is
a wholly-owned subsidiary of American Express Company.
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PAGE 55
State regulation
IDS Life of New York is subject to the laws of New York governing insurance
companies and to regulation by the New York Department of Insurance. An annual
statement in a prescribed form is filed with New York's Department of Insurance.
IDS Life of New York's books and accounts are subject to review by the New York
Department of Insurance 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
American Express Financial Advisors Inc., a registered broker/dealer and an
affiliate of IDS Life of New York, is the sole distributor of the policy. IDS
Life of New York pays its representatives a commission of up to 47.5% of the
initial minimum monthly premium (annualized) when the policy is sold, plus 3% of
all premiums in excess of 12 times the minimum monthly premium. Additional
commissions are paid if an increase in coverage occurs.
IDS Life of New York also pays approximately 27% of the total representative's
commission to the field vice presidents and district sales managers of the
selling representative.
Legal proceedings
There are no material legal proceedings to which the variable account is a party
or to which the assets of the variable account are subject. IDS Life of New York
is engaged in various kinds of routine litigation that, in IDS Life of New
York's judgment, are not of material importance in relation to its total assets.
None of such litigation relates to the variable account.
Experts
The financial statements of IDS Life of New York at Dec. 31, 1996 and 1995, and
for each of the three years in the period ended Dec. 31, 1996, and the
individual and combined financial statements of the segregated asset subaccounts
of IDS Life of New York Account 8 for Flexible Premium Variable Life Insurance,
as of Dec. 31, 1996, and for each of the three years in the period then ended,
except for the following subaccounts: YIT subaccount which is for each of the
two years in the period ended Dec. 31, 1996 and the period Oct. 28, 1994
(commencement of operations) to Dec. 31, 1994, YGI and YNO subaccounts which are
for the period Nov. 22, 1996 (commencement of operations) to Dec. 31, 1996,
respectively, and the Y95 subaccount which is for year ended Dec. 31, 1994 the
period Jan. 1, 1995 to Nov. 15, 1995 (date of maturity of securities in the
trust) 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.
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PAGE 56
Actuarial matters included in the prospectus have been examined by Eugene C.
Chen, Chief Actuary, as stated in his opinion filed as an exhibit to the
Registration Statement.
Management of IDS Life of New York
Directors
John C. Boeder
Vice president, Mature Market Group, AEFC, since March 1994; president and chief
operating officer, IDS Life of New York, from 1991 to 1994; vice president and
chief operating officer, IDS Life of New York, from 1989 to 1991.
Roger C. Corea
Group vice president, Upstate New York, AEFA, since January 1995; vice
president, Northeast Region, AEFA, from May 1987 to December 1994.
Charles A. Cuccinello
Retired since 1982; former senior vice president, American Express Company.
Milton R. Fenster
President, Milton Fenster Associates.
Robert A. Hatton
Vice president and chief operating officer, IDS Life of New York since June
1994; special assignment/Project leader, AEFA, December 1992 to June 1994;
manager/Analyst operations, AEFA, August 1989 to December 1992.
Richard W. Kling
President and chairman of the board, IDS Life of New York, since April 1994;
director, IDS Life, since February 1984; President, IDS Life, since March 1994;
executive vice president, Marketing and Products, IDS Life, from January 1988 to
March 1994; senior vice president, Risk Management Products, AEFC, since May
1994; vice president, AEFC, from January 1988 to May 1994; director and
president of IDS Life Series Fund, Inc.; chairman of the board of managers and
president of IDS Life Variable Annuity Funds A and B.
Edward Landes
Retired, former Development Consultants; director, IDS Life Series Fund Inc.
since September 1985; member of the board of Managers of IDS Life Variable
Annuity Funds A and B since October 1988. Director of IDS Life Insurance Company
of New York; vice President of Financial YMCA Development, YMCA, since 1985.
Michael P. Monaco
Executive vice president and chief financial officer, American Express, since
September 1990; senior vice president and comptroller, American Express, from
1989 to 1990.
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PAGE 57
Thomas V. Nicolosi
Director since October 1996; group vice president, AEFA, from January 1995 to
present; field vice president, AEFA, from January 1988 to December 1994.
Stephen P. Norman
Secretary, American Express, since 1982.
Louise M. Parent
Executive vice president and general counsel, American Express, since 1993;
legal counsel, American Express, from 1992 to 1993; general counsel, First Data
Corporation, from 1989 to 1992.
Carl N. Platou
Retired since 1990; member of the board of directors, St. Thomas University,
since 1990; chief financial officer, Fairview Hospital, from 1953 to 1990.
Gordon H. Ritz
President, Con Rad Broadcasting Corporation (Minneapolis), since
1975.
Richard M. Starr
Director since October 1996; managing counsel, American Express Company, since
March 1995; senior counsel, American Express Company, from May 1992 to March
1995; counsel, American Express Company, from June 1989 to May 1992.
Michael R. Woodward
Senior vice president, Field Management, AEFC, since June 1991; region vice
president, Atlantic Region, AEFC, from 1988 to June 1991.
Principal officers other than directors
Mario Alaia
Claims officer and assistant secretary since 1988.
Darrell C. Beckstrom
Underwriting officer since 1994; underwriting technical manager, IDS Life, since
1990; senior underwriter, IDS Life, from 1987 to 1992.
Eugene C. Chen
Chief actuary since November 1996; manager of Life Planning and Analysis, AEFA,
from May 1995 to November 1996; senior staff actuary - Product Development Risk
Management, IDS Life, from
August 1992 to May 1995.
Darlene S. Farron
Treasurer since June 1996; financial project manager - Finance Department from
September 1994 to June 1996; team leader of Premium, Investment and External
Reporting - Finance Department
from March 1988 to September 1994.
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Donna Gaglione
Secretary since 1995; manager of Administrative Services since 1992; treasurer
from 1985 to 1992.
Margaret M. Grogan, M.D.
Medical director since 1986.
Lorraine R. Hart
Investment officer since March 1992; vice president, Insurance Investments, IDS
Life, since October 1989.
F. Dale Simmons
Vice president and assistant treasurer since 1994; vice president and senior
portfolio manager, Insurance Investments, AEFC, since 1990.
William A. Stoltzmann
Counsel and assistant secretary since March 1990.
Dennis W. West
Assistant underwriting officer; underwriting technical manager, IDS Life, since
1992; senior underwriter, IDS Life, from 1987 to 1992.
The officers, employees and sales force of IDS Life of New York are bonded, in
the amount of $100 million, by virtue of a blanket fidelity bond issued to
American Express Company by Saint Paul Fire and Marine, the leading underwriter.
A I M Advisors, Inc., Putnam Investment Management, Inc. and Smith
Barney Inc.
A I M Advisors, Inc.
A I M Advisors, Inc. ("AIM") was organized in 1976 and is headquartered in
Houson, Texas. AIM is a wholly owned subsidiary of A I M Management Group Inc.,
an indirect subsidiary of AMVESCO plc, (formerly INVESCO plc). As of March 18,
1997, total assets advised or managed by AIM and its subsidiaries were
approximately $68 billion.
Putnam Management
Putnam Management been managing mutual funds since 1937. Today, the firm serves
as the investment manager for the funds in the Putnam Family, with nearly $141
billion in assets under management in over 7 million shareholder accounts at
December 31, 1996.
Smith Barney, Inc.
Smith Barney, sponsor of the trust, a Delaware corporation and a
subsidiary of The Travelers Inc., is engaged in the underwriting,
securities and commodities brokerage business, and is a member of
the NYSE, other major securities exchanges and commodity exchanges
and the National Association of Securities Dealers, Inc. The
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PAGE 59
sponsor sponsors seven open-end investment companies and three closed-end
investment companies as well as a variety of unit investment trusts. The sponsor
has acted as principal underwriter and managing underwriter of other investment
companies. The sponsor, in addition to participating as a member of various
selling groups or as an agent of other investment companies, executes orders on
behalf of investment companies for the purchase and sale of securities of such
companies and sells securities to such companies in its capacity as a broker or
dealer in securities.
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 of New York, please refer to the registration statement, as
amended, with exhibits.
Substitution of investments
If shares of any fund or trust units are unavailable for purchase by the
appropriate subaccount or if, in the judgment of IDS Life of New York's
management, further investment in such shares is no longer appropriate, shares
of another registered, open-end management investment company or unit investment
trust may be substituted.
If deemed by IDS Life of New York 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 of New York 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 of New York will notify owners within five days of any
substitution or change.
Voting rights
All shares issued by the funds 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 funds issues its own series of common stock. The shares of each fund
represent an interest only in that fund's assets (and profits or losses) and in
the event of liquidation, each share of a fund would have the same rights to
dividends and assets as every other share of that fund.
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Each share of a fund has one vote. On some issues, such as election of
directors, all shares of IDS Life Series Fund Portfolios vote together as one
series. When electing directors, of IDS Life Series Fund, all shares of IDS Life
Series Fund Portfolios have cumulative voting 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 fund -- for example, a fundamental investment
restriction pertaining only to that fund -- its shares vote as a separate
series. If shareholders of a particular fund vote approval of the Investment
Management and Services Agreement, the agreement becomes effective with respect
to that fund, whether or not it is approved by shareholders of the other funds.
IDS Life of New York is the owner of all fund shares and as such holds all
voting rights. However, IDS Life of New York will vote the shares of each fund
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 of New York 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 of New York, 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 of New York may disregard
voting instructions that would change the goals of one or more of the funds or
would result in approval or disapproval of an investment advisory contract. In
addition, IDS Life of New York itself may disregard voting instructions that
would require changes in the investment policy or investment advisor of one or
more of the funds, if IDS Life of New York reasonably disapproves such changes
in accordance with applicable federal regulations. If IDS Life of New York does
disregard voting instructions, it will, in its next report to owners, advise
them of that action and the reasons for it.
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Generally, ownership of units of a unit investment trust does not involve the
exercise of voting rights. However, unit holders in the trust may vote for
removal of the trustee or for amendment or termination of the trust indenture.
In the event of such a vote, IDS Life of New York, as the owner of the units,
would solicit voting instructions from owners under the same procedures used for
votes affecting the fund.
Reports
At least once a year IDS Life of New York 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.
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 35-year-old male nonsmoker,
under Death Benefit Option 1, if:
o the annual rate of return of the fund is 0%, 6% or 12%.
o cost of insurance rates and policy fees are -- current rates
and fees for policies purchased on or after May 1, 1993 -- current rates
and fees for policies purchased before May 1, 1993 -- guaranteed rates
and fees.
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 age of the
person 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 funds. Results would differ depending on allocations among the
subaccounts, if returns averaged 0%, 6% and 12% for the funds as a whole but
differed across individual funds.
Insured: assumed to be a male insurance age 35, in a standard rate
classification, qualifying for the nonsmoker rate. Results would
be lower if the insured were in a substandard rate classification
or did not qualify for the non-smoker rate.
<PAGE>
PAGE 62
Premiums: A $900 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:
o the daily investment management fee paid by the funds, assumed to be
equivalent to an annual rate of 0.7% of the fund's 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 a nonadvisory expense charge of 0.1% of each fund's average daily net assets
for direct expenses incurred by the fund.
The nonadvisory expense charge for IDS Life Series Fund is capped by IDS Life at
0.1%, even though actual expenses on the IDS Life Series Fund-Government
Securities Portfolio ranged up to 0.18%, IDS Life Series Fund-Money Market
Portfolio ranged up to 0.23% and IDS Life Series Fund-International Equity
Portfolio ranged up to 0.37%. Although IDS Life reserves the right to
discontinue capping these expenses, IDS Life's 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. Other expenses for the period ended Dec. 31,
1996 were 0.09% for Putnam VT New Opportunities Fund. For AIM V.I. Growth and
Income Fund other expenses (annualized) were 0.13% for the period ended Dec.
31, 1996.
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 -1.69%, 4.21% and 10.11%, respectively.
Taxes: Results shown in the tables reflect the fact that IDS Life of New York
does not currently charge the subaccount for federal income tax. If such a
charge is taken in the future, the funds will have to earn more than they do now
in order to produce the death benefits and policy values illustrated.
<PAGE>
PAGE 63
<TABLE>
<CAPTION>
Illustration Policies purchased on or after May 1, 1993
- -----------------------------------------------------------------------------------------------------------------------------
Initial specified amount $100,000 Male age 35 Current costs assumed
Death benefit Option 1 nonsmoker annual premium $900
- -----------------------------------------------------------------------------------------------------------------------------
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> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $ 945 $100,000 $100,000 $100,000 $ 618 $ 662 $ 705 $ 0 $ 14 $ 58
2 1,937 100,000 100,000 100,000 1,226 1,352 1,483 499 625 756
3 2,979 100,000 100,000 100,000 1,814 2,061 2,329 1,028 1,276 1,544
4 4,073 100,000 100,000 100,000 2,381 2,790 3,250 1,537 1,945 2,406
5 5,222 100,000 100,000 100,000 2,929 3,538 4,254 2,028 2,637 3,353
6 6,428 100,000 100,000 100,000 3,456 4,308 5,350 2,735 3,587 4,629
7 7,694 100,000 100,000 100,000 3,965 5,101 6,547 3,424 4,560 6,007
8 9,024 100,000 100,000 100,000 4,452 5,914 7,854 4,091 5,554 7,494
9 10,420 100,000 100,000 100,000 4,915 6,747 9,279 4,735 6,567 9,099
10 11,886 100,000 100,000 100,000 5,352 7,598 10,833 5,352 7,598 10,833
11 13,425 100,000 100,000 100,000 5,763 8,467 12,529 5,763 8,467 12,529
12 15,042 100,000 100,000 100,000 6,149 9,356 14,384 6,149 9,356 14,384
13 16,739 100,000 100,000 100,000 6,508 10,263 16,411 6,508 10,263 16,411
14 18,521 100,000 100,000 100,000 6,837 11,188 18,628 6,837 11,188 18,628
15 20,392 100,000 100,000 100,000 7,134 12,128 21,053 7,134 12,128 21,053
16 22,356 100,000 100,000 100,000 7,397 13,082 23,707 7,397 13,082 23,707
17 24,419 100,000 100,000 100,000 7,625 14,050 26,615 7,625 14,050 26,615
18 26,585 100,000 100,000 100,000 7,811 15,027 29,800 7,811 15,027 29,800
19 28,859 100,000 100,000 100,000 7,952 16,008 33,291 7,952 16,008 33,291
20 31,247 100,000 100,000 100,000 8,042 16,992 37,120 8,042 16,992 37,120
age 60 45,102 100,000 100,000 100,000 7,565 21,792 61,747 7,565 21,792 61,747
age 65 62,785 100,000 100,000 117,624 4,981 25,956 96,413 4,981 25,956 96,413
(1) Assumes no policy loans or partial withdrawals have been made.
