<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 1, 1997
REGISTRATION NO. 33-47245
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
POST-EFFECTIVE AMENDMENT NO. 5
FORM S-1
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
---------------
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
---------------
NEW YORK 6311
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER)
36-2608394
(I.R.S. EMPLOYER IDENTIFICATION NUMBER)
---------------
P.O. BOX 9095
FARMINGVILLE, NEW YORK 11738
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICE)
---------------
MICHAEL J. VELOTTA, ESQUIRE
VICE PRESIDENT, SECRETARY AND GENERAL COUNSEL
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
P.O. BOX 9095
FARMINGVILLE, NEW YORK 11738
516/451-5170
(NAME AND COMPLETE ADDRESS OF AGENT FOR SERVICE)
COPIES TO:
GREGOR B. MCCURDY, ESQUIRE CHRISTINE A. EDWARDS, ESQUIRE
ROUTIER AND JOHNSON, P.C. DEAN WITTER REYNOLDS INC.
1700 K STREET N.W. TWO WORLD TRADE CENTER
SUITE 1003 NEW YORK, N.Y. 10048
WASHINGTON, D.C. 20006
---------------
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933 check the following box, [X].
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registeration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
PROPOSED PROPOSED
MAXIMUM MAXIMUM AMOUNT
TITLE OF EACH AMOUNT OFFERING AGGREGATE OF
CLASS OF SECURITIES TO BE PRICE OFFERING REGISTRATION
TO BE REGISTERED REGISTERED PER UNIT PRICE FEE
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Deferred Annuity Contracts and
Participating Interests therein..... * * * *
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</TABLE>
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*A maximum aggregate offering price of $15,320,000 has previously been
registered. No additional amount of securities is being registered by this
post-effective amendment to the registration statement.
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<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
P.O. BOX 9095
FARMINGVILLE, NEW YORK 11738
(516) 451-5170
INDIVIDUAL DEFERRED ANNUITY CONTRACTS
DISTRIBUTED BY
DEAN WITTER REYNOLDS INC.
TWO WORLD TRADE CENTER
NEW YORK, NEW YORK 10048
---------------
This Prospectus describes the individual Single Premium Deferred Annuity
Contract ("Contract") offered by Allstate Life Insurance Company of New York
("Company"), an indirect wholly owned subsidiary of Allstate Insurance
Company. Dean Witter Reynolds Inc. ("Dean Witter") is the principal
underwriter and distributor of the Contract.
The Contract is designed to aid you in your choice of short-term, mid-term
or long-term financial planning and can be used for retirement planning
regardless of whether the plan qualifies for special federal income tax
treatment. A minimum Purchase Payment of $4,000 must be presented at the time
of application for a Contract ($1,000 for a Qualified Contract). Presently,
the Company will accept a Purchase Payment of $1,000 for all Contracts, but
reserves the right to increase this amount to no more than $4,000.
Partial withdrawals & surrenders under the Contract may be subject to a
Market Value Adjustment. Therefore, the Owner bears some investment risk under
the Contract.
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.
PLEASE READ THIS PROSPECTUS CAREFULLY AND RETAIN IT FOR FUTURE REFERENCE.
THE DATE OF THIS PROSPECTUS IS MAY 1, 1997
<PAGE>
The Contracts are available only in New York.
At least once each Contract Year, the Company will send the Owner an annual
statement that contains certain information pertinent to the individual Owner's
Contract. The annual statement details values and specific Contract data that
applies to each particular Contract. The annual statement does not contain
financial statements of the Company, although the Company's financial
statements are on page F-1 of this prospectus. Our Company files annual and
quarterly reports and other information with the SEC. You may read and copy any
reports, statements or other information we file at the SEC's public reference
room in Washington, D.C. You can request copies of these documents upon payment
of a duplicating fee, by writing to the SEC. Please call the SEC at 1-800-SEC-
0330 for further information on the operation of the public reference rooms.
Our SEC filings are also available to the public on the SEC Internet site
http://www.sec.gov.).
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH
SUCH OFFERING MAY NOT LAWFULLY BE MADE. NO DEALER, SALESMAN, OR OTHER PERSON IS
AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATIONS IN CONNECTION
WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN
OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
GLOSSARY............................... 3
INTRODUCTION........................... 5
THE CONTRACT........................... 6
Purchase of the Contract............. 6
THE ACCUMULATION PHASE................. 7
The Accumulation Phase Defined....... 7
Initial and Subsequent Guarantee
Periods............................. 7
Interest Credited.................... 7
Example of Interest Crediting During
the Guarantee Period................ 8
Partial Withdrawals and Surrenders... 9
Withdrawal Charge.................... 9
Market Value Adjustment.............. 9
Withdrawals at the End of a Guarantee
Period.............................. 10
Taxes................................ 10
Payment Upon Partial Withdrawal or
Surrender........................... 10
Death Benefits....................... 10
THE PAYOUT PHASE....................... 11
Income Plans......................... 11
Payout Terms......................... 12
AMENDMENT OF THE CONTRACT.............. 13
DISTRIBUTION OF THE CONTRACT........... 13
CUSTOMER INQUIRIES..................... 13
</TABLE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
FEDERAL TAX MATTERS.................... 13
Introduction......................... 13
Taxation of the Company.............. 13
Taxation of Annuities in General..... 13
Qualified Plans...................... 15
THE COMPANY............................ 16
Business............................. 16
Investments by the Company........... 17
SELECTED FINANCIAL DATA................ 19
Management's Discussion and Analysis of
Financial Condition and Results of
Operations............................ 20
General.............................. 20
Results of Operations................ 20
Financial Position................... 21
Liquidity and Capital Resources...... 23
COMPETITION............................ 24
EMPLOYEES.............................. 24
PROPERTIES............................. 24
STATE AND FEDERAL REGULATION........... 24
EXECUTIVE OFFICERS AND DIRECTORS....... 25
EXECUTIVE COMPENSATION................. 27
LEGAL PROCEEDINGS...................... 28
EXPERTS................................ 28
LEGAL MATTERS.......................... 28
FINANCIAL STATEMENTS................... F-1
APPENDIX A............................. A-1
</TABLE>
2
<PAGE>
GLOSSARY
Accumulation Phase--The Accumulation Phase is the first of two phases in the
life of the Contract. The Accumulation Phase begins on the Issue Date. The Ac-
cumulation Phase will continue until the Payout Start Date unless the Contract
is terminated before that date.
Account Value--The Account Value is the Purchase Payment accumulated with
credited interest. Any withdrawals will affect the Account Value.
Age--Age on last birthday.
Annuitant--The person designated in the Contract, whose life determines the
duration of Income Payments involving life contingencies. Includes any Joint
Annuitant.
Beneficiary--The person(s) designated in the Contract who, during the Accumu-
lation Phase, after the death of all Owners, may elect to receive the Death
Benefit or continue the Contract as described in the "Death Benefits" section.
If the sole surviving Owner dies after the Payout Start Date, the Beneficiary
will receive any guaranteed Income Payments scheduled to continue.
Company--The issuer of the Contract, Allstate Life Insurance Company of New
York, which is an indirect wholly owned subsidiary of Allstate Insurance Com-
pany ("Allstate"). Allstate is a wholly owned subsidiary of The Allstate Corpo-
ration.
Contract--The Allstate Life Insurance Company of New York single premium de-
ferred annuity contract, known as the "Custom Annuity", that is described in
this Prospectus.
Date of Death--The date that an Owner and/or last surviving Annuitant dies.
Death Benefit--The Death Benefit is the greater of: (1) the Account Value or
(2) the Settlement Value.
Due Proof of Death--one of the following:
(a) A certified copy of a death certificate.
(b) A certified copy of a decree of a court of competent jurisdiction as
to the finding of death.
(c) Any other proof satisfactory to the Company.
Guarantee Period--The period for which a particular declared effective annual
interest rate is guaranteed.
Income Payments--A series of periodic payments made by the Company to the
Owner during the Payout Phase of the Contract.
Issue Date--The date the Contract becomes effective.
Joint Annuitant--The person, along with the Annuitant, whose life determines
the duration of Income Payments under a joint and last survivor annuity.
Market Value Adjustment--The Market Value Adjustment is the adjustment made
to the money distributed prior to the end of a Guarantee Period to reflect the
impact of changes in interest rates between the time money was allocated to the
Guarantee Period and the time of distribution.
Non-Qualified Contracts--Contracts that do not qualify for special federal
tax treatment.
Owner--The person(s) designated as the Owner(s) in the Contract. The Owner
will receive the Death Benefit upon the death of the last surviving Annuitant,
who is not also an Owner.
Payout Phase--The Payout Phase is the second of the two phases in the life of
the Contract. It begins on the Payout Start Date.
3
<PAGE>
Payout Start Date--The date Income Payments are to begin under the Contract.
Preferred Withdrawal Amount--A portion of the Account Value which may be an-
nually withdrawn without incurring a Withdrawal Charge or a Market Value Ad-
justment.
Purchase Payment--The premium paid by the Owner to the Company.
Qualified Contracts--Contracts issued under plans that qualify for special
federal tax treatment.
Settlement Value--The Settlement Value is the Account Value adjusted by any
applicable Market Value Adjustment less any applicable Withdrawal Charges and
premium tax.
Surrender--Termination of the Contract.
Systematic Withdrawals--Periodic partial withdrawals of $100 or more may be
deposited in the Owner's bank account or Dean Witter Active Assets(TM) Account.
Systematic Withdrawals are available monthly, quarterly, semi-annually and
annually.
Withdrawal Charge--The charge that will be assessed by the Company on full or
partial withdrawals in excess of the Preferred Withdrawal Amount.
4
<PAGE>
INTRODUCTION
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1. WHAT IS THE PURPOSE OF THE CONTRACT?
The Contract described in this Prospectus provides a cash withdrawal benefit
and a Death Benefit during the Accumulation Phase and periodic Income Payments
beginning on the Payout Start Date during the Payout Phase. (See "Partial
Withdrawals and Surrenders," pg. 9, "Death Benefits," pg. 10, and "The Payout
Phase," pg. 11.)
The cash withdrawal benefit may be subject to a Market Value Adjustment. As
such, the Owner bears some investment risk under the Contract. (See, "Market
Value Adjustment," pg. 9.)
2. HOW DO I PURCHASE A CONTRACT?
You may purchase the Contract from Dean Witter, the Company's sales
representative. The Purchase Payment must be at least $4,000 ($1,000 for a
Qualified Contract). Presently, the Company will accept a Purchase Payment of
$1,000 for all Contracts, but reserves the right to increase this amount to no
more than $4,000.
At the time of purchase, you will select a Guarantee Period in which to
allocate your Purchase Payment. Guarantee Periods, which are offered at the
discretion of the Company, may range from one to ten years. (See, "Purchase of
the Contract," pg. 6.)
3. WHAT IS A GUARANTEE PERIOD AND WHAT HAPPENS AT THE END OF IT?
Interest is credited at an effective annual rate declared by the Company for
the Guarantee Period.
You will have two options at the end of a Guarantee Period: you may either
withdraw your entire Account Value free of a Withdrawal Charge and a Market
Value Adjustment or you may select a renewal Guarantee Period. If you do not
choose either option within 10 calendar days after the end of a Guarantee
Period, the Company will establish a one-year renewal Guarantee Period for
you. At the end of any future Guarantee Period you may withdraw your Account
Value or select a renewal Guarantee Period. (See, "Initial and Subsequent
Guarantee Periods," pg. 7.)
4. IS THERE A FREE-LOOK PROVISION?
The Owner may cancel the Contract anytime within 10 days after the receipt
of the Contract and receive a full refund of the Purchase Payment.
5. DOES THE CONTRACT HAVE CHARGES OR DEDUCTIONS?
There are no front-end charges under the Contract. A Withdrawal Charge will
be applied to a partial withdrawal or full surrender during the initial
Guarantee Period. Withdrawal Charges will be the lesser of:
(a) one-half the interest crediting rate for the Guarantee Period
multiplied by the amount withdrawn in excess of the Preferred
Withdrawal Amount; or
(b) interest earned on the amount withdrawn.
The Withdrawal Charge will not exceed 10%, reduced by 1% for every year the
Contract is in force, multiplied by the sum of: (1) the amount withdrawn; and
(2) the Market Value Adjustment.
No Withdrawal Charge will be applied to a withdrawal following the end of
the initial Guarantee Period.
If money is withdrawn from the Contract prior to the end of an initial or a
renewal Guarantee Period, a Market Value Adjustment will be applied to the
money distributed in excess of the Preferred
5
<PAGE>
Withdrawal Amount. The Market Value Adjustment may be positive or negative.
(See "Withdrawal Charge," pg. 9, and "Market Value Adjustment," pg. 9.)
Money may be withdrawn from a Contract during the 10 calendar days after the
end of a Guarantee Period without being subject to a Market Value Adjustment.
If a surrender request is received by the Company at its home office within 10
calendar days after the end of a Guarantee Period, the Account Value as of the
end of that Guarantee Period will be paid.
6. CAN I GET MY MONEY IF I NEED IT?
All or part of the Account Value can be withdrawn before the earliest of the
Payout Start Date, the death of the Owner, or the death of the Annuitant.
Withdrawal Charges, taxes, and a Market Value Adjustment may be applied to the
partial withdrawal or surrender. (See, "Partial Withdrawals and Surrenders,"
pg. 9, and "Taxation of Annuities in General," pg. 14.) Withdrawal
restrictions may apply to Qualified Contracts as well as Non-Qualified
Contracts. (See, "Qualified Plans," pg. 15.)
THE COMPANY GUARANTEES THAT IF YOU SURRENDER THE CONTRACT, YOU WILL RECEIVE
AN AMOUNT AT LEAST EQUAL TO THE PURCHASE PAYMENT LESS ANY PRIOR PARTIAL
WITHDRAWALS.
7. DOES THE CONTRACT HAVE A GUARANTEED DEATH BENEFIT?
Prior to the Payout Start Date, the Contract offers a Death Benefit upon the
death of any Owner or last surviving Annuitant, whichever occurs first. The
Death Benefit is the greater of the Account Value or the Settlement Value as
of the receipt of a complete request for payment of the
Death Benefit. (See, "Death Benefits," pg. 10.)
Death Benefits after the Payout Start Date depend on the income plan chosen.
8. WHAT HAPPENS IN THE PAYOUT PHASE OF THE CONTRACT?
During this phase, the Account Value less premium tax and any other
applicable tax is applied to the income plan you choose and monies are paid to
you on a scheduled basis as provided in that plan. The Payout Phase begins on
the Payout Start Date. It continues until the Company makes the last payment
as provided by the income plan
chosen. (See, "The Payout Phase," pg. 11.)
THE CONTRACT
- -------------------------------------------------------------------------------
PURCHASE OF THE CONTRACT
The Contract may be purchased through sales representatives of Dean Witter,
the principal underwriter of the Contract. The Company will apply the Purchase
Payment to the Contract within seven days of the receipt of the Purchase
Payment and required issuing information.
The Purchase Payment must be at least $4,000 ($1,000 for a Qualified
Contract). Presently, the Company will accept a Purchase Payment of $1,000 for
all Contracts, but reserves the right to increase this amount to no more than
$4,000. Additional Purchase Payments to an existing Contract are not allowed.
The Contract described in this Prospectus is made up of two phases -- the
Accumulation Phase and the Payout Phase.
6
<PAGE>
THE ACCUMULATION PHASE
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THE ACCUMULATION PHASE DEFINED
The Accumulation Phase begins on the Issue Date stated on the Annuity Data
Page and continues until the Payout Start Date. During this phase, cash
withdrawal benefits and a Death Benefit are available. No deductions are made
by the Company from the Purchase Payment. Therefore, the full amount of the
Purchase Payment is invested and accumulates interest beginning on the Issue
Date. At least once every year, the Company will send the Owner a statement
containing Account Value information.
INITIAL AND SUBSEQUENT GUARANTEE PERIODS
The Owner will be required to designate a Guarantee Period, from the
Guarantee Periods which are offered at the Company's discretion, in which to
allocate the Purchase Payment. Guarantee Periods may range from one to ten
years.
A notice will be mailed 35 calendar days prior to the end of a Guarantee
Period reminding you of the event. If the Company has not had any instructions
from the Owner within 10 calendar days after the end of the Guarantee Period, a
one-year renewal Guarantee Period will be established.
INTEREST CREDITED
Interest will be credited daily based on the effective annual interest rate
declared by the Company at that time for that particular Guarantee Period.
"Effective annual rate" means the yield earned when interest credited at the
underlying daily rate has compounded for a full year. Effective annual interest
rates will be declared periodically for each initial and renewal Guarantee
Period then
being offered. The declared rates will be greater than or equal to the minimum
guaranteed interest rate under the Contract. The "minimum guaranteed interest
rate under the Contract" is a rate of interest specified in the Contract that
is guaranteed for the life of the Contract.
The Company has no specific formula for determining the rate of interest that
it will declare initially or in the future. Such interest rates will be
reflective of investment returns available at the time of the determination. In
addition, the management of the Company may also consider various other factors
in determining interest rates, including regulatory and tax requirements, sales
commissions and administrative expenses borne by the Company, general economic
trends and competitive factors.
THE MANAGEMENT OF THE COMPANY WILL MAKE THE FINAL DETERMINATION AS TO THE
INTEREST RATES TO BE DECLARED. THE COMPANY CAN NEITHER PREDICT NOR GUARANTEE
FUTURE INTEREST RATES.
The following illustration is an example of how interest will be credited to
the funds during your Guarantee Period.
NOTE: The following illustration assumes no withdrawals of any amount during
the entire five year period. A Market Value Adjustment and Withdrawal Charge
would apply to any such interim withdrawal in excess of the Preferred
Withdrawal Amount. The hypothetical interest rate is for illustrative purposes
only and is not intended to predict future interest rates to be declared under
the Contract. Actual interest rates declared for any given Guarantee Period may
be more or less than those shown.
7
<PAGE>
EXAMPLE OF INTEREST CREDITING DURING THE GUARANTEE PERIOD
<TABLE>
<S> <C>
Purchase Payment:................................................... $10,000.00
Guarantee Period: .................................................. 5 years
Effective Annual Rate: ............................................. 4.50%
</TABLE>
END OF CONTRACT YEAR:
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<TABLE>
<CAPTION>
YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Beginning Account Value $10,000.00
X (1 + Effective Annual
Rate) 1.045
----------
10,450.00
----------
Account Value at end of
Contract 10,450.00
year 1 X (1 + Effective 1.045
Annual Rate)
----------
10,920.25
----------
Account Value at end of
Contract 10,920.25
year 2 X (1 + Effective 1.045
Annual Rate)
----------
11,411.66
----------
Account Value at end of
Contract 11,411.66
year 3 X (1 + Effective 1.045
Annual Rate)
----------
11,925.19
----------
Account Value at end of
Contract 11,925.19
year 4 X (1 + Effective 1.045
Annual Rate)
----------
12,461.82
----------
</TABLE>
Total Interest Credited in Guarantee Period: $2,461.82 ($12,461.82 - $10,000)
8
<PAGE>
PARTIAL WITHDRAWALS AND SURRENDERS
You have the right to make a partial withdrawal or full surrender at any time
during the Accumulation Phase. A Preferred Withdrawal Amount free of Withdrawal
Charges and Market Value Adjustments will be available in each year. The
Preferred Withdrawal Amount is 10% of the amount of the Purchase Payment or
funds allocated to a Guarantee Period. Any Preferred Withdrawal Amount not
withdrawn in a year may not be carried over to increase the Preferred
Withdrawal Amount in a subsequent Contract year. Amounts withdrawn from the
Account Value in excess of the Preferred Withdrawal Amount will be adjusted by
any applicable Withdrawal Charge, Market Value Adjustment, and taxes.
The minimum partial withdrawal is $100.00. If a partial withdrawal reduces
the Account Value of the Contract to less than $1,000, the Company will treat
the request as a withdrawal of the entire Account Value and the Contract will
terminate.
Partial withdrawals may also be taken automatically through Systematic
Withdrawals. The Systematic Withdrawal program is not available for Qualified
Contracts issued pursuant to a Dean Witter Custodial Account.
Withdrawals and surrenders may be subject to income tax and a 10% tax
penalty. The tax and penalty are explained in "Federal Tax Matters" on page 13.
Subject to state approval, both the Withdrawal Charge and Market Value
Adjustment will be waived on withdrawals taken to satisfy IRS required
distribution rules for this Contract.
WITHDRAWAL CHARGE
A Withdrawal Charge will be applied to a full surrender or partial withdrawal
in excess of the Preferred Withdrawal Amount made prior to the end of the
initial Guarantee Period and will be deducted from the amount distributed.
Withdrawal Charges will be the lesser of:
a. one-half the interest crediting rate for the Guarantee Period
multiplied by the amount withdrawn in excess of the Preferred Withdrawal
Amount; or
b. interest earned on the amount withdrawn.
The Withdrawal Charge will not exceed 10%, reduced by 1% for every year the
Contract is in force, multiplied by the sum of: (1) the amount withdrawn; and
(2) the Market Value Adjustment.
No Withdrawal Charge will be applied to a withdrawal following the end of the
initial Guarantee Period.
MARKET VALUE ADJUSTMENT
The amount payable on a partial withdrawal or full surrender made prior to
the end of any Guarantee Period may be adjusted up or down, or not at all, by
the application of the Market Value Adjustment. The Market Value Adjustment
factor is applied to the amount withdrawn in excess of the Preferred Withdrawal
Amount. The Market Value Adjustment will reflect the relationship between the
current effective annual interest rate for the duration remaining in the
Guarantee Period at the time of the request for withdrawal or surrender, and
the effective annual interest rate guaranteed for that Guarantee Period.
Generally, if the effective annual interest rate for the Guarantee Period is
lower than the applicable current effective annual interest rate (interest rate
for a duration equal to the time remaining in the Guarantee Period), then the
Market Value Adjustment will result in a lower payment upon surrender.
Similarly, if the effective annual interest rate for the Guarantee Period is
higher than the applicable current effective annual interest rate, then the
Market Value Adjustment will result in a higher payment upon surrender.
9
<PAGE>
For example, the Owner purchases a Contract and selects a Guarantee Period
of five years, and the Company's effective annual rate for that duration is
4.50%. Assume that at the end of 3 years, the Owner makes a partial
withdrawal. If the current interest rate for a 2-year Guarantee Period is
4.80%, then the Market Value Adjustment will be negative, resulting in a
decrease in the amount payable to the Owner upon the partial withdrawal. If
the current interest rate for a 2-year Guarantee Period is 4.20%, then the
Market Value Adjustment will be positive, which will result in an increase in
the amount payable to the Owner upon the partial withdrawal.
Since current interest rates are based, in part, upon investment yields
available at the time, the effect of the Market Value Adjustment will be
closely related to the levels of such yields. It is theoretically possible,
therefore, that, should such yields increase significantly from the time the
Purchase Payment was made, coupled with the application of the Withdrawal
Charge, the amount received by the Owner upon full surrender of the Contract
would be less than the Purchase Payment plus interest at the minimum
guaranteed interest rate under the Contract. HOWEVER, THE COMPANY GUARANTEES
THAT THE AMOUNT RECEIVED UPON SURRENDER WILL BE AT LEAST EQUAL TO THE PURCHASE
PAYMENT LESS ANY PRIOR PARTIAL WITHDRAWALS. The renewal of any individual Sub-
Account(s) within the entire Contract does not in any way change the return of
Purchase Payment guarantee provided by this Contract. Upon Sub-Account renewal
the return of Purchase Payment guarantee will not be adjusted to include any
accrual interest, but will continue to apply to the Purchase Payment.
The formula for calculating the Market Value Adjustment is set forth in
Appendix A to this Prospectus, which also contains additional illustrations of
the application of the Market Value Adjustment.
WITHDRAWALS AT THE END OF A GUARANTEE PERIOD
During the first 10 days of a renewal Guarantee Period, any amount withdrawn
will not incur a Market Value Adjustment, nor will it reflect any interest
earned during this 10-day period.
TAXES
A premium tax deduction will be made, if provided under applicable law, on
full surrender, or upon annuitization of the Contract. Any other applicable
taxes will be deducted as well. Currently, no deductions are made because New
York does not charge premium taxes on annuities.
PAYMENT UPON PARTIAL WITHDRAWAL OR SURRENDER
The Company may defer payment of any partial withdrawal or Surrender for a
period not exceeding six months from the date of the receipt of the request.
