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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 16 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 24, 1998.
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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)
on (date) pursuant to paragraph (b)
60 days after filing pursuant to paragraph (a)(1)
X on May 1, 1998 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
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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
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 May 1, 1998
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 of New York is not a bank or financial institution and the securities
it offers are not deposits or obligations of, backed or guaranteed or endorsed
by any bank or 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.
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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
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Death benefits
Change in death benefit option
Changes in specified amount
Misstatement of age or sex
Suicide
Beneficiary
Transfers between the fixed account and subaccounts Fixed account transfer
policies Minimum transfer amounts Maximum transfer amounts Maximum
number of transfers per year Two ways to request a transfer, loan or
surrender Automated transfers Automated dollar-cost averaging
Policy loans
Policy surrenders
Total surrenders
Partial surrenders
Allocations of partial surrenders
Effects of partial surrenders
Taxes
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.
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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.
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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.
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.
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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.
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.
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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:
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.)
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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.
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.)
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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.)
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.)
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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 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:
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
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.
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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:
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.
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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:
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.
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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 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. Please refer to the fund
prospectuses for risk disclosure regarding mixed and shared funding.
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.
<PAGE>
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. After this date,
the section shows actual rates of return. All expenses mentioned in the section
are explained fully under "Loads, fees and charges".
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 12/31/97
<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**)
IDS Life Series Fund - Income
IDS Life Series Fund - Money Market
IDS Life Series Fund - Managed (Beta**)
IDS Life Series Fund - Government Securities
IDS Life Series Fund - International Equity
AIM V.I. Growth and Income Fund
Putnam VT New Opportunities Fund
</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.
<PAGE>
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. For all subaccounts, we show
actual performance from the date the subaccounts began investing in the funds.
For the subaccounts investing in AIM V.I. Growth and Income Fund and Putnam VT
New Opportunities Fund, we also show performance from the commencement date of
the funds as if the subaccounts had invested in the funds at that time.
<TABLE>
<CAPTION>
Since commencement Since commencement
of the subaccounts of the Funds
10 years or
Since Since
Subaccount Investment 1 year 3 years 5 years commencement* 1 year 3 years commencement
- ------------ ----------------------- ------- --------- --------- ---------------- ----- ------ --------------
<S> <C> <C> <C> <C> <C> <C> <C>
Equity
Income
Money Market
Managed
Government Securities
International Equity
YGI
YNO
</TABLE>
*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.
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.
<PAGE>
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 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, 1998 to maturity for the
trust, taking account of anticipated expenses are:
Trust maturity date Net rate of return to maturity
Nov. 15, 2004 _____%
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.
<PAGE>
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.
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:
<PAGE>
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%
1997 5.5 to 6.95%
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 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
<PAGE>
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.
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.
<PAGE>
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.
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
<PAGE>
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:
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.
<PAGE>
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.)
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
<PAGE>
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 and before November 20, 1997 qualify for lower
cost of insurance rates than policies purchased earlier. Cost of insurance rates
that are modified to reflect IDS Life of New York and industry-wide changes in
mortality experience apply to all policies purchased on or after November 20,
1997.
(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.
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
<PAGE>
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. 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.
<PAGE>
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.
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.
<PAGE>
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 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
<PAGE>
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
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
<PAGE>
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.
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.
<PAGE>
Policy value
The value of your policy is the sum of values in the fixed account and each
subaccount of the variable account.
Fixed account value
The value in the fixed account on the policy date (when the policy is issued)
equals the portion of your initial net premium that you have allocated to the
fixed account, plus interest accrued before the policy date, minus the portion
of the monthly deduction for the first policy month that you have allocated to
the fixed account. On any later date, the value in the fixed account equals:
o the value on the previous monthly date; plus
o net premiums allocated to the fixed account since the last monthly
date; plus
o any transfers to the fixed account from the subaccounts, including loan
transfers, since the last monthly date; plus
o accrued interest on all of the above; minus
o any transfers from the fixed account to the subaccounts, including loan
repayment transfers, since the last monthly date; minus
o any partial surrenders or partial surrender fees allocated to the fixed
account since the last monthly date; minus
o interest on any transfers or partial surrenders, from the date of the
transfer or surrender to the date of calculation; minus
o any portion of the monthly deduction for the coming month that is
allocated to the fixed account if the date of calculation is a monthly
date.