(2) Assumes a $900 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.
</TABLE>
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.
<PAGE>
PAGE 64
<TABLE>
<CAPTION>
Illustration Policies purchased before May 1, 1993
- -----------------------------------------------------------------------------------------------------------------------------
Initial specified amount $100,000 Male age 35 Current costs assumed
Death benefit Option 1 nonsmoker annual premium $900
- -----------------------------------------------------------------------------------------------------------------------------
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> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $ 945 $100,000 $100,000 $100,000 $ 618 $ 662 $ 705 $ 0 $ 14 $ 58
2 1,937 100,000 100,000 100,000 1,226 1,352 1,483 499 625 756
3 2,979 100,000 100,000 100,000 1,814 2,061 2,329 1,028 1,276 1,544
4 4,073 100,000 100,000 100,000 2,381 2,790 3,250 1,537 1,945 2,406
5 5,222 100,000 100,000 100,000 2,929 3,538 4,254 2,028 2,637 3,353
6 6,428 100,000 100,000 100,000 3,445 4,297 5,338 2,724 3,576 4,617
7 7,694 100,000 100,000 100,000 3,942 5,077 6,522 3,402 4,536 5,982
8 9,024 100,000 100,000 100,000 4,410 5,869 7,806 4,049 5,509 7,446
9 10,420 100,000 100,000 100,000 4,859 6,686 9,212 4,679 6,506 9,032
10 11,886 100,000 100,000 100,000 5,280 7,516 10,742 5,280 7,516 10,742
11 13,425 100,000 100,000 100,000 5,673 8,362 12,409 5,673 8,362 12,409
12 15,042 100,000 100,000 100,000 6,038 9,224 14,229 6,038 9,224 14,229
13 16,739 100,000 100,000 100,000 6,365 10,093 16,208 6,365 10,093 16,208
14 18,521 100,000 100,000 100,000 6,665 10,979 18,375 6,665 10,979 18,375
15 20,392 100,000 100,000 100,000 6,929 11,875 20,741 6,929 11,875 20,741
16 22,356 100,000 100,000 100,000 7,157 12,780 23,328 7,157 12,780 23,328
17 24,419 100,000 100,000 100,000 7,338 13,686 26,152 7,338 13,686 26,152
18 26,585 100,000 100,000 100,000 7,473 14,593 29,242 7,473 14,593 29,242
19 28,859 100,000 100,000 100,000 7,552 15,492 33,621 7,552 15,492 33,621
20 31,247 100,000 100,000 100,000 7,564 16,373 36,316 7,564 16,373 36,316
age 60 45,102 100,000 100,000 100,000 6,768 20,655 60,169 6,768 20,655 60,169
age 65 62,785 100,000 100,000 113,472 3,434 23,746 93,010 3,434 23,746 93,010
(1) Assumes no policy loans or partial withdrawals have been made.
(2) Assumes a $900 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.
</TABLE>
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.
<PAGE>
PAGE 65
<TABLE>
<CAPTION>
Illustration
- -----------------------------------------------------------------------------------------------------------------------------
Initial specified amount $100,000 Male age 35 Guaranteed costs assumed
Death benefit Option 1 nonsmoker annual premium $900
- -----------------------------------------------------------------------------------------------------------------------------
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> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $ 945 $100,000 $100,000 $100,000 $ 618 $ 662 $ 705 $ 0 $ 14 $ 58
2 1,937 100,000 100,000 100,000 1,226 1,352 1,483 499 625 756
3 2,979 100,000 100,000 100,000 1,814 2,061 2,329 1,028 1,276 1,544
4 4,073 100,000 100,000 100,000 2,381 2,790 3,250 1,537 1,945 2,406
5 5,222 100,000 100,000 100,000 2,929 3,538 4,254 2,028 2,637 3,353
6 6,428 100,000 100,000 100,000 3,445 4,297 5,338 2,724 3,576 4,617
7 7,694 100,000 100,000 100,000 3,942 5,077 6,522 3,402 4,536 5,982
8 9,024 100,000 100,000 100,000 4,410 5,869 7,806 4,049 5,509 7,446
9 10,420 100,000 100,000 100,000 4,859 6,686 9,212 4,679 6,506 9,032
10 11,886 100,000 100,000 100,000 5,280 7,516 10,742 5,280 7,516 10,742
11 13,425 100,000 100,000 100,000 5,673 8,362 12,409 5,673 8,362 12,409
12 15,042 100,000 100,000 100,000 6,038 9,224 14,229 6,038 9,224 14,229
13 16,739 100,000 100,000 100,000 6,365 10,093 16,208 6,365 10,093 16,208
14 18,521 100,000 100,000 100,000 6,665 10,979 18,375 6,665 10,979 18,375
15 20,392 100,000 100,000 100,000 7,929 11,875 20,741 6,929 11,875 20,741
16 22,356 100,000 100,000 100,000 7,146 12,770 23,318 7,146 12,770 23,318
17 24,419 100,000 100,000 100,000 7,327 13,675 26,141 7,327 13,675 26,141
18 26,585 100,000 100,000 100,000 7,462 14,581 29,230 7,462 14,581 29,230
19 28,859 100,000 100,000 100,000 7,541 15,480 32,608 7,541 15,480 32,608
20 31,247 100,000 100,000 100,000 7,554 16,360 36,301 7,554 16,360 36,301
age 60 45,102 100,000 100,000 100,000 6,486 20,369 59,888 6,486 20,369 59,888
age 65 62,785 100,000 100,000 112,054 2,602 22,855 91,847 2,602 22,855 91,847
(1) Assumes no policy loans or partial withdrawals have been made.
(2) Assumes a $900 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.
</TABLE>
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.
<PAGE>
IDS Life of New York Account 8
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 8 for
Flexible Premium Variable Life Insurance (comprised of subaccounts YEQ, YIN,
YMM, YMA, YGS, YIT, YGI, YNO and Y04) as of December 31, 1996, 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 YGI and YNO subaccounts which are for
the period November 22, 1996 (commencement of operations) to December 31, 1996
and the YIT subaccount which is for each of the two years in the period ended
December 31, 1996 and for the period October 28, 1994 (commencement of
operations) to December 31, 1994. We have also audited the accompanying
statements of operations and changes in net assets for the former Y95 subaccount
which are for the year ended December 31, 1994 and for the period January 1,
1995 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 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. Our procedures included
confirmation of securities owned at December 31, 1996 with the affiliated and
unaffiliated mutual fund managers 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 8 for Flexible
Premium Variable Life Insurance at December 31, 1996 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 21, 1997
<PAGE>
<TABLE>
<CAPTION>
IDS Life of New York Account 8
- ---------------------------------------------------------------------------------------------------------------------
Statements of Net Assets Dec. 31, 1996
Segregated Asset Subaccounts
--------------------------------------------------------------------------
Assets YEQ YIN YMM YMA YGS
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investments in shares of mutual fund portfolios,
funds and the trust, at market value:
IDS Life Series Fund Equity Portfolio -
1,263,823 shares at net asset value
of $25.65 per share (cost $26,373,170) $32,422,480 $ -- $ -- $ -- $ --
IDS Life Series Fund Income Portfolio -
422,540 shares at net asset value
of $10.17 per share (cost $4,192,993) -- 4,295,812 -- -- --
IDS Life Series Fund Money Market
Portfolio - 917,410 shares at net asset
value of $1.00 per share (cost $917,322) -- -- 917,322 -- --
IDS Life Series Fund Managed Portfolio -
1,414,161 shares at net asset value
of $17.06 per share (cost $20,896,466) -- -- -- 24,123,501 --
IDS Life Series Fund Government Securities
Portfolio - 58,440 shares at net asset value
of $10.03 per share (cost $591,660) -- -- -- -- 586,079
IDS Life Series Fund International Equity
Portfolio - 323,841 shares at net asset value
of $15.04 per share (cost $4,698,429) -- -- -- -- --
AIM V.I. Growth & Income Fund -
9,848 shares at net asset value
of $15.03 per share (cost $144,847) -- -- -- -- --
Putnam VT New Opportunities Fund -
4,753 shares at net asset value
of $17.22 per share (cost $81,922) -- -- -- -- --
Smith Barney Inc., Stripped ("Zero Coupon")
U. S. Treasury Securities Fund, Series A 2004
Trust - 1,294,211 units at net asset value
of $0.61 per unit (cost $573,162) -- -- -- -- --
- ---------------------------------------------------------------------------------------------------------------------
32,422,480 4,295,812 917,322 24,123,501 586,079
- ---------------------------------------------------------------------------------------------------------------------
Dividends receivable -- 24,007 3,700 -- 2,833
Accounts receivable from IDS Life of New York
for contract purchase payments 62,775 11,455 170 26,809 25
- ---------------------------------------------------------------------------------------------------------------------
Total assets 32,485,255 4,331,274 921,192 24,150,310 588,937
- ---------------------------------------------------------------------------------------------------------------------
Liabilities
- ---------------------------------------------------------------------------------------------------------------------
Payable to IDS Life of New York for:
Transaction charge -- -- -- -- --
Mortality and expense risk fee 47,657 3,333 688 35,563 449
Payable to mutual fund portfolios, funds
and the trust for investments purchased 62,775 32,129 3,182 26,809 10,949
- ---------------------------------------------------------------------------------------------------------------------
Total liabilities 110,432 35,462 3,870 62,372 11,398
- ---------------------------------------------------------------------------------------------------------------------
Net assets applicable to Variable Life
contracts in accumulation period $32,374,823 $4,295,812 $917,322 $24,087,938 $577,539
- ---------------------------------------------------------------------------------------------------------------------
Accumulation units outstanding 10,218,855 2,032,494 605,111 8,043,384 295,283
- ---------------------------------------------------------------------------------------------------------------------
Net asset value per accumulation unit $ 3.17 $ 2.11 $ 1.52 $ 2.99 $ 1.96
- ---------------------------------------------------------------------------------------------------------------------
See accompanying notes to financial statements
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
IDS Life of New York Account 8
- ---------------------------------------------------------------------------------------------------------------------
Statements of Net Assets Dec. 31, 1996
Segregated Asset Subaccounts Combined
------------------------------------------------------------ Variable
Assets YIT YGI YNO Y04 Account
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investments in shares of mutual fund portfolios,
funds and the trust, at market value:
IDS Life Series Fund Equity Portfolio -
1,263,823 shares at net asset value
of $25.65 per share (cost $26,373,170) $ -- $ -- $ -- $ -- $32,422,480
IDS Life Series Fund Income Portfolio -
422,540 shares at net asset value
of $10.17 per share (cost $4,192,993) -- -- -- -- 4,295,812
IDS Life Series Fund Money Market
Portfolio - 917,410 shares at net asset
value of $1.00 per share (cost $917,322) -- -- -- -- 917,322
IDS Life Series Fund Managed Portfolio -
1,414,161 shares at net asset value
of $17.06 per share (cost $20,896,466) -- -- -- -- 24,123,501
IDS Life Series Fund Government Securities
Portfolio - 58,440 shares at net asset value
of $10.03 per share (cost $591,660) -- -- -- -- 586,079
IDS Life Series Fund International Equity
Portfolio - 323,841 shares at net asset value
of $15.04 per share (cost $4,698,429) 4,870,341 -- -- -- 4,870,341
AIM V.I. Growth & Income Fund -
9,848 shares at net asset value
of $15.03 per share (cost $144,847) -- 148,013 -- -- 148,013
Putnam VT New Opportunities Fund -
4,753 shares at net asset value
of $17.22 per share (cost $81,922) -- -- 81,843 -- 81,843
Smith Barney Inc., Stripped ("Zero Coupon")
U. S. Treasury Securities Fund, Series A 2004
Trust - 1,294,211 units at net asset value
of $0.61 per unit (cost $573,162) -- -- -- 788,809 788,809
- ---------------------------------------------------------------------------------------------------------------------
4,870,341 148,013 81,843 788,809 68,234,200
- ---------------------------------------------------------------------------------------------------------------------
Dividends receivable -- -- -- -- 30,540
Accounts receivable from IDS Life of New York
for contract purchase payments 6,650 2,000 4,733 854 115,471
- ---------------------------------------------------------------------------------------------------------------------
Total assets 4,876,991 150,013 86,576 789,663 68,380,211
- ---------------------------------------------------------------------------------------------------------------------
Liabilities
- ---------------------------------------------------------------------------------------------------------------------
Payable to IDS Life of New York for:
Transaction charge -- -- -- 172 172
Mortality and expense risk fee 6,851 56 33 553 95,183
Payable to mutual fund portfolios, funds
and the trust for investments purchased 6,650 2,000 4,733 854 150,081
- ---------------------------------------------------------------------------------------------------------------------
Total liabilities 13,501 2,056 4,766 1,579 245,436
- ---------------------------------------------------------------------------------------------------------------------
Net assets applicable to Variable Life
contracts in accumulation period $4,863,490 $147,957 $81,810 $788,084 $68,134,775
- ---------------------------------------------------------------------------------------------------------------------
Accumulation units outstanding 2,922,492 147,682 83,723 290,576
- ---------------------------------------------------------------------------------------------------------------------
Net asset value per accumulation unit $ 1.66 $ 1.00 $ 0.98 $ 2.71
- ---------------------------------------------------------------------------------------------------------------------
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
IDS Life of New York Account 8
- --------------------------------------------------------------------------------------------------------------------------------
Statements of Operations Year ended Dec. 31, 1996
Segregated Asset Subaccounts
-----------------------------------------------------------------------------
YEQ YIN YMM YMA YGS
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment income (loss):
Dividend income from mutual fund portfolios and funds $4,256,160 $252,288 $ 27,500 $1,556,968 $ 38,169
- --------------------------------------------------------------------------------------------------------------------------------
Expenses:
Mortality and expense risk fee 238,970 34,107 4,683 188,866 5,146
Transaction charge -- -- -- -- --
- --------------------------------------------------------------------------------------------------------------------------------
Total expenses 238,970 34,107 4,683 188,866 5,146
- --------------------------------------------------------------------------------------------------------------------------------
Investment income (loss) - net 4,017,190 218,181 22,817 1,368,102 33,023
- --------------------------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) on Investments - net
- --------------------------------------------------------------------------------------------------------------------------------
Realized gain on sales of investments in mutual fund
portfolios, funds and in the trust:
Proceeds from sales 810,674 299,105 1,020,483 594,770 118,200
Cost of investments sold 647,479 295,360 1,020,488 527,763 119,926
- --------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on investments 163,195 3,745 (5) 67,007 (1,726)
Net change in unrealized appreciation or