DEATH BENEFITS
If any Owner or last surviving Annuitant dies prior to the Payout Start
Date, a Death Benefit may be paid.
If an Owner dies (first Owner's death) prior to the Payout Start Date, the
new Owner (any surviving Joint Owner(s), or if none, the Beneficiary) may
elect, within 180 days of the Date of Death, to receive the Death Benefit in a
lump sum or to apply the Death Benefit to an income plan. Payments from the
income plan must begin within one year of the Date of Death and must be over
the life of the new Owner, or a period not to exceed the life expectancy of
the new Owner.
If no election is made within 180 days of the Date of Death, the new Owner
may elect to receive the Settlement Value payable in a lump sum within five
years of the Date of Death. Any remaining Settlement Value will be distributed
at the end of the five-year period. An Annuitant is necessary to continue the
Contract between the date of the Owner's death and the final distribution. If
there is no Annuitant at that time, the new Annuitant will be the youngest new
Owner.
10
<PAGE>
If the new Owner is the surviving spouse of the deceased Owner, then the
spouse may continue the Contract in the Accumulation Phase as if the death had
not occurred. If there is no Annuitant at that time, the new Annuitant will be
the surviving spouse. The surviving spouse may also select one of the options
listed above.
If the new Owner is a non-natural person (other than a grantor trust), then
the Owner must receive a lump sum payment, and the options listed above are
not available. If the Company receives Due Proof of Death within 180 days of
the date of death, a Death Benefit will be paid. Otherwise, a Settlement Value
will be paid.
If the last surviving Annuitant, not also an Owner, dies prior to the Payout
Start Date, then in most cases and subject to state approval, the Owner has
the following three options:
continue the Contract as if the death had not occurred. The new Annuitant
will be the youngest Owner unless the Owner names a different Annuitant; or
receive the Death Benefit in a lump sum. The Death Benefit is equal to the
greater of the Account Value or the Cash Surrender Value; or
apply the Death Benefit to an Income Plan.
This section is intended to comply with Internal Revenue Code Section 72(s),
pertaining to required distributions upon death.
THE PAYOUT PHASE
- -------------------------------------------------------------------------------
The Payout Phase is the second of the two phases in the Contract. The Payout
Phase begins on the Payout Start Date and continues until the Company makes
the last payment as provided by the income plan.
Unless the Owner notifies the Company in writing, the Payout Start Date will
be the later of the Annuitant's 85th birthday or the 10th anniversary date of
the Contract.
The Owner may change the Payout Start Date at any time by notifying the
Company in writing of the change at least 30 days before the current Payout
Start Date. The Payout Start Date must be no later than the oldest Annuitant's
85th birthday or the 10th anniversary date of the Contract, if later. The
Owner of a Qualified Contract may be limited by the plan under which the
Contract is issued with regard to a Payout Start Date after age 70 1/2.
INCOME PLANS
The Owner may elect an income plan which distributes Income Payments on a
scheduled basis. Up to 30 days before the Payout Start Date, the Owner may
change the income plan or request any other form of income plan agreeable to
both the Company and the Owner. If the Company does not receive a written
choice from the Owner, the income plan will be life income with 120 monthly
payments guaranteed. If an income plan is chosen which depends on the
Annuitant or Joint Annuitant's life, proof of age will be required before
Income Payments begin. If the sole surviving Owner dies after the Payout Start
Date, the Beneficiary will receive any guaranteed Income Payments scheduled to
continue under the income plan in effect.
The Account Value on the Payout Start Date, less any applicable tax, will be
applied to the income plan selected by the Owner. The income plans include:
INCOME PLAN 1--Life Income with Guaranteed Payments
Payments will be made to the Owner for as long as the Annuitant lives. If
the Annuitant dies
11
<PAGE>
before all the guaranteed payments have been made, the remainder of the
guaranteed payments will be paid to the Owner.
INCOME PLAN 2--Joint and Survivor Life Income with Guaranteed Payments
Payments beginning on the Payout Start Date will be made to the Owner for as
long as either the Annuitant or Joint Annuitant is living. If both the
Annuitant and Joint Annuitant die before all guaranteed payments have been
made, the remainder of the guaranteed payments will be made to the Owner.
INCOME PLAN 3--Guaranteed Payments for a Specified Period
Payments beginning on the Payout Start Date will be made to the Owner for a
specified period. Payments under this option do not depend on the continuation
of the Annuitant's life. The number of guaranteed months may be 60 to 360
months.
At the Company's discretion, other income plans may be available.
PAYOUT TERMS
The Contract, described in this Prospectus, contains life annuity tables
that provide for different benefit payments to men and women of the same age.
Nevertheless, in accordance with the U.S. Supreme Court's decision in Arizona
Governing Committee v. Norris, in certain employment-related situations,
annuity tables that do not vary on the basis of sex may be used. Accordingly,
if the Contract is to be used in connection with an employment-related
retirement or benefit plan, consideration should be given, in consultation
with legal counsel, to the impact of Norris on any such plan before making any
contributions under this Contract.
The duration of the income plan will generally affect the dollar amounts of
each Income Payment. For example, if an income plan guaranteed for life is
chosen, the Income Payments may be greater or less than Income Payments under
an income plan for a specified period depending on the life expectancy of the
Annuitant.
After the Account Value has been applied to an income plan on the Payout
Start Date, the income plan cannot be changed and no withdrawals can be made.
The Company may require proof that the Annuitant or Joint Annuitant is still
alive before the Company makes each payment that depends on the annuitant's
life.
If any Owner dies during the Payout Phase, Income Payments will continue as
scheduled, in accordance with the income plan in effect.
If the Account Value to be applied to an income plan is less than $2,000, or
if the monthly Income Payments determined under the income plan are less than
$20, the Company may pay the Account Value in a lump sum or change the payment
frequency to an interval which results in Income Payments of at least $20.
12
<PAGE>
AMENDMENT OF THE CONTRACT
- --------------------------------------------------------------------------------
The Company reserves the right to amend the Contract to meet the requirements
of applicable federal or State of New York laws or regulations. The Company
will notify the Owner of any such amendments.
DISTRIBUTION OF THE CONTRACT
- --------------------------------------------------------------------------------
The Contract will be distributed exclusively by Dean Witter which serves as
the principal underwriter of the Contract under a General Agents' Agreement
with the Company.
Dean Witter Reynolds Inc. ("Dean Witter") is the principal underwriter of the
Contract. Dean Witter is located at Two World Trade Center, New York, New York,
10048. Dean Witter is a member of the New York Stock Exchange and the National
Association of Securities Dealers, Inc.
The Company may pay up to a maximum sales commission of 8% both upon sale of
the Contract and upon renewal of a Guarantee Period.
The General Agents' Agreement between the Company and Dean Witter provides
that the Company will indemnify Dean Witter for certain damages that may be
caused by actions, statements or omissions by the Company.
CUSTOMER INQUIRIES
- --------------------------------------------------------------------------------
The Owner or any persons interested in the Contract may make inquiries
regarding the Contract by calling or writing their Dean Witter Account
Executive.
FEDERAL TAX MATTERS
- --------------------------------------------------------------------------------
INTRODUCTION
THE FOLLOWING DISCUSSION IS GENERAL AND IS NOT INTENDED AS TAX ADVICE. THE
COMPANY MAKES NO GUARANTEE REGARDING THE TAX TREATMENT OF ANY CONTRACT OR
TRANSACTION INVOLVING A CONTRACT. Federal, state, local and other tax conse-
quences of ownership or receipt of distributions under an annuity contract de-
pend on the individual circumstances of each person. If you are concerned about
any tax consequences with regard to your individual circumstances, you should
consult a competent tax adviser.
TAXATION OF THE COMPANY
The Company is taxed as a life insurance company under Part I of Subchapter L
of the Internal Revenue Code. The following discussion assumes that the Company
is taxed as a life insurance company under Part I of Subchapter L.
TAXATION OF ANNUITIES IN GENERAL
TAX DEFERRAL
In general, an annuity contract owned by a natural person is not taxed on in-
creases in the contract value until a distribution occurs. Annuity con -
13
<PAGE>
tracts owned by non-natural persons are generally not treated as annuity con-
tracts for federal income tax purposes and the income on such contracts is
taxed as ordinary income received or accrued by the owner during the taxable
year. There are exceptions to the non-natural owner rule and you should dis-
cuss these with your tax advisor.
DELAYED MATURITY DATE
If the contract's scheduled maturity date is at a time when the annuitant
has reached an advanced age, e.g., past age 85, it is possible that the con-
tract would not be treated as an annuity. In that event, the income and gains
under the contract would be currently includible in the owner's income.
TAXATION OF PARTIAL AND FULL WITHDRAWALS
In the case of a partial withdrawal under a non-qualified contract, amounts
received are taxable to the extent the contract value, without regard to any
surrender charges exceeds the investment in the contract. In the case of a
partial withdrawal under a qualified contract, the portion of the payment that
bears the same ratio to the total payment that the investment in the contract
bears to the contract value, can be excluded from income. In the case of a
full withdrawal under a non-qualified contract or a qualified contract, the
amount received will be taxable only to the extent it exceeds the investment
in the contract. If an individual transfers an annuity contract without full
and adequate consideration to a person other than the individual's spouse (or
to a former spouse incident to a divorce), the owner will be taxed on the dif-
ference between the contract value and the investment in the contract at the
time of transfer. Other than in the case of certain qualified contracts, any
amount received as a loan under a contract, and any assignment or pledge (or
agreement to assign or pledge) of the contract value is treated as a with-
drawal of such amount or portion.
TAXATION OF ANNUITY PAYMENTS
Generally, the rule for income taxation of payments received from an annuity
contract provides for the return of the owner's investment in the contract in
equal tax-free amounts over the payment period. The balance of each payment
received is taxable. In the case of fixed annuity payments, the amount ex-
cluded from income is determined by multiplying the payment by the ratio of
the investment in the contract (adjusted for any refund feature or period cer-
tain) to the total expected value of annuity payments for the term of the con-
tract.
TAXATION OF ANNUITY DEATH BENEFITS
Amounts may be distributed from an annuity contract because of the death of
an owner or annuitant. Generally, such amounts are includible in income as
follows: (1) if distributed in a lump sum, the amounts are taxed in the same
manner as a full withdrawal or (2) if distributed under an annuity option, the
amounts are taxed in the same manner as an annuity payment.
PENALTY TAX ON PREMATURE DISTRIBUTIONS
There is a 10% penalty tax on the taxable amount of any premature distribu-
tion from a non-qualified annuity contract. The penalty tax generally applies
to any distribution made prior to the owner attaining age 59 1/2. However,
there should be no penalty tax on distributions to owners: (1) made on or af-
ter the owner attains age 59 1/2; (2) made as a result of the owner's death or
disability; (3) made in substantially equal periodic payments over life or
life expectancy; or (4) made under an immediate annuity. Similar rules apply
for distributions from qualified contracts.
AGGREGATION OF ANNUITY CONTRACTS
All non-qualified annuity contracts issued by the Company (or its affili-
ates) to the same owner during any calendar year will be aggregated and
14
<PAGE>
treated as one annuity contract for purposes of determining the taxable amount
of a distribution.
IRS REQUIRED DISTRIBUTION AT DEATH RULES
In order to be considered an annuity contract for federal income tax purpos-
es, an annuity contract must provide: (1) if any owner dies on or after the an-
nuity start date but before the entire interest in the contract has been dis-
tributed, the remaining portion of such interest must be distributed at least
as rapidly as under the method of distribution being used as of the date of the
owner's death; (2) if any owner dies prior to the annuity start date, the en-
tire interest in the contract will be distributed within five years after the
date of the owner's death. These requirements are satisfied if any portion of
the owner's interest which is payable to, or for the benefit of, a designated
beneficiary is distributed over the life of such beneficiary (or over a period
not extending beyond the life expectancy of the beneficiary) and the distribu-
tions begin within one year of the owner's death. If the owner's designated
beneficiary is the surviving spouse of the owner, the contract may be continued
with the surviving spouse as the new owner. If the owner of the contract is a
nonnatural person, then the annuitant will be treated as the owner for purposes
of applying the distribution at death rules. Also, a change of annuitant on a
contract owned by a nonnatural person will be treated as the death of the own-
er.
QUALIFIED PLANS
This annuity contract may be used with several types of qualified plans. The
tax rules applicable to participants in such qualified plans vary according to
the type of plan and the terms and conditions of the plan itself. Adverse tax
consequences may result from excess contributions, premature distributions,
distributions that do not conform to specified commencement and minimum distri-
bution rules, excess distributions and in other circumstances. Owners and par-
ticipants under the plan and annuitants and beneficiaries under the contract
may be subject to the terms and conditions of the plan regardless of the terms
of the contract.
TYPES OF QUALIFIED PLANS
INDIVIDUAL RETIREMENT ANNUITIES
Section 408 of the Code permits eligible individuals to contribute to an in-
dividual retirement program known as an Individual Retirement Annuity. Individ-
ual Retirement Annuities are subject to limitations on the amount that can be
contributed and on the time when distributions may commence. Certain distribu-
tions from other types of qualified plans may be "rolled over" on a tax-de-
ferred basis into an Individual Retirement Annuity.
SIMPLIFIED EMPLOYEE PENSION PLANS
Section 408(k) of the Code allows employers to establish simplified employee
pension plans for their employees using the employees' individual retirement
annuities if certain criteria are met. Under these plans the employer may,
within specified limits, make deductible contributions on behalf of the employ-
ees to their individual retirement annuities.
SAVINGS INCENTIVE MATCH PLANS FOR EMPLOYEES (SIMPLE PLANS)
Section 408(p) and 401(k) of the Code allow employers with 100 or fewer
employees to establish SIMPLE retirement plans for their employees. SIMPLE
plans may be structured as a SIMPLE retirement account using an employee's IRA
to hold the assets or as a Section 401(k) qualified cash or deferred
arrangement. In general, a SIMPLE plan consists of a salary deferral program
for eligible employees and matching contributions made by employers. Employers
intending to use the contract in conjunction with SIMPLE plans should seek
competent tax and legal advice.
TAX SHELTERED ANNUITIES
Section 403(b) of the Code permits public school employees and employees of
certain types of tax-exempt organizations (specified in Section 501(c)(3) of
the Code) to have their employers
15
<PAGE>
purchase annuity contracts for them, and subject to certain limitations, to
exclude the purchase payments from the employees' gross income. An annuity
contract used for a Section 403(b) plan must provide that distributions
attributable to salary reduction contributions made after 12/31/88, and all
earnings on salary reduction contributions, may be made only after the
employee attains age 59 1/2, separates from service, dies, becomes disabled or
on the account of hardship (earnings on salary reduction contributions may not
be distributed for hardship).
CORPORATE AND SELF-EMPLOYED PENSION AND PROFIT SHARING PLANS
Sections 401(a) and 403(a) of the Code permit corporate employers to
establish various types of tax favored retirement plans for employees. The
Self-Employed Individuals Retirement Act of 1962, as amended, (commonly
referred to as "H.R. 10" or "Keogh") permits self-employed individuals to
establish tax favored retirement plans for themselves and their employees.
Such retirement plans may permit the purchase of annuity contracts in order to
provide benefits under the plans.
STATE AND LOCAL GOVERNMENT AND TAX-EXEMPT ORGANIZATION DEFERRED COMPENSATION
PLANS
Section 457 of the Code permits employees of state and local governments and
tax-exempt organizations to defer a portion of their compensation without
paying current taxes. The employees must be participants in an eligible
deferred compensation plan. Generally, under the non-natural owner rules, such
contracts are not treated as annuity contracts for federal income tax
purposes. However, under these plans, contributions made for the benefit of
the employees will not be includible in the employees' gross income until
distributed from the plan.
INCOME TAX WITHHOLDING
The Company is required to withhold federal income tax at a rate of 20% on
all "eligible rollover distributions" unless an individual elects to make a
"direct rollover" of such amounts to another qualified plan or Individual
Retirement Account or Annuity (IRA). Eligible rollover distributions generally
include all distributions from qualified contracts, excluding IRAs, with the
exception of (1) required minimum distributions, or (2) a series of
substantially equal periodic payments made over a period of at least 10 years,
or the life (joint lives) of the participant (and beneficiary). For any
distributions from non-qualified annuity contracts, or distributions from
qualified contracts which are not considered eligible rollover distributions,
the Company may be required to withhold federal and state income taxes unless
the recipient elects not to have taxes withheld and properly notifies the
Company of such election.
THE COMPANY
- -------------------------------------------------------------------------------
BUSINESS
The Company was incorporated in 1967 as a stock life insurance company under
the laws of New York and was known as "Financial Life Insurance Company" from
1967 to 1978. From 1978 to 1984, the Company was known as "PM Life Insurance
Company." Since 1984 the Company has been known as "Allstate Life Insurance
Company of New York." The Company's operations consist of one business segment
which is the issuance of individual annuities and life insurance. The Company
is currently licensed to operate in New York. The Company's home office is
located in Farmingville, New York.
The Company is an indirect, wholly owned subsidiary of Allstate Insurance
Company
16
<PAGE>
("Allstate") which is a stock property-liability insurance company
incorporated under the laws of Illinois. With the exception of directors'
qualifying shares, all of the outstanding capital stock of Allstate is owned
by The Allstate Corporation ("Corporation"). On June 30, 1995, Sears, Roebuck
and Co. ("Sears") distributed its 80.3% ownership in the Corporation to Sears
common shareholders through a tax-free dividend.
INVESTMENTS BY THE COMPANY
The Company's general account assets must be invested in accordance with
applicable state laws. These laws govern the nature and quality of investments
that may be made by life insurance companies and the percentage of their
assets that may be committed to any particular type of investment. In general,
these laws permit investments, within specified limits and subject to certain
qualifications, in federal, state, and municipal obligations, corporate bonds,
preferred stocks, real estate mortgages, real estate and certain other
investments. All of the Company's general account assets are available to meet
the Company's obligations.
Purchase Payments under the Contract will be accounted for in a non-unitized
Separate Account of the Company. Owners have no priority claims on assets
accounted for in this Separate Account. All general account assets of the
Company, including those accounted for in this non-unitized Separate Account,
are available to meet the guarantees under the Contract.
The Company will primarily invest its general account assets in investment-
grade fixed income securities including the following:
Securities issued by the United States Government or its agencies or
instrumentalities, which may or may not be guaranteed by the United States
Government;
Debt instruments, including, but not limited to, issues of or guaranteed
by banks or bank holding companies, and of corporations, which are deemed
by the Company's management to have qualities appropriate for inclusion in
this portfolio;
Commercial mortgages, mortgage-backed securities collateralized by real
estate mortgage loans, or securities collateralized by other assets, that
are insured or guaranteed by the Federal Home Loan Mortgage Association,
the Federal National Mortgage Association or the Government National
Mortgage Association, or that have an investment grade at time of purchase
within the four highest grades assigned by Moody's Investors Services, Inc.
(Aaa, Aa, A or Baa), Standard & Poor's Corporation (AAA, AA, A or BBB) or
any other nationally recognized rating service;
Commercial paper, cash, or cash equivalents, and other short-term
investments having a maturity of less than one year that are considered by
the Company's management to have investment quality comparable to
securities having the ratings stated above;
Participations in or assignments of loans made to business entities by
banks and other financial institutions (so long as the loan is one in which
the Company is permitted to invest directly) and/or collateralized loan
obligations. These are both typically floating-rate instruments so they
would be combined with a swap agreement to create a fixed-rate asset to
better match fixed-rate liabilities;
In addition, interest rate swaps, futures, options, rate caps, and other
hedging instruments may be used solely for non-speculative hedging
purposes. Anticipated use of these financial instruments shall be limited
to protecting the value of portfolio sales or
17
<PAGE>
purchases, or to enhance yield through the creation of a synthetic
security.
At inception, the Company will purchase only investment grade assets for the
non-unitized Separate Account; however, this position and the investment
strategy may be readdressed as market conditions change.
Additionally, the Company maintains certain unitized Separate Accounts which
invest in shares of an open-end investment company registered under the
Investment Company Act of 1940. These Separate Account assets do not support
the Company's obligations under the Contract.
18
<PAGE>
SELECTED FINANCIAL DATA
- -------------------------------------------------------------------------------
The following selected financial data for the Company should be read in
conjunction with the financial statements and notes thereto included in this
Prospectus beginning on page F-1.
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
SELECTED FINANCIAL DATA
(IN THOUSANDS)
<TABLE>
<CAPTION>
YEAR-END FINANCIAL DATA 1996 1995 1994 1993 1992
- ----------------------- ---------- ---------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C>
For the Years Ended
December 31:
Revenues............... $ 228,387 $ 250,854 $ 186,249 $ 227,445 $ 203,890
Net Income............. 20,561 19,522 18,221 13,163 12,225
As of December 31:
Total Assets........... 1,990,284 1,842,969 1,449,993 1,410,895 1,162,763
</TABLE>
In 1992, the Company adopted the provisions of Statement of Financial
Accounting Standard ("SFAS") No. 106 "Employers' Accounting for Postretirement
Benefits Other than Pensions," which resulted in a charge against 1992
earnings of $623 thousand on an after tax basis. Effective December 31, 1993,
the Company adopted SFAS No. 115, "Accounting for Certain Investments in Debt
and Equity Securities," which requires that investments classified as
available for sale be carried at fair value. The net effect of adoption of
this statement increased shareholder's equity at December 31, 1993 by $25,391
thousand and did not have a material impact on net income.
19
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
GENERAL
The following discussion highlights significant factors influencing results
of operations and financial position of Allstate Life Insurance Company of New
York (the "Company"). It should be read in conjunction with the financial
statements and related notes.
The Company, which is wholly owned by a wholly owned subsidiary of Allstate
Insurance Company ("AIC"), markets a broad line of life insurance and annuity
products in the State of New York. Life insurance includes traditional prod-
ucts such as whole life and term life insurance, as well as universal life and
other interest-sensitive life products. Annuities include deferred annuities,
such as variable annuities and fixed rate single and flexible premium annui-
ties, and immediate annuities such as structured settlement annuities. The
Company distributes its products using a combination of Allstate agents in-
cluding life specialists, banks and other financial institutions, brokers and
direct response marketing.
RESULTS OF OPERATIONS
<TABLE>
<CAPTION>
1996 1995 1994
--------- --------- ---------
($ IN THOUSANDS)
<S> <C> <C> <C>
Statutory premiums and deposits................ $ 235,634 $ 216,361 $ 153,000
========= ========= =========
Investments.................................... 1,636,654 1,541,329 1,172,524
Separate Account assets........................ 260,668 220,141 175,918
--------- --------- ---------
Investments and Separate Account assets........ 1,897,322 1,761,470 1,348,442
========= ========= =========
Premiums and contract charges (net of
reinsurance).................................. 117,106 148,316 88,560
Net investment income.......................... 112,862 104,384 96,911
Contract benefits (net of reinsurance)......... 172,772 198,055 137,434
Operating costs and expenses................... 23,386 23,366 20,205
Early retirement program....................... -- -- 1,210
--------- --------- ---------
Income from operations......................... 33,810 31,279 26,622
Income tax expense on operations............... 12,221 10,557 8,907
--------- --------- ---------
Net operating income........................... 21,589 20,722 17,715
Realized capital losses and gains, after tax... (1,028) (1,200) 506
--------- --------- ---------
Net income..................................... $ 20,561 $ 19,522 $ 18,221
========= ========= =========
</TABLE>
PREMIUMS, DEPOSITS AND CONTRACT CHARGES
Statutory premiums, which include premiums and deposits for all products,
increased $19.3 million or 8.9% in 1996 from 1995. The increase is largely the
result of a sale of a funding agreement, a type of investment contract first
sold by the Company in 1996, as well as higher sales of variable annuity and
life insurance products, partially offset by lower sales of structured settle-
ment annuities. Sales of funding agreements may not continue, as they are en-
tered into based on the Company's assessment of market opportunities. In 1995,
statutory premiums increased $63.4 million or 41.4% compared to 1994 levels
primarily due to growth in sales of individual annuities. Increased sales of
structured settlement annuities in 1995 were partially offset by a decrease in
the sales of variable annuities. Individual annuities comprised 55.4% and
77.3% of statutory premiums and deposits in 1996 and 1995, respectively.