Subaccount values
The value in each subaccount changes daily, depending on the investment
performance of the fund 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:
<PAGE>
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.
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:
<PAGE>
(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.
<PAGE>
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.
<TABLE>
<CAPTION>
Applicable percentage table
Youngest Applicable percentage of Youngest Insured's attained Applicable percentage of
Insured's policy value insurance age policy value
attained
insurance age
<S> <C> <C> <C>
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
</TABLE>
<PAGE>
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 $1,000,000 $1,000,000
policy value $50,000 $50,000
death benefit $1,000,000 $1,050,000
policy value increases to $80,000 $80,000
death benefit $1,000,000 $1,080,000
policy value decreases to $30,000 $30,000
death benefit $1,000,000 $1,030,000
If you want to have premium payments and favorable investment performance
reflected partly in the form of an increasing death benefit, you should consider
Option 2. If you are satisfied with the specified amount of insurance protection
and prefer to have premium payments and favorable investment performance
reflected to the maximum extent in the policy value, you should consider Option
1. Under Option 1, the cost of insurance is lower because IDS Life 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).
<PAGE>
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.
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
<PAGE>
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.
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.
<PAGE>
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.
<PAGE>
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.
<PAGE>
1 By letter
Regular mail:
IDS Life Insurance Company of New York
P.O. Box 5144
Albany, NY 12205
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
<PAGE>
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.
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. There is no charge for
dollar-cost averaging.
<PAGE>
How dollar-cost averaging works
Accumulation Number of units
Month Amount 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.
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.
<PAGE>
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.
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.")
<PAGE>
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.
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:
<PAGE>
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.
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.
<PAGE>
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.
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.
<PAGE>
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.
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.
<PAGE>
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.
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
<PAGE>
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.
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
<PAGE>
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:
<TABLE>
<CAPTION>
Adjusted age payee Life income per $1,000 with payments guaranteed for
- --------------------------------------------------------------------------------------------
10 years 15 years 20 years
Male Female Male Female Male Female
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
50 $4.81 $4.47 $4.74 $4.45 $4.65 $4.40
55 5.20 4.80 5.09 4.74 4.94 4.87
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
</TABLE>
Deferral of payments:
We reserve the right to defer payments of cash surrender value, policy loans or
variable death benefits in excess of the specified amount if:
o the payments derive from a premium payment made by a check that has not
cleared the banking system (good payment has not been collected);
o the NYSE is closed (other than customary weekend and holiday closings);
o in accordance with SEC rules, trading on the NYSE is restricted or,
because of an emergency, it is not practical to dispose of securities
held in the subaccount or determine the value of the subaccount's net
assets.
Any loans or surrenders from the fixed account may be delayed up to six months
from the date we receive the request. If we postpone the payment of surrender
proceeds more than 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.
<PAGE>
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.
Source of proceeds Taxable portion of pre-death proceeds
Full surrender: Amount received plus any indebtedness,
minus your investment in the policy.*
Lapse: Any outstanding indebtedness minus
your investment in the policy.*
Partial surrenders Lesser of:
(modified endowments): the amount received or policy value
minus your investment in the policy.*
Policy loans and Lesser of:
assignments the amount of the loan / assignment or
(modified endowments): policy value minus your investment in
the policy.*
<PAGE>
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.
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.
<PAGE>
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.
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.
<PAGE>
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.
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
<PAGE>
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.
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.
<PAGE>
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.
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.
<PAGE>
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.
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.
<PAGE>
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
Houston, 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 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.
<PAGE>
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 or the investments of the subaccounts may be changed.
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.
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.
<PAGE>
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.
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:
<PAGE>
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 November 20, 1997, and on or after
May 1, 1993 and before November 20, 1997 -- 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.