depreciation of investments 227,037 (101,695) 3 1,242,208 (29,290)
- --------------------------------------------------------------------------------------------------------------------------------
Net gain (loss) on investments 390,232 (97,950) (2) 1,309,215 (31,016)
- --------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting
from operations $4,407,422 $120,231 $ 22,815 $2,677,317 $ 2,007
- --------------------------------------------------------------------------------------------------------------------------------
* For the period Nov. 22, 1996 (commencement of operations) to Dec. 31, 1996.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
IDS Life of New York Account 8
- ---------------------------------------------------------------------------------------------------------------------------------
Statements of Operations Year ended Dec. 31, 1996
Segregated Asset Subaccounts Combined
-------------------------------------------------------- Variable
YIT YGI* YNO* Y04 Account
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment income (loss):
Dividend income from mutual fund portfolios and funds $369,589 $ 284 $ -- $ -- $6,500,958
- ---------------------------------------------------------------------------------------------------------------------------------
Expenses:
Mortality and expense risk fee 25,967 55 33 6,817 504,644
Transaction charge -- -- -- 1,913 1,913
- ---------------------------------------------------------------------------------------------------------------------------------
Total expenses 25,967 55 33 8,730 506,557
- ---------------------------------------------------------------------------------------------------------------------------------
Investment income (loss) - net 343,622 229 $ (33) (8,730) 5,994,401
- ---------------------------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) on Investments - net
- ---------------------------------------------------------------------------------------------------------------------------------
Realized gain on sales of investments in mutual fund
portfolios, funds and in the trust:
Proceeds from sales 705,857 1,783 -- 108,552 3,659,424
Cost of investments sold 698,109 1,743 -- 79,747 3,390,615
- ---------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on investments 7,748 40 -- 28,805 268,809
Net change in unrealized appreciation or
depreciation of investments (5,575) 3,166 (79) (32,185) 1,303,590
- ---------------------------------------------------------------------------------------------------------------------------------
Net gain (loss) on investments 2,173 3,206 (79) (3,380) 1,572,399
- ---------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net
assets resulting from operations $345,795 $3,435 $(112) $(12,110) $7,566,800
- ---------------------------------------------------------------------------------------------------------------------------------
* For the period Nov. 22, 1996 (commencement of operations) to Dec. 31, 1996.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
IDS Life of New York Account 8
- ----------------------------------------------------------------------------------------------------------------------------------
Statements of Operations Year ended Dec. 31, 1995
Segregated Asset Subaccounts Combined
----------------------------------------------------------------------------------------- Variable
YEQ YIN YMM YMA YGS YIT Y95* Y04 Account
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Investment income (loss):
Dividend income from
mutual fund portfolios.... $ 365,168 $191,968 $ 18,332 $ 738,863 $32,693 $ 6,898 $ -- $ -- $1,353,922
- ----------------------------------------------------------------------------------------------------------------------------------
Expenses:
Mortality and expense
risk fee ................. 148,582 25,384 2,588 139,149 4,797 5,471 1,533 5,928 333,432
Transaction charge ....... -- -- -- -- -- -- 426 1,647 2,073
- ----------------------------------------------------------------------------------------------------------------------------------
Total expenses............ 148,582 25,384 2,588 139,149 4,797 5,471 1,959 7,575 335,505
- ----------------------------------------------------------------------------------------------------------------------------------
Investment income
(loss) -- net............. 216,586 166,584 15,744 599,714 27,896 1,427 (1,959) (7,575) 1,018,417
- ----------------------------------------------------------------------------------------------------------------------------------
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....... 490,632 272,924 352,853 729,876 80,977 54,522 217,232 61,502 2,260,518
Cost of investments sold.. 388,384 269,516 352,863 706,047 81,252 47,643 148,740 46,239 2,040,684
- ----------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss)
on investments............ 102,248 3,408 (10) 23,829 (275) 6,879 68,492 15,263 219,834
Net change in unrealized
appreciation or depreciation
of investments............ 4,708,717 341,906 8 2,003,441 54,903 178,601 (57,647) 158,169 7,388,098
- ----------------------------------------------------------------------------------------------------------------------------------
Net gain (loss) on
investments............... 4,810,965 345,314 (2) 2,027,270 54,628 185,480 10,845 173,432 7,607,932
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets
assets resulting
from operations........... $5,027,551 $511,898 $ 15,742 $2,626,984 $82,524 $186,907 $ 8,886 $165,857 $8,626,349
- ----------------------------------------------------------------------------------------------------------------------------------
* 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>
<PAGE>
<TABLE>
<CAPTION>
IDS Life of New York Account 8
- --------------------------------------------------------------------------------------------------------------------------------
Statements of Operations Year ended Dec. 31, 1994
Segregated Asset Subaccounts Combined
------------------------------------------------------------------------------------------- Variable
YEQ YIN YMM YMA YGS YIT* Y95 Y04 Account
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Investment income (loss):
Dividend income from
mutual fund
portfolios........... $994,621 $ 172,635 $ 10,329 $1,283,650 $ 31,646 $ -- $ -- $ -- $2,492,881
- --------------------------------------------------------------------------------------------------------------------------------
Expenses:
Mortality and expense
risk fee ............ 90,695 21,703 2,574 105,352 4,217 113 1,717 4,582 230,953
Transaction charge .. -- -- -- -- -- -- 477 1,273 1,750
- --------------------------------------------------------------------------------------------------------------------------------
Total expenses....... 90,695 21,703 2,574 105,352 4,217 113 2,194 5,855 232,703
- --------------------------------------------------------------------------------------------------------------------------------
Investment income
(loss) -- net........ 903,926 150,932 7,755 1,178,298 27,429 (113) (2,194) (5,855) 2,260,178
- --------------------------------------------------------------------------------------------------------------------------------
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.. 453,989 442,507 272,948 421,489 81,158 848 20,279 63,213 1,753,431
Cost of investments
sold................. 396,361 445,254 272,955 396,726 84,081 856 14,109 50,100 1,660,442
- --------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss)
on investments....... 57,628 (2,747) (7) 24,763 (2,923) (8) 6,170 13,113 95,989
Net change in
unrealized appreciation
or depreciation
of investments....... (661,339) (278,775) (11) (1,215,708) (52,250) (1,114) (2,957) (61,672) (2,273,826)
- --------------------------------------------------------------------------------------------------------------------------------
Net gain (loss) on
investments.......... (603,711) (281,522) (18) (1,190,945) (55,173) (1,122) 3,213 (48,559) (2,177,837)
- --------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease)
in net assets assets
resulting from
operations........... $300,215 $(130,590) $ 7,737 $ (12,647) $(27,744) $(1,235) $ 1,019 $(54,414) $ 82,341
- --------------------------------------------------------------------------------------------------------------------------------
* Commenced operations on Oct. 28, 1994.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
IDS Life of New York Account 8
- ------------------------------------------------------------------------------------------------------------------------------
Statements of Changes in Net Assets Year ended Dec. 31, 1996
Segregated Asset Subaccounts
--------------------------------------------------------------------------------
Operations YEQ YIN YMM YMA YGS
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment income (loss) - net ............... $ 4,017,190 $ 218,181 $ 22,817 $ 1,368,102 $ 33,023
Net realized gain (loss) on investments ...... 163,195 3,745 (5) 67,007 (1,726)
Net change in unrealized appreciation or
depreciation of investments .................. 227,037 (101,695) 3 1,242,208 (29,290)
- ------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting
from operations .............................. 4,407,422 120,231 22,815 2,677,317 2,007
- ------------------------------------------------------------------------------------------------------------------------------
Contract Transactions
- ------------------------------------------------------------------------------------------------------------------------------
Variable life contract purchase payments ..... 6,573,071 906,414 421,727 4,258,738 128,415
Net transfers* ............................... 4,592,956 411,398 84,784 1,920,764 (32,588)
Transfers for policy loans ................... (505,653) (62,503) 3,059 (356,351) (9,286)
Policy charges ............................... (1,632,273) (261,231) (59,118) (1,378,652) (53,375)
Contract terminations:
Surrender benefits ........................... (1,066,592) (138,797) (68,038) (750,212) (37,811)
Death benefits ............................... (96,266) (9,994) (488) (64,115) (4,633)
- ------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) from contract transactions 7,865,243 845,287 381,926 3,630,172 (9,278)
- ------------------------------------------------------------------------------------------------------------------------------
Net assets at beginning of year .............. 20,102,158 3,330,294 512,581 17,780,449 584,810
- ------------------------------------------------------------------------------------------------------------------------------
Net assets at end of year .................... $32,374,823 $4,295,812 $917,322 $24,087,938 $577,539
- ------------------------------------------------------------------------------------------------------------------------------
Accumulation Unit Activity
- ------------------------------------------------------------------------------------------------------------------------------
Units outstanding at beginning of year ....... 7,545,186 1,614,264 351,572 6,737,143 300,900
Contract purchase payments ................... 2,226,541 448,584 284,151 1,529,296 67,086
Net transfers* ............................... 1,568,157 201,620 54,143 691,235 (17,357)
Transfers for policy loans ................... (172,189) (30,740) 2,027 (127,659) (4,888)
Contract charges ............................. (555,329) (128,282) (39,921) (495,019) (28,020)
Contract terminations:
Surrender benefits ........................... (361,430) (67,972) (46,534) (269,131) (19,955)
Death benefits ............................... (32,081) (4,980) (327) (22,481) (2,483)
- ------------------------------------------------------------------------------------------------------------------------------
Units outstanding at end of year ............. 10,218,855 2,032,494 605,111 8,043,384 295,283
- ------------------------------------------------------------------------------------------------------------------------------
* Includes transfer activity from (to) other subaccounts and transfers from (to) IDS Life of New York's fixed account.
** For the period Nov. 22, 1996 (commencement of operations) to Dec. 31, 1996.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
IDS Life of New York Account 8
- -----------------------------------------------------------------------------------------------------------------------------
Statements of Changes in Net Assets Year ended Dec. 31, 1996
Segregated Asset Subaccounts Combined
---------------------------------------------------------------------- Variable
Operations YIT YGI** YNO** Y04 Account
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment income (loss) - net $ 343,622 $ 229 $ (33) $ (8,730) $ 5,994,401
Net realized gain (loss) on investments 7,748 40 0 28,805 268,809
Net change in unrealized appreciation or
depreciation of investments (5,575) 3,166 (79) (32,185) 1,303,590
- -----------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations 345,795 3,435 (112) (12,110) 7,566,800
- -----------------------------------------------------------------------------------------------------------------------------
Contract Transactions
- -----------------------------------------------------------------------------------------------------------------------------
Variable life contract purchase payments 1,399,027 1,212 2,327 106,648 13,797,579
Net transfers* 2,388,202 143,217 79,670 (471) 9,587,932
Transfers for policy loans (36,027) 203 203 (9,996) (976,351)
Policy charges (181,270) (110) (278) (48,708) (3,615,015)
Contract terminations:
Surrender benefits (80,784) -- -- (24,330) (2,166,564)
Death benefits (642) -- -- -- (176,138)
- -----------------------------------------------------------------------------------------------------------------------------
Increase (decrease) from contract transactions 3,488,506 144,522 81,922 23,143 16,451,443
- -----------------------------------------------------------------------------------------------------------------------------
Net assets at beginning of year 1,029,189 -- -- 777,051 44,116,532
- -----------------------------------------------------------------------------------------------------------------------------
Net assets at end of year $ 4,863,490 $ 147,957 $ 81,810 $ 788,084 $ 68,134,775
- -----------------------------------------------------------------------------------------------------------------------------
Accumulation Unit Activity
- -----------------------------------------------------------------------------------------------------------------------------
Units outstanding at beginning of year 759,139 -- -- 278,550
Contract purchase payments 862,329 1,221 2,412 40,078
Net transfers* 1,485,306 146,370 81,389 3,047
Transfers for policy loans (22,490) 201 209 (3,781)
Contract charges (111,831) (110) (287) (18,322)
Contract terminations:
Surrender benefits (49,577) -- -- (8,996)
Death benefits (384) -- -- --
- -----------------------------------------------------------------------------------------------------------------------------
Units outstanding at end of year 2,922,492 147,682 83,723 290,576
- -----------------------------------------------------------------------------------------------------------------------------
* Includes transfer activity from (to) other subaccounts and transfers from (to) IDS Life of New York's fixed account.