Premiums and contract charges under generally accepted accounting principles
("GAAP") decreased 21.0% in 1996 and increased 67.5% in 1995. Under GAAP, rev-
enues exclude deposits on most annuities and premiums on universal life insur-
ance policies. The changes in premiums and contract charges in 1996 and 1995
primarily reflect fluctuations in the level of sales of structured settlement
annuities sold with life contingencies. Provision for policy benefits de-
creased $25.3 million or 12.8%, during 1996 and increased $60.6 million or
44.1%, during 1995. These changes also result primarily from the fluctuations
in the level of sales of structured settlement annuities with life contingen-
cies. GAAP premium and contract charges will vary with the mix of products
sold during the period.
NET INVESTMENT INCOME
Pretax net investment income increased 8.1% in 1996 primarily due to growth
of 13.3% or $178.2 million in investments excluding unrealized gains on fixed
income securities. The additional invest -
20
<PAGE>
ment income earned on the higher base of assets is partially offset by lower
yields on fixed income securities. Pretax net investment income increased 7.7%
in 1995 primarily due to the 12.8% or $151.8 million increase in investments
excluding unrealized gains on fixed income securities. The increase in invest-
ments resulted primarily from growth in new business, partially offset by sur-
renders, withdrawals and benefits paid.
In low interest rate environments, funds from maturing investments may be
reinvested at substantially lower interest rates than those which prevailed
when the funds were previously invested.
REALIZED CAPITAL GAINS AND LOSSES
Realized capital losses of $1.0 million after tax in 1996 were 14.3% lower
than those reported in 1995. Reduced mortgage losses were partially offset by
losses incurred on the sale of fixed income securities to reposition a portion
of the investment portfolio to improve overall yield in 1996. Net capital
losses were realized in 1995 as compared to net capital gains in 1994. Capital
losses in 1995 were realized primarily from writedowns of mortgage loans, par-
tially offset by gains on sales of fixed income securities. In 1994, the Com-
pany experienced lower asset writedowns and, as a result, realized net capital
gains from sales of securities and bond calls.
OPERATING EXPENSES
Operating expenses were essentially unchanged in 1996. The 15.6% increase in
1995 operating expense resulted from an increase in amortization of deferred
acquisition costs. In 1994, the Company recognized an after tax charge of $787
thousand related to the cost of an early retirement program offered to certain
home office employees. The program provided one year of salary continuation
and related benefits and an enhanced retirement benefit.
NET OPERATING INCOME
Net operating income increased 4.2% in 1996 and 17.0% in 1995. The increase
in 1996 is the result of growth in investments partially offset by less favor-
able mortality experience on structured settlement annuities with life contin-
gencies. The increase in net operating income in 1995 was primarily due to
higher margins and growth in revenues.
MARKET RISK
Market risk is the risk that the Company will incur losses due to adverse
changes in market rates and prices. The Company's primary market risk exposure
is to changes in interest rates. The Company does not currently have material
exposures to equity price, commodity price, or foreign currency exchange risk.
The active management of market risk is integral to the Company's opera-
tions. The Company may use the following tools to manage its exposure to mar-
ket risk within defined tolerance ranges: 1) rebalance its existing asset or
liability portfolios, 2) change the character of future investments purchased
or 3) use derivatives to modify the interest rate characteristics of existing
assets and liabilities or assets expected to be purchased. (See the financial
futures contracts section in "Investments" and Note 5 to the financial state-
ments for a more detailed discussion of these products.)
The Company offers a variety of annuities including fixed rate single and
flexible premium deferred annuities and single premium immediate annuities,
including structured settlement annuities. For such products, the Company in-
vests premiums and deposits to create cash flows that will fund future claims,
benefits and expenses, and earn stable margins.
The Company calculates effective durations of assets and liabilities and
monitors quarterly whether the asset-liability duration gap is within desired
tolerances. The primary tools for managing
21
<PAGE>
investment portfolios in relation to liabilities are simulation models (in-
cluding cash flow and duration analysis), asset allocation models and periodic
analysis of portfolio composition compared to specifications. In addition, the
Company uses financial futures to hedge the interest rate risk related to as-
set liability management.
INVESTMENTS
The composition of the investment portfolio at December 31, 1996 is pre-
sented at carrying value in the table below (see Notes 2 and 4 to the finan-
cial statements for investment accounting policies and additional informa-
tion).
<TABLE>
<CAPTION>
PERCENT
TO
TOTAL
-------
($ IN THOUSANDS)
<S> <C> <C>
Fixed income securities...................................... 1,500,783 91.7%
Mortgage loans............................................... 84,657 5.2
Short-term................................................... 25,855 1.6
Policy loans................................................. 25,359 1.5
---------- -----
Total........................................................ $1,636,654 100.0%
========== =====
</TABLE>
FIXED INCOME SECURITIES
The Company's fixed income securities portfolio consists of tax-exempt mu-
nicipal bonds, publicly traded corporate bonds, privately-placed securities,
mortgage-backed securities, asset-backed securities, and U.S. government
bonds. The Company generally holds its fixed income securities for the long
term, but has classified all of these securities as available for sale to al-
low maximum flexibility in portfolio management. At December 31, 1996, net
unrealized capital gains on the fixed income securities portfolio totaled
$122.6 million compared to $205.5 million as of December 31, 1995. The de-
crease in the unrealized gain position is primarily attributable to rising in-
terest rates.
Substantially all of the Company's fixed income securities portfolio is
rated investment grade, which is defined by the Company as a security having a
National Association of Insurance Commissioners ("NAIC") rating of 1 or 2, a
Moody's rating of Aaa, Aa, A or Baa, or a comparable Company internal rating.
As of December 31, 1996, the fixed income securities portfolio included
$492.8 million of privately-placed corporate obligations, compared with $466.2
million at December 31, 1995. The benefits of privately-placed securities as
compared to public securities are generally higher yields, improved cash flow
predictability through pro-rata sinking funds on many bonds and a combination
of covenant and call protection features designed to better protect the holder
against losses resulting from credit deterioration, reinvestment risk and
fluctuations in interest rates. The relative disadvantages of privately-placed
securities as compared to public securities include reduced liquidity and in
some cases limited access to information. All of the privately-placed securi-
ties are rated as investment grade by either the NAIC or the Company's inter-
nal ratings. The Company determines the fair value of privately-placed fixed
income securities based on discounted cash flows using current interest rates
for similar securities.
At December 31, 1996 and 1995, $194.2 million and $200.9 million, respec-
tively, of the fixed income portfolio were invested in mortgage-backed securi-
ties ("MBS"). At December 31, 1996, all of the MBS were investment grade and
approximately 81.6% have underlying collateral that is guaranteed by U.S. gov-
ernment entities, thus credit risk was minimal.
MBS, however, are subject to interest rate risk as the duration and ultimate
realized yield are affected by the rate of repayment of the underlying mort-
gages. The Company attempts to limit interest rate risk by purchasing MBS
whose cost does not significantly exceed par value, and with repayment protec-
tion to provide a more certain cash flow to the Company. At December 31, 1996,
the amortized cost of the MBS portfolio was below par value by $6.9 million
and over 34% of the MBS portfolio
22
<PAGE>
was invested in planned amortization class bonds. This type of MBS is repaid
over a predetermined time period, which is guaranteed to be met under most
circumstances.
The fixed income securities portfolio contained $31.5 million and $24.7 mil-
lion of asset-backed securities ("ABS") at December 31, 1996 and 1995, respec-
tively. ABS are subject to many of the same risks as MBS, but to a lesser de-
gree because of the nature of the underlying assets. The Company attempts to
mitigate these risks by primarily investing in highly-rated, publicly-traded,
intermediate term ABS at par value. At December 31, 1996, the amortized cost
of the ABS portfolio was below par value by $327 thousand.
The Company closely monitors its fixed income portfolio for declines in
value that are other than temporary. Securities are placed on non-accrual sta-
tus when they are in default or when the receipt of interest payments is in
doubt.
MORTGAGE LOANS
The Company's $84.6 million investment in mortgage loans at December 31,
1996 is comprised primarily of loans secured by first mortgages on developed
commercial real estate. Property type diversification is a key consideration
used to manage the Company's mortgage loan risk.
The Company closely monitors its commercial mortgage loan portfolio on a
loan-by-loan basis. Loans with an estimated collateral value less than the
loan balance, as well as loans with other characteristics indicative of a
higher than normal credit risk, are reviewed by financial and investment man-
agement at least quarterly for purposes of establishing valuation allowances
and placing loans on non-accrual status. The underlying collateral values are
based upon discounted property cash flow projections, which are updated as
conditions change or at least annually.
In 1996, $8.6 million of commercial mortgage loans were contractually due.
Of these, 20.3% were paid as due, and 79.7% were refinanced at prevailing mar-
ket terms. For contractual maturities of the commercial mortgage loan portfo-
lio as of December 31, 1996, and for loans that were not in foreclosure see
Note 4 of the financial statements. The Company expects to continue to extend
the maturity of certain maturing loans at prevailing interest rates where the
borrower is unable to obtain financing elsewhere. Depending on the interest
rate environment, some loans may not be able to be extended at prevailing mar-
ket rates.
SHORT-TERM INVESTMENTS
The Company's short-term investment portfolio was $25.9 million and $7.3
million at December 31, 1996 and 1995, respectively. The Company invests all
available cash balances in taxable and tax-exempt short-term securities having
a final maturity date or redemption date of one year or less.
FINANCIAL FUTURES CONTRACTS
The Company uses financial futures contracts to reduce its exposure to in-
terest rate risk on its investments as well as to improve asset/liability man-
agement. The Company does not hold or issue these instruments for trading pur-
poses. At December 31, 1996, the Company had $6.7 million in notional amount
of futures contracts outstanding, all of which mature within one year. The
Company is exposed to credit-related losses in the event of nonperformance by
counterparties to financial futures contracts. However, such nonperformance is
not expected because the Company utilizes highly rated counterparties, estab-
lishes risk control limits and maintains ongoing monitoring procedures. In ad-
dition, futures contracts have limited off-balance-sheet credit risk as they
are executed on organized exchanges and require security deposits, as well as
the daily cash settlement of margins.
23
<PAGE>
SEPARATE ACCOUNTS
Separate Account balances increased 18.4% from $220.1 million at December
31, 1995 to $260.7 million at December 31, 1996 due to favorable investment
performance of the Separate Account investment portfolios and sales of flexi-
ble premium deferred variable annuity contracts, partially offset by variable
annuity contract surrenders and withdrawals.
RESERVE FOR LIFE-CONTINGENT CONTRACT BENEFITS
The reserve for life-contingent contract benefits increased 8.7% to $911.5
million at December 31, 1996, resulting primarily from the sales of structured
settlement annuities with life contingencies.
LIQUIDITY AND CAPITAL RESOURCES
CAPITAL RESOURCES
The NAIC has a standard for assessing the solvency of insurance companies,
which is referred to as risk-based capital ("RBC"). The requirement consists
of a formula for determining each insurer's RBC and a model law specifying
regulatory actions if an insurer's RBC falls below specified levels. The RBC
formula for life insurance companies establishes capital requirements relating
to insurance risk, business risk, asset risk and interest rate risk. At Decem-
ber 31, 1996, RBC for the Company was significantly above levels which would
require regulatory action.
FINANCIAL RATINGS AND STRENGTH
Claims-paying ability ratings at December 31, 1996 assigned to the Company
include AA+, A+(g) and Aa3 from Standard & Poor's, A.M. Best and Moody's, re-
spectively.
LIQUIDITY
The Company's principal sources of funds are premiums, deposits, and collec-
tions of principal and income from the investment portfolio. The primary uses
of these funds are to purchase investments and pay policyholder claims, bene-
fits, contract maturities and surrenders, and operating costs.
Fixed income securities represent 91.7% of the Company's total investments.
The maturity structure of these securities is managed to meet the anticipated
cash flow requirements of the underlying liabilities. A portion of the
Company's product portfolio, primarily fixed deferred annuities and universal
life insurance policies, is subject to discretionary surrender and withdrawal
by customers. Management believes its assets are sufficiently liquid to meet
future obligations to its life and annuity policyholders, under various inter-
est rate scenarios.
OTHER DEVELOPMENTS
The initial draft of the NAIC's codification of statutory accounting prac-
tices will be distributed in March 1997 for a six-month public exposure peri-
od. Finalization of the codification is expected to occur in late 1997 or
early 1998, with implementation tentatively planned for January 1, 1999. Due
to the possible changes resulting from the public exposure of the codifica-
tion, the potential impact to statutory surplus is not determinable at this
time.
PENDING ACCOUNTING STANDARD
In June 1996, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 125, "Accounting for Transfers of Financial
Assets and Extinguishments of Liabilities." This standard distinguishes be-
tween transfers of financial assets as sales versus financing transactions
based upon relinquishment of control and addresses the accounting for securi-
tizations, securities lending, repurchase agreements and insubstance defea-
sance transactions. The requirements of this statement that were effective on
January 1, 1997 were adopted and are not expected to have a material impact on
the results of operations or financial position of the Company.
24
<PAGE>
COMPETITION
- -------------------------------------------------------------------------------
The Company is engaged in a business that is highly competitive because of
the large number of stock and mutual life insurance companies and other
entities competing in the sale of insurance and annuities. There are
approximately 1,700 stock, mutual and other types of insurers in business in
the United States. A.M. Best Company assigns A+r (Superior) to the Company.
Under Best's rating policy and procedure, the Company is assigned the Best's
rating of its parent company, and is based on the consolidated performance of
the parent and its subsidiary. Standard & Poor's Insurance Rating Services
assigns AA+ (Excellent) to the Company and Moody's assigns an Aa3 (Excellent)
financial stability rating to the Company. The Company shares the same ratings
of its parent.
EMPLOYEES
- -------------------------------------------------------------------------------
As of December 31, 1996, Allstate Life Insurance Company of New York had
approximately 82 employees at its Home Office in Farmingville, New York who
work on the Company's matters.
PROPERTIES
- -------------------------------------------------------------------------------
The Company occupies office space in Farmingville, New York. Expenses
associated with these offices are allocated to the Company.
STATE AND FEDERAL REGULATION
- -------------------------------------------------------------------------------
The insurance business of the Company is subject to comprehensive and
detailed regulation and supervision by the State of New York.
The laws of New York establish a supervisory agency with broad
administrative powers with respect to licensing to transact business,
overseeing trade practices, licensing agents, approving policy forms,
establishing reserve requirements, fixing maximum interest rates on life
insurance policy loans and minimum rates for accumulation of surrender values,
prescribing the form and content of required financial statements, and
regulating the type and amounts of investments permitted. Each insurance
company is required to file detailed annual reports with the supervisory
agency and its operations and accounts are subject to examination by such
agency at regular intervals.
Under insurance guaranty fund law for the State of New York, insurers doing
business therein can be assessed up to prescribed limits for contract owner
losses incurred by insolvent companies. The amount of any future assessments
on the Company under these laws cannot be reasonably estimated. These laws do
provide, however, that an assessment may be excused or deferred if it would
threaten an insurer's own financial strength.
In addition, the State of New York regulates affiliated groups of insurers,
such as the Company and its affiliates, under insurance holding company
legislation. Under such laws, intercompany
25
<PAGE>
transfers of assets and dividend payments from insurance subsidiaries may be
subject to prior notice or approval, depending on the size of such transfers
and payments in relation to the financial positions of the companies.
Although the federal government generally does not directly regulate the
business of insurance, federal initiatives often have an impact on the
business in a variety of ways. Current and proposed federal measures which may
significantly affect the insurance business include employee benefit
regulation, controls on medical care costs, removal of barriers preventing
banks from engaging in the insurance business, tax law changes affecting the
taxation of insurance companies, the tax treatment of insurance products and
its impact on the relative desirability of various personal investment
vehicles, and proposed legislation to prohibit the use of gender in
determining insurance and pension rates and benefits.
EXECUTIVE OFFICERS AND DIRECTORS
- -------------------------------------------------------------------------------
The directors and executive officers are listed below, together with
information as to their ages, dates of election and principal business
occupations during the last five years (if other than their present business
occupations). Except as otherwise indicated, the directors and executive
officers of the Company have been associated with the Company more than five
years either in the position shown or in other positions.
LOUIS G. LOWER, II, 51, Chairman of the Board and President (1992)*
Also Director (1986-Present) and Senior Vice President (1995-Present) of
Allstate Insurance Company; Director (1991-Present) of Allstate Life Financial
Services, Inc.; Director (1986-Present) and President (1990-Present) Allstate
Life Insurance Company; Director (1983-Present) and Chairman of the Board
(1990-Present) of Allstate Life Insurance Company of New York; Chairman of the
Board of Directors and Chief Executive Officer (1995-Present), Chairman of the
Board of Directors and President (1990-1995) of Glenbrook Life Insurance
Company; Director (1992-Present), Chairman of the Board of Directors and Chief
Executive Officer (1995-Present) of Glenbrook Life and Annuity Company;
Director and Chairman of the Board (1995-Present) of Laughlin Group Holdings,
Inc.; Director and Chairman of the Board of Directors and Chief Executive
Officer (1989-Present) Lincoln Benefit Life Company; Chairman of the Board of
Directors and Chief Executive Officer (1995-Present) of Northbrook Life
Insurance Company; and Chairman of the Board of Directors and Chief Executive
Officer (1995-Present) Surety Life Insurance Company.
MICHAEL J. VELOTTA, 50, Vice President, Secretary, General Counsel, and
Director (1993)*
Also Director and Secretary (1993-Present) of Allstate Life Financial
Services, Inc.; Director (1992-Present) Vice President, Secretary and General
Counsel (1993-Present) Allstate Life Insurance Company; Director (1992-
Present) Vice President, Secretary and General Counsel (1993-Present) Allstate
Life Insurance Company of New York; Director (1992-Present) Vice President,
Secretary and General Counsel (1993-Present) Glenbrook Life Insurance Company;
Director (1992-Present) Vice President, Secretary and General Counsel (1993-
Present) Glenbrook Life and Annuity Company; Director and Secretary (1995-
Present) Laughlin Group Holdings, Inc.; Director (1992-Present) and Assistant
Secretary (1995-Present) Lincoln Benefit Life Company; Director (1992-Present)
Vice President, Secretary and General Counsel (1993-Present) Northbrook Life
Insurance Company; and Director and Assistant Secretary (1995-Present) Surety
Life Insurance Company.
26
<PAGE>
SHARMAINE M. MILLER, 42, Director and Chief Administrative Officer (1996)*
Prior to 1996, she was a Department manager for Allstate Insurance Company.
PETER H. HECKMAN, 51, Vice President (1992)*
Also Director and Vice President (1988-Present) of Allstate Life Insurance
Company; Director (1990-1996), Vice President (1989-Present), Allstate Life
Insurance Company of New York; Director (1991-1993) of Allstate Life Financial
Services, Inc.; Director (1990-Present), President and Chief Operating Officer
(1996-Present), and Vice President (1990-1996), Glenbrook Life Insurance
Company; Director (1992-Present) President and Chief Operating Officer (1996-
Present), and was Vice President (1995-1996), Glenbrook Life and Annuity
Company; Director (1995-Present) and Vice Chairman of the Board (1996-Present)
Laughlin Group Holdings, Inc.; Director (1990-Present) and Vice Chairman of
the Board (1996-Present) Lincoln Benefit Life Company; Director (1988-Present)
President and Chief Operating Officer (1996-Present), and was Vice President
(1989-1996), Northbrook Life Insurance Company; and Director (1995-Present)
and Vice Chairman of the Board (1996-Present) Surety Life Insurance Company.
TIMOTHY H. PLOHG, 50, Vice President and Director (1995)*
Timothy H. Plohg is also Assistant Vice President (1991-Present), Allstate
Life Insurance Company, and Vice President and Director (1995-Present)
Allstate Life Insurance Company. Prior to 1995, he was Vice President of the
ALSC; Assistant Vice President Sales, Regional Vice President.
KAREN C. GARDNER, 43, Vice President (1996)*
Vice President (1996-Present) Allstate Insurance Company; Vice President
(1996-Present) Allstate Life Insurance Company; Vice President (1996-Present)
Allstate Life Insurance Company of New York; Vice President (1996-Present)
Glenbrook Life Insurance Company; Vice President (1996-Present) Laughlin Group
Holdings, Inc.; Assistant Vice President (1996-Present) Lincoln Benefit Life
Company; Vice President (1996-Present) Northbrook Life Insurance Company;
Assistant Vice President (1996-Present) Surety Life Insurance Company. Prior
to 1996 she was a Partner (1975-1996) Ernst & Young LLP.
KEVIN R. SLAWIN, 39, Director and Vice President (1996)*
Also Assistant Vice President and Assistant Treasurer (1995-1996) Allstate
Insurance Company; Director (1996-Present) and Assistant Treasurer (1995-1996)
Allstate Financial Services, Inc.; Director and Vice President (1996-Present)
and Assistant Treasurer (1995-1996) Allstate Life Insurance Company; Director
and Vice President (1996-Present) and Assistant Treasurer (1995-1996) Allstate
Life Insurance Company of New York; Director and Vice President (1996-Present)
and Assistant Treasurer (1995-1996) Glenbrook Life Insurance Company; Vice
President (1996-Present) and Assistant Treasurer (1995-1996) Glenbrook Life
and Annuity Company; Director (1996-Present) and Assistant Treasurer (1995-
1996) Laughlin Group Holdings, Inc.; Director (1996-Present) Lincoln Benefit
Life Company; Director and Vice President (1996-Present) and Assistant
Treasurer (1995-1996) Northbrook Life Insurance Company; Director (1996-
Present) Surety Life Insurance Company; Assistant Treasurer and Director
(1994-1995) Sears Roebuck and Co.; and Treasurer and First Vice President
(1986-1994) Sears Mortgage Corporation.
CASEY J. SYLLA, 53, Chief Investment Officer and Director (1995)*
Also Director (1995-Present) Senior Vice President and Chief Investment
Officer (1995-Present) Allstate Insurance Company; Director
27
<PAGE>
(1995-Present) Chief Investment Officer (1995- Present) Allstate Life Insurance
Company; Chief Investment Officer (1995-Present) Allstate Life Insurance
Company of New York; Chief Investment Officer (1995-Present) Glenbrook Life
Insurance Company; Chief Investment Officer (1995-Present) Glenbrook Life and
Annuity Company; and Director and Chief Investment Officer (1995-Present)
Northbrook Life Insurance Company. Prior to 1995 he was Senior Vice President
and Executive Officer-Investments (1992-1995) of Northwestern Mutual Life
Insurance Company.
JAMES P. ZILS, 46, Treasurer (1995)*
Also Vice President and Treasurer (1995- Present) Allstate Insurance Company;
Treasurer (1995-Present) Allstate Life Financial Services, Inc.; Treasurer
(1995-Present) Allstate Life Insurance Company; Treasurer (1995-Present)
Allstate Life Insurance Company of New York; Treasurer (1995-Present) Glenbrook
Life Insurance Company; Treasurer (1995-Present) Glenbrook Life and Annuity
Company; Treasurer (1995-Present) Laughlin Group Holdings, Inc. and Treasurer
(1995-Present) Northbrook Life Insurance Company. Prior to 1995, he was Vice
President of Allstate Life Insurance Company and prior to 1993, he held various
management positions.
MARCIA D. ALAZRAKI, 55, Director (1993)*
Marcia D. Alazraki is an attorney practicing with the firm of Simpson,
Thacher & Bartlett, New York, New York. Prior to 1991, she practiced with the
firm of Shea & Gould, New York, New York.
JOSEPH F. CARLINO, 79, Director (1983)*
Joseph F. Carlino is a self-employed practicing attorney in Mineola, New
York.
CLEVELAND JOHNSON, JR., 61, Director (1983)*
Cleveland Johnson, Jr. is currently a Business Development Advocate for the
Town of Islip, Division of Economic Development. Previously he was a Vice
President with State University of New York in Farmingdale, New York.
PHILLIP E. LAWSON, 43, Director (1994)*
Phillip E. Lawson is also a Regional Vice President of Allstate Insurance
Company. Prior to 1990, he was a Director of Allstate Insurance Company.
GERARD F. MCDERMOTT, 50, Director (1995)*
Gerard F. McDermott is also a Regional Vice President of Allstate Insurance
Company. Prior to 1992, he held various management positions.
JOSEPH P. MCFADDEN, 57, Director (1992)*
Joseph P. McFadden is also a Territorial Vice President of Allstate Insurance
Company. Prior to 1992, he was a Claim Vice President of Allstate Insurance
Company.
JOHN R. RABEN, JR., 51, Director (1988)*
John R. Raben, Jr. is also Vice President & Municipal Bond/Public Finance
Liaison with J.P. Morgan Securities, Inc.