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
<PAGE>
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>
<TABLE>
<CAPTION>
Illustration Policies purchased on or after November 20, 1997
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
Initial specified Male - age 35 Current costs
amount $100,000 nonsmoker assumed
Death benefit Option 1 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>
1 $ 945 $100,000 $100,000 $100,000 $ 621 $ 665 $ 709 $ 0 $ 7 $ 61
2 1,937 100,000 100,000 100,000 1,232 1,328 1,490 508 635 766
3 2,979 100,000 100,000 100,000 1,823 2,071 2,340 1,040 1,288 1,547
4 4,073 100,000 100,000 100,000 2,393 2,802 3,265 1,552 1,961 2,424
5 5,222 100,000 100,000 100,000 2,943 3,554 4,273 2,043 2,655 3,374
6 6,428 100,000 100,000 100,000 3,473 4,328 5,374 2,752 3,607 4,653
7 7,694 100,000 100,000 100,000 3,984 5,125 6,576 3,444 4,584 6,036
8 9,024 100,000 100,000 100,000 4,474 5,942 7,889 4,113 5,582 7,529
9 10,420 100,000 100,000 100,000 4,942 6,782 9,324 4,762 6,602 9,144
10 11,886 100,000 100,000 100,000 5,384 7,639 10,888 5,384 7,639 10,888
11 13,425 100,000 100,000 100,000 5,800 8,516 12,595 5,800 8,516 12,595
12 15,042 100,000 100,000 100,000 6,192 9,413 14,462 6,192 9,413 14,462
13 16,739 100,000 100,000 100,000 6,555 10,328 16,503 6,555 10,328 16,503
14 18,521 100,000 100,000 100,000 6,889 11,261 18,735 6,889 11,261 18,735
15 20,392 100,000 100,000 100,000 7,194 12,213 21,179 7,194 12,213 21,179
16 22,356 100,000 100,000 100,000 7,465 13,180 23,854 7,465 13,180 23,854
17 24,419 100,000 100,000 100,000 7,699 14,160 26,784 7,699 14,160 26,789
18 26,585 100,000 100,000 100,000 7,893 15,149 29,994 7,893 15,149 29,994
19 28,859 100,000 100,000 100,000 8,041 16,145 33,512 8,041 16,145 33,512
20 31,247 100,000 100,000 100,000 8,141 17,145 37,373 8,141 17,145 37,373
age 60 45,102 100,000 100,000 100,000 7,714 22,042 63,312 7,714 22,042 63,312
age 65 62,785 100,000 100,000 129,185 5,182 26,336 105,889 5,182 26,336 105,889
(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.
The above hypothetical investment results are illustrative only and should not
be deemed a representation of past or future investment results. Actual
investment results may be more or less than those shown. The death benefit,
policy value and cash surrender value would be different from those shown if
returns averaged 0%, 6% and 12% over a period of years, but fluctuated above and
below those averages for individual policy years. No representation can be made
that these hypothetical rates of return can be achieved for any one year or
sustained over any period of time.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Illustration Policies purchased on or after May 1, 1993 and before November 20, 1997
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
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>
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 1,483 503 628 760
3 2,979 100,000 100,000 100,000 1,814 2,061 2,329 1,032 1,279 1,547
4 4,073 100,000 100,000 100,000 2,381 2,790 3,250 1,540 1,949 2,409
5 5,222 100,000 100,000 100,000 2,929 3,538 4,254 2,029 2,639 3,355
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 62,844 7,565 21,792 62,844
age 65 62,785 100,000 100,000 128,223 4,981 25,956 105,101 4,981 25,956 105,101
(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.
The above hypothetical investment results are illustrative only and should not
be deemed a representation of past or future investment results. Actual
investment results may be more or less than those shown. The death benefit,
policy value and cash surrender value would be different from those shown if
returns averaged 0%, 6% and 12% over a period of years, but fluctuated above and
below those averages for individual policy years. No representation can be made
that these hypothetical rates of return can be achieved for any one year or
sustained over any period of time.
</TABLE>
<PAGE>
<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>
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 1,483 503 628 760
3 2,979 100,000 100,000 100,000 1,814 2,061 2,329 1,032 1,279 1,547
4 4,073 100,000 100,000 100,000 2,381 2,790 3,250 1,540 1,949 2,409
5 5,222 100,000 100,000 100,000 2,929 3,538 4,254 2,029 2,639 3,355
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 7,146 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 61,016 6,486 20,369 61,056
age 65 62,785 100,000 100,000 124,007 2,602 22,855 101,645 2,602 22,855 101,645
(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.