** For the period Nov. 22, 1996 (commencement of operations) to Dec. 31, 1996.
</TABLE>
<PAGE>
<TABLE>
IDS Life of New York Account 8
- ----------------------------------------------------------------------------------------------------------------------------------
Statements of Changes in Net Assets Year ended Dec. 31, 1995
Segregated Asset Subaccounts Combined
------------------------------------------------------------------------------------------------ Variable
Operations YEQ YIN YMM YMA YGS YIT Y95** Y04 Account
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Investment income
loss) -- net....... $ 216,586 $ 166,584 $ 15,744 $ 599,714 $ 27,896 $ 1,427 $ (1,959) $ (7,575) $ 1,018,417
Net realized gain (loss)
on investments..... 102,248 3,408 (10) 23,829 (275) 6,879 68,492 15,263 219,834
Net change in unrealized
appreciation or
depreciation
of investments..... 4,708,717 341,906 8 2,003,441 54,903 178,601 (57,647) 158,169 7,388,098
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase in net
assets resulting
from operations.... 5,027,551 511,898 15,742 2,626,984 82,524 186,907 8,886 165,857 8,626,349
- ----------------------------------------------------------------------------------------------------------------------------------
Contract Transactions
- ----------------------------------------------------------------------------------------------------------------------------------
Variable life contract
purchase payments.. 3,794,832 584,353 81,641 3,321,378 122,755 326,063 12,881 103,254 8,347,157
Net transfers*..... 1,229,446 157,500 238,223 605,901 (13,926) 465,906 (185,387) 39,181 2,536,844
Transfers for policy
loans.............. (315,444) (17,868) (10,292) (354,356) (8,919) (19,573) (292) (9,584) (736,328)
Policy charges .... (1,228,453) (220,918) (32,357) (1,200,990) (52,035) (44,302) (8,262) (47,833) (2,835,150)
Contract terminations:
Surrender benefits (532,822) (102,633) (21,712) (494,500) (16,005) (13,988) (15,334) (7,463) (1,204,457)
Death benefits..... (42,827) (2,511) (30,660) (146,900) (723) -- -- (771) (224,392)
- ----------------------------------------------------------------------------------------------------------------------------------
Increase (decrease)
from contract
transactions....... 2,904,732 397,923 224,843 1,730,533 31,147 714,106 (196,394) 76,784 5,883,674
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets at beginning
of year............ 12,169,875 2,420,473 271,996 13,422,932 471,139 128,176 187,508 534,410 29,606,509
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets at end
of year............ $20,102,158 $3,330,294 $512,581 $17,780,449 $584,810 $1,029,189 $ -- $777,051 $44,116,532
- ----------------------------------------------------------------------------------------------------------------------------------
Accumulation Unit Activity
- ----------------------------------------------------------------------------------------------------------------------------------
Units outstanding at
beginning of year.. 6,264,819 1,408,215 196,238 5,999,602 283,647 130,380 105,071 247,625
Contract purchase
payments........... 1,670,681 308,878 57,494 1,406,500 68,039 288,272 7,049 42,187
Net transfers*..... 534,034 79,609 165,152 256,018 (7,789) 406,561 (99,144) 15,433
Transfers for policy
loans.............. (139,658) (9,737) (7,381) (149,809) (5,170) (16 732) (159) (3,951)
Policy charges..... (539,694) (117,478) (22,780) (507,431) (28,858) (38,369) (4,506) (19,366)
Contract terminations:
Surrender benefits. (226,906) (53,959) (15,145) (207,716) (8,585) (10,973) (8,311) (3,088)
Death benefits..... (18,090) (1,264) (22,006) (60,021) (384) -- -- (290)
- --------------------------------------------------------------------------------------------------------------------
Units outstanding at end
of year............ 7,545,186 1,614,264 351,572 6,737,143 300,900 759,139 -- 278,550
- --------------------------------------------------------------------------------------------------------------------
* Includes transfer activity from (to) other subaccounts and transfers from (to) IDS Life of
New York's fixed account.
** 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>
<PAGE>
<TABLE>
IDS Life of New York Account 8
- -----------------------------------------------------------------------------------------------------------------------------------
Statements of Changes in Net Assets Year ended Dec. 31, 1994
Segregated Asset Subaccounts Combined
------------------------------------------------------------------------------------------------ Variable
Operations YEQ YIN YMM YMA YGS YIT** Y95 Y04 Account
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Investment income
(loss) -- net...... $ 903,926 $ 150,932 $ 7,755 $ 1,178,298 $ 27,429 $ (113) $ (2,194) $ (5,855) $ 2,260,178
Net realized gain (loss)
on investments..... 57,628 (2,747) (7) 24,763 (2,923) (8) 6,170 13,113 95,989
Net change in unrealized
appreciation or
depreciation
of investments..... (661,339) (278,775) (11) (1,215,708) (52,250) (1,114) (2,957) (61,672) (2,273,826)
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in
net assets resulting
from operations.... 300,215 (130,590) 7,737 (12,647) (27,744) (1,235) 1,019 (54,414) 82,341
- -----------------------------------------------------------------------------------------------------------------------------------
Contract Transactions
- -----------------------------------------------------------------------------------------------------------------------------------
Variable life contract
purchase payments.. 3,533,741 637,406 107,011 3,507,759 128,221 29,594 17,187 150,892 8,111,811
Net transfers*..... 1,531,741 (10,066) (23,363) 1,885,400 16,391 101,284 (4,906) 7,372 3,503,853
Transfers for policy
loans.............. (176,254) (114,663) (33,585) (217,212) (3,747) 179 (922) (5,208) (551,412)
Policy charges .... (972,908) (220,640) (34,073) (1,066,791) (51,225) (1,646) (9,292) (45,418) (2,401,993)
Contract terminations:
Surrender benefits (387,127) (109,404) (12,156) (315,545) (21,324) -- (6,000) (13,645) (865,201)
Death benefits..... (15,577) (4,196) -- (18,215) -- -- -- (2,118) (40,106)
- -----------------------------------------------------------------------------------------------------------------------------------
Increase (decrease)
from contract
transactions....... 3,513,616 178,437 3,834 3,775,396 68,316 129,411 (3,933) 91,875 7,756,952
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets at beginning
of year............ 8,356,044 2,372,626 260,425 9,660,183 430,567 -- 190,422 496,949 21,767,216
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets at end of
year .............. $12,169,875 $2,420,473 $271,996 $13,422,932 $471,139 $128,176 $187,508 $534,410 $29,606,509
- -----------------------------------------------------------------------------------------------------------------------------------
Accumulation Unit Activity
- -----------------------------------------------------------------------------------------------------------------------------------
Units outstanding at
beginning of year.. 4,382,201 1,308,032 192,997 4,307,613 244,426 -- 107,290 206,552
Contract purchase
payments........... 1,895,768 365,346 78,174 1,575,867 75,710 30,154 9,613 68,017
Net transfers*..... 825,099 (7,881) (16,784) 843,686 8,908 101,713 (2,769) 3,063
Transfers for policy
loans.............. (94,801) (65,296) (24,382) (97,795) (2,237) 18 1 (521) (2,274)
Policy charges..... (523,957) (126,801) (24,929) (480,332) (30,400) (1,668) (5,435) (20,635)
Contract terminations:
Surrender benefits. (210,056) (62,754) (8,838) (140,418) (12,760) -- (3,107) (6,117)
Death benefits..... (9,435) (2,431) -- (9,019) -- -- -- (981)
- --------------------------------------------------------------------------------------------------------------------
Units outstanding at
end of year........ 6,264,819 1,408,215 196,238 5,999,602 283,647 130,380 105,071 247,625
- --------------------------------------------------------------------------------------------------------------------
* Includes transfer activity from (to) other subaccounts and transfers from
(to) IDS Life of New York's fixed account.
** For the period Oct. 28, 1994 (commencement of operations) to Dec. 31, 1994.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
IDS Life of New York Account 8
Notes to Financial Statements
______________________________________________________________________
1. Organization
IDS Life of New York Account 8 (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 Aug. 31, 1987.
The Variable Account is comprised of nine 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. Variable Universal Life policy owners allocate their premium payment to one
or more of the nine subaccounts. Such funds are then invested in shares of six
portfolios of IDS Life Series Fund, Inc. (the mutual fund); or in shares of the
AIM V.I. Growth and Income Fund; or in shares of the Putnam VT New Opportunities
Fund or in units of one Trust of Smith Barney Inc., Stripped ("Zero Coupon")
U.S. Treasury Securities Fund, Series A (individually, a Trust or collectively,
the Trusts). 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. AIM Variable Insurance Funds, Inc., a Maryland corporation,
which was incorporated on Jan. 22, 1993, is also a diversified, open-end
management investment company. Putnam Variable Trust, which was organized on
Sept. 24, 1987, is a Masschusetts business trust. Funds allocated to Equity
Subaccount (YEQ) are invested in the shares of the Equity Portfolio; Income
Subaccount (YIN) invests in the shares of the Income Portfolio; Money Market
Subaccount (YMM) invests in the shares of the Money Market Portfolio; Managed
Subaccount (YMA) invests in the shares of the Managed Portfolio; Government
Securities Subaccount (YGS) invests in the shares of the Government Securities
Portfolio; International Equity Subaccount (YIT) invests in shares of the
International Equity Portfolio; YGI Subaccount invests in shares of the AIM V.I.
Growth and Income Fund and YNO Subaccount invests in shares of the Putnam VT New
Opportunities Fund. 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 1995 U.S. Treasury Securities Subaccount (Y95) were invested
in units of the 1995 Trust and the 2004 U.S. Treasury Securities Subaccount
(Y04) invests in units of the 2004 Trust.
IDS Life, parent company of IDS Life of New York, acts as the investment manager
and American Express Financial Corporation acts as the investment advisor of the
IDS Life Series Fund, Inc. IDS Life serves as distributor for the Variable
Account and the underlying mutual fund. AIM Management Group Inc. acts as the
investment manager for AIM V.I. Growth and Income Fund. Putnam Investments acts
as the investment manager for Putnam VT New Opportunities Fund. Smith Barney
Inc. serves as sponsor for the Trust.
______________________________________________________________________
2. Summary of Significant Accounting Policies
Investments in Mutual Funds
Investments in shares of the Portfolio(s) of the mutual fund or in shares of the
Funds are stated at market value which is the net asset value per share as
determined by the respective portfolio or fund. 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 or the Funds are reinvested, net of
any expenses payable to IDS Life of New York, in additional shares of the
portfolios' and are 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.
<PAGE>
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, no income taxes are payable with respect
to any investment income of the Variable Account.
_______________________________________________________________________
3. Mortality and Expense Risk Fee and Policy Charges
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 0.9 percent of the daily net
asset value of the Variable Account. A monthly deduction is made for the cost of
insurance, the policy fee, the cost of any riders and the death benefit
guarantee charge for the policy month. The cost of insurance for the policy
month is determined on the monthly date by determining the net amount at risk,
as of that day, and by then applying the cost of insurance rates to the net
amount at risk which IDS Life of New York is assuming for the succeeding month.
The monthly deduction will be taken from the subaccounts as specified in the
application for the policy.
IDS Life of New York deducts a policy fee of $5 per month. This charge
reimburses IDS Life of New York for expenses incurred in administering the
policy, such as processing claims, maintaining records, making policy changes
and communicating with owners of Policies. IDS Life of New York does not
anticipate that it will make any profit on this charge.
________________________________________________________________________
4. Death Benefit Guarantee Charge and Optional Insurance Benefit Charge
For each policy month the death benefit guarantee is in effect, IDS Life of New
York deducts a charge of $.01 per $1,000 of the amount used to determine the
death benefit (specified amount) and $.01 per $1,000 coverage under the other
insured rider to compensate it for the risk assumed in providing the death
benefit guarantee.
Each month IDS Life of New York deducts charges for any optional insurance
benefits added to the policy by rider.
________________________________________________________________________
5. Premium Expense Charge
IDS Life of New York deducts a sales charge and a charge for premium taxes from
each premium payment. The total of these charges is called the premium expense
charge.
A sales charge of 2.5 percent of each premium payment will be deducted to
compensate IDS Life of New York for expenses relating to the distribution of the
policy, including agents' commissions, advertising, and the printing of the
prospectuses and sales literature. In addition, IDS Life of New York may charge
a contingent deferred sales charge if the policy is surrendered or lapses.
The policy provides that a charge of 1 percent of each premium payment will be
deducted to cover the premium taxes imposed by the state of New York.
________________________________________________________________________
6. Transaction Charge
IDS Life of New York makes a daily charge against the assets of the subaccount
investing in the Trust. 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 Trust. 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.
<PAGE>
________________________________________________________________________
7. Surrender Charge
There are surrender charges for full surrender in the first 10 years of the
policy and for 10 years following an increase in specified amount. They are
generally level for 5 years and decreasing the next 5 years. The surrender
charge is based on the specified amount, the Insured's age, sex and smoker class
and the total gross premium paid. 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 $551,374 in 1996, $464,724 in 1995
and $269,275 in 1994. 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.
________________________________________________________________________
8. Investment Transactions
The subaccounts' purchases of portfolio or fund shares or trust units (net of
charges), including reinvestment of dividend distributions, were as follows:
<TABLE>
<CAPTION>
Year ended Dec. 31,
Subaccount Investment 1996 1995 1994
- ------------------------------------------------------------------------------------
<S> <C> <C> <C>
YEQ Equity Portfolio............... $12,711,900 $3,623,207 $4,876,621
YIN Income Portfolio............... 1,362,573 837,431 771,876
YMM Money Market Portfolio......... 1,273,437 745,230 284,537
YMA Managed Portfolio.............. 5,602,928 3,068,323 5,378,194
YGS Government Securities Portfolio 150,485 140,020 176,903
YIT International Equity Portfolio. 4,543,458 771,320 130,259*
YGI AIM V.I. Growth and Income
Fund........................... 146,590** -- --
YNO Putnam VT New Opportunities
Fund........................... 81,922** -- --
Y95 1995 Trust..................... -- 18,702*** 14,258
Y04 2004 Trust..................... 122,983 130,917 149,223
- ------------------------------------------------------------------------------------
$25,996,276 $9,335,150 $11,781,755
- ------------------------------------------------------------------------------------
* Commenced operations on Oct. 28, 1994.