THEODORE A. SCHNELL, 48, Assistant Vice President and Director (1995)*
Theodore A. Schnell is also Assistant Vice President, Assistant Secretary and
Assistant Treasurer (1989-Present) Allstate Life Insurance Company; Assistant
Treasurer (1990-Present), Glenbrook Life Insurance Company; Assistant Treasurer
(1992-Present) Glenbrook Life and Annuity Company; Director (1987-Present)
Lincoln Benefit Life Company; Assistant Vice President, Assistant Secretary and
Assistant Treasurer (1989-Present) Northbrook Life Insurance Company and
Director (1995-Present) Surety Life Insurance Company.
SALLY A. SLACKE, 63, (Director) (1983)*
Sally A. Slacke is also President of Slacke Test Boring, Inc.
*Date elected to current office.
28
<PAGE>
EXECUTIVE COMPENSATION
- -------------------------------------------------------------------------------
Some executive officers of the Company also serve as officers of the
Company's parent and receive no compensation directly from the Company. Some
of the officers also serve as officers of other companies affiliated with the
Company. Allocations have been made as to each individual's time devoted to
his duties as an executive officer of the Company. However, no officer's
compensation allocated to the Company exceeded $100,000 in 1996. The allocated
cash compensation of all officers of the Company as a group for services
rendered in all capacities to the Company during 1996 totalled $61,330.32.
Directors of the Company receive no compensation in addition to their
compensation as employees of the Company. Directors of the Company who are not
also employees of the Company receive compensation for services provided.
Marcia D. Alazraki, John R. Raben, Jr. and Sally A. Slacke receive $5,500
annually; Cleveland Johnson, Jr. receives $5,500 annually; and Joseph F.
Carlino receives $5,500 annually.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
----------------------------------- --------------------- --------
(A) (B) (C) (D) (E) (F) (G) (H) (I)
OTHER SECURITIES
ANNUAL RESTRICTED UNDERLYING LTIP ALL OTHER
NAME AND PRINCIPAL SALARY BONUS COMPENSATION STOCK OPTIONS/ PAYOUTS COMPENSATION
POSITION YEAR ($) ($) ($) AWARD(S) SARS(#) ($) ($)
------------------ ---- -------- -------- ------------ ---------- ---------- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Louis G. Lower, II...... 1996 $436,800 $246,781 $10,246 $ 0 18,258 $ 0 $5,250(1)
President and 1995 $416,000 $266,175 $17,044 $199,890 N/A $411,122 $5,250(1)
Chairman of the 1994 $389,050 $ 43,973 $26,990 $170,660 N/A 0 $1,890(1)
Board of Directors
James J. Brazda(2)...... 1995 $115,870 $ 27,808 $ 175 0 N/A 0 $5,761(3)
Chief Administrative 1994 $108,195 $ 21,707 0 $ 16,935 N/A 0 $1,608(3)
Officer and Director
</TABLE>
- -------
(1) Amount received by Mr. Lower which represents the value allocated to his
account from employer contributions under The Savings and Profit Sharing
Fund of Allstate Employees and prior to 1996, The Profit Sharing Fund and
to its predecessor, The Savings and Profit Sharing Fund of Sears
employees.
(2) Mr. Brazda no longer serves in this capacity for Allstate Life Insurance
Company of New York.
(3) Amount received by Mr. Brazda which represents the value allocated to his
account from employer contributions under The Profit Sharing Fund and to
its predecessor, The Savings and Profit Sharing Fund of Sears employees.
29
<PAGE>
LEGAL PROCEEDINGS
- -------------------------------------------------------------------------------
The Company is involved in pending and threatened litigation in the normal
course of its business in which claims for monetary damages are asserted.
Management, after consultation with legal counsel, does not anticipate the
ultimate liability arising from such pending or threatened litigation to have
a material effect on the financial condition of the Company.
EXPERTS
- -------------------------------------------------------------------------------
The financial statements and financial statement schedules of the Company
included in this prospectus have been audited by Deloitte & Touche LLP, Two
Prudential Plaza, 180 North Stetson Avenue, Chicago, IL 60601-6779,
independent auditors, as stated in their report appearing herein, and are
included in reliance upon the report of such firm given upon their authority
as experts in accounting and auditing.
LEGAL MATTERS
- -------------------------------------------------------------------------------
Certain legal matters relating to the federal securities laws applicable to
the issue and sale of the Contract have been passed upon by Routier and
Johnson, P.C., of Washington, D.C. All matters of New York law pertaining to
the Contract, including the validity of the Contract and the Company's right
to issue such Contract under New York insurance law, have been passed upon by
Michael J. Velotta, General Counsel of the Company.
30
<PAGE>
INDEPENDENT AUDITORS' REPORT
TO THE BOARD OF DIRECTORS AND SHAREHOLDER OF
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK:
We have audited the accompanying Statements of Financial Position of
Allstate Life Insurance Company of New York (the "Company") as of December 31,
1996 and 1995, and the related Statements of Operations, Shareholder's Equity
and Cash Flows for each of the three years in the period ended December 31,
1996. Our audits also included Schedule IV--Reinsurance and Schedule V--
Valuation and Qualifying Accounts. These financial statements and financial
statement schedules are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements and
financial statement schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of Allstate Life Insurance Company of New
York as of December 31, 1996 and 1995, and the results of its operations and
its cash flows for each of the three years in the period ended December 31,
1996 in conformity with generally accepted accounting principles. Also, in our
opinion, Schedule IV--Reinsurance and Schedule V--Valuation and Qualifying
Accounts, when considered in relation to the basic financial statements taken
as a whole, present fairly, in all material respects, the information set
forth therein.
/s/ Deloitte & Touche LLP
Chicago, Illinois
February 21, 1997
F-1
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
STATEMENTS OF FINANCIAL POSITION
<TABLE>
<CAPTION>
DECEMBER 31,
---------------------
1996 1995
---------- ----------
($ IN THOUSANDS)
<S> <C> <C>
ASSETS
Investments
Fixed income securities, at fair value (amortized
cost $1,378,155 and $1,219,418)..................... $1,500,783 $1,424,893
Mortgage loans....................................... 84,657 86,394
Policy loans......................................... 25,359 22,785
Short-term........................................... 25,855 7,257
---------- ----------
Total investments.................................. 1,636,654 1,541,329
Deferred acquisition costs............................. 61,559 53,944
Accrued investment income.............................. 20,321 18,828
Reinsurance recoverables............................... 2,566 3,331
Cash................................................... 1,027 1,472
Other assets........................................... 7,489 3,924
Separate Accounts...................................... 260,668 220,141
---------- ----------
Total assets....................................... $1,990,284 $1,842,969
========== ==========
LIABILITIES
Reserve for life-contingent contract benefits.......... $ 911,457 $ 838,739
Contractholder funds................................... 572,480 499,548
Deferred income taxes.................................. 3,692 23,659
Other liabilities and accrued expenses................. 6,405 8,950
Net payable to affiliates.............................. 2,515 1,865
Separate Accounts...................................... 260,668 220,141
---------- ----------
Total liabilities.................................. 1,757,217 1,592,902
---------- ----------
SHAREHOLDER'S EQUITY
Common stock, $25 par value, 80,000 shares authorized,
issued and outstanding................................ 2,000 2,000
Additional capital paid-in............................. 45,787 45,787
Unrealized net capital gains........................... 36,852 74,413
Retained income........................................ 148,428 127,867
---------- ----------
Total shareholder's equity......................... 233,067 250,067
---------- ----------
Total liabilities and shareholder's equity......... $1,990,284 $1,842,969
========== ==========
</TABLE>
See notes to financial statements.
F-2
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------
1996 1995 1994
-------- -------- --------
($ IN THOUSANDS)
<S> <C> <C> <C>
Revenues
Life and annuity premiums (net of reinsurance
ceded of $2,273, $2,147 and $2,198)............ $ 91,825 $126,713 $ 70,070
Contract charges................................ 25,281 21,603 18,490
Net investment income........................... 112,862 104,384 96,911
Realized capital gains and losses............... (1,581) (1,846) 778
-------- -------- --------
228,387 250,854 186,249
-------- -------- --------
Costs and expenses
Life and annuity contract benefits (net of rein-
surance recoveries of $2,827, $1,581 and
$1,860)........................................ 172,772 198,055 137,434
Amortization of deferred acquisition costs...... 6,512 5,502 3,875
Operating costs and expenses.................... 16,874 17,864 16,330
Early retirement program........................ -- -- 1,210
-------- -------- --------
196,158 221,421 158,849
-------- -------- --------
Income from operations before income tax expense.. 32,229 29,433 27,400
Income tax expense................................ 11,668 9,911 9,179
-------- -------- --------
Net income........................................ $ 20,561 $ 19,522 $ 18,221
======== ======== ========
</TABLE>
See notes to financial statements.
F-3
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
STATEMENTS OF SHAREHOLDER'S EQUITY
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------
1996 1995 1994
-------- -------- --------
($ IN THOUSANDS)
<S> <C> <C> <C>
Common stock...................................... $ 2,000 $ 2,000 $ 2,000
-------- -------- --------
Additional capital paid-in........................ 45,787 45,787 45,787
-------- -------- --------
Unrealized net capital gains and losses
Balance, beginning of year...................... 74,413 (6,891) 25,391
Net (decrease) increase......................... (37,561) 81,304 (32,282)
-------- -------- --------
Balance, end of year............................ 36,852 74,413 (6,891)
-------- -------- --------
Retained income
Balance, beginning of year...................... 127,867 108,345 90,124
Net income...................................... 20,561 19,522 18,221
-------- -------- --------
Balance, end of year............................ 148,428 127,867 108,345
-------- -------- --------
Total shareholder's equity.................... $233,067 $250,067 $149,241
======== ======== ========
</TABLE>
See notes to financial statements.
F-4
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------
1996 1995 1994
--------- --------- ---------
($ IN THOUSANDS)
<S> <C> <C> <C>
Cash flows from operating activities
Net income.................................. $ 20,561 $ 19,522 $ 18,221
Adjustments to reconcile net income to net
cash provided by operating activities
Depreciation, amortization and other non-
cash items............................... (26,172) (22,348) (18,969)
Realized capital gains and losses......... 1,581 1,846 (778)
Interest credited to contractholder funds. 25,817 26,924 27,233
Increase in life-contingent contract bene-
fits and contractholder funds............ 75,217 103,513 55,233
Increase in deferred acquisition costs.... (6,859) (5,537) (6,850)
Increase in accrued investment income..... (1,493) (2,497) (102)
Change in deferred income taxes........... 257 (2,677) (5,993)
Changes in other operating assets and lia-
bilities................................. (4,234) 3,897 (18,082)
--------- --------- ---------
Net cash provided by operating activi-
ties................................... 84,675 122,643 49,913
--------- --------- ---------
Cash flows from investing activities
Proceeds from sales of fixed income securi-
ties....................................... 28,454 13,526 49,903
Investment collections
Fixed income securities available for
sale..................................... 72,751 30,871 54,796
Fixed income securities held to maturity.. -- 3,067 17,186
Mortgage loans............................ 12,508 6,499 9,744
Investment purchases
Fixed income securities available for
sale..................................... (236,252) (142,205) (137,684)
Fixed income securities held to maturity.. -- (32,046) (38,709)
Mortgage loans............................ (10,325) (9,864) (10,132)
Change in short-term investments, net....... (18,598) (45) 41,528
Change in policy loans, net................. (2,574) (859) (2,133)
--------- --------- ---------
Net cash used in investing activities... (154,036) (131,056) (15,501)
--------- --------- ---------
Cash flows from financing activities
Contractholder fund deposits................ 115,420 76,534 57,468
Contractholder fund withdrawals............. (46,504) (68,412) (92,574)
--------- --------- ---------
Net cash provided by (used in) financing
activities............................. 68,916 8,122 (35,106)
--------- --------- ---------
Net decrease in cash.......................... (445) (291) (694)
Cash at beginning of year..................... 1,472 1,763 2,457
--------- --------- ---------
Cash at end of year........................... $ 1,027 $ 1,472 $ 1,763
========= ========= =========
</TABLE>
See notes to financial statements.
F-5
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS
($ IN THOUSANDS)
1. GENERAL
BASIS OF PRESENTATION
The accompanying financial statements include the accounts of Allstate Life
Insurance Company of New York (the "Company"). The Company is wholly owned by a
wholly owned subsidiary ("Parent") of Allstate Insurance Company ("AIC"), a
wholly owned subsidiary of The Allstate Corporation (the "Corporation"). On
June 30, 1995, Sears, Roebuck and Co. ("Sears") distributed its 80.3% ownership
in the Corporation to Sears common shareholders through a tax-free dividend
(the "Distribution"). These financial statements have been prepared in
conformity with generally accepted accounting principles.
To conform with the 1996 presentation, certain items in the prior years'
financial statements and notes have been reclassified.
NATURE OF OPERATIONS
The Company markets a broad line of life insurance and annuity products in
the State of New York. Life insurance includes traditional products such as
whole life and term life insurance, as well as universal life and other
interest-sensitive life products. Annuities include deferred annuities, such as
variable annuities and fixed rate single and flexible premium annuities, and
immediate annuities such as structured settlement annuities. The Company
distributes its products using a combination of Allstate agents, banks and
other financial institutions, brokers and direct response marketing.
Structured settlement annuity contracts issued by the Company are long-term
in nature and involve fixed guarantees relating to the amount and timing of
benefit payments. In addition, single and flexible premium deferred annuity
contracts issued by the Company are subject to discretionary withdrawal or
surrender by the contractholder, subject to applicable surrender charges. In a
low interest rate environment, funds from maturing investments, particularly
those supporting long-term structured settlement annuity obligations, may be
reinvested at substantially lower interest rates than those which prevailed
when the funds were previously invested.
The Company utilizes various modeling techniques in managing the relationship
between assets and liabilities. The fixed income securities supporting the
Company's obligations have been selected to meet, to the extent possible, the
anticipated cash flow requirements of the related liabilities. The Company
employs strategies to minimize its exposure to interest rate risk and to
maintain investments which are sufficiently liquid to meet obligations to
contractholders in various interest rate scenarios.
The Company monitors economic and regulatory developments which have the
potential to impact its business. There continues to be proposed federal
legislation and regulation that would allow banks greater participation in
securities and insurance businesses, which could present an increased level of
competition for sales of the Company's annuity contracts. Furthermore, the
market for deferred annuities and interest-
F-6
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
($ IN THOUSANDS)
sensitive life insurance is enhanced by the tax incentives available under
current law. Any legislative changes which lessen these incentives are likely
to negatively impact the market for these products.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
INVESTMENTS
Fixed income securities include bonds and mortgage-backed and asset-backed
securities. All fixed income securities are carried at fair value and may be
sold prior to their contractual maturity ("available for sale"). The
difference between amortized cost and fair value, net of deferred income
taxes, certain deferred acquisition costs and reserves for life-contingent
contract benefits, is reflected as a component of shareholder's equity.
Provisions are recognized for declines in the value of fixed income securities
that are other than temporary. Such writedowns are included in realized
capital gains and losses.
Mortgage loans are carried at outstanding principal balance, net of
unamortized premium or discount and valuation allowances. Valuation allowances
are established for impaired loans when it is probable that contractual
principal and interest will not be collected. Valuation allowances for
impaired loans reduce the carrying value to the fair value of the collateral
or the present value of the loan's expected future repayment cash flows
discounted at the loan's original effective interest rate. Valuation
allowances on loans not considered to be impaired are established based on
consideration of the underlying collateral, borrower financial strength,
current and expected future market conditions and other factors.
Short-term investments are carried at cost which approximates fair value.
Policy loans are carried at the unpaid principal balances.
Investment income consists primarily of interest, which is recognized on an
accrual basis. Interest income on mortgage-backed and asset-backed securities
is determined on the effective yield method, based on estimated principal
repayments. Accrual of income is suspended for fixed income securities and
mortgage loans that are in default or when the receipt of interest payments is
in doubt. Realized capital gains and losses are determined on a specific
identification basis.
DERIVATIVE FINANCIAL INSTRUMENTS
The Company utilizes futures contracts which are derivative financial
instruments. When futures meet specific criteria they may be designated as
accounting hedges and accounted for on a deferral basis, depending upon the
nature of the hedge strategy, and the method used to account for the hedged
item.
If, subsequent to entering into a hedge transaction, the future becomes
ineffective (including if the hedged item is sold or otherwise extinguished or
the occurrence of a hedged anticipatory transaction is no longer probable),
the Company terminates the derivative position. Gains and losses on these
terminations are reported in realized capital gains and losses in the period
they occur. The Company may also terminate
F-7
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
($ IN THOUSANDS)
the derivatives as a result of other events or circumstances. Gains and losses
on these terminations are either deferred and amortized over the remaining life
of the hedged item or are reported in shareholder's equity, consistent with the
accounting for the hedged item.
When the Company uses futures as hedging instruments, the derivative must
reduce the primary market risk exposure on an enterprise basis in conjunction
with the hedge strategy; be designated as a hedge at the inception of the
transaction; and be highly correlated with the fair value of, or interest
income or expense associated with, the hedged item at inception and throughout
the hedge period.
Under deferral accounting, gains and losses on derivatives are deferred on
the statement of financial position and recognized in earnings in conjunction
with earnings on the hedged item. The Company accounts for interest rate
futures as hedges using deferral accounting for anticipatory investment
purchases and sales when the criteria discussed above are met. In addition,
anticipated transactions must be probable of occurrence and their significant
terms and characteristics identified.
Changes in fair values of these derivatives are initially deferred as other
liabilities and accrued expenses. Once the anticipated transaction occurs, the
deferred gains or losses are considered part of the cost basis of the asset and
reported net of tax in shareholder's equity or recognized as a gain or loss
from disposition of the asset, as appropriate. The Company reports initial
margin deposits on futures in short-term investments. Fees and commissions paid
on these derivatives are also deferred as an adjustment to the carrying value
of the hedged item.
RECOGNITION OF PREMIUM REVENUES AND CONTRACT CHARGES
Premiums for traditional life insurance are recognized as revenue when due.
Accident and disability premiums are earned on a pro rata basis over the policy
period. Revenues on interest-sensitive life insurance contracts are comprised
of contract charges and fees, and are recognized when assessed against the
policyholder account balance. Revenues on investment contracts include contract
charges and fees for contract administration and surrenders. These revenues are
recognized when levied against the contract balances. Gross premium in excess
of the net premium on limited payment contracts, primarily structured
settlement annuities when sold with life contingencies, are deferred and
recognized over the contract period.
REINSURANCE
Certain premiums and contract benefits are ceded and reflected net of such
cessions in the statements of operations. Reinsurance recoverable and the
related reserves for life-contingent contract benefits are reported separately
in the statements of financial position. The Company continues to have primary
liability as the direct insurer for risks reinsured.
F-8
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
($ IN THOUSANDS)
DEFERRED ACQUISITION COSTS
Certain costs of acquiring life and annuity business, principally agents'
remuneration, premium taxes, certain underwriting costs and direct mail
solicitation expenses are deferred and amortized to income. For traditional
life, limited payment contracts and accident and disability, these costs are
amortized in proportion to the estimated revenues on such business. For
interest-sensitive life insurance and investment contracts, the costs are
amortized in relation to the present value of estimated gross profits on such
business. Changes in the amount or timing of estimated gross profits will
result in adjustments in the cumulative amortization of these costs. To the
extent that unrealized gains or losses on fixed income securities carried at
fair value would result in an adjustment of deferred acquisition costs had
those gains or losses actually been realized, the related unamortized deferred
acquisition costs are recorded as a reduction of the unrealized gains or losses
included in shareholder's equity.
INCOME TAXES
The income tax provision is calculated under the liability method. Deferred
tax assets and liabilities are recorded based on the difference between the
financial statement and tax bases of assets and liabilities and the enacted tax
regulations. The principal assets and liabilities giving rise to such
differences are insurance reserves and deferred acquisition costs. Deferred
income taxes also arise from unrealized capital gains or losses on fixed income
securities carried at fair value.
SEPARATE ACCOUNTS
The Company issues flexible premium deferred variable annuity contracts, the
assets and liabilities of which are legally segregated and reflected in the
accompanying statements of financial position as assets and liabilities of the
Separate Accounts. Assets and liabilities of the Separate Accounts represent
funds of Allstate Life of New York Variable Annuity Account, Allstate Life of
New York Variable Annuity Account II and Allstate Life of New York Separate
Account A ("Separate Accounts"), unit investment trusts registered with the
Securities and Exchange Commission.
Assets of the Separate Accounts are invested in funds of management
investment companies, and are carried at fair value. Investment income and
realized capital gains and losses of the Separate Accounts accrue directly to
the contractholders and, therefore, are not included in the Company's
statements of operations. Revenues to the Company from the Separate Accounts
consist of contract maintenance fees, administration fees and mortality and
expense risk charges.
RESERVES FOR LIFE-CONTINGENT CONTRACT BENEFITS
The reserve for life-contingent contract benefits, which relates to
traditional life insurance, group annuities and structured settlement annuities
with life contingencies, disability insurance and accident
F-9
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
($ IN THOUSANDS)
insurance, is computed on the basis of assumptions as to future investment
yields, mortality, morbidity, terminations and expenses. These assumptions,
which for traditional life insurance are applied using the net level premium
method, include provisions for adverse deviation and generally vary by such
characteristics as type of coverage, year of issue and policy duration. Reserve
interest rates ranged from 4.0% to 9.51% during 1996. To the extent that
unrealized gains on available for sale securities would result in a premium
deficiency had those gains actually been realized, the related increase in
reserves is recorded as a reduction of the unrealized gains included in
shareholder's equity.
CONTRACTHOLDER FUNDS
Contractholder funds arise from the issuance of individual or group contracts
that include an investment component, including most annuities and interest-
sensitive life insurance contracts. Payments received are recorded as interest-
bearing liabilities. Contractholder funds are equal to deposits received and
interest credited to the benefit of the contractholder less withdrawals,
mortality charges and administrative expenses. Credited interest rates on
contractholder funds ranged from 3.1% to 9.75% for those contracts with fixed
interest rates and from 3.55% to 8.42% for those with flexible rates during
1996.
OFF-BALANCE-SHEET FINANCIAL INSTRUMENTS
Commitments to extend mortgage loans have only off-balance-sheet risk because
their contractual amounts are not recorded in the Company's statements of
financial position.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the amounts reported in the financial statements and accompanying
notes. Actual results could differ from those estimates.
3. RELATED PARTY TRANSACTIONS
REINSURANCE
The Company cedes business to the Parent under reinsurance treaties to limit
aggregate and single exposures on large risks. Premiums and policy benefits
ceded totaled $1,383 and $1,662 in 1996, $1,259 and $278 in 1995, and $1,181
and $1,877 in 1994, respectively. Included in the reinsurance recoverable at
December 31, 1996 and 1995 are amounts due from the Parent of $965 and $1,212.
STRUCTURED SETTLEMENT ANNUITIES
AIC, through an affiliate, purchased $15,610, $11,243, and $7,568 of
structured settlement annuities from the Company in 1996, 1995 and 1994,
respectively. Of these amounts, $8,517, $4,164 and $1,221
F-10
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
($ IN THOUSANDS)
relate to structured settlement annuities with life contingencies and are
included in premium income in 1996, 1995 and 1994, respectively. Additionally,
the reserve for life-contingent contract benefits was increased by
approximately 94% of such premium received in each of these years.
BUSINESS OPERATIONS
The Company utilizes services and business facilities owned or leased, and
operated by AIC in conducting its business activities. The Company reimburses
AIC for the operating expenses incurred by AIC on its behalf. The cost to the
Company is determined by various allocation methods and is primarily related to
the level of the services provided. Expenses allocated to the Company were
$23,134, $21,288 and $17,320 in 1996, 1995 and 1994, respectively. A portion of
these expenses related to the acquisition of life and annuity business is
deferred and amortized over the contract period.