The above hypothetical investment results are illustrative only and should not
be deemed a representation of past or future investment results. Actual
investment results may be more or less than those shown. The death benefit,
policy value and cash surrender value would be different from those shown if
returns averaged 0%, 6% and 12% over a period of years, but fluctuated above and
below those averages for individual policy years. No representation can be made
that these hypothetical rates of return can be achieved for any one year or
sustained over any period of time.
</TABLE>
<PAGE>
<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>
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 7,565 21,792 61,747 7,565 21,792 61,747
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.
The above hypothetical investment results are illustrative only and should not
be deemed a representation of past or future investment results. Actual
investment results may be more or less than those shown. The death benefit,
policy value and cash surrender value would be different from those shown if
returns averaged 0%, 6% and 12% over a period of years, but fluctuated above and
below those averages for individual policy years. No representation can be made
that these hypothetical rates of return can be achieved for any one year or
sustained over any period of time.
</TABLE>
<PAGE>
(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 judgments, 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.
<PAGE>
CONTENTS OF POST-EFFECTIVE AMENDMENT NO. 16 TO REGISTRATION
STATEMENT NO. 33-15290
This Post-Effective Amendment No. 16 to Registration Statement No. 33-15290
comprises the following papers and documents:
The facing sheet.
The prospectus consisting of 57 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>
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.
(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.
<PAGE>
(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.
(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.
<PAGE>
2. Opinion and consent of counsel as to the legality of the securities
being registered is filed electronically herewith.
3. Financial Statement Schedules to be filed by amendment.
4. Not applicable.
5. Financial Data Schedules to be filed by amendment.
6. Actuarial Opinion of Eugene C. Chen to be filed by amendment.
7. (a) Written consent of Mary Ellyn Minenko, dated February
27, 1998, is filed electronically herewith.
(b) Written actuarial consent of Eugene C. Chen to be filed by amendment.
(c) Written auditor consent of Ernst & Young LLP to be filed by amendment.
(d) Directors' Power of Attorney to sign amendments to this
Registration Statement dated March 26, 1997, filed as Exhibit
7(d) to Registrant's Form N-8B-2 with Post-Effective Amendment
No. 15, File No. 33-15290 is incorporated herein by reference.
<PAGE>
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(a)(1) 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 27th day of February, 1998.
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 27th day of February, 1998:
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>
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 filed as Exhibit No.
7(d) to Registrant's Registration Statement No. 33-15290 is incorporated herein
by reference.
By: ________________________________
Mary Ellyn Minenko
<PAGE>
IDS Life of New York Account 8
File No. 33-15290/811-5213
EXHIBIT INDEX
Exhibit 2 & 7(a): Written consent of Mary Ellyn Minenko, dated February 27,
1998.
<PAGE>
February 27, 1998
IDS Life Insurance Company of New York
20 Madison Avenue Ext.
Albany, NY 12203
Ladies and Gentlemen:
Reference is made to the Registration Statement on Form S-6 (File No. 33-15290).
I am familiar with the establishment of IDS Life of New York Account 8
("Account") which is a separate account of IDS Life Insurance Company of New
York ("Company") established by the Company's Board of Directors pursuant to New
York Insurance Law. I am also familiar with the above-referenced Registration
Statement Form S-6 filed by the Company on behalf of the Account with the
Securities and Exchange Commission with respect to an indefinite amount of
securities.
I have made such examination of law and examined such documents and records as
in my judgment are necessary and appropriate to enable me to opine as follows:
1. The Account is a separate account of the Company, duly established and
validly existing pursuant to New York law, is registered as a unit
investment trust under the Investment Company Act of 1940 and has the
power and authority to issue the securities registered.
2. The securities, being variable life insurance policies, when issued,
offered and sold in accordance with the prospectus contained in the
aforesaid Registration Statement and, upon compliance with local law,
will be legal and binding obligations of the Company in accordance
with their terms.
3. There is no limitation as to the number of units of the Account that
may be issued.
4. Assets allocated to and held in the Account pursuant to New York
statutes in accordance with the policies are not chargeable with
liabilities arising out of any other business the Company may conduct.
I hereby consent to the filing of this opinion as an exhibit to the Registration
Statement.
Sincerely,
Mary Ellyn Minenko
Senior Counsel