** Commenced operations Nov. 22, 1996.
***For the period Jan. 1, 1995 to Nov. 15, 1995, date of maturity of securities in the
1995 Trust.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Condensed Financial Information (unaudited)
Period from
Aug. 31 to
Year Ended Dec. 31, Dec. 31,
----------------------------------------------------------------------
1996 1995 1994 1993 1992 1991 1990 1989 1988 1987*
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Subaccount YEQ (Equity)
Accumulation unit value at beginning of
period................................... $2.66 $1.94 $1.91 $1.70 $1.63 $0.98 $1.04 $0.85 $0.79 $1.00
Accumulation unit value at end of period. $3.17 $2.66 $1.94 $1.91 $1.70 $1.63 $0.98 $1.04 $0.85 $0.79
Number of accumulation units outstanding
at end of period (000 omitted)........... 10,219 7,545 6,265 4,382 2,916 1,668 1,061 572 349 46
- -------------------------------------------------------------------------------------------------------------------------
Subaccount YIN (Income)
Accumulation unit value at beginning of
period................................... $2.06 $1.72 $1.81 $1.59 $1.47 $1.29 $1.23 $1.10 $1.03 $1.00
Accumulation unit value at end of period. $2.11 $2.06 $1.72 $1.81 $1.59 $1.47 $1.29 $1.23 $1.10 $1.03
Number of accumulation units outstanding
at end of period (000 omitted)........... 2,032 1,614 1,408 1,308 744 517 369 215 70 7
- -------------------------------------------------------------------------------------------------------------------------
Subaccount YMM (Money Market)
Accumulation unit value at beginning of
period................................... $1.46 $1.39 $1.35 $1.33 $1.29 $1.24 $1.16 $1.07 $1.02 $1.00
Accumulation unit value at end of period. $1.52 $1.46 $1.39 $1.35 $1.33 $1.29 $1.24 $1.16 $1.07 $1.02
Number of accumulation units outstanding
at end of period (000 omitted)........... 605 352 196 193 147 191 167 119 73 3
- -------------------------------------------------------------------------------------------------------------------------
Subaccount YMA (Managed)
Accumulation unit value at beginning of
period................................... $2.64 $2.24 $2.24 $1.89 $1.73 $1.32 $1.23 $0.96 $0.89 $1.00
Accumulation unit value at end of period. $2.99 $2.64 $2.24 $2.24 $1.89 $1.73 $1.32 $1.23 $0.96 $0.89
Number of accumulation units outstanding
at end of period (000 omitted)........... 8,043 6,737 6,000 4,308 2,720 1,912 1,236 679 454 83
- -------------------------------------------------------------------------------------------------------------------------
Subaccount YGS (Government Securities)
Accumulation unit value at beginning of
period................................... $1.94 $1.66 $1.76 $1.58 $1.50 $1.30 $1.23 $1.09 $1.03 $1.00
Accumulation unit value at end of period. $1.96 $1.94 $1.66 $1.76 $1.58 $1.50 $1.30 $1.23 $1.09 $1.03
Number of accumulation units outstanding
at end of period (000 omitted)........... 295 301 284 244 159 112 69 33 26 2
- -------------------------------------------------------------------------------------------------------------------------
Subaccount YIT (International Equity)**
Accumulation unit value at beginning of
period................................... $1.36 $0.98 $1.00 -- -- -- -- -- -- --
Accumulation unit value at end of period. $1.66 $1.36 $0.98 -- -- -- -- -- -- --
Number of accumulation units outstanding
at end of period (000 omitted)........... 2,922 759 130 -- -- -- -- -- -- --
- -------------------------------------------------------------------------------------------------------------------------
Subaccount YGI (AIM V.I. Growth and Income)#
Accumulation unit value at beginning of
period................................... $1.00 -- -- -- -- -- -- -- -- --
Accumulation unit value at end of period. $1.00 -- -- -- -- -- -- -- -- --
Number of accumulation units outstanding
at end of period (000 omitted)........... 148 -- -- -- -- -- -- -- -- --
- -------------------------------------------------------------------------------------------------------------------------
Subaccount YNO (Putnam VT New Opportunities)#
Accumulation unit value at beginning of
period................................... $1.00 -- -- -- -- -- -- -- -- --
Accumulation unit value at end of period. $0.98 -- -- -- -- -- -- -- -- --
Number of accumulation units outstanding
at end of period (000 omitted)........... 84 -- -- -- -- -- -- -- -- --
- -------------------------------------------------------------------------------------------------------------------------
Subaccount Y95 (1995)***
Accumulation unit value at beginning of
period................................... $ -- $1.78 $1.77 $1.68 $1.58 $1.37 $1.26 $1.11 $1.04 $1.00
Accumulation unit value at end of period. $ -- $ -- $1.78 $1.77 $1.68 $1.58 $1.37 $1.26 $1.11 $1.04
Number of accumulation units outstanding
at end of period (000 omitted)........... -- -- 105 107 105 104 102 83 29 1
- -------------------------------------------------------------------------------------------------------------------------
Subaccount Y04 (2004)
Accumulation unit value at beginning of
period................................... $2.79 $2.16 $2.41 $2.00 $1.85 $1.55 $1.51 $1.23 $1.09 $1.00
Accumulation unit value at end of period. $2.71 $2.79 $2.16 $2.41 $2.00 $1.85 $1.55 $1.51 $1.23 $1.09
Number of accumulation units outstanding
at end of period (000 omitted)........... 291 279 248 207 183 153 146 105 112 10
- -------------------------------------------------------------------------------------------------------------------------
*Operations commenced on Aug. 31, 1987.
**Operations commenced on Oct. 28, 1994.
***Securities in the 1995 Trust matured on Nov. 15, 1995.
#Operations commenced on Nov. 22, 1996.
</TABLE>
<PAGE>
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 for the purpose of informing the
investor as to the financial condition of the insurance company and its ability
to carry out its obligations under its variable contracts.
IDS LIFE INSURANCE COMPANY OF NEW YORK
BALANCE SHEETS
Dec. 31, Dec. 31,
ASSETS 1996 1995
- ------ ----------- ------
(thousands)
Investments:
Fixed maturities:
Held to maturity, at amortized cost (Fair value:
1996, $604,635; 1995, $683,147) $ 585,812 $ 642,580
Available for sale, at fair value (Fair value:
1996, $590,608; 1995, $577,068) 601,623 601,298
Mortgage loans on real estate 160,017 158,730
Policy loans 20,077 18,035
Other investments 1,374 1,915
----------- ------
Total investments 1,368,903 1,422,558
Accrued investment income 21,068 22,572
Deferred policy acquisition costs 119,183 109,800
Other assets 3,950 2,108
Separate account assets 950,018 724,212
-------- ---------
Total assets $2,463,122 $2,281,250
======== ========
<PAGE>
IDS LIFE INSURANCE COMPANY OF NEW YORK
BALANCE SHEETS (continued)
Dec. 31, Dec. 31,
LIABILITIES AND STOCKHOLDER'S EQUITY 1996 1995
- ------------------------------------ ---------- ---------
(thousands)
Liabilities:
Future policy benefits:
Fixed annuities $1,054,954 $1,109,167
Universal life-type insurance 142,278 136,475
Traditional life, disability income
and long-term care insurance 45,338 42,477
Policy claims and other policyholders' funds 3,155 3,644
Deferred income taxes 9,046 15,663
Amounts due to brokers 3,007 10,000
Other liabilities 25,463 21,029
Separate account liabilities 950,018 724,212
--------- ---------
Total liabilities 2,233,259 2,062,667
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 on investments 6,943 15,341
Retained earnings 171,920 152,242
--------- -----------
Total stockholder's equity 229,863 218,583
-------- -----------
Total liabilities and stockholder's equity $2,463,122 $2,281,250
======== ========
Commitments and contingencies (Note 7)
See accompanying notes.
<PAGE>
IDS LIFE INSURANCE COMPANY OF NEW YORK
STATEMENTS OF INCOME
Years ended Dec.31,
1996 1995 1994
--------- ------- -------
(thousands)
Revenues:
Traditional life, disability income
and long-term care insurance
premiums $ 10,931 $ 9,280 $ 7,846
Policyholder and contractholder charges 15,832 13,216 11,607
Mortality and expense risk fees 8,574 6,213 4,562
Net investment income 109,468 110,924 108,143
Net realized gain (loss) on investments (1,424) 1,548 957
------ ------ -------
Total revenues 143,381 141,181 133,115
-------- -------- -------
Benefits and expenses:
Death and other benefits:
Traditional life, disability income
and long-term care insurance 4,182 3,354 6,016
Universal life-type insurance
and investment contracts 4,409 4,548 3,773
Increase in liabilities for future
policy benefits for traditional life,
disability income and
long-term care insurance 2,324 1,958 506
Interest credited on universal life-type
insurance and investment contracts 65,099 68,630 65,018
Amortization of deferred policy
acquisition costs 16,071 13,085 12,994
Other insurance and operating expenses 8,972 7,474 8,359
-------- ------- ------
Total benefits and expenses 101,057 99,049 96,666
------- ------- -------
Income before income taxes 42,324 42,132 36,449
Income taxes 14,640 14,745 12,794
------- ------- -------
Net income $ 27,684 $ 27,387 $ 23,655
====== ====== ======
See accompanying notes.
<PAGE>
<TABLE>
<CAPTION>
IDS LIFE INSURANCE COMPANY OF NEW YORK
STATEMENTS OF CASH FLOWS
Years ended Dec. 31,
1996 1995 1994
--------- --------- ------
(thousands)
<S> <C> <C> <C>
Cash flows from operating activities:
Net income $27,684 $27,387 $23,655
Adjustments to reconcile net income to net
cash provided by operating activities:
Policy loan issuance, excluding universal
life-type insurance (2,473) (2,093) (1,365)
Policy loan repayment, excluding universal
life-type insurance 1,571 881 849
Change in accrued investment income 1,504 (1,055) (175)
Change in deferred policy acquisition
costs, net (9,087) (11,017) (11,522)
Change in liabilities for future policy
benefits for traditional life, disability income
and long-term care insurance 2,861 1,931 501
Change in policy claims and other
policyholders' funds (489) 427 870
Change in deferred income taxes (2,095) (1,301) (4,321)
Change in other liabilities 4,434 2,429 (1,711)
(Accretion of discount)
amortization of premium, net (652) (480) 2,464
Net realized (gain) loss on investments 1,424 (1,548) (957)
Policyholder and contractholder
charges, non-cash (7,831) (6,962) (6,000)
Other, net (1,781) (508) 689
--------- ----- ------
Net cash provided by operating
activities $15,070 $ 8,091 $2,977
------- ------- ------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
IDS LIFE INSURANCE COMPANY OF NEW YORK
STATEMENTS OF CASH FLOWS (continued)
Years ended Dec. 31,
1996 1995 1994
------- ------- -----
(thousands)
<S> <C> <C> <C>
Cash flows from investing activities:
Fixed maturities held to maturity:
Purchases $ -- $ (37,540) $ (36,560)
Maturities, sinking fund payments and calls 39,082 34,216 78,757
Sales 14,465 28,905 2,649
Fixed maturities available for sale:
Purchases (97,370) (133,503) (117,965)
Maturities, sinking fund payments and calls 71,939 44,234 70,316
Sales 15,669 8,839 14,533
Other investments, excluding policy loans:
Purchases (14,802) (1,939) (47,353)
Sales 12,659 5,993 2,975
Change in amounts due to brokers (6,993) 10,000 (4,952)
------- ------- -------
Net cash provided by (used in)
investing activities 34,649 (40,795) (37,600)
--------- -------- ---------
Cash flows from financing activities:
Activity related to universal life-type insurance
and investment contracts:
Considerations received 131,011 159,431 188,469
Surrenders and death benefits (236,689) (190,695) (212,171)
Interest credited to account balances 65,099 68,630 65,018
Universal life-type insurance policy loans:
Issuance (4,490) (4,870) (3,907)
Repayment 3,350 2,946 2,476
Cash dividend to parent (8,000) (8,000) --
------ ------- ---
Net cash (used in) provided by financing
activities (49,719) 27,442 39,885
-------- ------- -------
Net (decrease) increase in cash and cash
equivalents -- (5,262) 5,262
Cash and cash equivalents at
beginning of year -- 5,262 --
-------- ------ -------
Cash and cash equivalents at
end of year $ -- $ -- $ 5,262
========= ======= =======
See accompanying notes.
</TABLE>
<PAGE>
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
flexible 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.
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 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, net of deferred taxes.
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.
Mortgage loans on real estate are carried at amortized cost less
reserves for mortgage loan losses. The estimated 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.
Impairment of mortgage loans 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
in a reserve for mortgage loan losses. The reserve for mortgage loans
losses is maintained at a level that management believes is adequate to
absorb estimated 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 mortgage loan losses.
The Company generally stops accruing interest on mortgage loans for
which interest payments are delinquent more than three months. Based on
management's judgement as to the ultimate collectibility of principal,
interest payments received are either recognized as income or applied
to the recorded investment in the loan.
The cost of interest rate caps is amortized to investment income over
the life of the contracts and payments received as a result of these
agreements are recorded as a reduction of investment income when
realized. The amortized cost of interest rate caps is included in other
investments.
Policy loans are carried at the aggregate of the unpaid loan balances
which do not exceed the cash surrender values of the related policies.
When evidence indicates a decline, which is other than temporary, in
the underlying value or earning power of individual investments, such
investments are written down to the fair value by a charge to income.
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.
Supplementary information to the statements of cash flows is summarized
as follows:
1996 1995 1994
-------- -------- ------
Cash paid during the year for:
Income taxes $15,247 $15,026 $17,386
Interest on borrowings 777 742 147
Recognition of profits on annuity contracts and insurance policies
Profits on fixed deferred annuities are recognized by the Company over
the lives of the contracts, using primarily the interest method.
Profits 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 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.
Policyholder and contractholder charges include the monthly cost of
insurance charges and issue and administrative fees. These charges also
include the minimum death benefit guarantee fees received from the
variable life insurance separate accounts. Management and other fees
include investment management fees and mortality and expense risk fees
from the variable annuity and variable life insurance separate accounts
and underlying funds.
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 most single premium deferred annuities and installment
annuities are amortized in relation to 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 and certain
installment annuities are amortized 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.
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 are based
on the net level premium method and anticipated rates of mortality,
policy persistency and interest earnings. Anticipated mortality rates
generally approximate the 1955-1960 Select and Ultimate Basic Table for
policies issued prior to 1980, the 1965-1970 Select and Ultimate Basic
Table for policies issued from 1981-1984 and the 1975-1980 Select and
Ultimate Basic Table for policies issued after 1984. Anticipated policy
persistency rates vary by policy form, issue age and policy duration
with persistency on cash value plans generally anticipated to be better
than persistency on term insurance plans. Anticipated interest rates
are 4% for policies issued before 1974, 5.25% for policies issued from
1974-1980, and range from 10% to 6% depending on policy form, issue
year and policy duration for policies issued after 1980.
Liabilities for future disability income policy benefits include both
policy reserves and claim reserves. Policy reserves are based on the
net level premium method and anticipated rates of morbidity, mortality,
policy persistency and interest earnings. Anticipated morbidity rates
are based on the 1964 Commissioners Disability Table for policies
issued before 1996 and the 1985 CIDA table for policies issued in 1996.
Anticipated mortality rates are based on the 1958 Commissioners
Standard Ordinary Table for policies issued before 1996 and the
1975-1980 Basic Table for policies issued in 1996. Anticipated policy
persistency rates vary by policy form, occupation class, issue age and
policy duration. Anticipated interest rates are 3% for policies issued
before 1996 and grade from 7.5% to 5% over five years for policies
issued in 1996. Claim reserves are calculated on the basis of
anticipated rates of claim continuance and interest earnings.
Anticipated claim continuance rates are based on the 1964 Commissioners
Disability Table for claims incurred before 1993 and the 1985 CIDA
Table for claims incurred after 1992. Anticipated interest rates are 8%
for claims incurred prior to 1992, 7% for claims incurred in 1992 and
6% for claims incurred after 1992.
Liabilities for future long-term care policy benefits include both
policy reserves and claim reserves. Policy reserves are based on the
net level premium method and anticipated rates of morbidity, mortality,
policy persistency and interest earnings. Anticipated morbidity rates
are based on the 1985 National Nursing Home Survey. Anticipated
mortality rates are based on the 1983a Table. Anticipated policy
persistency rates vary by policy form, issue age and policy duration.