4. INVESTMENTS
FAIR VALUES
The amortized cost, gross unrealized gains and losses and fair value for
fixed income securities are as follows:
<TABLE>
<CAPTION>
GROSS UNREALIZED
AMORTIZED ---------------- FAIR
AT DECEMBER 31, 1996 COST GAINS LOSSES VALUE
- -------------------- ---------- -------- ------- ----------
<S> <C> <C> <C> <C>
U.S. government and agencies............ $ 387,806 $ 54,349 $(2,642) $ 439,513
Municipal............................... 36,158 1,883 (406) 37,635
Corporate............................... 734,500 68,022 (4,592) 797,930
Mortgage-backed securities.............. 188,480 6,793 (1,106) 194,167
Asset-backed securities................. 31,211 394 (67) 31,538
---------- -------- ------- ----------
Total fixed income securities......... $1,378,155 $131,441 $(8,813) $1,500,783
========== ======== ======= ==========
<CAPTION>
GROSS UNREALIZED
AMORTIZED ---------------- FAIR
AT DECEMBER 31, 1995 COST GAINS LOSSES VALUE
- -------------------- ---------- -------- ------- ----------
<S> <C> <C> <C> <C>
U.S. government and agencies............ $ 336,331 $ 99,750 $ (526) $ 435,555
Municipal............................... 36,002 2,831 (92) 38,741
Corporate............................... 633,731 92,073 (767) 725,037
Mortgage-backed securities.............. 189,436 11,600 (164) 200,872
Asset-backed securities................. 23,918 770 -- 24,688
---------- -------- ------- ----------
Total fixed income securities......... $1,219,418 $207,024 $(1,549) $1,424,893
========== ======== ======= ==========
</TABLE>
F-11
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
($ IN THOUSANDS)
SCHEDULED MATURITIES
The scheduled maturities for fixed income securities are as follows at
December 31, 1996:
<TABLE>
<CAPTION>
AMORTIZED FAIR
COST VALUE
---------- ----------
<S> <C> <C>
Due in one year or less.................................. $ 16,350 $ 16,842
Due after one year through five years.................... 85,776 89,809
Due after five years through ten years................... 228,717 240,079
Due after ten years...................................... 827,621 928,348
---------- ----------
1,158,464 1,275,078
Mortgage-backed and asset-backed securities.............. 219,691 225,705
---------- ----------
Total.................................................. $1,378,155 $1,500,783
========== ==========
</TABLE>
Actual maturities may differ from those scheduled as a result of prepayments
by the issuers.
NET INVESTMENT INCOME
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------
1996 1995 1994
-------- -------- -------
<S> <C> <C> <C>
Fixed income securities.............................. $104,583 $ 95,212 $88,149
Mortgage loans....................................... 7,113 7,999 8,092
Other................................................ 2,942 2,744 2,246
-------- -------- -------
Investment income, before expense.................. 114,638 105,955 98,487
Investment expense................................. 1,776 1,571 1,576
-------- -------- -------
Net investment income.............................. $112,862 $104,384 $96,911
======== ======== =======
</TABLE>
REALIZED CAPITAL GAINS AND LOSSES
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER
31,
------------------------
1996 1995 1994
------- ------- ------
<S> <C> <C> <C>
Fixed income securities............................... $(1,522) $ 422 $1,570
Mortgage loans........................................ (59) (2,268) (792)
------- ------- ------
Realized capital losses and gains................... (1,581) (1,846) 778
Income taxes........................................ (553) (646) 272
------- ------- ------
Realized capital losses and gains, after tax........ $(1,028) $(1,200) $ 506
======= ======= ======
</TABLE>
F-12
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
($ IN THOUSANDS)
PROCEEDS FROM SALES OF FIXED INCOME SECURITIES
Proceeds from sales of investments in fixed income securities were $28,454,
$13,526 and $49,903 in 1996, 1995 and 1994, respectively. Gross gains of $480,
$172 and $1,743 and gross losses of $2,308, $105 and $973 were realized on
sales of fixed income securities during 1996, 1995 and 1994, respectively.
UNREALIZED NET CAPITAL GAINS
Unrealized net capital gains on fixed income securities included in
shareholder's equity at December 31, 1996 are as follows:
<TABLE>
<CAPTION>
COST/
AMORTIZED UNREALIZED
COST FAIR VALUE NET GAINS
---------- ---------- ----------
<S> <C> <C> <C>
Fixed income securities........................ $1,378,155 $1,500,783 $122,628
========== ==========
Reserves for life insurance policy benefits.... (65,300)
Deferred income taxes.......................... (19,844)
Deferred acquisition costs and other........... (632)
--------
Unrealized net capital gains................. $ 36,852
========
</TABLE>
CHANGE IN UNREALIZED NET CAPITAL GAINS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------
1996 1995 1994
-------- -------- --------
<S> <C> <C> <C>
Fixed income securities.......................... $(82,847) $216,975 $(52,740)
Reserves for life insurance policy benefits...... 24,300 (89,600) --
Deferred income taxes............................ 20,224 (43,779) 17,382
Deferred acquisition costs and other............. 762 (2,292) 3,076
-------- -------- --------
Change in unrealized net capital gains......... $(37,561) $ 81,304 $(32,282)
======== ======== ========
</TABLE>
INVESTMENT LOSS PROVISIONS AND VALUATION ALLOWANCES
Pretax provisions for investment losses, principally relating to other than
temporary declines in value on fixed income securities and valuation allowances
on mortgage loans were $208, $2,448 and $627 in 1996, 1995 and 1994,
respectively.
MORTGAGE LOAN IMPAIRMENT
A mortgage loan is impaired when it is probable that the Company will be
unable to collect all amounts due according to the contractual terms of the
loan agreement.
F-13
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
($ IN THOUSANDS)
The Company had no impaired loans at December 31, 1996. The net carrying
value of impaired loans at December 31, 1995 was $9,647, measured at the fair
value of the collateral. The total investment in impaired mortgage loans before
valuation allowance at December 31, 1995 was $11,581 and the related allowance
on these impaired loans was $1,934.
Activity in the valuation allowance for all mortgage loans for the years
ended December 31, 1996 and 1995 is summarized as follows:
<TABLE>
<CAPTION>
1996 1995
------- -------
<S> <C> <C>
Balance at January 1.................................... $ 1,952 $ 1,179
Additions............................................. 207 1,930
Direct write-downs.................................... (1,934) (1,157)
------- -------
Balance at December 31.................................. $ 225 $ 1,952
======= =======
</TABLE>
Interest income is recognized on a cash basis for impaired loans carried at
the fair value of the collateral, beginning at the time of impairment. For
other impaired loans, interest is accrued based on the net carrying value. The
Company recognized interest income of $281 and $1,398 on impaired loans during
1996 and 1995, respectively, of which $281 and $1,194 was received in cash
during 1996 and 1995, respectively. The average recorded investment in impaired
loans was $5,154 and $8,900 during 1996 and 1995, respectively.
INVESTMENT CONCENTRATION FOR MUNICIPAL BOND AND COMMERCIAL MORTGAGE PORTFOLIOS
AND OTHER INVESTMENT INFORMATION
The Company maintains a diversified portfolio of municipal bonds. The largest
concentrations in the portfolio are presented below. Except for the following,
holdings in no other state exceeded 2.7% of the carrying value of the portfolio
at December 31, 1996:
(% of municipal bond portfolio carrying value)
<TABLE>
<CAPTION>
AT DECEMBER 31,
----------------
1996 1995
------- -------
<S> <C> <C>
Ohio.................................................... 25.9% 26.8%
California.............................................. 24.3 23.1
Illinois................................................ 19.0 19.7
Maryland................................................ 7.8 7.6
Maine................................................... 5.7 5.7
New York................................................ 5.3 5.3
Minnesota............................................... 5.3 5.2
</TABLE>
The Company's mortgage loans are collateralized by a variety of commercial
real estate property types located throughout the United States. Substantially
all of the commercial mortgage loans are non-recourse
F-14
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
($ IN THOUSANDS)
to the borrower. The states with the largest portion of the commercial mortgage
loan portfolio are as listed below. Except for the following, holdings in no
other state exceed 2.3% of the portfolio at December 31, 1996:
(% of commercial mortgage portfolio carrying value)
<TABLE>
<CAPTION>
AT DECEMBER 31,
----------------
1996 1995
------- -------
<S> <C> <C>
California.............................................. 49.1% 56.7%
Illinois................................................ 21.3 22.9
New York................................................ 21.1 11.1
The types of properties collateralizing the commercial mortgage loans are as
follows:
(% of commercial mortgage portfolio carrying value)
<CAPTION>
AT DECEMBER 31,
----------------
1996 1995
------- -------
<S> <C> <C>
Retail.................................................. 39.1% 39.5%
Warehouse............................................... 24.2 32.1
Apartment complex....................................... 14.6 4.5
Office buildings........................................ 14.3 16.0
Industrial.............................................. 6.8 6.9
Other................................................... 1.0 1.0
------- -------
100.0% 100.0%
======= =======
</TABLE>
SECURITIES ON DEPOSIT
At December 31, 1996, fixed income securities with a carrying value of $1,829
were on deposit with regulatory authorities as required by law.
5. FINANCIAL INSTRUMENTS
In the normal course of business, the Company invests in various financial
assets, incurs various financial liabilities and enters into agreements
involving derivative financial instruments and other off-balance-sheet
financial instruments. The fair value estimates of financial instruments
presented below are not necessarily indicative of the amounts the Company might
pay or receive in actual market transactions. Potential taxes and other
transaction costs have not been considered in estimating fair value. The
disclosures that follow do not reflect the fair value of the Company as a whole
since a number of the Company's significant assets (including deferred
acquisition costs and reinsurance recoverables) and liabilities (including
reserve for life-contingent contract benefits and deferred income taxes) are
not
F-15
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
($ IN THOUSANDS)
considered financial instruments and are not carried at fair value. Other
assets and liabilities considered financial instruments, including accrued
investment income and cash, are generally of a short-term nature. It is assumed
that their carrying value approximates fair value.
FINANCIAL ASSETS
<TABLE>
<CAPTION>
CARRYING FAIR
AT DECEMBER 31, 1996 VALUE VALUE
-------------------- ---------- ----------
<S> <C> <C>
Fixed income securities............................ $1,500,783 $1,500,783
Mortgage loans..................................... 84,657 83,789
Short-term investments............................. 25,855 25,855
Policy loans....................................... 25,359 25,359
Separate Accounts.................................. 260,668 260,668
<CAPTION>
AT DECEMBER 31, 1995
--------------------
<S> <C> <C>
Fixed income securities............................ $1,424,893 $1,424,893
Mortgage loans..................................... 86,394 89,517
Short-term investments............................. 7,257 7,257
Policy loans....................................... 22,785 22,785
Separate Accounts.................................. 220,141 220,141
</TABLE>
Carrying value and fair value include the effects of derivative financial
instruments where applicable.
Fair values for fixed income securities are based on quoted market prices
where available. Non-quoted securities are valued based on discounted cash
flows using current interest rates for similar securities. Mortgage loans are
valued based on discounted contractual cash flows. Discount rates are selected
using current rates at which similar loans would be made to borrowers with
similar characteristics, using similar properties as collateral. Loans that
exceed 100% loan-to-value are valued at the estimated fair value of the
underlying collateral. Short-term investments are highly liquid investments
with maturities of less than one year whose carrying value approximates fair
value. The carrying value of policy loans approximates its fair value. Assets
of the Separate Accounts are carried in the statements of financial position at
fair value.
FINANCIAL LIABILITIES
<TABLE>
<CAPTION>
CARRYING FAIR
AT DECEMBER 31, 1996 VALUE VALUE
-------------------- -------- --------
<S> <C> <C>
Contractholder funds on investment contracts........... $421,642 $430,696
Separate Accounts...................................... 260,668 260,668
<CAPTION>
CARRYING FAIR
AT DECEMBER 31, 1995 VALUE VALUE
-------------------- -------- --------
<S> <C> <C>
Contractholder funds on investment contracts........... $366,481 $392,111
Separate Accounts...................................... 220,141 220,141
</TABLE>
F-16
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
($ IN THOUSANDS)
The fair value of contractholder funds on investment contracts is based on
the terms of the underlying contracts. Reserves on investment contracts with
no stated maturities (single premium and flexible premium deferred annuities)
are valued at the account balance less surrender charges. The fair value of
immediate annuities and annuities without life contingencies with fixed terms
is estimated using discounted cash flow calculations based on interest rates
currently offered for contracts with similar terms and durations. Separate
Accounts liabilities are carried at the fair value of the underlying assets.
DERIVATIVE FINANCIAL INSTRUMENTS
The Company primarily uses derivative financial instruments to reduce its
exposure to interest rate risk in conjunction with asset/liability management.
The Company does not hold or issue these instruments for trading purposes. The
following table summarizes the contract or notional amount, credit exposure,
fair value and carrying value of the Company's derivative financial
instruments:
<TABLE>
<CAPTION>
CONTRACT/NOTIONAL CREDIT CARRYING FAIR
AT DECEMBER 31, 1996 AMOUNT EXPOSURE VALUE VALUE
-------------------- ----------------- -------- -------- -----
<S> <C> <C> <C> <C>
Financial futures contracts..... $ 6,700 $-- $266 $ 56
<CAPTION>
AT DECEMBER 31, 1995
--------------------
<S> <C> <C> <C> <C>
Financial futures contracts..... $22,900 $-- $576 $--
</TABLE>
The contract or notional amounts are used to calculate the exchange of
contractual payments under the agreements and are not representative of the
potential for gain or loss on these agreements.
Credit exposure represents the Company's potential loss if all of the
counterparties failed to perform under the contractual terms of the contracts
and all collateral, if any, became worthless. This exposure is represented by
the fair value of contracts with a positive fair value at the reporting date
reduced by the effect, if any, of master netting agreements.
The Company manages its exposure to credit risk by utilizing highly rated
counterparties, establishing risk control limits, executing legally
enforceable master netting agreements and obtaining collateral where
appropriate. To date, the Company has not incurred any losses on derivative
financial instruments due to counterparty nonperformance.
Fair value is the estimated amount that the Company would receive (pay) to
terminate or assign the contracts at the reporting date, thereby taking into
account the current unrealized gains or losses of open contracts. Deal and
exchange quotes are available for the Company's derivatives.
Financial futures are commitments to either purchase or sell designated
financial instruments at a future date for a specified price or yield. They
may be settled in cash or through delivery. As part of its
F-17
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
($ IN THOUSANDS)
asset/liability management, the Company generally utilizes futures contracts to
manage its market risk related to fixed income securities and anticipatory
investment purchases and sales. Futures used as hedges of anticipatory
transactions pertain to identified transactions which are probable to occur and
are generally completed within ninety days. Futures contracts have limited off-
balance-sheet credit risk as they are executed on organized exchanges and
require security deposits, as well as the daily cash settlement of margins.
Market risk is the risk that the Company will incur losses due to adverse
changes in market rates and prices. Market risk exists for all of the
derivative financial instruments that the Company currently holds, as these
instruments may become less valuable due to adverse changes in market
conditions. The Company mitigates this risk through established risk limits set
by senior management. In addition, the change in the value of the Company's
derivative financial instruments designated as hedges are generally offset by
the change in the value of the related assets.
OFF-BALANCE-SHEET FINANCIAL INSTRUMENTS
Commitments to extend mortgage loans are agreements to lend to a customer
provided there is no violation of any condition established in the contract.
The Company enters these agreements to commit to future loan fundings at a
predetermined interest rate. Commitments generally have fixed expiration dates
or other termination clauses. Commitments to extend mortgage loans, which are
secured by the underlying properties, are valued based on estimates of fees
charged by other institutions to make similar commitments to similar borrowers.
At December 31, 1996, the Company had $6,190 in mortgage loan commitments which
had a fair value of $62. No such commitments existed at December 31, 1995.
6. INCOME TAXES
Consolidated federal income tax returns are filed by the Corporation and its
eligible subsidiaries, including the Company. Tax liabilities and benefits
realized by the consolidated group are allocated as generated by the respective
entities.
Prior to the Distribution, the Corporation and all of its domestic
subsidiaries, including the Company, (the "Allstate Group") joined with Sears
and its domestic business units (the "Sears Group") in the filing of a
consolidated federal income tax return (the "Sears Tax Group") and were parties
to a federal income tax allocation agreement (the "Tax Sharing Agreement").
Under the Tax Sharing Agreement, the Company, through the Corporation, paid to
or received from the Sears Group the amount, if any, by which the Sears Tax
Group's federal income tax liability was affected by virtue of inclusion of the
Company in the consolidated federal income tax return. Effectively, this
resulted in the Company's annual income tax provision being computed as if the
Company filed a separate return, except that items such as net operating
losses, capital losses or similar items, which might not be recognized in a
separate return, were allocated according to the Tax Sharing Agreement.
F-18
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
($ IN THOUSANDS)
The Allstate Group and Sears Group have entered into an agreement which
governs their respective rights and obligations with respect to federal income
taxes for all periods prior to the Distribution ("Consolidated Tax Years"). The
agreement provides that all Consolidated Tax Years will continue to be governed
by the Tax Sharing Agreement with respect to the Company's federal income tax
liability.
The components of the deferred income tax assets and liabilities at December
31, 1996 and 1995 are as follows:
<TABLE>
<CAPTION>
AT DECEMBER 31,
------------------
1996 1995
-------- --------
<S> <C> <C>
DEFERRED ASSETS
Life-contingent contract reserves.................. $ 27,951 $ 25,562
Difference in tax bases of investments............. 270 1,536
Loss on disposal of discontinued operations........ 375 376
Other postretirement benefits...................... 524 496
Other assets....................................... 1,789 1,701
-------- --------
Total deferred assets............................ 30,909 29,671
-------- --------
DEFERRED LIABILITIES
Unrealized net capital gains....................... (19,844) (40,069)
Deferred acquisition costs......................... (14,020) (12,655)
Prepaid commission expense......................... (717) (578)
Other liabilities.................................. (20) (28)
-------- --------
Total deferred liabilities....................... (34,601) (53,330)
-------- --------
Net deferred liability........................... $ (3,692) $(23,659)
======== ========
</TABLE>
The components of income tax expense are as follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------
1996 1995 1994
------- ------- -------
<S> <C> <C> <C>
Current......................................... $11,411 $12,588 $15,172
Deferred........................................ 257 (2,677) (5,993)
------- ------- -------
Total income tax expense...................... $11,668 $ 9,911 $ 9,179
======= ======= =======
</TABLE>
The Company paid income taxes of $11,968, $11,000 and $27,682 in 1996, 1995
and 1994, respectively, to the Parent. The Company had an income tax
recoverable from the Parent of $105 at December 31, 1996, and an income tax
payable of $1,729 at December 31, 1995.
F-19
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
($ IN THOUSANDS)
Prior to January 1, 1984, the Company was entitled to exclude certain amounts
from taxable income and accumulate such amounts in a "policyholder surplus"
account. The balance in this account at December 31, 1996, approximately $389,
will result in taxes payable of $136 if distributed by the Company to the
Parent. No provision for taxes has been made as the Company has no plan to
distribute amounts from this account. No further additions to the account are
allowed under the Tax Reform Act of 1984.
7. STATUTORY FINANCIAL INFORMATION
The following tables reconcile net income and shareholder's equity as
reported herein in conformity with generally accepted accounting principles
with statutory net income and capital and surplus, determined in accordance
with statutory accounting practices prescribed or permitted by insurance
regulatory authorities:
<TABLE>
<CAPTION>
NET INCOME
YEAR ENDED DECEMBER 31,
-------------------------
1996 1995 1994
------- ------- -------
<S> <C> <C> <C>
Balance per generally accepted accounting
principles.................................. $20,561 $19,522 $18,221
Deferred acquisition costs................. (6,859) (5,537) (6,850)
Deferred income taxes...................... 257 (2,677) (5,993)
Non-admitted assets and statutory reserves. 6,224 12,786 6,900
Other postretirement and postemployment
benefits.................................. (34) 71 105
Other...................................... (2,004) (965) (1,442)
------- ------- -------
Balance per statutory accounting practices... $18,145 $23,200 $10,941
======= ======= =======
</TABLE>
<TABLE>
<CAPTION>
SHAREHOLDER'S
EQUITY
AT DECEMBER 31,
------------------
1996 1995
-------- --------
<S> <C> <C>
Balance per generally accepted accounting princi-
ples............................................... $233,067 $250,067
Deferred acquisition costs........................ (61,559) (53,944)
Deferred income taxes............................. 3,692 23,659
Unrealized net capital gains...................... (57,102) (114,500)
Non-admitted assets and statutory reserves........ 48,426 43,624
Other postretirement and postemployment benefits.. 968 1,058
Other............................................. (2,473) (1,667)
-------- --------
Balance per statutory accounting practices.......... $165,019 $148,297
======== ========
</TABLE>
F-20
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
($ IN THOUSANDS)
PERMITTED STATUTORY ACCOUNTING PRACTICES
The Company prepares its statutory financial statements in accordance with
accounting principles and practices prescribed or permitted by the New York
Department of Insurance. Prescribed statutory accounting practices include a
variety of publications of the National Association of Insurance
Commissioners, as well as state laws, regulations and general administrative
rules. Permitted statutory accounting practices encompass all accounting
practices not so prescribed. The Company does not follow any permitted
statutory accounting practices that have a material effect on statutory
surplus or risk-based capital.
DIVIDENDS
The ability of the Company to pay dividends is dependent on business
conditions, income, cash requirements of the Company and other relevant
factors. Under New York Insurance Law, a notice of intention to distribute any
dividend must be filed with the New York Superintendent of Insurance not less
than 30 days prior to the distribution. Such proposed declaration is subject
to the Superintendent's disapproval.
8. BENEFIT PLANS
PENSION PLANS
Defined benefit pension plans, sponsored by the Corporation, cover domestic
full-time employees and certain part-time employees. Benefits under the
pension plans are based upon the employee's length of service, average annual
compensation and estimated social security retirement benefits. The
Corporation's funding policy for the pension plans is to make annual
contributions in accordance with accepted actuarial cost methods. The costs to
the Company included in net income were $490, $446, and $344 for the pension
plans in 1996, 1995 and 1994, respectively.
POSTRETIREMENT BENEFITS OTHER THAN PENSIONS
The Corporation provides certain health care and life insurance benefits for
retired employees. Qualified employees may become eligible for these benefits
if they retire in accordance with the Corporation's established retirement
policy and are continuously insured under the Corporation's group plans or
other approved plans for 10 or more years prior to retirement. The Corporation
shares the cost of the retiree medical benefits with retirees based on years
of service with the Corporation's share being subject to a 5% limit on annual
medical cost inflation after retirement. The Corporation's postretirement
benefit plans currently are not funded. The Corporation has the right to
modify or terminate these plans.
F-21
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS--(CONCLUDED)
($ IN THOUSANDS)
PROFIT SHARING FUND
Employees of the Corporation and its domestic subsidiaries are also eligible
to become members of The Savings and Profit Sharing Fund of Allstate Employees
("Allstate Plan"). The Corporation contributions are based on the
Corporation's matching obligation and performance. The Allstate Plan includes
an Employee Stock Ownership Plan ("Allstate ESOP") to pre-fund a portion of
the Corporation's anticipated contribution. The Allstate Plan and the Allstate
ESOP split from The Savings and Profit Sharing Fund of Sears Employees ("Sears
Plan") on the date of the Distribution. In connection with this, the
Corporation paid Sears $327 million, and in return received a note from the
Allstate ESOP for a like principal amount and 50% of the unallocated shares.
The Corporation will make contributions to the Allstate ESOP annually in the
amount necessary to allow the Allstate ESOP to fund interest and principal
payments on the note after considering the dividends paid on ESOP shares,
which are available for debt service. The Company's defined contribution to
the Allstate Plan was $111 and $141 in 1996 and 1995, respectively. The cost
to the Company prior to the Distribution and the split from the Sears Plan was
$123 in 1994.
F-22
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
SCHEDULE IV--REINSURANCE
($ IN THOUSANDS)
<TABLE>
<CAPTION>
GROSS NET
YEAR ENDED DECEMBER 31, 1996 AMOUNT CEDED AMOUNT
- ---------------------------- ---------- -------- ----------
<S> <C> <C> <C>
Life insurance in force......................... $9,962,300 $553,628 $9,408,672
========== ======== ==========
Premiums and contract charges:
Life and annuities............................ $ 114,296 $ 1,398 $ 112,898
Accident and health........................... 5,044 834 4,210
---------- -------- ----------
$ 119,340 $ 2,232 $ 117,108
========== ======== ==========
<CAPTION>
GROSS NET
YEAR ENDED DECEMBER 31, 1995 AMOUNT CEDED AMOUNT
- ---------------------------- ---------- -------- ----------
<S> <C> <C> <C>
Life insurance in force......................... $8,513,295 $398,025 $8,115,270
========== ======== ==========
Premiums and contract charges:
Life and annuities............................ $ 146,732 $ 1,246 $ 145,486
Accident and health........................... 3,731 901 2,830
---------- -------- ----------
$ 150,463 $ 2,147 $ 148,316
========== ======== ==========
<CAPTION>
GROSS NET
YEAR ENDED DECEMBER 31, 1994 AMOUNT CEDED AMOUNT
- ---------------------------- ---------- -------- ----------
<S> <C> <C> <C>
Life insurance in force......................... $7,598,374 $321,623 $7,276,751
========== ======== ==========
Premiums and contract charges:
Life and annuities............................ $ 87,562 $ 1,193 $ 86,369
Accident and health........................... 3,276 1,005 2,271
---------- -------- ----------
$ 90,838 $ 2,198 $ 88,640
========== ======== ==========
</TABLE>
F-23
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
SCHEDULE V--VALUATION AND QUALIFYING ACCOUNTS
($ IN THOUSANDS)
<TABLE>
<CAPTION>
BALANCE AT CHARGED TO BALANCE AT
BEGINNING COSTS AND END OF
DESCRIPTION OF PERIOD EXPENSES DEDUCTIONS PERIOD
- ----------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Year Ended December 31, 1996
Allowance for estimated losses on
mortgage loans.................. $1,952 $ 207 $1,934 $ 225
Year Ended December 31, 1995
Allowance for estimated losses on
mortgage loans.................. $1,179 $2,170 $1,397 $1,952
Year Ended December 31, 1994
Allowance for estimated losses on
mortgage loans.................. $2,297 $ 667 $1,785 $1,179
</TABLE>
F-24
<PAGE>
APPENDIX A
MARKET VALUE ADJUSTMENT 1
The Market Value Adjustment is based on the following:
I= the effective annual Interest Crediting Rate for that Guarantee Period;
N = the number of complete days from the withdrawal to the end of the
Guarantee Period; and
J= the current initial or current renewal interest rate credited for a
withdrawal from an initial or renewal guarantee period, respectively, on
the date the withdrawal request is received for a Guarantee Period of
duration N. If a Guarantee Period of duration N is not currently being
offered, J will be determined by linear interpolation (weighted average)
between the two nearest periods being offered. If N is less than or equal
to 365 days, J will be the rate for a Guarantee Period of duration 365.
For any withdrawal, if J is not available, J will be equal to the most
recent Moody's Corporate Bond Yield Average--Monthly Average Corporates
(for the applicable duration) as published by Moody's Investor Services,
Inc. In the event that the Moody's Corporate Bond Yield Average--Monthly
Average Corporates is no longer available, a suitable replacement index,
subject to the approval of the New York Insurance Department, would be
utilized.
The Market Value Adjustment factor is determined from the following
formula:
[.9 x (I-J) x (N/365)].
The amount withdrawn less any applicable Preferred Withdrawal Amount will be
multiplied by the Market Value Adjustment factor to determine the Market Value
Adjustment.
ILLUSTRATION
EXAMPLE OF MARKET VALUE ADJUSTMENT
<TABLE>
<S> <C>
Purchase Payment: .................................................. $10,000
Guarantee Period: .................................................. 5 years
Interest Rate: ..................................................... 4.50%
</TABLE>
<TABLE>
<S> <C>
Full Surrender: ......................................... End of Contract Year 3
</TABLE>
NOTE: This illustration assumes that premium taxes were not applicable.
EXAMPLE 1: (Assumes declining interest rates)
Step 1: Calculate Account Value at End of Contract Year 3.
= 10,000.00 X (1.045)/3/ = $11,411.66
Step 2: Calculate The Amount Withdrawn in Excess of the Preferred Withdrawal
Amount.
Amount Withdrawn: 11,411.66
Preferred Withdrawal Amount: .10 X 10,000.00 = 1,000.00
Amount Withdrawn in Excess of the Preferred Withdrawal Amount:
= 11,411.66 - 1,000.00 = $10,411.66
A-1
<PAGE>
Step 3: Calculate the Withdrawal Charge.
.0225 (represents 1/2 of interest crediting rate of .045) X 10,411.66 = $234.26
Step 4: Calculate the Market Value Adjustment.
I = 4.50%
J = 4.20%
N = 730 days
Market Value Adjustment Factor: .9 X (I - J) X (N/365)
= .9 X (.045 - .042) X (730/365) = .0054
Market Value Adjustment = Factor X Amount in Excess of Preferred Withdrawal
Amount.
= .0054 X 10,411.66 = $56.22
Step 5: Calculate The Net Surrender Value at End of Contract Year 3.
11,411.66 - 234.26 + 56.22 = $11,233.62
EXAMPLE 2: (Assumes rising interest rates)
Step 1: Calculate Account Value at End of Contract Year 3.
= 10,000.00 X (1.045)/3/ = $11,411.66
Step 2: Calculate The Amount Withdrawn in Excess of the Preferred Withdrawal
Amount.
Amount Withdrawn: 11,411.66
Preferred Withdrawal Amount: .10 X 10,000.00 = 1,000.00
Amount Withdrawn in Excess of the Preferred Withdrawal Amount:
= 11,411.66 - 1,000.00 = $10,411.66
Step 3: Calculate the Withdrawal Charge.
.0225 X 10,411.66 = $234.26
Step 4: Calculate the Market Value Adjustment.
I = 4.50%
J = 4.80%
N = 730 days
Market Value Adjustment Factor: .9 X (I - J) X (N/365)
= .9 X (.045 - .048) X (730/365) = -.0054
Market Value Adjustment = Factor X Amount in Excess of Preferred Withdrawal
Amount.
= -.0054 X 10,411.66 = --$56.22
Step 5: Calculate The Net Surrender Value at End of Contract Year 3.
11,411.66 - 234.26 - 56.22 = $11,121.18
A-2
<PAGE>
PART II
Information Not Required In Prospectus
Item 13. Other Expenses of Issuance and Distribution.
Pursuant to Item 511 of Regulation S-K, the Registrant hereby
represents that the following expenses totaling approximately
$24,500 will be incurred or are anticipated to be incurred in
connection with the issuance and distribution of the securities to
be registered: registration fees -$ 0; cost of printing and
engraving - $19,000; legal fees - $5,000; and accounting fees -
$500. All amounts are estimated.
Item 14. Indemnification of Directors and Officers.
Incorporated herein by reference to the previously filed Form S-1
Registration Statement of Allstate Life Insurance Company of New
York, File No. 33-47245.
Item 15. Recent Sales of Unregistered Securities.
Not applicable.
Item 16. Exhibits and Financial Statement Schedules.
Exhibit No. Description
- ----------- -----------
(1) Underwriting Agreement*
(2) Not Applicable
(3) (i) Certificate of Incorporation**
(ii) By-Laws**
(4) Allstate Life Insurance Company of New York Single Premium Deferred
Annuity Contract and Application
(5) Opinion of General Counsel re: Legality
(6) Not Applicable
(7) Not Applicable
(8) Not Applicable
(9) Not Applicable
(10) Reinsurance Agreement between Allstate Life Insurance Company of
New York and Allstate Life Insurance Company
(11) Not Applicable
(12) Not Applicable
(14) Not Applicable
(15) Not Applicable
(16) Not Applicable
(21) Not Applicable
(23)(a) Consent of Independent Public Accountants
(23)(b) Consent of Attorneys
(24) Powers of Attorney
(25) Not Applicable
(26) Not Applicable
(27) Financial Data Schedule***
(28) Not Applicable
(99) Form of Resolution of Board of Directors
* Previously filed with Form S-1 Registration Statement, File No. 33-47245
dated April 15, 1992.
** Previously filed in Form N-4 Registration Statement No 33-65381 dated
September 20, 1996.
*** Previously filed in Registrant's Form 10-K filed on March 31, 1997.
<PAGE>
Item 17. Undertakings.
The undersigned registrant, Allstate Life Insurance Company of New
York, hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration
statement:
(i) To include any Prospectus required by section 10(a)(3)
of the Securities Act of 1933;
(ii) To reflect in the Prospectus any facts or events arising
after the effective date of the registration statement
(or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a
fundamental change in the information set forth in the
registration statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof;
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant, Allstate Life Insurance
Company of New York, 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 registrant of
expenses incurred or paid by a director, officer or controlling
person of 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>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant, has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, and its seal to be hereunto affixed and
attested, all in the Township of Northfield, State of Illinois, on the 26th of
March, 1997.
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
(Registrant)
By: /s/ MICHAEL J. VELOTTA
-----------------------
Michael J. Velotta
Vice President, Secretary
and General Counsel
(SEAL)
Attest: /s/ BRENDA D. SNEED
--------------------
Brenda D. Sneed
Assistant Vice President
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following Directors and Officers of
Allstate Life Insurance Company of New York on this 26th of March, 1997.
SIGNATURE TITLE
--------- -----
**/LOUIS G. LOWER II President and Chairman of the Board of
- -------------------- Directors
Louis G. Lower II (Principal Executive Officer)
/s/ MICHAEL J. VELOTTA Vice President, Secretary,
- ---------------------- General Counsel and Director
Michael J. Velotta
*/SHARMAINE M. MILLER Chief Administrative Officer
- ---------------------- and Director
Sharmaine M. Miller
*/PETER H. HECKMAN Vice President
- -------------------
Peter H. Heckman
*/KAREN C. GARDNER Vice President
- -------------------
Karen C. Gardner
*/THOMAS A. MCAVITY Vice President
- --------------------
Thomas A. McAvity
**/TIMOTHY H. PLOHG Vice President and Director
- -------------------
Timothy H. Plohg
*/KEVIN R. SLAWIN Vice President and Director
- ------------------ (Principal Financial Officer)
Kevin R. Slawin
**/MARCIA D. ALAZRAKI Director
- ---------------------
Marcia D. Alazraki
**/JOSEPH F. CARLINO Director
- --------------------
Joseph F. Carlino
**/CLEVELAND JOHNSON JR. Director
- ------------------------
Cleveland Johnson Jr.
**/PHILLIP E. LAWSON Director
- --------------------
Phillip E. Lawson
**/GERARD F. MCDERMOTT Director
- ----------------------
Gerard F. McDermott
**/JOSEPH P. MCFADDEN Director
- ---------------------
Joseph P. McFadden
**/JOHN R. RABEN, JR. Director
- ---------------------
John R. Raben, Jr.
**/THEODORE A. SCHNELL Director
- ---------------------
Theodore A. Schnell
**/SALLY A. SLACKE Director
- ------------------
Sally A. Slacke
**/JAMES P. ZILS Treasurer
- ---------------
James P. Zils
**/CASEY J. SYLLA Chief Investment Officer
- ----------------
Casey J. Sylla
*/KEITH A. HAUSCHILDT Assistant Vice President
- ---------------------- and Controller
Keith A. Hauschildt (Chief Accounting Officer)
*/ By Michael J. Velotta, pursuant to Power of Attorney filed herewith.
**/ By Michael J. Velotta, pursuant to Power of Attorney previously filed.
<PAGE>
INDEX TO EXHIBITS
The following exhibits are filed herewith:
(1) Underwriting Agreement*
(2) Not Applicable
(3) (i) Certificate of Incorporation**
(ii) By-Laws**
(4) Allstate Life Insurance Company of New York Single Premium Deferred
Annuity Contract and Application
(5) Opinion of General Counsel re: Legality
(6) Not Applicable
(7) Not Applicable
(8) Not Applicable
(9) Not Applicable
(10) Reinsurance Agreement between Allstate Life Insurance Company of
New York and Allstate Life Insurance Company
(11) Not Applicable
(12) Not Applicable
(14) Not Applicable
(15) Not Applicable
(16) Not Applicable
(21) Not Applicable
(23)(a) Consent of Independent Public Accountants
(23)(b) Consent of Attorneys
(24) Powers of Attorney
(25) Not Applicable
(26) Not Applicable
(27) Financial Data Schedule***
(28) Not Applicable
(99) Form of Resolution of Board of Directors
* Previously filed in Form S-1 Registration Statement, File No. 33-47245 dated
April 15, 1992.
** Previously filed in Form N-4 Registration Statement, File No. 33-65381 dated
September 20, 1996.
*** Previously filed in Registrant's Form 10-K filed on March 31, 1997.
<PAGE>
EXHIBIT 4
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
SINGLE PREMIUM DEFERRED
ANNUITY CONTRACT
Allstate Life Insurance Company of New York, A Stock Company,
Home Office: P. O. Box 9095, Farmingville, New York 11738-9095
This Contract is issued in consideration of the application and the purchase
payment. Allstate Life Insurance Company of New York will pay the benefits of
this Contract, subject to its terms and conditions.
Throughout this Contract, "you" and "your" refer to the Contract's owner(s).
"We", "us" and "our" refer to Allstate Life Insurance Company of New York.
This single premium deferred annuity provides a cash withdrawal benefit and a
death benefit during the accumulation phase and periodic income payments
beginning on the payout start date during the payout phase.
This Contract does not pay dividends.
This Contract contains a market value adjustment provision which may result in
an upward or a downward adjustment to the amount distributed. The cash
withdrawal benefit will be adjusted by a market value adjustment if the
withdrawal occurs before the end of a guarantee period. No adjustment applies
during the 10 days following the end of a guarantee period.
PLEASE READ YOUR CONTRACT CAREFULLY
This policy is a legal Contract between the policyholder and the insurer.
Return Privilege
If you are not satisfied with this Contract for any reason, you may return it to
us within 10 days after you receive it. We will refund the purchase payment to
you.
/s/ Michael J. Velotta /s/ Louis G. Lower, II
Secretary President
Flexible Premium Deferred Annuity Contract
Page 1
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Table of Contents
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ANNUITY DATA................................................................ 3
THE PEOPLE INVOLVED......................................................... 4
ACCUMULATION PHASE.......................................................... 5
PAYOUT PHASE................................................................ 8
INCOME PAYMENT TABLES....................................................... 9
GENERAL PROVISIONS.......................................................... 10
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<TABLE>
<CAPTION>
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ANNUITY DATA
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<S> <C>
CONTRACT NUMBER:........................................................44444444
ISSUE DATE:.........................................................July 1, 1991
PURCHASE PAYMENT:......................................................$6,000.00
OWNER:..................................................................John Doe
........................................................................Jane Doe
ANNUITANT:..............................................................John Doe
AGE AT ISSUE:............................................................35
SEX:...................................................................Male
JOINT ANNUITANT:........................................................Mary Doe
AGE AT ISSUE:............................................................35
SEX:.................................................................Female
PAYOUT START DATE:..................................................July 1, 2041
MINIMUM GUARANTEED RATE:....................................................3.0%
GUARANTEE PERIOD:........................................................3 Years
GUARANTEE PERIOD ENDING DATE:.......................................July 1, 1994
ALLOCATION AMOUNT:.....................................................$6,000.00
INTEREST CREDITING RATE FOR GUARANTEE PERIOD:..............................6.50%
</TABLE>
<TABLE>
<CAPTION>
RELATIONSHIP
BENEFICIARY TO OWNER PERCENTAGE
- ----------- ------------ ----------
<S> <C> <C>
Jeff Doe Son 100%
</TABLE>
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PEOPLE INVOLVED
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Owner. The person named at the time of application is(are) the owner (joint
owners) of this Contract unless subsequently changed. As owner, you will
receive any periodic income payments.
You may exercise all rights stated in this Contract, subject to the rights of
any irrevocable beneficiary.
You may change the owner or beneficiary while the annuitant is alive. You may
not, however, change the annuitant. Once we have received a satisfactory written
request for an owner or beneficiary change, the change will take effect as of
the date you signed it. We are not liable for any payment we make or other
action we take before receiving any written request from you.
The owner will receive the death benefit upon the death of the annuitant, who is
not also an owner.
You may not assign an interest in this Contract as collateral or security for a
loan. Other than stated previously, you may assign benefits under this Contract
prior to the payout start date. No beneficiary may assign benefits under the
Contract until they are due to them. We are not bound by an assignment unless it
is signed by you and filed with us. We are not responsible for the validity of
an assignment.
If the owner is more than one person:
. owner as used in this Contract is defined as all people named as owners,
unless otherwise indicated;
. any request to exercise ownership rights must be signed by all owners; and
. on the death of the first person who is an owner, the new owner shall be the
surviving person[s] named as the owner.
Annuitant. The annuitant must be a natural person. The annuitant's life may
affect the timing or amount of the payout under this Contract. The owner is the
annuitant unless a different annuitant has been named.
Beneficiary. The beneficiary becomes the new owner if the sole surviving owner
dies prior to the payout start date.
If the sole surviving owner dies after the payout start date, the beneficiary
will receive any guaranteed income payments scheduled to continue.
We will determine the beneficiary from the most recent written request we have
received from you. If you do not name a beneficiary or if the beneficiary named
is no longer living, the beneficiary will be:
. your spouse if living; otherwise
. your children equally if living; otherwise
. your estate.
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ACCUMULATION PHASE
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Accumulation Phase Defined. The accumulation phase is the first of two phases
in the life of your Contract. The accumulation phase begins on the issue date
stated on the Annuity Data page. This phase will continue until the payout start
date unless the Contract is terminated before that date.
Guarantee Period. You choose the length of the first guarantee period from the
choices offered at the time of purchase. The guarantee periods will be offered
at our discretion and may range from one to ten years.
A notice will be mailed 35 days prior to the expiry of a guarantee period
directing you to select a renewal guarantee period. If we do not receive a
selection by the expiry of the guarantee period, a one year renewal guarantee
period will automatically be established. Renewal guarantee period crediting
rates will be set at the time of renewal.
Account Value. Your account value is equal to the funds allocated to the
guarantee period plus interest credited thereon. Any withdrawals will affect
your account value.
Interest Credited. Interest will be credited daily using the effective annual
interest rate declared by us for that particular guarantee period at the time
the guarantee period is established. Interest will be credited to the purchase
payment from the issue date. "Effective annual rate" is defined as the yield
resulting when interest credited at the underlying daily rate has compounded for
a full year. Interest rates will be declared periodically for each guarantee
period then being offered. The declared rates will be greater than or equal to
the minimum guaranteed rate shown on the Annuity Data Page.
Partial Withdrawal or Surrender. You have the right to make a partial
withdrawal or full surrender at any time during the accumulation phase.
If a withdrawal is made prior to the end of a guarantee period, a market value
adjustment will be applied. In addition, the amount you receive will reflect the
deduction of any applicable withdrawal charge and taxes.
Any partial withdrawal must be at least $100. If any partial withdrawal reduces
the account value of your Contract to less than $1000, we will treat the request
as a full surrender of the entire account value and the Contract will terminate.
If you surrender your Contract, we will pay you its account value adjusted by
any applicable market value adjustment, less any applicable withdrawal charges
and taxes. Upon surrender, the Contract will terminate.
During the first ten days of a renewal guarantee period, any amount withdrawn
will not incur withdrawal charges or market value adjustments, nor will it
reflect any interest earned during this period.
Preferred Withdrawal Amount. A withdrawal amount not subject to withdrawal
charges and market value adjustments will be available in each contract year for
each initial and renewal guarantee period. The preferred withdrawal amount for
an initial guarantee period is 10% of the amount of the initial guarantee
period's purchase payment. The preferred withdrawal amount for a renewal
guarantee period is 10% of the amount of the funds allocated to the renewal
guarantee period.
Any preferred withdrawal amount not withdrawn in a contract year may not be
carried over to increase the preferred withdrawal amount in a subsequent
contract year.
The contract year is defined as beginning on the anniversary date of the
establishment of the guarantee period.
Preferred withdrawal amounts may be subject to tax or penalty imposed by the
Internal Revenue Service.
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Market Value Adjustment. If money is withdrawn prior to the end of an initial
or renewal guarantee period, an adjustment will be made prior to distribution.
The market value adjustment may be either positive or negative and will be based
on the following:
I = the interest crediting rate for that guarantee period;
N = the number of complete days from the date the withdrawal request is
received to the end of the guarantee period; and
J = the current initial or current renewal interest rate credited for a
withdrawal from an initial or renewal guarantee period, respectively,
on the date the withdrawal request is received, for a guarantee period
of duration N. If a guarantee period of duration N is not currently
being offered, J will be determined by linear interpolation (weighted
average) between the two nearest periods being offered. If N is less
than or equal to 365 days, J will be the rate for a guarantee period of
duration 365.
For any withdrawal, if J is not available, J will be equal to the most
recent Moody's Corporate Bond Yield Average - Monthly Average
Corporates (for the applicable duration) as published by Moody's
Investor Services, Inc. In the event that the Moody's Corporate Bond
Yield Average - Monthly Average Corporates is no longer available, a
suitable replacement index, subject to the approval of the New York
Insurance Department, would be utilized.
The market value adjustment factor is determined from the following formula:
9 x [I - J] x [N / 365]
The amount withdrawn in excess of the preferred withdrawal amount will be
multiplied by the result of the adjustment factor to determine the market value
adjustment.
Withdrawal Charge. A withdrawal charge will be applied to a withdrawal during
the initial guarantee period.
Withdrawal charges will be the lesser of:
[a] one half the interest crediting rate for the guarantee period
multiplied by the amount withdrawn in excess of the preferred
withdrawal amount; or
[b] interest earned on the amount withdrawn.
The withdrawal charge will not exceed 10%, reduced by 1% for every year the
contract is inforce, multiplied by the sum of (1) the amount withdrawn and (2)
the market value adjustment.
No withdrawal charge will be applied to a withdrawal following the end of the
initial guarantee period.
Taxes. Any premium taxes or other applicable taxes imposed on amounts relating
to this Contract may be deducted from the purchase payment or the account value
when the tax is incurred or at a later time.
Return of Purchase Payment Guarantee. If you surrender this Contract, you will
receive an amount at least equal to the purchase payment less any prior partial
withdrawals.
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Death of Owner or Annuitant. If any owner or annuitant dies prior to the payout
start date, a death benefit may be paid.
If an owner dies (first owner's death) prior to the payout start date, the new
owner (any surviving joint owner(s) or if none, the beneficiary) may elect,
within 60 days of the date of death, to receive the death benefit in a lump sum
or apply the death benefit to an income plan. Payments from the income plan must
begin within one year of the date of death and must be over the life of the new
owner, or a period not to exceed the life expectancy of the new owner.
If no election is made within 60 days of the date of death, the new owner may
elect to receive the settlement value payable in a lump sum within five years of
the date of death. Any remaining settlement value will be distributed at the end
of the five year period. An annuitant is necessary to continue the Contract
between the date of the owner's death and the final distribution. If there is no
annuitant at that time, the new annuitant will be the youngest new owner.
If the new owner is the surviving spouse of the deceased owner, then the spouse
may continue the Contract in the accumulation phase as if the death had not
occurred. If there is no annuitant at that time, the new annuitant will be the
surviving spouse. The surviving spouse may also select one of the options listed
above.
If the new owner is a non-natural person, then the owner must receive a lump sum
payment, and the options listed above are not available. If we receive due proof
of death within 60 days of the date of death, a death benefit will be paid.
Otherwise, a settlement value will be paid.
If the annuitant, not also an owner, dies prior to the payout start date, then
the owner may elect within 60 days of the date of death, to receive the death
benefit in a lump sum, or apply the death benefit to an income plan. Otherwise,
the settlement value will be paid in a lump sum. The options listed above are
not available.
This section is intended to comply with Internal Revenue Code Section 72(s),
pertaining to required distributions upon death. The new owner is considered the
designated beneficiary as referred to in Internal Revenue Code Section 72(s).
Death Benefit. The death benefit is the greater of:
[a] the account value, or
[b] the settlement value
We will calculate the value of the death benefit as of the date we receive a
complete request for payment of the death benefit. A complete request includes
due proof of death.
Settlement Value. The settlement value is the account value adjusted by any
applicable market value adjustment, less any applicable withdrawal charges and
taxes.
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PAYOUT PHASE
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Payout Phase Defined. The payout phase is the second of the two phases in the
life of your Contract. During this phase the account value is applied to the
income plan you choose and is paid out as provided in that plan.
The payout phase begins on the payout start date. It continues until we make
the last payment as provided by the income plan chosen.
Payout Start Date. The anticipated payout start date is shown on the Annuity
Data page. You may change the payout start date by writing to us at least 30
days prior to the payout start date.
The payout start date must be on or before the later of:
. the annuitant's 85th birthday; or
. the 10th anniversary of this Contract's issue date.
Unless changed as described above, we will use the payout start date shown on
the Annuity Data page.