Anticipated interest rates are 9.5% grading to 7% over 10 years for
policies issued from 1989-1992 and 7.75% grading to 7% over 4 years for
policies issued after 1992. Claim reserves are calculated on the basis
of anticipated rates of claim continuance and interest earnings.
Anticipated claim continuance rates are based on the 1985 National
Nursing Home Survey. Anticipated interest rates are 8% for claims
incurred prior to 1992, 7% claims incurred in 1992 and 6% 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 monthly benefit for
benefit periods longer than three years. The excesses are reinsured
with other life insurance companies on a yearly renewable term basis.
Long-term care policies are primarily reinsured on a coinsurance 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 subsidiaries for
all tax benefits.
Included in other liabilities at Dec. 31, 1996 and 1995 are $5,161 and
$3,971, 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 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. For variable life insurance, the Company
guarantees that the rates at which insurance charges and administrative
fees are deducted from contract funds will not exceed contractual
maximums. The Company also guarantees that the death benefit will
continue payable at the initial level regardless of investment
performance so long as minimum premium payments are made.
Accounting changes
The Financial Accounting Standards Board's (FASB) Statement of
Financial Accounting Standards No. 121, "Accounting for the Impairment
of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of," was
effective Jan. 1, 1996. The new rule did not have a material impact on
the Company's results of operations or financial condition.
Reclassification
Certain 1995 and 1994 amounts have been reclassified to conform to the
1996 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.
Net realized gain (loss) on investments for the years ended Dec. 31 is
summarized as follows:
1996 1995 1994
------ ------ -----
Fixed maturities $ (572) $1,997 $948
Mortgage loans (855) (487) -
Other investments 3 38 9
---------- ----- --
$(1,424) $1,548 $957
======== ====== ====
Changes in net unrealized appreciation (depreciation) of investments
for the years ended Dec. 31 are summarized as follows:
1996 1995 1994
---------- --------- --------
Fixed maturities:
Held to maturity $(21,744) $73,970 $(84,244)
Available for sale (13,215) 43,726 (38,226)
<PAGE>
The amortized cost, gross unrealized gains and losses and fair value of
investments in fixed maturities and equity securities at Dec. 31, 1996
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 $ 4,498 $ 144 $ -- $ 4,642
Corporate bonds and obligations 523,807 23,060 2,964 543,903
Mortgage-backed securities 57,507 409 1,826 56,090
--------- --------- ------ ---------
$585,812 $23,613 $4,790 $604,635
======== ======= ====== ========
Gross Gross
Amortized Unrealized Unrealized Fair
Available for sale Cost Gains Losses Value
State and municipal obligations $ 105 $ 10 $ -- $ 115
Corporate bonds and obligations 260,966 8,857 1,181 268,642
Mortgage-backed securities 329,537 5,788 2,459 332,866
-------- -------- ------ --------
$590,608 $14,655 $3,640 $601,623
======== ======= ====== ========
</TABLE>
The change in net unrealized loss on available for sale securities
included as a separate component of stockholder's equity was $8,398 in
1996.
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
======== ======= ====== ========
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 on available for sale securities
included as a separate component of stockholder's equity was $27,710 in
1995.
<PAGE>
The amortized cost and fair value of investments in fixed maturities at
Dec. 31, 1996 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.
Amortized Fair
Held to maturity Cost Value
Due in one year or less $ 11,777 $ 11,912
Due from one to five years 125,637 132,169
Due from five to ten years 321,472 333,245
Due in more than ten years 69,419 71,219
Mortgage-backed securities 57,507 56,090
--------- ---------
$585,812 $604,635
======== ========
Amortized Fair
Available for sale Cost Value
Due in one year or less $ 39,155 $ 39,695
Due from one to five years 55,313 58,288
Due from five to ten years 127,642 130,246
Due in more than ten years 38,961 40,528
Mortgage-backed securities 329,537 332,866
-------- --------
$590,608 $601,623
======== ========
During the years ended Dec. 31, 1996, 1995 and 1994, fixed maturities
classified as held to maturity were sold with amortized cost of
$14,507, $27,971 and $2,735, respectively. Net gains and losses on
these sales were not significant. 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 1996
with proceeds of $15,669 and gross realized gains and losses of $28 and
$1,541, respectively. Fixed maturities available for sale were sold
during 1995 with proceeds of $8,839 and gross realized gains and losses
of $nil and $74, respectively. Fixed maturities available for sale were
sold during 1994 with proceeds of $14,533 and gross realized gains and
losses of $181 and $308, respectively.
At Dec. 31, 1996, bonds carried at $261 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:
1996 1995 1994
---------- --------- -------
Interest on fixed maturities $ 95,574 $ 97,092 $ 93,800
Interest on mortgage loans 14,171 13,888 13,226
Other investment income 1,293 1,291 1,219
Interest on cash equivalents 67 186 363
----------- ---- ------
111,105 112,457 108,608
Less investment expenses 1,637 1,533 465
---------- ------ -------
$109,468 $110,924 $108,143
======== ======== ========
<PAGE>
At Dec. 31, 1996, 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 $130 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 1996 1995
---------------------- ------- --------
Aaa/AAA $ 396,097 $ 391,321
Aa/AA 13,996 17,572
Aa/A 10,197 9,950
A/A 196,542 209,483
A/BBB 62,488 61,912
Baa/BBB 336,706 357,445
Baa/BB 51,639 46,029
Below investment grade 108,755 125,936
----------- --------
$1,176,420 $1,219,648
========== ==========
At Dec. 31, 1996, 94 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, 1996, approximately 11.6 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, 1996 Dec. 31, 1995
------------------------ ----------------------------
On Balance Commitments On Balance Commitments
Region Sheet to Purchase Sheet to Purchase
-------------- ------ ----------- --------- -----------
<S> <C> <C> <C> <C>
West North Central $ 23,191 $1,342 $ 23,705 $ --
East North Central 33,430 1,708 34,207 --
South Atlantic 35,501 -- 38,802 2,033
Middle Atlantic 22,889 -- 23,502 --
Pacific 12,986 -- 13,150 --
Mountain 15,425 -- 14,937 5,084
New England 8,805 -- 8,982 --
East South Central 8,825 -- 1,613 7,407
West South Central 265 -- 277 --
--------- ---------- ---- -------
161,317 3,050 159,175 14,524
Less allowance for losses 1,300 -- 445 --
------ --- ---- -------
$160,017 $3,050 $158,730 $14,524
======== ====== ======== =======
Dec. 31, 1996 Dec. 31, 1995
--------------------- --------------------------
On Balance Commitments On Balance Commitments
Property type Sheet to Purchase Sheet to Purchase
------------------------- -------- ----------- ------- -----------
Apartments $ 70,292 $ 1,708 $ 64,136 $7,988
Department/retail stores 48,476 1,342 55,308 --
Office buildings 18,684 -- 12,367 6,536
Industrial buildings 11,956 -- 13,255 --
Nursing/retirement 6,477 -- 6,565 --
Medical buildings 5,167 -- 5,255 --
Other -- -- 2,012 --
Hotels/motels 265 -- 277 --
------ ---- --- -------
161,317 3,050 159,175 14,524
Less allowance for losses 1,300 -- 445 --
----- ----- ---- -------
$160,017 $ 3,050 $158,730 $14,524
======== ======= ======== =======
</TABLE>
<PAGE>
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.
At Dec. 31, 1996 and 1995, the Company's recorded investment in
impaired loans was $1,327 and $2,052 with a reserve of $1,300 and $445,
respectively. During 1996 and 1995, the average recorded investment in
impaired loans was $1,628 and $3,003, respectively.
The Company recognized $152 and $204 of interest income related to
impaired loans for the year ended Dec. 31, 1996 and 1995, respectively.
The following table presents changes in the reserve for investment
losses related to all loans:
1996 1995
------ -----
Balance, Jan. 1 $ 445 $445
Provision for investment losses 855 --
------ ----
Balance, Dec. 31 $1,300 $445
====== ====
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:
1996 1995 1994
------ ------ ------
Federal income taxes:
Current $15,735 $15,146 $16,419
Deferred (2,095) (1,301) (4,320)
------- ------ -------
13,640 13,845 12,099
State income taxes-current 1,000 900 695
----- ------ -----
Income tax expense $14,640 $14,745 $12,794
======= ======= =======
Increases (decreases) to the federal tax provision applicable to pretax
income based on the statutory rate are attributable to:
<TABLE>
<CAPTION>
1996 1995 1994
-------------------- --------------------- --------------------
Provision Rate Provision Rate Provision Rate
<S> <C> <C> <C> <C> <C> <C>
Federal income taxes based
on the statutory rate $14,813 35.0% $14,746 35.0% $12,757 35.0%
Increases (decreases) are
attributable to:
Tax-excluded interest
and dividend income (458) (1.1) (464) (1.1) (554) (1.5)
Other, net (716) (1.7) (437) (1.0) (104) (0.3)
---- ---- ---- ---- ----- ----
Federal income taxes $13,639 32.2% $13,845 32.9% $12,099 33.2%
======= ==== ======= ==== ======= ====
</TABLE>
<PAGE>
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, 1996, 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:
1996 1995
-------- ------
Deferred tax assets:
Policy reserves $28,809 $26,237
Other 4,018 2,791
------- -----
Total deferred tax assets 32,827 29,028
------ ------
Deferred tax liabilities:
Deferred policy acquisition costs 35,302 33,001
Investments 6,571 11,690
------ ------
Total deferred tax
liabilities 41,873 44,691
------ -------
Net deferred tax liabilities $(9,046) $(15,663)
======= ========
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 $94,007 as of Dec.
31, 1996 and $85,964 as of Dec. 31, 1995 (see Note 3 with respect to
the income tax effect of certain distributions).
Dividends paid to parent were $8,000 in 1996, $8,000 in 1995 and $nil
in 1994.
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 $34, $33 and
$33 in 1996, 1995 and 1994, respectively.
The Company has a "Sales Benefit Plan" which is an unfunded,
noncontributory retirement plan for all eligible financial advisors.
Total plan costs for 1996, 1995 and 1994, which are calculated on the
basis of commission earnings of the individual financial advisors, were
$1,474, $1,392 and $1,372, 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 1996, 1995
and 1994 were $248, $231 and $251, 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.
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 1996, 1995 and 1994 were $1,424, $1,720 and $1,287, 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 $12,389, $12,122 and $9,314 for 1996, 1995 and 1994,
respectively. Certain of the costs assessed to the Company are included
in deferred policy acquisition costs.
7. Commitments and contingencies
At Dec. 31, 1996 and 1995, traditional life insurance and universal
life-type insurance in force aggregated $4,053,561 and $3,502,851,
respectively, of which $203,963 and $163,462 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. Premiums ceded to IDS Life
amounted to $98, $85 and $76 for the years ended Dec. 31, 1996, 1995
and 1994, respectively. Claim recoveries under the terms of this
reinsurance agreement were $861, $1,426 and $nil in 1996, 1995 and
1994, respectively.
Premiums ceded to reinsurers other than IDS Life amounted to $747, $667
and $735 for the years ended Dec. 31, 1996, 1995 and 1994,
respectively. Reinsurance recovered from reinsurers other than IDS Life
amounted to $66, $576 and ($107) for the years ended Dec. 31, 1996,
1995 and 1994.
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 $345,943 and $392,106 at Dec. 31, 1996 and 1995,
respectively. The accompanying statement of income includes premiums of
$nil for the years ended Dec. 31, 1996, 1995 and 1994, and decrease in
liabilities for future policy benefits of $2,010, 2,039 and $2,538
related to this agreement for the years ended Dec. 31, 1996, 1995 and
1994, respectively.
8. Lines of credit
The Company has available lines of credit with two banks and American
Express Financial Corporation (AEFC) aggregating $55,000 of which
$25,000 is with AEFC. The lines of credit are at 40 to 80 basis points
over each lender's cost of funds. The $10,000 line of credit with one
bank expired on Dec. 31, 1996 and the Company did not seek renewal. The
$20,000 line of credit with the other bank expires on June 30, 1997 and
the Company expects to seek renewal. Outstanding borrowings under these
agreements were $nil at Dec. 31, 1996 and 1995.
<PAGE>
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 does not hold derivative
instruments for trading purposes. The Company manages risks associated
with these instruments as described below.
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.
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.
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.
The Company's holdings of derivative financial instruments are as
follows:
Notional Carrying Fair Total Credit
Dec. 31, 1996 Amount Value Value Exposure
------------- ------ ------- ----- ---------
Assets:
Interest rate caps $250,000 $1,374 $832 $832
======== ====== ==== ====
Dec. 31, 1995
Assets:
Interest rate caps $300,000 $1,905 $745 $745
======== ====== ==== ====
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
interest rate risk. 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.
<PAGE>
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 practicable 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.
<TABLE>
<CAPTION>
1996 1995
------- ------
Carrying Fair Carrying Fair
Financial Assets Value Value Value Value
<S> <C> <C> <C> <C>
Investments:
Fixed maturities (Note 2):
Held to maturity $ 585,812 $ 604,635 $ 642,580 $ 683,147
Available for sale 601,623 601,623 601,298 601,298
Mortgage loans on real estate (Note 2) 160,017 164,444 158,730 168,194
Other:
Equity securities (Note 2) -- -- 10 10
Derivative financial instruments (Note 9) 1,374 832 1,905 745
Separate accounts assets (Note 1) 950,019 950,019 724,212 724,212
Financial Liabilities
Future policy benefits for
fixed annuities 979,030 946,359 1,038,431 1,005,004
Separate account liabilities 880,160 838,492 678,263 645,389
</TABLE>
At Dec. 31, 1996 and 1995, the carrying amount and fair value of future
policy benefits for fixed annuities exclude life insurance-related
contracts carried at $72,252 and $67,843, respectively, and policy
loans of $3,672 and $2,893, respectively. The fair value of these
benefits is based on the status of the annuities at Dec. 31, 1996 and
1995. 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 1996 and 1995.
At Dec. 31, 1996 and 1995, 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
$69,859 and $45,949, respectively.