Income Plans. An income plan distributes payments on a scheduled basis. The
account value on the payout start date, less any applicable tax, will be applied
to your income plan choice from the following list:
1. Life Income with Guaranteed Payments. We will make payments to you for as
long as the annuitant lives. If the annuitant dies before all guaranteed
payments have been made, we will continue to pay you the remainder of the
guaranteed payments.
2. Joint and Survivor Life Income with Guaranteed Payments. We will make
payments to you for as long as either the annuitant named by you or any joint
annuitant, named at the time of income plan selection, lives. If both the
annuitant and the joint annuitant die before all guaranteed payments have
been made, we will continue to pay you the remainder of the guaranteed
payments.
3. Guaranteed Payments for a Specified Period. We will make payments beginning
on the payout start date for a specified period. These payments do not depend
on the annuitant's life. The number of months guaranteed may be from 60 to
360.
We reserve the right to accept other income plans.
Payout Terms and Conditions. The income payments are subject to the following
terms and conditions:
. If we do not receive a written choice of an income plan from you at least 30
days before the payout start date, the income plan will be life income with
120 months guaranteed.
. If you choose an income plan which depends on any person's life, we may
require proof of age and sex before income payments begin.
. We may require proof that the annuitant or joint annuitant is still alive
before we make each payment that depends on their continued life.
. After the account value has been applied to an income plan on the payout
start date, the income plan cannot be changed and no withdrawals can be
made.
. If any owner dies during the payout phase, income payments will continue as
scheduled.
. If the account value is less than $2,000, or not be enough to provide an
initial payment of at least $20, we reserve the right to:
. change the payment frequency to make the payment at least $20; or
. terminate the Contract and pay you the account value in a lump sum.
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INCOME PAYMENT TABLES
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Income payments will be not be less than the amount determined by applying the
account value less applicable taxes to a current single premium immediate
annuity issued by us. Income payments will be at least the amount shown in the
tables below, less any federal taxes which are required to be withheld. The
Income Payment Tables are based on 3.0% interest and the 1983 Table a Annuity
Mortality Tables. The age(s) of the annuitant and any joint annuitant at his or
her last birthday on or prior to the payout start date will be set back one year
for each six full years between January 1, 1983 and the payout start date.
Income payments not shown in this section will be determined on a basis
consistent with that used to determine those that are shown.
<TABLE>
<CAPTION>
Income Plan 1 - Life Income with 120 Months Guaranteed
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Monthly Income Payment for each $1,000 Applied to this Income Plan
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Annuitant's Male Female Annuitant's Male Female Annuitant's Male Female
Age Age Age
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<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
35 $3.43 $3.25 49 $4.15 $3.82 63 $5.52 $4.97
36 3.47 3.28 50 4.22 3.88 64 5.66 5.09
37 3.51 3.31 51 4.29 3.94 65 5.80 5.22
38 3.55 3.34 52 4.37 4.01 66 5.95 5.35
39 3.60 3.38 53 4.45 4.07 67 6.11 5.49
40 3.64 3.41 54 4.53 4.14 68 6.27 5.64
41 3.69 3.45 55 4.62 4.22 69 6.44 5.80
42 3.74 3.49 56 4.71 4.29 70 6.61 5.96
43 3.79 3.53 57 4.81 4.38 71 6.78 6.13
44 3.84 3.58 58 4.92 4.46 72 6.96 6.31
45 3.90 3.62 59 5.02 4.55 73 7.13 6.50
46 3.96 3.67 60 5.14 4.65 74 7.31 6.69
47 4.02 3.72 61 5.26 4.75 75 7.49 6.88
48 4.08 3.77 62 5.39 4.86
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Income Plan 2 - Joint and Survivor Life Income with 120 Months Guaranteed
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Male Monthly Income Payment for each $1,000 Applied to this Income Plan
Annuitant's -------------------------------------------------------------------------------------------------
Age
Female Annuitant's Age
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35 40 45 50 55 60 65 70 75
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35 $3.09 3.16 3.23 3.28 3.32 3.36 3.39 3.40 3.42
40 3.13 3.22 3.31 3.39 3.46 3.51 3.56 3.59 3.61
45 3.17 3.28 3.39 3.50 3.60 3.69 3.76 3.81 3.85
50 3.19 3.32 3.45 3.60 3.74 3.87 3.98 4.07 4.14
55 3.21 3.35 3.51 3.68 3.87 4.06 4.23 4.37 4.48
60 3.23 3.37 3.55 3.75 3.98 4.23 4.47 4.70 4.88
65 3.24 3.39 3.57 3.80 4.07 4.37 4.71 5.04 5.34
70 3.24 3.40 3.59 3.83 4.13 4.48 4.90 5.36 5.81
75 3.25 3.41 3.61 3.86 4.17 4.56 5.04 5.61 6.22
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<PAGE>
Income Plan 3 - Guaranteed Payments for a Specified Period
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Specified Period Monthly Income Payment for each
$1,000 Applied to this Income Plan
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10 Years $ 9.61
11 Years 8.86
12 Years 8.24
13 Years 7.71
14 Years 7.26
15 Years 6.87
16 Years 6.53
17 Years 6.23
18 Years 5.96
19 Years 5.73
20 Years 5.51
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</TABLE>
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GENERAL PROVISIONS
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The Entire Contract. The entire contract consists of this Contract, any
attached application, and any attached endorsements.
All statements made in written applications are representations and not
warranties. No statement will be used by us in defense of a claim or to void a
Contract unless it is included in a written application.
Only our officers may change the Contract or waive a right or requirement. No
other individual may do this. Any such change or waiver must be in a written
endorsement and will be subject to approval by the Superintendent of Insurance
of the State of New York.
We may not modify this Contract without your consent, except to make it comply
with any changes in the Internal Revenue Code or as required by any other
applicable law.
Incontestability. We will not contest the validity of this Contract after the
issue date.
Misstatement of Age or Sex. If any age or sex has been misstated, we will pay
the amounts which would have been paid at the correct age and sex.
If we find the misstatement of age or sex after the income payments begin, we
will:
. pay all amounts underpaid including interest; or
. stop payments until the total payments are equal to the corrected amount
plus due interest.
For purposes of the Misstatement of Age or Sex provision, due interest will be
calculated at an effective annual rate of 6%.
Annual Statement. At least once a year, prior to the payout start date, we will
send you a statement containing account value information. The information
presented will comply with any applicable law.
Settlements. We may require that this Contract be returned to us prior to any
settlement. We must receive due proof of death of the owner or annuitant prior
to settlement of a death claim. Due proof of death is one of the following:
. a certified copy of a death certificate; or
. a certified copy of a decree of a court of competent jurisdiction as to a
finding of death; or
. any other proof acceptable to us.
Any cash surrender or death benefit under this Contract will not be less than
the minimum benefits required by any New York statute.
Deferment of Payments. We reserve the right to defer payment of any partial
withdrawal or full surrender for up to six months after the date you request it.
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Allstate Life Insurance Company of New York
(herein called "we" or "us")
Amendatory Endorsement for IRA Plans
The following provisions are added to your Contract and will take precedence
over any other provision to the contrary in your Contract:
1. The owner of this Contract must be the annuitant.
2. You may not:
a. transfer;
b. sell;
c. assign;
d. discount; or
e. pledge
this Contract for any purpose.
3. Your rights in this Contract are nonforfeitable. This Contract is for the
exclusive benefit of you and your beneficiaries.
4. Except as described below, the annual purchase payment under the Contract
shall not exceed the lesser of $2,000 or 100% of compensation. In the case
of a spousal IRA, the maximum contribution shall not exceed the lesser of
$2,250 or 100% of compensation, but no more than $2,000 can be paid to
either spouse's IRA. The exceptions are:
a. The above limits shall not apply to "rollover contributions" as that
term is described in Sections 402(a)(5), 402(a)(6), 402(a)(7),
403(a)(4), 403(b)(8) and 408(d)(3) of the Internal Revenue Code.
b. In addition to any amounts you contribute, your employer can contribute
annually up to the lesser of 15% of your compensation or $30,000 under
408(k) of the Internal Revenue Code.
c. Any or all of the above contribution limits shall change in step with
changes to such limits in the Internal Revenue Code.
5. Your entire interest must be or begin to be distributed by April 1 following
the calendar year in which you reach age 70 1/2. You must take distributions
in accordance with the requirements of Section 401(a)(9) of the Internal
Revenue Code, including the incidental death benefit requirements of Section
401(a)(9)(G) of the Code, and the regulations thereunder, including the
minimum distribution incidental benefit requirement of Section 1.401(a)(9)-2
of the Proposed Income Tax Regulations. The distribution may be made in a
single sum or in periodic payments over:
a. your life; or
b. the lives of you and your "designated beneficiary"; or
c. a period certain not extending beyond your life expectancy; or
d. a period certain not extending beyond the life expectancy of you and
your "designated beneficiary".
For purposes of this endorsement "designated beneficiary" is the natural
person that you name prior to the payout start date.
For the purpose of the distribution rules described in this section,
payments must be made in periodic payments at intervals of no longer than
one year. In addition, payments must be either nonincreasing or they may
increase only as provided in Q&A F-3 of Section 1.401(a)(9)-1 of the
Proposed Income Tax Regulations.
6. The minimum amount you are required to receive for any tax year is at
least equal to:
a. the value of the Contract at the end of the prior year; divided by
b. your life expectancy (or the joint life and last survivor expectancy of
you and your "designated beneficiary") using the age(s) as of your
birthday(s) in that year.
7. If your spouse is not the "designated beneficiary":
a. the minimum amount you are required to receive beginning with the
first calendar year for which distributions are required is:
1) the value of the Contract at the end of the prior year; divided by
2) the lesser of:
<PAGE>
a) the applicable life expectancy; or
b) the applicable divisor contained in Q & A -4 in 1.401(a)(9)-2 of
the Proposed Income Tax Regulations.
b. if payments are made in the form of a period certain annuity, the maximum
period certain at the required beginning date is defined in 1.401(a)(9)-
2.
c. if the payments are made in the form of a joint and survivor annuity, the
payment to the survivor must not exceed the applicable percentage as
defined in 1.401(a)(9)-2.
8. For purposes of calculating the minimum annual distribution from this
Contract, life expectancies are determined by the return multiples contained
in Tables V and VI of Section 1.72-9 of the Income Tax Regulations. Life
expectancies of you and your spouse (if your spouse is the "designated
beneficiary") may be recalculated annually. The life expectancy of a non-
spousal "designated beneficiary" may not be redetermined.
Your life expectancy and any spousal "designated beneficiary's" life
expectancy will be redetermined annually using 1.72-9 unless you elect
otherwise prior to the start of the required distributions.
If you elect not to have life expectancies redetermined annually, then life
expectancies will be calculated only once, at the time of the first payment,
and will thereafter decrease at the rate of 1 year per year elapsed. If
made, this election is irrevocable and will apply to all subsequent years.
9. If you die before distribution has begun and your beneficiary is your
surviving spouse, your spouse must elect one of the following forms of
distribution:
a. a life annuity; or
b. one or more certain payments over a period no longer than his/her own
life expectancy; or
c. treat the account as his/her own IRA.
If the form of distribution elected is a. or b. above, equal or
substantially equal payments will be made over your spouse's life or life
expectancy. The form of distribution must be elected within five years after
your death or the calendar year in which you would have attained age 70 1/2,
whichever is earlier. If the form of distribution is a. or b. above,
payments must commence within one year of your death or the year in which
you would have attained age 70 1/2, whichever is later. If your surviving
spouse makes a regular IRA contribution to the account, makes a rollover to
or from the account, or fails to elect any of the three forms of
distribution listed above, c. is automatically assumed. Any amount paid to a
child of the owner will be treated as if it were paid to the surviving
spouse if the remainder of the interest becomes payable to the surviving
spouse when the child reaches age of majority.
10. If you die before distribution has begun and your beneficiary is not your
surviving spouse, the beneficiary must either:
a. start receiving, within one year of your death, equal or substantially
equal payments over the life or life expectancy of your beneficiary; or
b. have the proceeds totally distributed within five years of your death.
11. For the purpose of the distribution rules described in the two preceding
sections, the payments to be received by your beneficiary will be computed
using the return multiples specified in section 1.72-9 of the Income Tax
Regulations. Life expectancies of a surviving spousal beneficiary may be
recalculated annually. The life expectancy of a non-spousal beneficiary may
not be redetermined.
If the beneficiary is your spouse, his/her life expectancy will be
redetermined annually using Table V and VI of Section 1.72-9 unless he/she
elects otherwise prior to the start of the required distributions.
If your spouse is the beneficiary and does not elect to have life
expectancies redetermined annually, or if your beneficiary is not your
spouse, then life expectancies will be calculated only once, at the time of
the first payment, and will thereafter decrease at the rate of 1 year per
year elapsed. If made, this election is irrevocable and will apply to all
subsequent years.
Distributions made in accordance with this section are considered to have
begun if distributions are made on account of your beneficiary reaching his
or her required beginning date or if prior to the required beginning date
distributions irrevocably begin for your beneficiary over a period permitted
and in an annuity form acceptable under Section 1.401(a)(9) of the Proposed
Income Tax Regulations.
12. If you die after distribution has begun, any remaining payments shall
continue to be paid to your beneficiaries at least as rapidly as under the
method of distribution in effect.
13. We will issue annual reports containing account value information.
/s/ Michael J. Velotta /s/ Louis G. Lower, II
Secretary President
<PAGE>
Allstate Life Insurance Company of New York
(herein called "we" or "us")
Amendatory Endorsement for Unisex Plans
All references to sex are deleted from your contract.
The Income Payment Tables show the initial monthly income payment per $1,000
of cash value applied for each of the income plans listed in the Payout Phase
section. The tables below are to be used in place of "Income Plan 1 - Life with
120 Months Guaranteed" and "Income Plan 2 - Joint and Survivor Life Income with
120 Months Guaranteed" tables in the Income Payment Tables section. The Unisex
Income Payment Tables below are based on 3% interest and an 80% female, 20% male
blend of the sex distinct 1983 Table a Annuity Mortality Tables with the
following age adjustment. The age(s) of the annuitant and any joint annuitant
at his or her last birthday on or prior to the payout start date will be set
back one year for each six full years between January 1, 1983 and the payout
start date. Income payments for ages not shown in this section will be
determined on a basis consistent with that used to determine those that are
shown.
Income Plan 1 - Life with 120 Months Guaranteed
<TABLE>
<CAPTION>
===================================================================
First Income Payment for each $1,000 of Cash Value
- -------------------------------------------------------------------
Annuitant's Age Amount Annuitant's Amount Annuitant's Amount
Age Age Age
- -------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
35 $3.29 49 $3.89 63 $5.08
36 3.32 50 3.95 64 5.20
37 3.35 51 4.01 65 5.34
38 3.38 52 4.08 66 5.47
39 3.42 53 4.15 67 5.61
40 3.46 54 4.22 68 5.77
41 3.50 55 4.30 69 5.93
42 3.54 56 4.37 70 6.09
43 3.58 57 4.47 71 6.26
44 3.63 58 4.55 72 6.44
45 3.68 59 4.64 73 6.63
46 3.73 60 4.75 74 6.81
47 3.78 61 4.85 75 7.00
48 3.83 62 4.97
===================================================================
</TABLE>
Income Plan 2 - Joint and Survivor Life Income with 120 Months Guaranteed
<TABLE>
<CAPTION>
====================================================================
First Income Payment for each $1,000 of Cash Value
Annuitant's
Age
-----------------------------------------------------
Joint Annuitants's Age
- --------------------------------------------------------------------
35 40 45 50 55 60 65 70 75
- --------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
35 $3.07 3.12 3.17 3.20 3.23 3.25 3.26 3.27 3.28
40 3.12 3.20 3.26 3.32 3.36 3.39 3.42 3.44 3.45
45 3.17 3.26 3.35 3.44 3.51 3.56 3.60 3.63 3.65
50 3.20 3.32 3.44 3.55 3.66 3.75 3.82 3.87 3.91
55 3.23 3.36 3.51 3.66 3.81 3.95 4.07 4.16 4.22
60 3.25 3.39 3.56 3.75 3.95 4.15 4.34 4.49 4.61
65 3.26 3.42 3.60 3.82 4.07 4.34 4.61 4.86 5.07
70 3.27 3.44 3.63 3.87 4.16 4.49 4.86 5.24 5.57
75 3.28 3.45 3.65 3.91 4.22 4.61 5.07 5.57 6.08
====================================================================
</TABLE>
/s/ Michael J. Velotta /s/ Louis G. Lower, II
Secretary President
<PAGE>
Allstate Life Insurance Company of New York
(herein called "we" or "us")
Amendatory Endorsement for Section 403(b) Annuities
This CONTRACT is changed as follows:
1. The owner of this contract must be the ANNUITANT.
2. You may not:
a. transfer;
b. sell;
c. assign;
d. discount; or
e. pledge
this CONTRACT either as collateral for a loan or as security for the
performance of an obligation or for any other purpose, to any person but us.
3. Account balances accruing after December 31, 1986 must begin to be paid out
by the April 1 after the calendar year in which you reach age 70 1/2. The
distribution may be made in a single sum or in periodic payments. The
payments must be over:
a. your life;
b. the lives of you and your beneficiary;
c. a period certain not extending beyond your life expectancy; or
d. a period certain not extending beyond the life expectancy of you and
your beneficiary.
The minimum amount you are required to receive for any tax year is:
a. the value of the CONTRACT at the end of the prior year, divided by;
b. your life expectancy (or the joint and last survivor expectancy of you
and your beneficiary) using the age(s) as of your birthday(s) in that
year.
4. Life expectancies are determined by the return multiples contained in 1.72-9
of the Income Tax Regulations. Your life expectancy or your spouse's life
expectancy may be redetermined annually using 1.72-9. However, the life
expectancy of a beneficiary who is not your spouse is determined by 1.72-9
only once - at the time of the first payment - and thereafter decreases at
the rate of one year per year elapsed.
5. For account balances accruing after December 31, 1988 distributions of
contributions made under a salary reduction agreement may only occur upon:
a. attainment of age 59 1/2;
b. separation from service;
c. death;
<PAGE>
d. disability (as defined in Internal Revenue Code Section 72(m)(7)), which
states an individual shall be considered to be disabled if he is unable
to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment with can be expected to
result in death or to be of long-continued and indefinite duration. An
individual shall not be considered to be disabled unless he furnishes
proof of the existence thereof in such form and manner as the Secretary
of the Treasury may require); or
e. hardship (as defined in Regulation Section 1.401(k)-1(d)(2)).
In the case of hardship distributions:
1) Income due to these contributions cannot be withdrawn; and
2) The plan must contain provisions allowing hardship withdrawals and
may define hardship more restrictively than the Internal Revenue Code
Regulations. In the event that the provisions of the plan are
inconsistent with the Internal Revenue Code and Regulations, then the
plan provisions are controlling.
For the purpose of this endorsement, "account balances" includes:
1. any contributions to the CONTRACT after the specified date:
a. December 31, 1986; or
b. December 31, 1988
whichever is applicable; and
2. all earnings credited to the CONTRACT after the specified date.
You are permitted to directly rollover to an eligible retirement plan (i.e.,
IRA, 401(a), or 403(b)) all or a portion of any eligible rollover distribution
which you receive. In the case of an eligible rollover distribution to your
surviving spouse, an eligible retirement plan is limited to an IRA.
An eligible rollover distribution is any distribution from your account except:
1. one of a series of payments pursuant to a life or a joint life income option,
or
2. one of a series of payments pursuant to a period certain income option based
on your life expectancy (or joint life expectancy of you and your designated
beneficiary), or
3. one of a series of substantially equal periodic payments for a specified
period of ten years or more, or
4. one that qualifies as a required minimum distribution as defined by section
401(a)(9) of the Internal Revenue Code.
/s/ Michael J. Velotta /s/ Louis G. Lower, II
Secretary President
<PAGE>
Market Value Adjusted Annuity
Issued by Allstate Life Insurance Company of New York
Send Application to: Allstate Life Insurance Company of New York, P.O. Box 9095,
Farmingville, New York 11738-9095
- --------------------------------------------------------------------------------
1. Total Purchase Payment
$_____________________
- --------------------------------------------------------------------------------
2. Annuity Plan (check only one plan)
[_] Custom Annuity for __________ (1-10) years.
[_] Custom Growth & Income Annuity for ________ (5-10) years.
(2 contracts will be issued.)
- --------------------------------------------------------------------------------
3. Federal Withholding Election
Do you wish to have Federal Income Tax
withheld from your annuity payments?
[_] Yes [_] No
- --------------------------------------------------------------------------------
4. Owner(s) [_] Male [_] Female (mm / dd / yy)
Name________________________ Soc. Sec. No._______________ Birthdate_________
Address_______________________ City___________________ State____ Zip________
[_] Male [_] Female
Name________________________ Soc. Sec. No._______________ Birthdate_________
Address_______________________ City___________________ State____ Zip________
- --------------------------------------------------------------------------------
5. Annuitant (Leave blank if Annuitant same as sole Owner or if this annuity
will be part of an IRA, 403(b), or SEP.) (Defining life only, not entitled
to benefits.)
[_] Male [_] Female Relationship to Owner_________________________
Name________________________ Soc. Sec. No._______________ Birthdate_________
Address_______________________ City___________________ State____ Zip________
- --------------------------------------------------------------------------------
6. Beneficiary(ies) (Entitled to benefits upon last Owner's death.)
Name______________________________ Relationship to Owner___________________
Name______________________________ Relationship to Owner___________________
- --------------------------------------------------------------------------------
7. Replacement Will this annuity replace or change any existing annuity or life
insurance? [_] Yes [_] No
(If yes, complete the following.)
Company_____________________________________ Policy No._____________________
Cost basis amount___________________________ Policy Date____________________
Intended to qualify as a 1035 exchange? [_] Yes [_] No (If yes, attach copy
of signed Absolute Assignment form.)
- --------------------------------------------------------------------------------
8. Tax Qualified Plan [_] Yes [_] No (If yes, complete the following)
[_] IRA Rollover [_] IRA Transfer [_] 401(a)(pension)
[_] 403(b)(TSA) [_] SEP/Year of Contribution _______ (Attach Form 5305)
[_] Other ________
- --------------------------------------------------------------------------------
9. Special Instructions
- --------------------------------------------------------------------------------
A copy of this Application signed by the Agent will be the receipt for the
purchase payment. If this Application is declined, Allstate Life Insurance
Company of New York ("Allstate") will have no liability except to return the
purchase payment.
I have read the above statements and represent that they are complete and
true to the best of my knowledge and belief. I agree that this Application shall
be a part of the Contract issued by Allstate. Allstate may add to or correct the
Application in the space labeled "Home Office Endorsement." By accepting the
Contract issued, I agree to any additions or corrections to this Application.
Allstate will obtain written agreement from me for any change in the benefits,
type of plan, or birth dates.
I UNDERSTAND THAT WITHDRAWALS AND SURRENDERS MAY BE SUBJECT TO A MARKET
VALUE ADJUSTMENT IF EXERCISED PRIOR TO THE END OF A RATE GUARANTEE PERIOD. I
ALSO ACKNOWLEDGE RECEIPT OF THE CURRENT PROSPECTUS FOR THIS PRODUCT.
Signed at___________________________________________________ Date___/___/___
City State
Signature(s) of Owner(s)________________________________________________________
- --------------------------------------------------------------------------------
Home Office Endorsement
- --------------------------------------------------------------------------------
Agent Use Only Do you have any reason to believe that the Contract(s) applied
for is (are) to replace or change any existing annuity or life insurance?
[_] YES [_] NO
Agent's Signature______________________________________________ Quote #_________
Branch/Agent No.___________ Phone Number (___)___________ Transaction#_________
- --------------------------------------------------------------------------------
NYLR151 40764 9/94
- --------------------------------------------------------------------------------
AGENT INSTRUCTIONS FOR USING THIS APP TO PURCHASE MULTIPLE CONTRACTS:
. Indicate the total purchase payment in box 1 above.
. Indicate the amount to be allocated to each contract in box 9 above.
- --------------------------------------------------------------------------------
<PAGE>
EXHIBIT 5
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
LAW AND REGULATION DEPARTMENT
3100 Sanders Road, J5B
Northbrook, Illinois 60062
Direct Dial Number 708 402-5173
Facsimile 708 402-4371
Michael P. Duncan Please direct reply to:
Vice President, Secretary Post Office Box 3005
and General Counsel Northbrook, Illinois 60065-3005
November 12, 1992
TO: Allstate Life Insurance Company of New York
Huntington Station, New York 11746
FROM: Michael P. Duncan, Vice President
Secretary and General Counsel
RE: Form S-1, Pre-Effective Amendment to the Registration Statement
under the Securities Act of 1933
With reference to the Pre-Effective Amendment to the Registration Statement
on Form S-1 filed by Allstate Life Insurance Company of New York with the
Securities and Exchange Commission covering Individual and Group Market Value
Adjusted Deferred Annuity Contracts ("Contracts"), I have examined such
documents and such law as I have considered necessary and appropriate, and on
the basis of such examination, it is my opinion that:
1. Allstate Life Insurance Company of New York is duly organized and
existing under the laws of the State of New York and has been duly
authorized to do business and to issue the Contracts by the
Superintendent of Insurance of the State of New York.
2. The Contracts covered by the above Registration Statement have been or
will be approved and authorized by the Superintendent of Insurance of
the State of New York and when issued will be valid, legal and binding
obligations of Allstate Life Insurance Company of New York.
I hereby consent to the filing of this opinion as an exhibit to the above
Registration Statement and to the use of my name under the caption "Legal
Matters" in the Prospectus constituting a part of the Registration Statement.
Sincerely,
/s/Michael P. Duncan
-------------------------
Michael P. Duncan
Vice President, Secretary
and General Counsel
<PAGE>
REINSURANCE AGREEMENT
between the
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
called the "Ceding Company", and
ALLSTATE LIFE INSURANCE COMPANY
called the "Accepting Company"
ARTICLE I
BASIS OF REINSURANCE
--------------------
1. The Ceding Company's excess of Life, Waiver of Premium and Accidental
Death Benefit insurance issued on policies subject to reinsurance, as shown on
Schedule C, shall be reinsured with the Accepting Company. At the option of the
Ceding Company, applications for reinsurance may be on a facultative basis or
reinsurance may be ceded to the Accepting Company automatically as hereinafter
provided.
2. The liability of the Accepting Company shall begin simultaneously with
that of the ceding Company and in no event shall the reinsurance of the
Accepting Company be in force and binding unless the policy issued by the Ceding
Company to the insured is in force.
Automatic Reinsurance
3. When the Ceding Company retains its maximum limit of retention on a
standard or substandard risk, as shown on Schedule A attached hereto, it shall
cede and the Accepting Company shall accept automatically reinsurance of Life,
Waiver of Premium and Accidental Death Benefit insurance within the limits shown
on Schedule A.
4. If the Ceding Company has for its own account its maximum limit of
retention on a standard or substandard risk under previously issued policies
and, therefore, is not retaining any portion of the insurance applied for in
connection with the current application, Life, Waiver of Premium and Accidental
Death Benefit reinsurance may be ceded automatically to the Accepting Company
for amounts within the limits shown on Schedule A.
1
<PAGE>
5. Reinsurance shall not be ceded automatically to the Accepting Company
on any life if the sum of the amount of insurance already in force on the life
and the amount applied for currently, in the Ceding Company and all other
companies, is known to be in excess of the amounts shown on Schedule A.
Facultative Reinsurance
6. Applications for reinsurance of amounts in excess of those provided on
Schedule A may be submitted for reinsurance upon a facultative basis. To submit
a risk for reinsurance upon a facultative basis, the Ceding Company shall file
an application for such reinsurance together with such underwriting data as may
be required by the Accepting Company.
ARTICLE II
PLAN OF REINSURANCE
-------------------
Life reinsurance shall be upon the yearly renewable term plan for the
amount reinsured on a policy issued by the Ceding Company.
ARTICLE III
REINSURANCE PREMIUMS
--------------------
1. Life reinsurance under this Agreement shall be on a non-refund basis.
The consideration to be paid to the Accepting Company for Life reinsurance shall
be at the rates shown on Schedule B attached hereto. The rates on Schedule B
are guaranteed except where such rates are less than 1958 SCO one-year term net
premiums at 3%, in which case such SCO net premiums are guaranteed.
2. The consideration to be paid the Accepting Company for reinsurance of
Waiver of Premium and Accidental Death benefits shall be as shown on Schedule B.
While premiums are being waived, the Ceding Company will not be required to pay
Premium Waiver reinsurance premiums but will be required to continue paying
premiums for the life reinsurance and accidental death reinsurance in force on
the insured.
ARTICLE IV
PREMIUM ACCOUNTING
------------------
1. Within 15 (fifteen) days after the end of each calendar quarter, the
Ceding Company shall send the Accepting Company a list of all policies reinsured
2
<PAGE>
under this agreement and in force at the end of such calendar quarter. The list
will indicate amounts of insurance in force and will be used by the Accepting
Company to compute the premium due for such calendar quarter. The Accepting
Company may, solely for convenience in computing the premium, assume that the
retention limits as shown on Schedule A are applicable on a per policy basis
rather than a per life basis.
2. Within 20 (Twenty) days after receipt of a billing statement, the
Ceding Company shall remit to the Accepting Company the premiums due for
reinsurance in force during such calendar quarter.
3. Except as provided in Article V. (Oversight), the payment of
reinsurance premiums shall be a condition to the liability of the Accepting
Company under reinsurance covered by this Agreement. In the event of non-
payment of reinsurance premiums, the Accepting Company shall have the right to
terminate the reinsurance for all policies having reinsurance premiums in
arrears. If the Accepting Company elects to exercise its right of termination,
it shall give the Ceding Company 30 (Thirty) days' notice of its intention to
terminate such reinsurance; and if all reinsurance premiums in arrears,
including any which may become in arrears during the 30-day period, are not paid
before the expiration of such period, the Accepting Company shall thereupon be
relieved of future liability with respect to all policies for which reinsurance
premiums remain unpaid. The reinsurance so terminated may be reinstated at any
time within 60 (Sixty) days of the date of termination upon payment of all
reinsurance premiums in arrears; but in the event of such reinstatement, the
Accepting Company shall have no liability in connection with any claims incurred
between the date of termination and the date of reinstatement of the
reinsurance. The Accepting Company's right to terminate reinsurance as herein
provided shall be without prejudice to its right to collect premiums for the
period reinsurance was in force prior to the expiration of the 30-day notice
period.
ARTICLE V
OVERSIGHTS
----------
The Accepting Company shall be bound as the Ceding Company is bound, and it
is expressly understood and agreed that it nonpayment of premiums within the
time specified, failure to reinsure or failure to comply with any terms of this
contract is shown to be unintentional and the result of misunderstanding or
oversight on the part of either the Ceding Company or the Accepting Company,
both the Ceding Company and the Accepting Company shall be restored to the
position they would have occupied had no such error or oversight occurred.
3
<PAGE>
ARTICLE VI
EXPENSES
--------
The Ceding Company shall bear the expense of all medical examinations,
inspection fees, and other charges incurred in connection with the original
policy.
ARTICLE VII
REDUCTIONS
----------
If any portion of the insurance carried by the Ceding Company on a
life reinsured hereunder shall be terminated, the amount of reinsurance carried
by the Ceding Company on that life shall be reduced by a like amount as of the
date and time of the termination of the original insurance; if the amount of
insurance terminated exceeds the total amount of reinsurance carried by the
Ceding Company on the life, all such reinsurance shall be terminated. In the
interpretation of this Article, (a) the maturity of an endowment policy or the
expiration of a term policy shall be considered as a termination of insurance;
and (b) in no case shall the Ceding Company be required to assume a risk for an
amount in excess of its regular retention limit for the age at issue and
mortality rating of the policy under which reinsurance is being terminated.
ARTICLE VIII
INCREASE IN RETENTION
---------------------
The Ceding Company shall have the right to recapture any part of the
reinsurance in force at any time. However, recapture must apply uniformly by
increasing the maximum limits of retention as shown in Schedule A.
ARTICLE IX
EXTENDED AND PAID UP INSURANCE
------------------------------
In case the original policy of the Ceding Company shall lapse and
extended or paid upon insurance be granted in accordance with its provisions,
the Ceding Company shall retain its full retention, as shown on Schedule A, on
the life insured. Only amounts in excess of such retention shall be reinsured
under this Agreement.
4
<PAGE>
ARTICLE X
SETTLEMENT OF CLAIMS
--------------------
1. The Accepting Company shall be liable to the Ceding Company for
the benefits covered by reinsurance hereunder to the same extent as the Ceding
Company is liable to the insured for such benefits, and all reinsurance shall be
subject to the terms and conditions of the particular form of policy under which
the Ceding Company shall be liable. It is understood and agreed, however, that
payment of a death claim by the Accepting Company shall be made in one lump sum
regardless of the mode of settlement under the policy of the Ceding Company.
2. Whenever a claim is made under a policy of the ceding Company
which has been reinsured hereunder, it shall be taken and considered by the
Accepting Company to be a claim for the amount of reinsurance on such risk, and
the Accepting Company shall abide the issue as it shall be settled by the Ceding
Company and shall pay the amount of reinsurance covered by the policy of
reinsurance when the Ceding Company shall settle with the claimant.
3. Any suit or claim may be contented or compromised by the Ceding
Company; and in case of a reduction of the claim made upon the Ceding Company,
the Accepting Company and the Ceding Company shall participate in such reduction
in the ratio that each company's net liability bore to the total net liability
prior to the reduction of the claim. Any unusual expenses incurred by the
Ceding Company in defending or investigating any claims or taking upon or
rescinding any policy reinsured hereunder, aside from routine investigations and
other expenses incidental to the settlement of the claims, shall be shared in
the same proportion.
4. In every case of loss, copies of proof obtained by the Ceding
Company shall likewise be taken as sufficient by the Accepting Company and
copies thereof, together with a statement showing the amount paid on such claim
by the Ceding Company, shall be furnished to the Accepting Company before
payment shall be demanded of it.
5. In the event of an increase or reduction in the amount of the
Ceding Company's insurance provided by any policy or policies reinsured
hereunder because of a misstatement of age being established after the death of
the insured, the Ceding Company and the Accepting Company shall share in such
increase or reduction in the ratio that each company's net liability bore to the
total net liability prior to the reduction under such policy or policies.
5
<PAGE>
ARTICLE XI
REINSTATEMENTS
--------------
If a reinsured policy lapses for nonpayment of premiums and is
reinstated in accordance with its terms and the rules of the Ceding Company, the
reinsurance under such policy shall be reinstated automatically by the Accepting
Company.
ARTICLE XII
POLICY CHANGES
--------------
If any change is made in the amount of insurance under a policy
reinsured hereunder, the Ceding Company shall notify the Accepting Company.
ARTICLE XIII
INSPECTION OF RECORDS
---------------------
The Ceding Company and the Accepting Company shall have the right, at
any reasonable time, to examine at the office of the other any books, documents,
reports or records which pertain in any way to the policies reinsured under this
Agreement.
ARTICLE XIV
INSOLVENCY
----------
1. In the event of the insolvency of the Ceding Company, reinsurance
hereunder is payable by the Accepting Company on the basis of the liability of
the Ceding Company under the contracts reinsured without diminution because of
the insolvency of the Ceding Company. It is further agreed, in the event of the
insolvency of the Ceding Company, that the liquidator, or receiver, or statutory
successor of the insolvent Ceding Company shall give written notice to the
Accepting Company of the pendency of a claim against the insolvent Ceding
Company coming to his notice, on any contract reinsured, within a reasonable
time after such claim is filed in the insolvency proceedings; that during the
pendency of such claim the Accepting Company may investigate such claim and
interpose, at its own expense, in the proceeding where such claim is to be
adjudicated any defense or defenses which it may deem available to the Ceding
Company or its liquidator or statutory successor; that the expense thus incurred
by the Accepting Company shall be chargeable, subject to court approval, against
the insolvent Ceding Company as part of the expenses of liquidation to the
extent
6
<PAGE>
of a proportionate share of the benefit which may accrue to the Ceding Company
solely as a result of the defense undertaken by the Accepting Company.
2. Where two or more reinsurers are involved in the same claim and a
majority in interest elect to interpose defense to such claim, the expense will
be apportioned in accordance with the terms of the Reinsurance Agreement as
though such expense had been incurred by the Ceding Company.
ARTICLE XV
ARBITRATION
-----------
Any dispute arising with respect to this Agreement which is not
settled by mutual agreement of the parties shall be referred to arbitration.
Within 20 (Twenty) days from receipt of notice from one party that an arbitrator
has been appointed, the other party shall also name an arbitrator. The two
arbitrators shall choose a third arbitrator and shall forthwith notify the
contracting parties of such choice. Each arbitrator shall be an officer of a
life insurance company. The arbitrators shall consider this Agreement as an
honorable engagement rather than merely as a legal obligation, and shall be
relieved of all judicial formalities. The decision of the arbitrators shall be
final and binding upon the parties hereto. Each party shall bear the expenses
of its own arbitrator and shall jointly and equally bear the expenses of the
third arbitrator and of the arbitration. Any such arbitration shall take place
at the Home Office of the Ceding Company, unless some other location is mutually
agreed upon.
ARTICLE XVI
PARTIES TO AGREEMENT
--------------------
This is an Agreement solely between the Ceding Company and the
Accepting Company. The acceptance of reinsurance hereunder shall not create any
right or legal relation whatever between the Accepting Company and the insured
or the beneficiary under any policy of the Ceding Company which may be reinsured
hereunder.
ARTICLE XVII
DURATION OF AGREEMENT
---------------------
This Agreement shall be effective as of January 1, 1984 and shall be
unlimited as to its duration but may be terminated at any time insofar as it
pertains
7
<PAGE>
to the handling of new business by either party giving one month's notice of
termination in writing.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed in duplicate by their respective officers, this ______ day of
_______, _____.
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
- ------------------------------
Vice President
ALLSTATE LIFE INSURANCE COMPANY
- ------------------------------
8
<PAGE>
EXHIBIT 23(a)
INDEPENDENT AUDITORS' CONSENT
We consent to the use in this Post-Effective Amendment No. 5 to Registration
Statement No. 033-47245 of Allstate Life Insurance Company of New York on Form
S-1 of our report dated February 21, 1997 relating to the financial statements
and financial statement schedules of Allstate Life Insurance Company of New
York, appearing in the Prospectus, which is part of such Registration Statement,
and to the reference to us under the heading "Experts" in such Prospectus.
/s/ DELOITTE & TOUCHE LLP
Chicago, Illinois
March 28, 1997
<PAGE>
EXHIBIT 23(b)
ROUTIER, MACKEY AND JOHNSON, P.C.
Attorneys at Law
1700 K Street N.W.
Suite 1003
Washington, D.C. 20006
(202) 296-4852
November 10, 1992
CONSENT OF ATTORNEYS
--------------------
This firm hereby consents to the reference to it under the caption "Legal
Matters" in the prospectus forming part of Pre-Effective Amendment No. 1 to the
Registration Statement on Form S-1 under the Securities Act of 1933 filed by
Allstate Life Insurance Company of New York (File No. 33-47245).
Routier, Mackey and Johnson, P.C.
By: /s/ Mark Mackey
-----------------------------
<PAGE>
EXHIBIT 24
POWER OF ATTORNEY
WITH RESPECT TO THE ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
CUSTOM ANNUITY CONTRACT
Know all men by these presents that Thomas A. McAvity, Jr. whose signature
appears below, constitutes and appoints Louis G. Lower, II, and Michael J.
Velotta, and each of them, his attorneys-in-fact, with power of substitution,
and him in any and all capacities, to sign any registration statements and
amendments thereto for the Allstate Life Insurance Company of New York Custom
Annuity Contract and to file the same, with exhibits thereto and other documents
in connection therewith, with the Securities and Exchange Commission, hereby
ratifying and confirming all that each of said attorneys-in-fact, or his
substitute or substitutes, may do or cause to be done by virtue thereof.
September 18, 1996
- -----------------------------
Date
/s/ THOMAS A. MCAVITY, JR.
- -----------------------------
Thomas A. McAvity, Jr.
Vice President
<PAGE>
POWER OF ATTORNEY
WITH RESPECT TO THE ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
CUSTOM ANNUITY CONTRACT
Know all men by these presents that Karen C. Gardner whose signature
appears below, constitutes and appoints Louis G. Lower, II, and Michael J.
Velotta, and each of them, her attorneys-in-fact, with power of substitution,
and her in any and all capacities, to sign any registration statements and
amendments thereto for the Allstate Life Insurance Company of New York Custom
Annuity Contract and to file the same, with exhibits thereto and other documents
in connection therewith, with the Securities and Exchange Commission, hereby
ratifying and confirming all that each of said attorneys-in-fact, or his
substitute or substitutes, may do or cause to be done by virtue thereof.
September 18, 1996
- -----------------------------
Date
/s/ KAREN C. GARDNER
- -----------------------------
Karen C. Gardner
Vice President
<PAGE>
POWER OF ATTORNEY
WITH RESPECT TO THE ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
CUSTOM ANNUITY CONTRACT
Know all men by these presents that Sharmaine M. Miller whose signature
appears below, constitutes and appoints Louis G. Lower, II, and Michael J.
Velotta, and each of them, her attorneys-in-fact, with power of substitution,
and her in any and all capacities, to sign any registration statements and
amendments thereto for the Allstate Life Insurance Company of New York Custom
Annuity Contract and to file the same, with exhibits thereto and other documents
in connection therewith, with the Securities and Exchange Commission, hereby
ratifying and confirming all that each of said attorneys-in-fact, or his
substitute or substitutes, may do or cause to be done by virtue thereof.
September 16, 1996
- -----------------------------
Date
/s/ SHARMAINE M. MILLER
- -----------------------------
Sharmaine M. Miller
Chief Administrative Officer and Director
<PAGE>
POWER OF ATTORNEY
WITH RESPECT TO THE ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
CUSTOM ANNUITY CONTRACT
Know all men by these presents that Kevin R. Slawin whose signature appears
below, constitutes and appoints Louis G. Lower, II, and Michael J. Velotta, and
each of them, his attorneys-in-fact, with power of substitution, and him in any
and all capacities, to sign any registration statements and amendments thereto
for the Allstate Life Insurance Company of New York Custom Annuity Contract and
to file the same, with exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, hereby ratifying and
confirming all that each of said attorneys-in-fact, or his substitute or
substitutes, may do or cause to be done by virtue thereof.
September 18, 1996
- -----------------------------
Date
/s/ KEVIN R. SLAWIN
- -----------------------------
Kevin R. Slawin
Vice President and Director
<PAGE>
POWER OF ATTORNEY
WITH RESPECT TO THE ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
CUSTOM ANNUITY CONTRACT
Know all men by these presents that Michael J. Velotta, whose signature
appears below, constitutes and appoints Louis G. Lower, II, his attorney-in-
fact, with power of substitution, and him in any and all capacities, to sign any
registration statements and amendments thereto for the Allstate Life Insurance
Company of New York Custom Annuity Contract and to file the same, with exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, hereby ratifying and confirming all that each of said
attorney-in-fact, or his substitute or substitutes, may do or cause to be done
by virtue thereof.
March 5, 1997
- -----------------------------
Date
/s/ MICHAEL J. VELOTTA
- -----------------------------
Michael J. Velotta
Vice President, Secretary, General
Counsel and Director
<PAGE>
POWER OF ATTORNEY
WITH RESPECT TO THE ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
CUSTOM ANNUITY CONTRACT
Know all men by these presents that Peter H. Heckman, whose signature
appears below, constitutes and appoints Louis G. Lower, II, and Michael J.
Velotta, and each of them, his attorneys-in-fact, with power of substitution,
and him in any and all capacities, to sign any registration statements and
amendments thereto for the Allstate Life Insurance Company of New York Custom
Annuity Contract and to file the same, with exhibits thereto and other documents
in connection therewith, with the Securities and Exchange Commission, hereby
ratifying and confirming all that each of said attorneys-in-fact, or his
substitute or substitutes, may do or cause to be done by virtue thereof.
March 7, 1997
- -----------------------------
Date
/s/ PETER H. HECKMAN
- -----------------------------
Peter H. Heckman
Vice President
<PAGE>
POWER OF ATTORNEY
WITH RESPECT TO THE ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
CUSTOM ANNUITY CONTRACT
Know all men by these presents that Keith A. Hauschildt, whose signature
appears below, constitutes and appoints Louis G. Lower, II, and Michael J.
Velotta, and each of them, his attorneys-in-fact, with power of substitution,
and him in any and all capacities, to sign any registration statements and
amendments thereto for the Allstate Life Insurance Company of New York Custom
Annuity Contract and to file the same, with exhibits thereto and other documents
in connection therewith, with the Securities and Exchange Commission, hereby
ratifying and confirming all that each of said attorneys-in-fact, or his
substitute or substitutes, may do or cause to be done by virtue thereof.
March 7, 1997
- -----------------------------
Date
/s/ KEITH A. HAUSCHILDT
- -----------------------------
Keith A. Hauschildt
Assistant Vice President and Controller
<PAGE>
EXHIBIT 99
Form of Resolution for the MVA-NY Separate Account
--------------------------------------------------
BE IT RESOLVED, That, Allstate Life Insurance Company of New York (the
"Company"), pursuant to the provisions of Section 4240 of the New York Insurance
Code, hereby established a separate account designated MVA-NY Separate Account
(the "Separate Account") for the following use and purposes, and subject to such
conditions as herein set forth.
BE IT FURTHER RESOLVED, That the Separate Account shall be established for
the purpose of holding amounts paid to the Company under certain market value
adjusted, single premium deferred annuity contracts issued by the Company (the
"Contracts"); and
BE IT FURTHER RESOLVED, That the Separate Account will be used by the
Company to facilitate matching of assets and liabilities and to better reflect
the adequacy of the assets to support future benefits under the contracts; and
BE IT FURTHER RESOLVED, That the Separate Account will be a "non-unitized"
separate account, in which the owners of the contracts will not be issued units
of the Separate Account and will not directly participate in the performance of
the assets of the Separate Account; and
BE IT FURTHER RESOLVED, That, pursuant to the Company's plan to issue the
Contracts, the appropriate officers of the Company, with such assistance from
the Company's auditors, legal counsel and independent consultants or others as
they may require, be, and hereby are, authorized and directed to take all action
necessary to: (a) register the Contracts on a continuous basis and in such
amounts as the officers of the Company shall from time to time deem appropriate
under the Securities Act of 1933; and (b) take all other actions which are
necessary in connections with the offering of said Contracts for sale in order
to comply with the Securities Exchange Act of 1934, the Securities Act of 1933,
and other applicable federal laws, including the filing of any amendments to
registration statements, any undertakings or other requirements of applicable
federal laws, as the officers of the Company shall deem necessary or
appropriate; and
BE IT FURTHER RESOLVED, That the Vice President, Secretary and General
Counsel, and the appropriate Vice President of the Company, and either or them
with full power to act without the other, hereby are severally authorized and
empowered to prepare, execute and cause to be filed with the Securities and
Exchange Commission on behalf of the Company as issuer of the Contracts, a
Registration Statement under the Securities Act of 1933 registering the
Contracts, and any and all amendments to the foregoing on behalf of the Company
and on behalf of and as attorneys for the principal executive officer and/or the
principal
<PAGE>
financial officer and/or the principal accounting officer and/or any other
officer of the Company; and
BE IT FURTHER RESOLVED, That the Vice President, Secretary, and general
Counsel is hereby appointed as agent for service under any such registration
statement and any and all amendments thereof, and is duly authorized to receive
communications and notices from the Securities and Exchange Commission under the
Securities Act of 1933; and
BE IT FURTHER RESOLVED, That the appropriate officers of the Company be,
and they hereby are, authorized on behalf of the company to take any and all
action that they may deem necessary or advisable in order to sell the Contracts,
including any registrations, filings and qualifications of the Company, its
officers, agents and employees, and the Contracts under the insurance and
Securities laws of any states of the United States of America or other
jurisdictions, and in connection therewith, to prepare execute, deliver and file
all such applications, reports, covenants, resolutions, applications for
exemptions, consents to service of process and other papers and instruments as
may be required under such laws, and to take any and all further action which
said officers or counsel of the Company may deem necessary or desirable
(including entering into whatever agreements and contracts may be necessary) in
order to maintain such registrations or qualifications for as long as said
officers or counsel deem them to be in the best interest of the Company; and
BE IT FURTHER RESOLVED, That the appropriate officers of the Company, and
each of them, are hereby authorized to execute and deliver all such documents
and papers and to do or cause to be done all such acts and things as they may
deem necessary or desirable to carry out the foregoing resolutions and the
intent and purposes thereof.