<PAGE>
11. Statutory insurance accounting practices
Reconciliations of net income for 1996, 1995 and 1994 and stockholder's
equity at Dec. 31, 1996 and 1995, as shown in the accompanying
financial statements, to that determined using statutory accounting
practices are as follows:
1996 1995 1994
-------- -------- -------
Net income, per accompanying
financial statements $27,684 $27,387 $23,655
Deferred policy acquisition costs (9,087) (11,017) (11,522)
Adjustments of future policy
benefit liabilities (9,683) (10,655) 13,741
Deferred federal income taxes (2,095) (1,301) (4,321)
Provision for losses on investments 877 -- (1,652)
IMR gain/loss transfer and amortization 1,010 (331) (54)
Adjustment to separate account reserves 8,863 20,769 142
Other, net 116 948 144
------- -------- --------
Net income, on basis of
statutory accounting practices $17,685 $25,800 $20,133
======= ======= =======
1996 1995
-------- -------
Stockholder's equity, per accompanying
financial statements $229,863 $218,583
Deferred policy acquisition costs (119,183) (109,800)
Adjustments of future policy benefit liabilities 13,458 23,172
Deferred federal income taxes 9,046 15,663
Securities valuation reserve (19,446) (18,029)
Adjustments of separate account liabilities 43,189 34,326
Net unrealized loss on investments (11,016) (24,231)
Premiums due, deferred and advance 1,149 925
Deferred revenue liability 1,342 794
Allowance for losses 1,349 445
Non-admitted assets (634) (578)
Interest maintenance reserve (1,432) (2,442)
Other, net (281) 347
-------- ------
Stockholder's equity, on basis of statutory
accounting practices $147,404 $139,175
======== ========
<PAGE>
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, 1996 and 1995, and the related statements of income and cash flows
for each of the three years in the period ended December 31, 1996. 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, 1996 and 1995, and the results of its operations and
its cash flows for each of the three years in the period ended December 31,
1996, in conformity with generally accepted accounting principles.
Ernst & Young LLP
February 7, 1997
Minneapolis, Minnesota
<PAGE>
PAGE 66
(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 of New York provide that:
To the extent permitted and in the manner prescribed by law, the
Corporation shall indemnify any person made, or threatened to be made, a
party to any action, suit or proceeding, civil or criminal, by reason of
the fact that he, his testator or intestate, is or was Director or
Officer of the Corporation or of any other corporation of any type or
kind, domestic or foreign, which he served in any capacity at the
request of the Corporation, against judgements, fines, amounts paid in
settlement and reasonable expenses (which the Corporation may advance),
including attorneys' fees, actually and necessarily incurred as a result
of such action, suit or proceeding, or any appeal therein.
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.
REPRESENTATION PURSUANT TO SECTION 205 OF THE NATIONAL SECURITIES
MARKET IMPROVEMENT ACT OF 1996
The sponsoring insurance company represents that the fees and charges deducted
under the contract, in the aggregate, are reasonable in relation to the services
rendered, the expenses expected to be incurred, and the risks assumed by the
insurance company.
<PAGE>
PAGE 67
CONTENTS OF POST-EFFECTIVE AMENDMENT NO. 15 TO REGISTRATION
STATEMENT NO. 33-15290
This Post-Effective Amendment No. 15 to Registration Statement
No. 33-15290 comprises the following papers and documents:
The facing sheet.
The prospectus consisting of 89 pages.
The undertakings to file reports.
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.
(1) Resolution of Board of Directors of IDS Life of New
York authorizing the Trust, adopted September 12,
1985, filed electronically as Exhibit 1.A.(1) to
Registrant's Form N-8B-2 with Post-Effective
Amendment No. 11, File No. 33-15290 is incorporated
herein by reference.
(2) Not applicable.
(3) (a) Not applicable.
(b) i) Explanation of New York Sales Agreements,
filed electronically as Exhibit
1.A.(3)(b)(i) to Registrant's Form N-8B-2
with Post-Effective Amendment No. 11, File
No. 33-15290 is incorporated herein by
reference.
ii) Form of Personal Financial Planner's
Agreement with IDS Financial Services
Inc., filed electronically as Exhibit
1.A.(3)(b)(ii) to Registrant's Form N-8B-2
with Post-Effective Amendment No. 11, File
No. 33-15290 is incorporated herein by
reference.
iii) Form of Personal Financial Planner's
Agreement with IDS Life Insurance Company
of New York, filed electronically as
Exhibit 1.A.(3)(b)(iii) to Registrant's
Form N-8B-2 with Post-Effective Amendment
No. 11, File No. 33-15290 is incorporated
herein by reference.
<PAGE>
PAGE 68
iv) Form of "Field Trainer's" Rider to
Personal Financial Planner's Agreement,
filed electronically as Exhibit
1.A.(3)(b)(iv) to Registrant's Form N-8B-2
with Post-Effective Amendment No. 11, File
No. 33-15290 is incorporated herein by
reference.
v) Form of District Manager's Rider to
Personal Financial Planner's Agreement,
filed electronically as Exhibit
1.A.(3)(b)(v) to Registrant's Form N-8B-2
with Post-Effective Amendment No. 11, File
No. 33-15290 is incorporated herein by
reference.
vi) Form of "New York District Manager-
Insurance" Rider to Personal Financial
Planner's Agreement, filed electronically
as Exhibit 1.A.(3)(b)(vi) to Registrant's
Form N-8B-2 with Post-Effective Amendment
No. 11, File No. 33-15290 is incorporated
herein by reference.
vii) Form of Division Manager's Agreement with
IDS Financial Services Inc., filed
electronically as Exhibit 1.A.(3)(b)(vii)
to Registrant's Form N-8B-2 with Post-
Effective Amendment No. 11, File No. 33-
15290 is incorporated herein by reference.
viii) Form of "New York Division Manager-
Insurance" Rider to Division Manager's
Agreement with IDS Financial Services
Inc., filed electronically as Exhibit
1.A.(3)(b)(viii) to Registrant's Form N-
8B-2 with Post-Effective Amendment No. 11,
File No. 33-15290 is incorporated herein
by reference.
(c) Flexible Premium Variable Life Insurance
Compensation: IDS Life of New York, filed
electronically as Exhibit 1.A.(3)(c) to
Registrant's Form N-8B-2 with Post-Effective
Amendment No. 11, File No. 33-15290 is
incorporated herein by reference.
(4) Not applicable.
(5) Flexible Premium Variable Life Insurance Policy,
dated April 1, 1987, filed electronically as Exhibit
1.A.(5) to Registrant's Form N-8B-2 with Post-
Effective Amendment No. 11, File No. 33-15290 is
incorporated herein by reference.
<PAGE>
PAGE 69
(6) (a) Certificate of Amendment of the Certificate of
Incorporation of IDS Life Insurance Company of
New York, filed electronically as Exhibit
1.A.(6)(a) to Registrant's Form N-8B-2 with
Post-Effective Amendment No. 11, File No. 33-
15290 is incorporated herein by reference.
(b) Amended Bylaws of IDS Life Insurance Company of
New York, dated May 1992, filed electronically
as Exhibit 1.A.(6)(b) to Post-Effective
Amendment No. 12, File No. 33-15290 is
incorporated herein by reference.
(7) Not applicable.
(8) (a) Investment Management and Services Agreement
between IDS Life Insurance Company and IDS Life
Series Fund, Inc., dated December 17, 1985,
filed electronically as Exhibit 1.A.(8)(a) to
Registrant's Form N-8B-2 with Post-Effective
Amendment No. 11, File No. 33-15290 is
incorporated herein by reference.
(b) Investment Advisory Agreement between IDS Life
Insurance Company (IDS Life) and IDS/American
Express Inc. (IDS), dated July 11, 1984, filed
electronically as Exhibit 1.A.(8)(b) to
Registrant's Form N-8B-2 with Post-Effective
Amendment No. 11, File No. 33-15290 is
incorporated herein by reference.
(c) Reference Trust Indenture among Shearson Lehman
Brothers Inc., the Bank of New York and
Standard & Poor's Corporation, dated August 4,
1986, filed electronically as Exhibit
1.A.(8)(c) to Registrant's Form N-8B-2 with
Post-Effective Amendment No. 11, File No. 33-
15290 is incorporated herein by reference.
(d) Standard Terms and Conditions of Trust,
effective August 4, 1986, filed electronically
as Exhibit 1.A.(8)(d) to Registrant's Form N-
8B-2 with Post-Effective Amendment No. 11, File
No. 33-15290 is incorporated herein by
reference.
(9) None.
(10) Application form for the Flexible Premium Variable
Life Insurance Policy, filed electronically as
Exhibit 1.A.(10) to Registrant's Form N-8B-2 with
Post-Effective Amendment No. 11, File No. 33-15290
is incorporated herein by reference.
<PAGE>
PAGE 70
(11) Description of Transfer and Redemption Procedures
and Method of Conversion to Fixed Benefit Policies,
filed electronically as Exhibit 1.A.(11) to
Registrant's Form N-8B-2 with Post-Effective
Amendment No. 11, File No. 33-15290 is incorporated
herein by reference.
B. (1) Not applicable.
(2) Not applicable.
C. Not applicable.
2. Opinion and consent of counsel as to the legality of the
securities being registered is filed with Registrant's most
recent 24f-2 Notice.
3. Financial Statement Schedules are filed electronically
herewith.
Schedule I - Summary of Investments other than
Investments in Related Parties
Schedule III - Supplementary Insurance Information
Schedule IV - Reinsurance
Schedule V - Valuation and Qualifying Accounts
Report of Independent Auditors dated February 2, 1997.
All other schedules to the financial statements required by Article 7 of
Regulation S-X are not required under the related instructions or are
inapplicable and, therefore, have been omitted.
4. Not applicable.
5. Financial Data Schedules are filed electronically herewith.
(a) Financial Data Schedule - IDS Life of New York Account 8
(b) Financial Data Schedule - IDS Life Insurance Company of
New York
6. Opinion of Eugene C. Chen dated April 24, 1997, is filed
electronically herewith as Exhibit No. 6 to Registrant's Post-
Effective Amendment No. 15, File No. 33-15290.
7. (a) Written consent of William A. Stoltzmann, dated June 19,
1987, filed as Exhibit 7(a) to Registrant's Form N-8B-2
with Post-Effective Amendment No. 11, File No. 33-15290
is incorporated herein by reference.
(b) Written consent of Eugene C. Chen dated April 24, 1997,
is filed electronically herewith as Exhibit No. 7(b) to
Registrant's Post-Effective Amendment No. 15, File No.
33-15290.
<PAGE>
PAGE 71
(c) Written consent of Ernst & Young LLP, is filed
electronically herewith as Exhibit No. 7(c) to
Registrant's Post-Effective Amendment No. 15, File No.
33-15290.
(d) Directors' Power of Attorney to sign amendments to this
Registration Statement dated March 26, 1997, is filed
electronically herewith as Exhibit 7(d) to Registrant's Form
N-8B-2 with Post-Effective Amendment No. 15, File
No. 33-15290.
<PAGE>
PAGE 72
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940 IDS Life Insurance Company of New York, on behalf of the
Registrant, certifies that it meets all of the requirements for effectiveness of
this Amendment to its Registration Statement pursuant to Rule 485(b) under the
Securities Act of 1933 and has duly caused this Amendment to its 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 29th
day of April, 1997.
IDS Life of New York Account 8
(Registrant)
By IDS Life Insurance Company of New York
(Sponsor)
By/s/ Richard W. Kling*
Richard W. Kling, President
Pursuant to the requirements of the Securities Act of 1933, this Amendment to
the Registration Statement has been signed by the following persons in the
capacities indicated on the 29th day of April, 1997:
Signature Title
/s/ Richard W. Kling* Director, Chairman of the
Richard W. Kling Board and President
/s/ John C. Boeder* Director
John C. Boeder
/s/ Roger C. Corea* Director
Roger C. Corea
/s/ Charles A. Cuccinello* Director
Charles A. Cuccinello
/s/ Robert A. Hatton* Director, Vice President
Robert A. Hatton and Chief Operating Officer
/s/ Edward Landes* Director
Edward Landes
<PAGE>
PAGE 73
Signature Title
/s/ Thomas V. Nicolosi* Director
Thomas V. Nicolosi
/s/ Stephen P. Norman* Director
Steven P. Norman
/s/ Carl Platou* Director
Carl Platou
/s/ Gordon H. Ritz* Director
Gordon H. Ritz
/s/ Richard M. Starr* Director
Richard M. Starr
/s/ Michael R. Woodward* Director
Michael R. Woodward
*Signed pursuant to Power of Attorney dated March 26, 1997 and is
filed electronically herewith as Exhibit No. 7(d) to Registrant's
Registration Statement No. 33-15290.
By: ________________________________
Mary Ellyn Minenko
<PAGE>
PAGE 1
IDS Life of New York Account 8
Registration No. 33-15290/811-5213
EXHIBIT INDEX
3. Financial Statement Schedules and Report of Independent
Auditors.
5. Financial Data Schedules
a. IDS Life of New York Account 8
b. IDS Life Insurance Company of New York
6. Opinion of Eugene C. Chen.
7. b. Written consent of Eugene C. Chen.
c. Written consent of Ernst & Young LLP.
d. Directors' Power of Attorney dated March 26, 1997.
<PAGE>
IDS LIFE INSURANCE COMPANY OF NEW YORK
SCHEDULE I - CONSOLIDATED SUMMARY OF INVESTMENTS
OTHER THAN INVESTMENTS IN RELATED PARTIES ($ thousands)
AS OF DECEMBER 31, 1996
- -----------------------------------------------------------------------------
Column A Column B Column C Column D
Type of Investment Cost Value Amount at which
shown in the
balance sheet
- -----------------------------------------------------------------------------
Fixed maturities:
Held to maturity:
United States Government and
government agencies and
authorities (a) $ 62,005 $ 60,732 $ 62,005
All other corporate bonds 523,807 543,903 523,807
---------- ----------- ----------------
Total held to maturity 585,812 604,635 585,812
Available for sale:
United States Government and
government agencies and
authorities (b) 308,587 311,541 311,541
States, municipalities and
political subdivisions 105 115 115
All other corporate bonds 281,916 289,967 289,967
---------- ----------- ----------------
Total available for sale 590,608 601,623 601,623
Mortgage loans on real estate 160,017 XXXXXXXXX 160,017
Policy loans 20,077 XXXXXXXXX 20,077
Other investments 1,374 XXXXXXXXX 1,374
---------- ----------------
Total investments $ 1,357,888 $ XXXXXXXXX $ 1,368,903
========== ================
(a) - Includes mortgage-backed securities with a cost and market value of
$57,507 and $56,090, respectively.
(b) - Includes mortgage-backed securities with a cost and market value of
$308,587 and $311,541, respectively.
<PAGE>
<TABLE>
<CAPTION>
IDS LIFE INSURANCE COMPANY OF NEW YORK
SCHEDULE III - SUPPLEMENTARY INSURANCE INFORMATION ($ thousands)
FOR THE YEAR ENDED DECEMBER 31, 1996
Column A Column B Column C Column D Column E Column F Column G Column H Column I Column J Column K
Segment Deferred Future Unearned Other Premium Net Benefits, Amortization Other Premiums
policy policy premiums policy revenue investment claims, of deferred operating written
acquisition benefits, claims income* losses and policy expenses*
cost losses, and settlement acquisition
claims and benefits expenses costs
loss payable
expenses
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Annuities $67,568 $1,054,954$ - $ 1,055 $ - $ 93,319 $ 80 $ 11,257 $ 3,923 N/A
Life, DI and
Long-term Care
Insurance 51,615 187,616 - 2,100 10,931 16,149 10,835 4,814 5,049 N/A
- -----------------------------------------------------------------------------------------------------------
Total $119,183 $1,242,570$ - $ 3,155 $10,931 $109,468 $10,915 $ 16,071 $ 8,972 N/A
- ------------------------------------------------------------------------------------------------------------
</TABLE>
*Allocations of net investment income and other operating expenses are based on
various assumptions and estimates.
<PAGE>
<TABLE>
<CAPTION>
IDS LIFE INSURANCE COMPANY OF NEW YORK
SCHEDULE III - SUPPLEMENTARY INSURANCE INFORMATION ($ thousands)
FOR THE YEAR ENDED DECEMBER 31, 1995
Column A Column B Column C Column D Column E Column F Column G Column H Column I Column J Column K
Segment Deferred Future Unearned Other Premium Net Benefits, Amortization Other Premiums
policy policy premiums policy revenue investment claims, of deferred operating written
acquisition benefits, claims income* losses and policy expenses*
cost losses, and settlement acquisition
claims and benefits expenses costs
loss payable
expenses
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Annuities $ 65,283 $1,109,167$ - $ 2,222 $ - $ 95,323 $ 171 $ 9,138 $ 6,908 N/A
Life, DI and
Long-term Care
Insurance 44,517 178,952 - 1,422 9,280 15,601 9,689 3,947 566 N/A
- -----------------------------------------------------------------------------------------------------------------
Total $ 109,800 $1,288,119$ - $ 3,644 $ 9,280 $110,924 $ 9,860 $ 13,085 $ 7,474 N/A
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
*Allocations of net investment income and other operating expenses are based on
various assumptions and estimates.
<PAGE>
<TABLE>
<CAPTION>
IDS LIFE INSURANCE COMPANY OF NEW YORK
SCHEDULE III - SUPPLEMENTARY INSURANCE INFORMATION ($ thousands)
FOR THE YEAR ENDED DECEMBER 31, 1994
Column A Column B Column C Column D Column E Column F Column G Column H Column I Column J Column K
Segment Deferred Future Unearned Other policy Premium Net Benefits, Amortization Other Premiums
policy policy premiums claims and revenue investment claims, of deferred operating written
acquisition benefits, benefits income* losses and policy expenses*
cost losses, payable settlement acquisition
claims and expenses costs
loss
expenses
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Annuities $61,442 $1,087,367$ - $ 1,348 $ - $92,583 $ 81 $ 9,392 $ 4,765 N/A
Life, DI and
Long-term Care
Insurance 38,636 168,417 - 1,869 7,846 15,560 10,214 3,602 3,594 N/A
- --------------------------------------------------------------------------------------------------------------------
Total $100,078 $1,255,784$ - $ 3,217 $ 7,846 $108,143 $ 10,295 $ 12,994 $ 8,359 N/A
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
*Allocations of net investment income and other operating expenses are based on
various assumptions and estimates.
<PAGE>
<TABLE>
<CAPTION>
IDS LIFE INSURANCE COMPANY OF NEW YORK
SCHEDULE IV - REINSURANCE ($ thousands)
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
- ---------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Gross amount Ceded to other Assumed from Net % of amount
companies other companies Amount assumed to net
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
For the year ended
December 31, 1996
Life insurance in force $ 3,707,618 $ 203,963 $ 345,943 $ 3,849,598 8.99%
===================================================================================================
Premiums:
Life insurance & annuities $ 2,634 $ 222 $ -- $ 2,412 0.00%
DI & long-term care insurance 8,651 132 -- 8,519 0.00%
- ---------------------------------------------------------------------------------------------------
Total premiums $ 11,285 $ 354 $ 0 $ 10,931 0.00%
===================================================================================================
For the year ended
December 31, 1995
Life insurance in force $ 3,110,745 $ 163,462 $ 392,106 $ 3,339,389 11.74%
===================================================================================================
Premiums:
Life insurance & annuities $ 2,327 $ 185 $ -- $ 2,142 0.00%
DI & long-term care insurance 7,221 83 -- 7,138 0.00%
- ---------------------------------------------------------------------------------------------------
Total premiums $ 9,548 $ 268 $ 0 $ 9,280 0.00%
===================================================================================================
For the year ended
December 31, 1994
Life insurance in force $ 3,602,888 $ 162,956 $ 447,317 $ 3,887,249 11.51%
===================================================================================================
Premiums:
Life insurance & annuities $ 2,219 $ 209 $ -- $ 2,010 0.00%
DI & long-term care insurance 5,919 83 -- 5,836 0.00%
- ---------------------------------------------------------------------------------------------------
Total premiums $ 8,138 $ 292 $ 0 $ 7,846 0.00%
===================================================================================================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
IDS LIFE INSURANCE COMPANY OF NEW YORK
SCHEDULE V - VALUATION AND QUALIFYING ACCOUNTS ($ thousands)
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
- -----------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E
Additions
--------------
Balance at Charged to
Description Beginning Charged to Other Accounts-Deductions- Balance at End
of Period Costs & Expenses Describe Describe of Period
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
For the year ended
December 31, 1996
- ------------------------------
Reserve for Mortgage Loans $445 $855 $0 $0 $1,300
Reserve for Fixed Maturities $26 $23 $0 $0 $49
For the year ended
December 31, 1995
- ------------------------------
Reserve for Mortgage Loans $445 $0 $0 $0 $445
Reserve for Fixed Maturities $0 $26 $0 $0 $26
For the year ended
December 31, 1994
- ------------------------------
Reserve for Mortgage Loans $445 $0 $0 $0 $445
Reserve for Fixed Maturities $1,652 ($1,652) $0 $0 $0
</TABLE>
<PAGE>
Report of Independent Auditors
The Board of Directors
IDS Life Insurance Company of New York
We have audited the financial statements of IDS Life Insurance Company of New
York (a wholly owned subsidiary of IDS Life Insurance Company) as of December
31, 1996 and 1995, and for each of the three years in the period ended December
31, 1996, and have issued our report thereon dated February 7, 1997 (included
elsewhere in this Registration Statement). Our audits also included the
financial statement schedules listed in Item 3 of this Registration Statement.
These schedules are the responsibility of the Company's management. Our
responsibility is to express an opinion based on our audits.
In our opinion, the financial statement schedules referred to above, when
considered in relation to the basic financial statements taken as a whole,
present fairly, in all material respects, the information set forth therein.
Ernst & Young LLP
Minneapolis, Minnesota
February 7, 1997
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000817132
<NAME> IDS Life of New York Account 8
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLAR
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 58469973
<INVESTMENTS-AT-VALUE> 68380211
<RECEIVABLES> 146011
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 68380211
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> (245436)
<TOTAL-LIABILITIES> (245436)
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 24639600
<SHARES-COMMON-PRIOR> 17586754
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 68134775
<DIVIDEND-INCOME> 6500958
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> (506557)
<NET-INVESTMENT-INCOME> 5994401
<REALIZED-GAINS-CURRENT> 268809
<APPREC-INCREASE-CURRENT> 1303590
<NET-CHANGE-FROM-OPS> 7566800
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 9695402
<NUMBER-OF-SHARES-REDEEMED> (2642556)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 24018243
<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> (506557)
<AVERAGE-NET-ASSETS> 56125654
<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
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 7
<MULTIPLIER> 1000
<CURRENCY> U.S. DOLLAR
<S> <C>
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<PERIOD-TYPE> YEAR
<EXCHANGE-RATE> 1
<DEBT-HELD-FOR-SALE> 601623
<DEBT-CARRYING-VALUE> 585812
<DEBT-MARKET-VALUE> 604635
<EQUITIES> 0
<MORTGAGE> 160017
<REAL-ESTATE> 0
<TOTAL-INVEST> 1368903
<CASH> 0
<RECOVER-REINSURE> 12
<DEFERRED-ACQUISITION> 119183
<TOTAL-ASSETS> 2463122
<POLICY-LOSSES> 1242570
<UNEARNED-PREMIUMS> 0
<POLICY-OTHER> 0
<POLICY-HOLDER-FUNDS> 3155
<NOTES-PAYABLE> 0
<COMMON> 2000
0
0
<OTHER-SE> 227863
<TOTAL-LIABILITY-AND-EQUITY> 2463122
10931
<INVESTMENT-INCOME> 109468
<INVESTMENT-GAINS> (1424)
<OTHER-INCOME> 24406
<BENEFITS> 76014
<UNDERWRITING-AMORTIZATION> 16071
<UNDERWRITING-OTHER> 8972
<INCOME-PRETAX> 42324
<INCOME-TAX> 14640
<INCOME-CONTINUING> 27684
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 27684
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<RESERVE-OPEN> 1142
<PROVISION-CURRENT> 8591
<PROVISION-PRIOR> 0
<PAYMENTS-CURRENT> 8253
<PAYMENTS-PRIOR> 0
<RESERVE-CLOSE> 1480
<CUMULATIVE-DEFICIENCY> 0
</TABLE>
<PAGE>
PAGE 1
April 24, 1997
IDS Life Insurance Company of New York
20 Madison Avenue Extension
Albany, New York 12203
Gentlemen:
This opinion is furnished in connection with post-effective Amendment No. 15 to
the registration by IDS Life Insurance Company of New York of a Flexible Premium
Variable Life Insurance Policy ("the Policy") under the Securities Act of 1933,
File #33-15290. The prospectus included on Form S-6 in the post-effective
amendment to the registration statement describes the Policy. I am familiar with
the Policy, the post-effective amendment, the registration statement and the
exhibits thereto. In my opinion, the illustrations of Death Benefits, Policy
Values, and Surrender Values included in the section of the prospectus entitled
"Illustrations", under the assumptions stated in that section, are consistent
with the provisions of the Policy.
I hereby consent to the use of this opinion as an exhibit to the post-effective
amendment to the registration statement and to the reference to my name under
the heading "Experts" in this prospectus.
Very truly yours,
/s/ Eugene C. Chen
Eugene C. Chen
Chief Actuary
<PAGE>
PAGE 1
CONSENT OF ACTUARY
The Board of Directors
IDS Life Insurance Company of New York
I consent to the reference to me under the caption "Experts" and to the use of
my opinion dated April 24, 1997 on the Illustrations used by IDS Life Insurance
Company of New York in the Prospectus for the Flexible Premium Variable Life
Insurance Policy offered by IDS Life Insurance Company of New York as part of
post-effective Amendment #15 to the Registration Statement being filed under the
Securities Act of 1933.
/s/ Eugene C. Chen
Eugene C. Chen
Chief Actuary
Albany, New York
April 24, 1997
<PAGE>
PAGE 1
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" and to the
use of our reports dated February 7, 1997 on the financial statements and
schedules of IDS Life Insurance Company of New York and our report dated March
21, 1997 on the financial statements of IDS Life of New York Account 8 for
Flexible Premium Variable Life Insurance in Post-Effective Amendment No. 15 to
the Registration Statement (Form S-6, No. 33-15290) and related Prospectus for
the registration of the Flexible Premium Variable Life Insurance Policy to be
offered by IDS Life Insurance Company of New York.
Ernst & Young LLP
Minneapolis, Minnesota
April 25, 1997
<PAGE>
PAGE 1
IDS LIFE INSURANCE COMPANY OF NEW YORK
POWER OF ATTORNEY
City of Albany
State of New York
Each of the undersigned, as officers and/or directors of IDS Life Insurance
Company of New York on behalf of the below listed registrants previously have
filed registration statements and amendments thereto pursuant to the
requirements of the Securities Act of 1933 and the Investment Company Act of
1940 with the Securities and Exchange Commission:
1933 Act 1940 Act
Reg. Number Reg. Number
IDS Life of New York 4, 5, 6, 9, 10, 11, 12, 13 and 14
IDS Life of New York Employee Benefit
Annuity 33-52567 811-3500
IDS Life of New York 4, 5, 6, 9, 10,
11, 12, 13 and 14
IDS Life of New York Flexible Annuity 33-4174 811-3500
IDS Life of New York 4, 5, 6, 9, 10, 11, 12, 13 and 14
IDS Life of New York Variable
Retirement and Combination Retirement
Annuity 2-78194 811-3500
IDS Life of New York Flexible Portfolio
Annuity Account
IDS Life of New York Flexible Portfolio
Annuity
IDS Life of New York Account 8
Flexible Premium Variable Life
Insurance Policy 33-15290 811-5213
IDS Life of New York Account SBS
Symphony Annuity 33-45776 811-6560
IDS Life of New York Account 7
Single Premium Variable Life
Insurance Policy 33-10334 811-4913
hereby constitutes and appoints William A. Stoltzmann, Mary Ellyn Minenko,
Eileen J. Newhouse, Sherilyn K. Beck, Colin Lancaster and Timothy S. Meehan or
any 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.
<PAGE>
PAGE 2
Dated the 26th day of March, 1997.
/s/ John C. Boeder /s/ Thomas V. Nicolosi
John C. Boeder Thomas V. Nicolosi
Director Director
/s/ Roger C. Corea /s/ Stephen P. Norman
Roger C. Corea Stephen P. Norman
Director Director
/s/ Charles A. Cuccinello /s/ Carl N. Platou
Charles A. Cuccinello Carl N. Platou
Director Director
/s/ Darlene S. Farron /s/ Gordon H. Ritz
Darlene S. Farron Gordon H. Ritz
Treasurer Director
/s/ Robert A. Hatton /s/ Richard M. Starr
Robert A. Hatton Richard M. Starr
Director, Vice President Director
and Chief Operating Officer
/s/ Richard W. Kling /s/ Michael R. Woodward
Richard W. Kling Michael R. Woodward
Director, Chairman of the Director
Board and President
/s/ Edward Landes
Edward Landes
Director
